Stockerati

Hearing Apple’s earnings announcement earlier today, I found myself thinking about what’ll Apple post-Jobs look like. Jobs is a pioneer and one of the most admired CEOs of all time. He’s my role-model, idol and inspiration.

Just like everyone in the industry, I’ve been very worried about his health, ever-since his surgery a few (I believe 4) years ago. My worries exacerbated seeing him at the launch of the 3G iPhone last month. Here’s a shot from that launch and it’s but obvious that it’s not alright– despite what officials from Apple say. I really hope Steve’s not in declining health and I wish him a speedy recovery.

Now coming back to the topic of Apple  post-Jobs (an inevitability as one can’t go on forever), let’s take a look at how Apple fared before Jobs came back and led the renaissance.

• Apple was overly reliant on outdated software due to its inability to release a major operating system upgrade
• It was badly managed
• It was near-bankrupt in the early-to-mid 1990s.

Steve’s progressive stance on open source and Unix underpinnings helped create an extensible. solid foundation for an operating system—popularly called OS-X. Steve’s both admired and criticized for his persuasion and salesmanship– the reality distortion effect, which has helped Apple reach the heights it has.

During today’s earnings announcement, Apple dropped its forecasts for this year despite

• significant market share gains of Macs as well as its continued domination of the digital music player business, in the recent 3rd  quarter
• a bumper quarter for iPods (11M sold) and iPhones (750K sold)
• the recent launch of iPhone v2

The reasons quoted for the conservative estimates for the next quarters were wide and varied and it’s a stretch connecting the dots here. The reasons ranged from

• Reduced margins were planned on taking away the  “umbrella for the competitors"
• educational discounts

• component price adjustments
• a new product line that is widely rumored to include redesigned laptop computers
• some investments ahead which couldn’t be discussed today

Huh? This paradigm shift can be equated to Neiman Marcus taking on JC Penny or Ferrari taking on Honda. Apple’s always taken pride in being a boutique business.

I partially agree with the analysts that the reduced margins are mainly because Apple’s tasted blood with it’s surging Mac PC business. It’s now the 3rd largest OEM in the US after Dell and HP and wants to build its stature there. Apple does benefit from the stickiness it’s digital lifestyle offerings such as iPhone and iPod create however this change of heart does signal that Apple’s ready to grind it out.

Though the sceptic in me thinks that this is the trademark Steve Jobs reality distortion effect– a bait and switch. My sneaky feeling’s that Apple maybe preparing for a post-Jobs era here, if Steve’s planning to retire or cut down on his work-schedule. His legacy at Apple will then be a self-sustaining business which grows through volume. I wish his legacy instead is his vision, out-of-the-box thinking and innovation, which seemingly only he’s capable of doing in this company– unfortunately.

I believe Apple’s biting more than it can chew– no pun intended. I just hope their overarching ambitions doesn’t get the better of them and they forget their basics. Let’s hope their innovative touch and ability to build the singular end-to-end customer experiences doesn’t fade away in their zeal to become a major platform player in the industry. But maybe that’s the only role they see for themselves without their charismatic and fearless leader at the helm.

What do you think?

Apple’s currently trading at $162 and change. I’ll analyze it in a post later this week.