Posts Tagged ‘Steve Jobs’

SEC Opens Inquiry Into Apple and Steve Jobs

January 21, 2009

This morning, Bloomberg reported that the Securities & Exchange Commission is reviewing disclosures about Apple Chief Executive Officer Steve Jobs’s health problems to ensure investors weren’t misled.

Later today, the Wall Street Journal followed up with a story reporting that the SEC “has opened an inquiry into Apple Inc.’s disclosures about Chief Executive Steve Jobs’s health.”

I am not surprised that the SEC has opened an inquiry, if it has. Last week, I wrote a story questioning the actions of the Apple board with respect to this issue, based on interview with corporate governance experts. Many experts said that Jobs and the Apple board, of which Jobs is a member, have not been forthcoming enough about the health of Jobs and the company’s succession plan.

I reiterated these thoughts on an interview with Fox News in which I criticized the actions of the Apple board. I thought it seemed a bit dodgy that Apple and Jobs could have changed their view of his health problems so drastically within one week. In my blog, I questioned the first letter that Jobs wrote. “The letter should have been much more measured in its presentation and tone, indicating that the cause of Jobs’s health problems was not totally clear,” I wrote.

Then again, it’s entirely possible that the board did nothing wrong, as Stanford law professor Joe Grundfest noted. If board members believed Jobs was going to be fine, they may not have seen a big need to be more forthcoming about his health or future, he notes. “One of the hallmarks of a complex medical condition is a diagnosis can change over time,” Grundfest says. “If the board has told the truth, then they’ve handled it best as they could.”

These are the issues the SEC will be looking into. What did the board know before the first letter was written? And what did they learn after it was written?

Admittedly, this is a very difficult situation for Apple. And I hope the company is cleared of any wrongdoing. But this is an inquiry that needs to happen in order to protect the shareholders of Apple and any other company that may find itself in a similar situation.


Who Will Fill Steve Jobs Shoes? (Don’t Ask the Apple Board)

January 15, 2009

Tonight, BusinessWeek just published a story I co-wrote my with my colleague Jena McGregor about Apple’s board of directors and the not-so-hot job they have done at succession planning, and grooming a successor to Steve Jobs. The story is called: Apple Succession Plan: Nobody’s Business?

Here is the beginning of the piece:

Apple Succession Plan: Nobody’s Business?
Steve Jobs’ health is a material concern, many argue, and investors deserve reassurance about who will eventually replace him and how

By Spencer E. Ante and Jena McGregor

Ask Apple (AAPL) about succession planning for CEO Steve Jobs and you’ll quickly get the message: We have a plan, but we’re not sharing it with you.

Now, Apple may need to start sharing more. News that Jobs will take a leave of absence because of health problems and turn day-to-day operations to Chief Operating Officer Tim Cook has renewed concerns that the company and its board haven’t been forthcoming enough about plans for Jobs’ permanent replacement. “When there is some sort of disruption at the company, it’s the obligation of the board to let everybody know they are on top of it, and that everything is in good hands,” says Nell Minow, co-founder of The Corporate Library, a corporate governance research firm.

Leadership experts say uncertainty over Jobs’ health underscores the need for clear communication of a well-defined succession plan by Apple’s star-studded board of directors, which includes Genentech (DNA) CEO Arthur Levinson and Google (GOOG) CEO Eric Schmidt. The board now ought to release a “better, clearer announcement” about the chain of command, Minow says. Apple declined to comment for the story, and board members, all of whom were contacted by BusinessWeek, either didn’t respond to requests for comment or declined to comment.

Read the rest of it here.

SHOCKING: What Steve Jobs Departure Means

January 14, 2009


This is the most shocking and sad announcement of the technology industry in recent memory, news that will likely reverberate for years to come.

In an email to all Apple employees today, Steve Jobs said he was taking a medical leave of absence until the end of June because he learned that “his health-related issues are more complex” than he originally thought. The news is all the more astonishing since just nine days ago Jobs wrote in another letter that he was suffering from a “hormone imbalance” and that “the remedy for this nutritional problem is relatively simple and straightforward.”

Current chief operating officer Tim Cook will take over day-to-day operations. However, Jobs also said that he will remain CEO, and plans “to remain involved in major strategic decisions” while he is out.

I have a few reactions to this stunning announcement.

1. Not to be too macabre, but you have to wonder if Steve Jobs is at risk of dying. Has his cancer returned? If not, what exactly is wrong with him? It must be pretty bad if he has to step down.

2. If he isn’t mortally ill, you have to wonder if he’s ever coming back to Apple. Most people I’ve spoken to today assume that his days at Apple are over.

3. How much does Apple stock fall? Apple just suffered its worst-case scenario. The company has lost its visionary and highly successful leader for at least the next 6 months, and probably longer. I shudder to think what will happen to Apple’s stock tomorrow, and the stock markets in general. Apple’s stock was down 8% in the after-hours market before trading was halted in its shares. I could easily see Apple stock falling 15% to 20% tomorrow, or possibly more.

4. Can Apple’s board be trusted? This is a huge black eye to Apple’s board. Apple was already under fire for the way it’s handled this situation. Some corporate governance experts have said the company should have been more forthcoming. Now that the company had made such a stark reversal so quickly, it will be hard for investors to believe almost anything that comes from the company’s board. I would not be surprised to see a bunch of shareholder lawsuits filed over the next few days.

5. Given the speed with which Jobs health situation changed so rapidly, why did Steve Jobs even send out the Jan. 9 letter? You could argue that the Macworld conference forced his hand. Even so, the letter clearly sent the wrong message, presenting an inaccurate picture of Jobs’s health. The letter should have been much more measured in its presentation and tone, indicating that the cause of Jobs’s health problems was not totally clear.

In his letter today, Jobs closed with an optimistic note. “I look forward to seeing all of you this summer,” he wrote. I hope that is true. But it’s very hard for me to believe it will be true.

Steve Jobs on the Recession: “We’ll be fine.”

October 22, 2008

Great companies are producing solid earnings so far. Yesterday, Apple was the latest company to turn out solid resultsin the Panic of 2008. Still, Apple’s forecasts for revenue and earnings going forward were lower than analysts expected. So Apple may be fine but they are not immune from the slowdown.

My colleague Arik Hesseldahl covered the announcement.

“Steve Jobs may not be sure how much the economic slump will hurt Apple, but he’s clear on this: It won’t be as bad as pessimists predict. And for the first time in eight years, he got on an analyst conference call to discuss quarterly results to make sure the point wasn’t lost on anyone.

“We may get buffeted by the waves a bit, but we’ll be fine,” Jobs said on the call, following the release of Apple’s fiscal fourth-quarter results.

Evidence of the buffeting may already be showing up. Apple (AAPL) reported $7.9 billion in sales, below the average estimate of analysts, which had come in at $8.05 billion. As for the fiscal first quarter, which includes the all-important holiday selling season, Apple forecast sales of $9 billion to $10 billion, more than $500 million less than analysts were expecting. Per-share earnings will come in at $1.06 to $1.35, at least 30¢ below the consensus estimate. CFO Peter Oppenheimer said the company was being “prudent” in light of the uncertain economy.”

The other stunning news. Apple sold more cell phones than RIMM, which Jobs gleefully pointed out on the call. Having released its second iPhone product, the iPhone 3G in July, Apple sold 6.9 million iPhones, besting the 6.1 million BlackBerrys that RIM sold during the quarter ended Aug. 30.

Read the rest of the story here.

Apple Update: Is Steve Jobs Sick?

September 9, 2008

Today, I was invited to appear on CNBC’s Power Lunch around 1:15pm to talk about the health of Apple CEO Steve Jobs, along with managing editor Dan Colarusso.

Given that Jobs looked no more thin or gaunt today at the Apple music conference than he did this summer, and that he joked about his health (a slide flashed on the screen behind him saying “Reports of My Death Are Greatly Exaggerated”), I think we can probably conclude that he’s doing fine, or at least he’s healthy enough to handle the job.

But still, without the company directly addressing the issue it’s impossible to know for sure. Execs have hidden serious illnesses before. In my segment I talk about how in 1995 Intel chief exec Andy Grove was diagnosed with prostate cancer. He told the board. But the company did not disclose the illness to the public at tha time. (Grove later revealed the cancer when he wrote about it the following year.) Grove now says that because the cancer never impaired his ability to do the job, there was no reason to inform shareholders.

I’m not sure everyone would agree with that, but it just proves the point that there are no hard and fast rules when it comes to the issue of disclosing health matters of corporate executives.

Check out part one of the video here.

And here’s part two where we shift gears and talk about the big news of the week–the bailout of Fannie Mae and Freddie Mac.

Will Apple Offer a Subscription Music Service (and Steve Jobs Eat Crow)?

March 23, 2008

How much will the recession hurt tech? Will subscription music ever take off? Do Facebook’s privacy controls solve the problem of too much info on the Web? Plus, March Madness picks in this week’s Digital Dish from BusinessWeek reporters Spencer Ante, Heather Green, Arik Hessehdahl and Catherine Holahan.

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Ding Ding Ding: Tech Fight Night

March 2, 2008

BusinessWeek puts the gloves on for tech fight night. In this week’s Digital Dish, BW reporters Spencer Ante, Heather Green, Arik Hesseldahl, and Catherine Holahan debate whether Microsoft, Google and Sprint deserve the whuppings they got this week. Plus, from the department of weird leading indicators, the Dish talks about the ginormous tab for Steve Jobs’ private corporate jet.

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Did Steve Jobs Miss the Bullseye at Macworld?

January 19, 2008

BusinessWeek technology reporters Heather Green, Arik Hesseldahl, Catherine Holahan and Spencer Ante discuss Macworld, whether the tech sector is headed for a downturn, and the billion-dollar-plus buys of MySQL and BEA in this week’s broadcast of the Digital Dish.

My colleague Arik is bullish on the future prospects of Apple’s new online movie rental service. But I am less optimistic. Apple TV will get better and do better but it’s not a groundbreaking product like iTunes/iPod or the iPhone. Jobs can’t ride into the local square and save the day because there are already a few sheriffs in town. Netflix is the dominant player in online movie rentals and they are offering a download service for FREE with 6,000 movies and TV shows right now. Interestingly, the top five most-watched shows are all TV programs, according to the list on the NetFlix Web site on January 19: Heroes, The Office and 30 Rock.

As for Macworld, the maestro Jobs turned in a middling performance. He was due for one, no doubt. That’s the nature of creativity. Every film Martin Scorses makes can’t be a masterpiece like Raging Bull or Taxi Driver. Every once in a while you’re going to have a Casino or a Bringing Out the Dead. Macworld 2008 was the Casino of Steve Jobs career.