Steve Jobs’ (and Apple’s) Biggest Mistake

by Chris Seibold Jan 15, 2009

The financial world is a fickle place. When Apple was running wild with the iPod and the iPhone the analysts put signs next to Apple's stock that said "Free pony rides to fat profits." A note from Steve Jobs and a little speculation later the sign is "get your horse meat before the maggots show up."

The chuckling hyenas of the financial world aren't so interested in up as down as they are in change. Red numbers or green numbers are all profit in the hands of the right trader, the most important thing is that the stock moves. Stasis is boring, uncertainty is profit. Expect the announcement by Steve to generate a lot of profits one way or another.

Which brings us to Steve Jobs and Apple's biggest mistake. When a CEO steps down or retires there is always a reaction from the stock market. This is no surprise, the markets work off information, any information. With Apple things are a bit different. To the general public, the people who buy computers Steve Jobs (to borrow a overused cliché) is Apple Inc. The two are inseparable. An unhealthy Steve Jobs means an unhealthy Apple. An unhealthy Apple means a fading star in the tech sector.

But there is more than stock value in this situation. There are the users to consider. Apple has a lot of fans but the delineation between Apple fans (Mac and iPhone users) and people who believe in Steve Jobs is a murky line at best. Do you own an Apple product because you believe in Apple or because you believe in Jobs? The likely answer is that you like the product first. But the reason you trusted the product is because you believe in Steve.

This is Apple's biggest mistake, Steve's most obvious hubris. Steve didn't rescue Apple without a lot of help. Steve didn't take Apple from a marginal computer company to a major consumer electronics corporation alone. But people wouldn't know that from the PR. If you listened to Apple you'd get the idea that it was all due to Steve Jobs influence. You'd get the idea that every product, every software update, every application carried the personal blessing of Steve Jobs. On a logical level you know this is ridiculous. There isn't enough time in the day and if Steve was that involved then the Cupertino campus should be searched for Kryptonite because when Superman feels ill there's only one reason.

Part of the problem is just human nature. It is human nature to assign too much credit to the leader while giving the people working with the leader short shrift in the credit department. Joe Montana isn't Joe Montana without the offensive line on front of him. And Steve Jobs doesn't accomplish the turnaround at Apple without a ton of help from people around him.

That Steve had a ton of help, that there were other key players at Apple, is a notion that was never really pushed. No problem when Steve is (relatively) fat and healthy but a big problem now that Steve is sick. It isn't just the stock price that will be undermined but a lot of faith in Apple from the users will be going out the window as well. You might find yourself a little hesitant to buy that next Mac because you're not sure that Apple will be the same company after Steve Jobs leaves.

That is the real problem, by so publicly making himself the single most important factor in Apple's success. is that Steve is too closely tied to the public perception the company. That isn't fair to the users or the others that worked so hard for Apple to reach the level of success the company is currently enjoying. The bright side is that it is a safe bet that Steve has surrounded himself with supremely competent individuals, individuals that will be able to carry on with aplomb in his absence. The sad part is, because of the carefully cultivated cult of Jobs, everyone else will be forced to prove their competence under intense media scrutiny.


It didn't have to be this way. If Steve had stepped back from the spotlight a little bit on occasion things wouldn't be so uncertain. If Apple had forced other execs into situations where they were exposed to the public people wouldn't be feeling so uncertain about what a Steve Jobs' leave of absence means. They'd be worrying about Steve instead of about Apple as a company.



  • Very well said, Mr Seibold.

    This is a very important opportunity for Apple to show that it’s more than Steve Jobs. It needs to keep the big announcements coming and show us the faces behind them. That should be Tim Cook’s goal.

    If Apple doesn’t make any significant product releases while Steve’s away, then it is dead without him. And these need to be of the magnitude of an iPhone nano or Mac netbook; Mac mini refreshes won’t cut it.

    Chris Howard had this to say on Jan 15, 2009 Posts: 1209
  • I agree with both Chris’s.

    Beeblebrox had this to say on Jan 16, 2009 Posts: 2220
  • So to those of us in the know, Steve Jobs’ retirement (to enjoy the remaining HALF of his life, hopefully) will be a buying opportunity as Apple stock swoons momentarily from skittish low-info investors.

    Yes, the fuzzy succession picture at Apple is unfortunate.  But contrast that to the much more orderly hand off that took place in Microsoft, where of course the problem is the orderly hand off handed off to a most disorderly minded buffoon.  As fuzzy as the Apple succession scenario may appear, anyone of Cook, Schiller, Oppeheimer, Ive, or the few other names bandied about is certainly more reassuring than anointed heir apparent Balmer whose only qualification for his current position is that he was Bill Gates’ college buddy.

    tundraboy had this to say on Jan 16, 2009 Posts: 132
  • “will be a buying opportunity”

    Is there any time that the fanboys DON’T think is a buying opportunity for Apple stock?

    When the stock tanks, that’s a time to buy.  When it goes up, that’s a time to buy.  When Steve Jobs is CEO, that’s a time to buy.  When Steve Jobs leaves, that’s a time to buy.

    Is there never a good time to SELL Apple stocks?

    Beeblebrox had this to say on Jan 16, 2009 Posts: 2220
  • Yes, when you are ready to get your money out, hopefully at a time when it is up. If you were in it for the short term, you bought several thousand shares and want to make a few dollars a share. Or you need to get your money out before the company folds so you can salvage some of your investment. Pretty much the same as any other investment, any other silly questions? smile

    Wundryn II had this to say on Jan 16, 2009 Posts: 11
  • “Pretty much the same as any other investment, any other silly questions?”

    Ask the fanboys if Apple stock is pretty much the same as any other investment.  Like Microsoft or IBM.

    Beeblebrox had this to say on Jan 16, 2009 Posts: 2220
  • My purchasing of Apple products is not dependant on who is running the company now and it never was.  It is silly to think that people buy because of Steve and I can prove this.  Just ask people ‘Do you know who Steve Jobs is?’  You will be surprised at how many people have never heard of him, BUT they have heard of Apple.  Only the fan boys really know who Steve is and they will still continue to buy the products regardless be cause they are ‘Apple Fans’.  It is in fact very derogatory of all the products that Apple sells to say that they won’t sell if Steve is not the CEO.  These products sell themselves, no more so now with all the press and coverage the iPhone has received.  We bought Apple products before Steve and sometime in the future we will buy them when he has left Apple.  He is a great man BUT he is not as important to sales as you think.

    Are Pixar and Disney worrried?  Have you seen any fall in their stock?  Steve is the biggest Disney shareholder and a board member.  I assume he is taking the time off there as well.  All this stock movement as you rightly say is down to idiot analysts!

    Parky had this to say on Jan 18, 2009 Posts: 51
  • RayCon, I don’t think anyone is suggesting Apple magically create and releae a product in just a few months.

    Rather we feel Apple has these products almost ready to go and should not delay their release until SJ is available. There is a strong suspicion that this kind of thinking occurred at MWSF.

    Apple needs to prove it is more than SJ and the best way is to release a significant product. That could mean releasing one they’ve been sitting on, accelerating one already in the pipeline, such as the strongly rumored (and logically necessary) iPhone nano.

    Chris Howard had this to say on Jan 19, 2009 Posts: 1209
  • I think you’re right Raycon about the “awesome new products” line but I don’t think it was Steve who said it. I think it was said during a recent quarterly conference call, either Q3 or Q4 last year… anyone remember? And who said it? (lemme go search…)

    Ok, I think this is it:

    And I don’t think anything Apple has released since fits that excitement. All we’ve had is new MacBooks, the 2G iPod touch, a new iPod nan, and LED displays.

    However, you get the feeling that there’s still something big to come.

    It’s a bit of a catch for Apple. If they coincidentally can’t announce “it” until after Steve returns, it will look like they waited and are dependent on SJ. Unless they then deliberately delay it longer so it doesn’t look like that. But then they slip back nearer to the pack.

    (oops, if I keep writing I won’t have anything to write in my piece this week - which is around this whole idea.)

    Chris Howard had this to say on Jan 19, 2009 Posts: 1209
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