Steve Jobs, the visionary co-founder of Apple Inc. and driving force behind a string of products that revolutionized the consumer-electronics industry, stepped down as chief executive but was named chairman of the board, the company said late Wednesday.
His relinquishing of daily control had been widely anticipated since he took an extended medical leave earlier this year. Jobs, 56, had a liver transplant two years ago and underwent surgery for pancreatic cancer seven years ago.
“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know,” he wrote in a letter to the board Wednesday. “Unfortunately, that day has come.”
Nevertheless, the announcement stirred doubts about Apple’s future, given Jobs’ deep personal association with its most successful innovations, including the Macintosh computer line, the iPod portable music player and the iPhone smartphone.
Apple shares dropped in after-hours trading by nearly $20, or about 5%, immediately after the news broke.
Apple named Tim Cook, the company’s well-regarded operations chief who had run the company in Jobs’ absence, as chief executive.
Though Apple has a deep reservoir of technological talent at its Cupertino, Calif., campus, investors have long worried that it could be impossible to replace Jobs’ intuitive ability to anticipate tech trends and craft products that resonate with consumers.
“He’s the head visionary,” said Jeffrey Fidacaro, an analyst at Susquehanna Financial Group. “Can you replace his vision, his passion for the products, his rigor in the day-to-day operations? That’s going to be hard, it’s undeniable.”
Others said Apple won’t have to grapple with that issue as long as Jobs remains chairman of Apple.
“He has this higher level of mind that he can see the future clearly in a way that few people can. That rubs off on people,” said Apple co-founder Steve Wozniak. “But Apple’s a lot of people. And in the meantime, he’ll still be there, still watching over it and within reach if needed.”
Under Jobs, Apple has become one of the most successful and recognizable companies in modern American history — and, in recent years, a closely watched weather vane of global consumer preferences and spending habits.
Jobs and Wozniak financed the original Apple Computer with $1,300 they raised from the sale of Jobs’ Volkswagen microbus and Wozniak’s Hewlett-Packard Co. scientific calculator. They built their first machines in Jobs’ family garage in 1976.
In 1984, they introduced the Macintosh, the first personal computer to implement features that are now commonplace on all personal computers, including the mouse and graphical user interface.
Jobs left in 1985 after losing a boardroom showdown with then-CEO John Sculley — later starting his own company dubbed NeXT. Wozniak also left that year. Jobs returned to Apple as an advisor in late-1996 when the company bought NeXT. He later became chief executive again, quickly setting out to remake a company that was close to bankruptcy.
His first innovation was the introduction in 1998 of the iMac, whose translucent blue exterior stood out from the legions of beige personal computers.
Apple introduced a blockbuster product in 2001: the iPod. Although not the first consumer MP3 player, Apple broke ground by integrating the device with easy-to-use software for organizing music playlists, as well as an online store for purchasing tracks. The powerful combination transformed the digital music market.
Beyond its technological prowess, Apple has consistently notched impressive profits that have propelled its stock price to astronomical levels.
Its stock price hit $403.41 in July — a near-60% gain from a year earlier — after executives released better-than-expected third-quarter earnings. That put Apple’s market value at $374 billion, briefly toppling Exxon Mobil Corp. as the world’s most valuable firm. A decade earlier the stock traded at $10.
On Wednesday, Apple’s shares rose $2.58 to $376.18. They fell to about $356 in after-hours trading.
Jobs’ health had long cast a shadow over Apple and its stock.
Apple told investors in January 2009 that Jobs was stepping away from the company to receive hormone treatments. After his return, it disclosed that his condition had been far more acute and that he had undergone a liver transplant.
Jobs’ letter to Apple’s board Wednesday offered no specifics about his current condition. In a statement from the Apple board, director Art Levinson, chairman of Genentech Inc., praised Jobs as an inspirational leader.
“Steve has made countless contributions to Apple’s success, and he has attracted and inspired Apple’s immensely creative employees and world class executive team,” Levinson said. “In his new role as chairman of the board, Steve will continue to serve Apple with his unique insights, creativity and inspiration.”
Though the stock dropped in after-hours trading, some analysts warned investors against overreacting because Jobs’ marginal health condition was not a surprise.
“Don’t panic, remain calm,” said Colin Gillis, an analyst at BGC Partners. “This is not unexpected.”
“He clearly has some major health issues going on,” Gillis said. But “deteriorating or not deteriorating, chairman is the perfect role for him to continue providing artistic input.”
Tim Bajarin, president of Creative Strategies Inc., described Jobs as a pioneer with an unparalleled track record of success.
“He has had more hits than any technology leader I know,” Bajarin said. “And in that context, he’s got an amazing legacy. You cannot underestimate his importance on our industry and on American business.”
Bajarin said what distinguishes Jobs from others in technology is his appreciation for the key role of industrial design and his desire to make technology as easy to use as any other household appliance.
“I’ve talked to Steve multiple times,” Bajarin said. “Whenever I’ve ever asked him the question of what drives him, it almost always came back to this: Technology is too hard for people and it has been my goal in life to make it easy.”