Apple CEO Steve Jobs is taking a medical leave of absence until the end of June because his health problems are "more complex than originally thought," he said in an e-mail to company employees Wednesday.
His medical leave revives lingering doubts about the well-being of Jobs and that of Apple aapl, the American corporate institution he co-founded more than three decades ago. The iconic CEO, who helped redefine personal computing in the 1980s and digital entertainment during the past decade, is the driving creative force behind the iPhone, iPod and Macintosh computer.
But in recent months the 53-year-old Jobs, a pancreatic cancer survivor, has lost considerable weight. That has raised concerns not only about whether the cancer has returned, but about his ability to forcefully lead during an economic downturn — especially a company like Apple, which specializes in premium-price consumer products.
"Unfortunately, the curiosity over my personal health continues to be a distraction not only for me and my family, but everyone else at Apple as well," Jobs said in the e-mail. "As CEO, I plan to remain involved in major strategic decisions while I am out," he said. "Our board of directors fully supports this plan."
Apple's chief operating officer, Tim Cook, will take over Jobs' day-to-day responsibilities while he is on leave. Cook, who left Compaq Computer in 1998 to join Apple, filled in as interim Apple CEO when Jobs battled pancreatic cancer.
Jittery investors reacted immediately to Jobs' medical leave, sending Apple shares down 7%, to $79.30, in after-hours trading — its lowest in two years. A year ago, the stock was trading at just under $200.
Last week, Jobs had tried to soothe investors' concerns about his health. He said his noticeable weight loss in recent months was the result of a treatable hormone imbalance.
Although Jobs has not elaborated on his health, a hormone imbalance is a possible consequence of cancer treatment, some medical specialists say. Concern over Jobs' health has led some critics to question whether he and Apple are being fair to shareholders by not disclosing more information.
His medical leave, however long, raises questions about Apple's long-term viability.
"There's only one Steve Jobs," says Leander Kahney, author of Inside Steve's Brain, a book on Jobs' influence on Apple. "Apple will survive, but it may not burn so bright."
Jobs' health issues complicate what already was expected to be a less-than-stellar year for Apple and the consumer electronics industry. A withering global economic downturn has undercut consumer purchases, bruising tech companies and resulting in thousands of layoffs in Silicon Valley.
Some analysts fear that without a big product launch, such as last year's iPhone 3G, Apple will lack a hit product this year.
The company already had announced less-than-expected quarterly revenue of $7.9 billion in October, and crowds were thin at Macworld, the computer trade show in San Francisco that Jobs skipped this month for the first time in more than a decade. Apple says it will no longer participate in the show.
Apple without Jobs
Stepping into Jobs' formidable shadow is Cook, 48, a low-key manager who rarely raises his voice, according to co-workers. In many ways, they say, he is the management opposite of Jobs.
Brian Marshall, an analyst at Broadpoint AmTech, says the move appears to have been calculated to give the highly respected Cook a six-month grace period to establish himself as Jobs' successor.
"After six months, if he does a good job, I think he will be anointed, and Jobs will step back and become a senior adviser," Marshall says. "I think this is a way to break the news softly to Wall Street over an extended period of time, and I actually think this is the right thing to do."
Gartner analyst Van Baker says the move was "rumored but not expected." He said investors and the tech industry will want more details about Jobs' recovery.
"I suspect that we will have some indication prior to the June date as to how things are progressing but probably only after a couple of months," Baker says. "Without details, it is hard to know what the prognosis is."
Jobs' singular presence at Apple — he holds much sway over the design and "cool factor" of Apple products — makes it extremely difficult to find a worthy successor, corporate recruiters say.
"You don't replace Steve Jobs," says Brian Sullivan, CEO of executive search firm CTPartners. "You slice up what he does: product development, vision and marketing. No one person can bring his swagger and savoir-faire to Apple."
But Baker says Jobs may not matter "as much as some people think."
"He is the public face of Apple and enjoys, or more accurately, endures, celebrity status," Baker says. "As such, he has many fans, but the executive team at Apple is very competent and capable of running the company without Steve involved. His role is largely directional in nature, so the company should fare well even in his absence."
Even so, Jobs' announcement isn't likely to quell concerns among investors about his health. The notoriously secretive Apple has been tight-lipped about his condition. It waited until after Jobs underwent surgery in 2004 to treat a rare form of pancreatic cancer — an islet-cell neuroendocrine tumor — before alerting investors. That cancer is easily cured if diagnosed early, unlike the deadlier and more common adenocarcinoma.
Last summer, Apple insisted Jobs' weight loss was the result of a common bug.
It's impossible to tell what's going on with Jobs from the limited information that's been given, says Carl Grunfeld, a professor of endocrinology at the University of California-San Francisco.
But with the information available, two possibilities seem likely, Grunfeld says. "It could be out-of-control diabetes, or it could be an exceedingly rare tumor called a glucagonoma."
That neuroendocrine tumor secretes a hormone called glucagon, which robs the body of protein. It causes a wasting syndrome and is often accompanied by a skin rash that's called necrolytic migratory erythema, which resembles very inflamed acne, says Grunfeld, who has written articles on the tumors. While most neuroendocrine tumors are slow growing, glucagonomas often are malignant and can metastasize.
There's an ongoing, complicated medical debate about how to treat the symptoms caused by a glucagonoma. Hyperalimentation, or very high-nutritional feeding, is one approach. Grunfeld says it doesn't always improve the patient's condition.
An unclear future
Apple's abrupt change at the top will do little to mollify anxious shareholders, says Jeffrey Sonnenfeld, senior associate dean of the Yale School of Management.
Jobs has "regressed into telling us nothing again, other than, sadly, he's caught in a serious health battle," says Sonnenfeld. "They should have told us this a year ago."
Sonnenfeld acknowledged Jobs as a "genius" and a "hero" for co-founding Apple (with Steve Wozniak) in 1976 and then reviving it in the late 1990s after he was ousted in a board battle in 1985.
"But he's an infamous control freak, and he can't control this," Sonnenfeld says. "It's got to be frustrating. Going into limbo like this until June is not good for him or the company."
Relentless competition against the iPhone, iPod and MacBooks won't stop. And Jobs' alluding to returning to running the company by summer suggests Apple will go "on cruise control" until then, Sonnenfeld says.
"Profound strategic decisions cannot wait six months," he says. These include tech investments, marketing decisions and product placement issues. "Only in academia can people take a sabbatical for six months and the world not care."
The impact of all this on Apple's business partners, such as AT&T — the iPhone's exclusive carrier in the USA — also isn't clear. Mark Siegel, an AT&T spokesman, said the telecom giant had no comment on Jobs' medical leave.