Apple faces uncertainty with Jobs’s passing

Trying to maintain Jobs’s spirit within Apple’s corporate culture represents a major challenge to the company [Reuters]

If brands were people, Apple would no doubt be a Hollywood idol, inspiring a singular frenzy among devotees – techies and non-techies alike. No matter the weather or market situations, fans of the company’s products line up for the laters versions of its products, which have often had long waiting lists.

The brand’s strength is indisputable.

But with the passing of Steve Jobs, the co-creator, innovator and, largely, the face of the brand, what is the future of Apple?

The immediate response in the stock market has been somewhat predictable, with the Bloomberg news agency reporting that Apple shares dropped in German trading. But this was just an immediate “shock response” said one tech analyst to the news agency. The larger questions remain.

Aside from the drop in the German market (before US markets opened), all there is to go by at the moment is the response to the new iPhone – the 4S – the first product to be launched since Jobs left his CEO post, and possibly the first to get a luke-warm reception from Apple fans. 

The new phone seems to have disappointed fans anticipating something perhaps more innovative than what many see as just a faster version of the iPhone 4.

Professor John Naughton of the Open University and Wolfson College, at the University of Cambridge said that the response to the new iPhone has little to do with the product itself.

“The ‘disappointment’ reaction to the iPhone 4S is a reflection mostly of the idiocy of the stock-market analysts and some parts of the blogosphere,” Naughton said. 

“What did they expect? A phone that could do teleporting? The 4GS seems to me to be an intelligent enhancement of an already superb product: the voice-recognition system is potentially very important; and the improved camera is also significant – the iPhone is now the most popular camera on Flickr, for example. This seems to have bypassed the more excitable – and clueless – parts of the mass media.”

Nate Lanxon, the editor or Wired.co.uk thinks the issue with the phone had less to do with cooling affections towards the brand and more to do with packaging.

“I just think people were expecting a redesigned iPhone. The specifications on the inside are great, and I think if you put the same specs into a redesigned body people wouldn’t have seemed quite as disappointed,” Lanxon said.

Largely internal challenges

Questions about the health of the company have persisted for some time as the state of Jobs’s deteriorating health started to become apparent in recent years.

Indeed, when Jobs stepped down from his position as the company’s CEO in August, when it seemed that his seven-year fight with pancreatic cancer was taking a turn for a worse, the company’s stock dipped three per cent immediately after the announcement (knocking $10bn off the company’s value).

Even though the stock then rallied, rising by seven per cent in the month following the departure of Jobs as CEO and became the company’s chairman, analysts took note.

When a brand becomes so completely associated with a particular person, the stability of the brand becomes questionable when that person is no longer part of the equation. 

In the case of Jobs, his presentations were major business news events, often viewed with the same marvel as a magic show, with the man himself generally sporting a black shirt, blending into the dark background, his head and hands – holding a new Apple product – standing out, almost glowing.

In other words, in the eyes of many,  especially internally, within the company itself, Apple is (or was) Steve Jobs. And this, said Ian Stephens, principal at Saffron Brand Consultants in the UK, is a major problem. 

“Apple’s real problem is that Apple’s competitive advantage is culture – many great technology companies have tried to replicate Apple and failed,” said Stephens, who does not think customers will downgrade the brand after Jobs’s passing.

“The thing that frustrates them is that they get smart people, they invest, the do the market research, and yet, time and time again, they fall short of where Apple is, and the difference is culture,” said Stephens, who said Jobs, known as a “tough micro-manager on every level”, was “irreplaceable and an all-encompassing eye-in-the sky”.

The danger the company faces is that Apple will stop being Apple, and that “over time their invincibility will wane, and the very hungry competitors around them will actually do what they’ve not been able to do for at least the last decade, and match Apple’s ability to somehow create these amazing products that capture people’s imaginations, because those things have come from the Apple culture, and the Apple culture comes from Steve Jobs,” Stephens said.

Future of the iconic brand

No one is predicting the demise of Apple just yet. For one thing, as Wired‘s Lanxon said, Apple’s current CEO Tim Cook has been essentially acting in the role for some time, and the man behind the winning iPod, iMac and iPad designs, Jonathan Ive, isn’t going anywhere.

“…Apple is an incredibly healthy company with an enormous amount of talent, and Jobs hired amazing people and made them love working for Apple, so I believe they will continue to make great kit,” Lanxon said.

But for how long?

Naughton said that the death of Jobs will likely not have any short term effect on the company’s products as any gadgets being released in the next 18 -14 months would have been in the works while Jobs was still in his post. 

The uncertainty, he said, is in the long-term future of the company, which, he described as a “corporate extension of Jobs’s personality”.

“In the longer run I’m sure his passing will have a profound impact, because an obsessive visionary like him only comes along once in a generation,” Naughton said. 

“Apple without Steve Jobs will become a bit more like any other large company.”

Still, Naughton thinks Apple has a few good years left yet, in which it will continue to dominate the market for smartphones, tablets and music sales.

“But nothing lasts forever: Just remember what happened to Nokia,” he said, referring to the embattled Finnish brand that once lead the mobile phone market.

Follow D. Parvaz on Twitter: @Dparvaz