Apple Inc. (NASDAQ:AAPL) is a powerful player in the electronics market and one of the United States’ most iconic and successful companies, symbolizing American technology leadership like no other. However, the death of Steve Jobs prompted debate regarding how viable the Cupertino entity is on its own, or whether its success depends wholly on a few key individuals. The furor over the brief disappearance of a picture of Jonathan “Jony” Ive on Monday highlights that this is a hot-button issue lurking under the stock markets’ apparently impersonal surface.
On Monday morning, the profile photograph of Mr. Ive vanished from the Executive Profiles page of the Apple (AAPL) website. The picture was only absent for a few hours, and the legendary designer’s biographical page elsewhere on the site remained intact.
Nevertheless, news spread rapidly, and it was probably only the fact that the stock exchanges were closed for President’s Day in the U.S. that prevented share prices from falling in response. It soon emerged that Mr. Ive’s picture was accidentally removed by a glitch when the page was updated on Monday morning, and the missing image was soon restored to its proper place.
The message of this is clear, however – that specific individuals are viewed as being at the heart of Apple’s success, and that the slightest oblique hint of their leaving the firm is as newsworthy as acquisitions, mergers, political events, and natural disasters. Steve Jobs’ death was forecast to cause a collapse of the firm’s share value. Yet, Mashable.com reported in 2012, Apple Inc. (AAPL) shares had risen to $575 each from a value of $378.25 five months earlier when the company founder died. Today, share prices are oscillating in the $540 to $550 range, which is not a significant drop from the values two year ago.
Resolving whether Apple Inc. (AAPL) can stand as the world’s most powerful consumer electronics company as long as competent people are at its helm, or whether its success depends on the irreplaceable genius of a few key individuals, is a critical question for investors to answer. If the influence of these individuals is overstated, then investors could lose money in a useless panic when a specific individual retires, moves on to another job, or dies. Conversely, if these individuals really are indispensable to the tech firm’s success, then watching them closely is a rational guide to investment decisions involving the California company’s stock.
The answer could be argued to lie somewhere in between. The deaths of Walt Disney and Roy Disney sent the Walt Disney Corporation into a decline, yet the subsequent presidency of Frank Wells caused 30 percent gains in the company’s stock annually until Mr. Wells’ death in 1994. This suggests that good or inspired leadership is vital to a company’s success, and can lay the groundwork for future triumphs and profits also. However, it is also wrong to assume than any one set of leaders has a permanent monopoly on success and that they are literally irreplaceable.
Steve Jobs and Jonathan Ive likely qualify as geniuses, and have created a powerful, unique electronics firm whose strengths will be inherited by future Apple Inc. (AAPL) leaders. Apple is likely to continue to be a good investment precisely because Mr. Jobs and Mr. Ive have given future leaders and inventors strong material to work with, even after they themselves are gone.
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