Reaction to Steve Jobs' New Medical Absence

The US futures market has already dipped on news Apple CEO, Steve Jobs is to take a third medical leave of absence from Apple. Apple shares themselves saw an almost immediate 8.3 percent decline on the Frankfurt market on the news, announced today during a US public holiday.

In a short note Apple and Jobs both disclosed and requested privacy on the medical absence, an absence sure to ignite concerns about Jobs.

"At my request, the board of directors has granted me a medical leave of absence so I can focus on my health," Jobs, 55, wrote. "I love Apple so much and hope to be back as soon as I can."

It is possible Jobs may be suffering one of the "down" cycles thatcan sometimes afflict those who have had a liver transplant, says the New York Times, citing an anonymous source. In the last few weeks, Jobs has appeared thinner, has been in the office two days a week and taken his lunch in his office, rather than the company cafeteria, the report states.

Don't panic

Jobs has not been seen in public (in the sense of the grand stage) since October 20, 2010, when he introduced the MacBook Air and previewed the all-new upcoming Mac OS X 'Lion'.

News of a fresh medical leave will inevitably spark concern his illness has returned, and inevitably drive discussion of Apple's succession plans. Apple's leader received a liver transplant in 2009 to help cure him of pancreatic cancer.

Shareholders will vote on new succession plan proposals at Apple AGM in February, but the company opposes these, warning that as it stands these would benefit competitors more than Apple.

While Jobs is away, Apple's Chief Operating Officer (COO), Tim Cook will take charge of day to day running of the world's second most valuable company.

Despite the market jitters, analysts are generally sanguine.

Ireland's BusinessWorld cites Alexander Peterc, equity analyst at Exane who says, "... even if Steve Jobs never returns to Apple, I would not expect a visible, tangible impact on how Apple is executing over the next couple of years."

The impact on public perception of the firm will be felt, however, warned Nomura analyst Richard Windsor, who notes Jobs as being seen to be a "major force in Apple's strategic direction."

Investors are being advised not to panic, with Atlantic Equities analyst James Cordwell advising they should hang on for more information on the matter, expected to emerge tomorrow.

"Apple is a very well-managed business and this won't be something that's just happened out of the blue." said Rathbone's James Maltin, speaking to Forbes. "They will have ensured sufficient handover."

Apple's big year

This will be a big year. Apple says Jobs remains as CEO, and will, "be involved in major strategic decisions for the company."

Apple is preparing to introduce the iPad 2.0. This is now expected to host multicore processors and extremely high-res graphics. It wil also boast a camera and much improved graphics processor according to a series of reports which broke this last weekend.

Apple is also expected to introduce iPhone 5 within the coming months. This is likely to feature a much faster processor, better graphics, NFC support and many other improvements.

At WWDC in June, Apple is likely to seed Mac OS X 10.7 (beta) among its developers, with a launch in late September possible. Apple's customary iPod, iTunes, professional software products and, of course, its Mac range will all also upgrades during the year.

In 2009, Apple's Tim Cook handled the launch of the iPhone 3GS in the absence of Jobs. Many noted last week that it was Cook, not Jobs, who joined Verizon's COO, Lowell McAdam to launch the CDMA iPhone last week.

"I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011," Jobs wrote in his note today.

He also told us, "I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy."

This public privacy

During his last absence in late 2008 and 2009, the level of speculation around Apple's leader hit fever pitch. This reached its anti-private zenith when various reports told us about his transplant, who had performed it and where it had taken place -- all in advance of any notification from Jobs.

Inevitably there is a public interest argument. After all, news of the leave of absence today is already affecting the NASDAQ and DOW futures markets and is partially being attributed as cause of a change in the dollar exchange rate. As CEO of a company that's almost as valuable as Exxon in terms of market cap, Jobs can't expect questions not to be asked.

Tomorrow is Apple's quarterly financial results conference. Apple's Peter Oppenheimer (himself now thought to be in the running for an upgrade) will officiate. It is extremely likely Cook will also attend this event. Analysts will ask for a statement as to what is going on with the health of the company co-founder --as well they might, given the somewhat opaque way in which such matters have been explained in the past.

Apple was heavily criticised in 2008, when critics noted Jobs' weight loss which the company tried to characterise as due to a common bug, later calling this a "hormonal imbalance". It was only later that it was revealed Jobs actually required a liver transplant.

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