Apple's Jobs takes 3rd medical leave, stock slumps

09:01, January 18, 2011      

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Apple CEO Steve Jobs unveils the latest improvements to the company's Mac software during a news conference at Apple Inc. headquarters in Cupertino, California, in this Oct 20, 2010 file photo. [Photo/Agencies]

Apple Inc Chief Executive Steve Jobs is taking medical leave for the third time since 2004, sending its shares tumbling more than 8 percent as the surprise revived concerns over the long-term future of the iPhone- and iPad-maker.

The company disclosed the news early on a US holiday when US markets were closed and did not specify why or for how long its visionary leader would be absent. Jobs' latest leave comes nearly two years to the date after he took a six-month break to undergo a liver transplant.

"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 in an email to staff published on a regulatory newswire. "I love Apple so much and hope to be back as soon as I can."

Unlike the previous announcement, Apple did not say when Jobs would return, driving up the worst fears about Jobs' medical condition. An Apple spokesman declined to comment further.

"This time around you have to question his ability to bounce back," said Hudson Square Research analyst Daniel Ernst.

Jobs, a survivor of pancreatic cancer, said Chief Operating Officer Tim Cook would take responsibility for day-to-day operations once again, but he would remain as CEO and be involved in major strategic decisions.

Apple shares closed 6.2 percent lower in Frankfurt. Nasdaq futures fell 1.29 percent.

In recent days, Apples shares reached new all-time highs after announcing its iPhone would be available to customers of Verizon Wireless, the largest US mobile operator.

Kaufman Bros. analyst Shaw Wu said the news may present a buying opportunity for investors: "Obviously the stock is going to get hit tomorrow. But I see no reason why this stock won't continue to work."

Jobs key to apple rebirth

Apple's destiny has been closely tied to Jobs, the short-tempered and charismatic leader who rescued the computer maker from near death in 1996 after a 12-year absence from the company he co-founded.

The launch of the iPhone, a smartphone with a touchscreen in 2007, and the iPad, a tablet computer in 2010, forged new business lines for the company that created the personal computing category and helped lead the technology industry into new directions.

Analysts said the effect on Apple's operations should be limited in the short term, since its product line-up was strong.

The next version of the iPad, the iPad 2, is still expected to be announced in the coming weeks. The splashy debut of a digital newspaper with News Corp, though delayed by a technical glitch, is also on track to be launched shortly.

Jobs' absence would be a bigger concern if it became prolonged. Cook ran day-to-day operations during Jobs' last absence in 2009.

"This will come as a surprise to Apple investors and definitely take some shine off the Apple stock," said Alexander Peterc, an equity analyst at Exane.

"But 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."

Although Apple has not articulated a clear succession strategy, Cook, whose name routinely appears on the short list for top jobs at other technology firms, is widely seen as the heir apparent.

Between the announcement of Jobs' 2009 medical leave until his return, Apple shares rose 60 percent under Cook's watch.

Still, it is far from certain whether Cook has the strategic vision that Jobs so famously possesses.

Cook was named COO in 2005 and is seen as a master of Apple's complex and far-flung supply chain. He also manages sales, service and support and leads the company's Mac computer division, where sales have been surging over the past few years.

Cook took over day-to-day operations in 2009 when Jobs took leave to have a liver transplant. He also steered the company in 2005, after Jobs had surgery for pancreatic cancer.
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