Steve Jobs' replacement

The WSJ had a fascinating exclusive Friday on what’s happening at Apple at the midpoint of Steve Jobs’ planned medical leave. No one seems to have followed up on the story (yet).

Since Jobs and Apple aren’t talking, the WSJ reporters stitched together 2nd and 3rd hand accounts of how Apple is being run by COO Tim Cook as acting CEO with help from Jobs at home. The portrait is one of Jobs reviewing key details on current projects, as well as working on the future roadmap:

People privy to the company's strategy say Apple is working on new iPhone models and a portable device that is smaller than its current laptop computers but bigger than the iPhone or iPod Touch.

The article said that Apple expects Jobs to come back in June [my guess: to announce iPhone #3] and that the board is talking directly to Apple’s doctors.

The closing paragraph is the most intriguing:

Shaw Wu, an industry analyst at Kaufman Bros., says investors are prepared for the possibility that Mr. Jobs could play a reduced role. "Most investors have factored in a management transition," he said. "What people are expecting is that Steve Jobs would retain a chairman role, and Tim Cook would formalize his role."

I disagree that the market has factored this in: Apple with Jobs gone (or on his way out) is a much slower growth company that Apple of the past decade, which means the 23% stock growth this year would need a correction.

However, this prediction rings really, really true. Apple has gotten used to Steve not being there every day, Steve still has his finger in the pie and as chairman has the final say, but eventually he can let go. If there’s any point in the next few years when he’s going to give up day-to-day control, this is when it will happen.

Qualcomm did something like this when the only CEO it had ever known — Irwin Jacobs — gave up the reins in 2005 after exactly 20 years. He abdicated in favor of his son Paul Jacobs, who had trouble escaping the shadow of his legendary father. Irwin spent not quite four years as non-executive chairman, and then when everyone saw the company was running fine without him, quietly stepped down for good last month.

The problem is, Qualcomm is a systems and infrastructure company, and Apple is a consumer products company. It needs a product fanatic pushing the envelope on new designs, and neither Cook nor SVP Phil Schiller are it. So as I noted last August, if Cook is CEO they need a passionate product guru.

Mark Papermaster (poached from IBM) is finally starting work at Apple on April 24, when he will be SVP of Devices Hardware Engineering, reporting to the CEO. (Devices, of course, are Apple’s high-growth product lines like the iPhone). I know nothing about him other than his resume, but Papermaster (or one of the other product-related SVPs) is where Apple’s leadership will have to come from if Jobs decides (or is forced) to fade away into the sunset.

Life is more than just shipping products, and I hope that Steve will have some post-Apple time (whether now or a decade from now) to spend with his family.