On Martin Luther King Day, Steve Jobs released a letter saying he would be taking a medical leave of absence. It’s believed he did this on a holiday in order to avoid Apple stock taking a big hit in the US, but the Frankfurt exchange saw an immediate drop of 7%, shaving more than $22 billion off the company’s market cap. The next day, AAPL dropped sharply at about %6, but quickly rebounded. In total, they only saw a 3% drop.
There are a few major factors at work here. The first is that Jobs has been out twice before. During those times, there were major drops, but the company has continued to exceed expectations since then. Also, yesterday, Apple had their earnings call for the first fiscal quarter of 2011. They blew away most Wall Street estimates.
At an increase of 71%, the company posted its highest revenue ever at $26.74 billion. Earnings grew 78%, for a net quarterly profit of $6 billion, thanks to massive sales of 16.24 million iPhones (up 86% year-over-year) and 4.13 million Macs (up 23%). Apple also shipped an impressive 7.33 million iPads. Only iPod sales declined, yet Apple still shipped 19.45 million units. Sales of the iPod Touch shot up 27%, and now represent half of all iPods sold. (via Fast Company)
One thing missing from the earnings call was any commentary whatsoever on the health of Steve Jobs. No one even dared to ask. Many have speculated that his medical absence is related to his previous liver transplant in 2009. A University of Chicago Medical Center transplantation expert tells Scientific American that there are a myriad of complications that can result from a liver transplant. The use (or under use) of immunosuppressants can cause everything from hypertension and hypoglycemia to organ rejection and viral infection.
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Whatever the case may be, we all wish the best for Jobs and hope for a speedy return. Some are already thinking the unthinkable, though. Forbes speculates on what Apple would be like without Steve Jobs, who brings an element to the company that no one will be able to duplicate. To date, Apple only releases products that Jobs himself has scrutinized closely and approved.
When he leaves, someone else will have the power to make those decisions. But he or she may not have Jobs’ sense, as he once put it, of where the technological puck is headed. And no matter who the new CEO may be, that person will never have the authority that comes from having founded the company, been ousted, and returned to rescue it from bankruptcy.
At this point, Apple is on a roll and it doesn’t seem that anything will stop them. They have a vision and a plan and Jobs may be taking a breather because he knows all their ducks are in a row. What do you think?