Will Jobs' departure shake up the mobile industry?

With succession plan, rivals will be 'foolish' to try to take advantage of leadership change at Apple, analysts say

The iPhone. The iPad. Both iconic Apple products have soared in global popularity. Both have led to a mobile computing movement started, arguably, when the iPhone first appeared in 2007.

Perhaps it is more properly called a minor revolution that has forced the public to question its reliance on desktop and laptop computers. However you describe the way the mobile market and IT in general have been affected by the iPhone and the iPad, both products had Steve Jobs as the motivating spark behind their development.

Now that he has resigned as CEO, probably due to lingering health concerns, can his fire still burn inside Apple's engineers, designers and marketers? Jobs is staying on as Apple's board chairman, with former Chief Operating Officer Tim Cook installed as CEO. But is that enough to keep Apple on top with alluring new product designs and technology marvels, much less the business savvy to work with carriers and manufacturers globally?

"His departure will affect parts of the [mobile computing] industry dramatically," independent analyst Jeffrey Kagan said in an email. "Remember, it was Apple that was the leader in changing the music business [with iTunes], the smartphone business, and Apple invented the [touchscreen] tablet computer business. Much of that came from Steve Jobs' vision."

Magical products from a magic-maker

Many will recall that Apple is the company whose CEO called the iPad "magical" in January 2010. The touchscreen device easily came to dominate the global media tablet business, and it now has a market share of more than a 70%, according to IDC.

What perhaps best captures Jobs' impact on Apple, and his imprint on the entire mobile computing industry, is the way he put everything together in a company: brilliant marketing, combined with the ability to find creative managers and designers to do all the heavy lifting.

The first-generation touchscreen iPhone was inspired in its design and software function, but Jobs clearly understood the need to sell the device around the globe. Setting up manufacturing, marketing and business agreements with hundreds of overseas carriers (most speaking different languages) is plain hard work, and it takes a capable manager to find the right people and keep the effort going.

Analysts noted that it took Research In Motion more than a decade to set up the carrier agreements necessary to sell BlackBerry smartphones worldwide, but Jobs and Apple needed less than half that time to put together a similar network of carrier agreements for the iPhone.

Leveraging the powerful carriers

In 2007, Jobs was especially shrewd in negotiating with powerful carriers around the world to provide wireless service for the iPhone. Jobs and his team initially set up an exclusive iPhone deal with AT&T that took advantage of the carrier's universal GSM network (useful for later expansion of the iPhone abroad), forcing CDMA provider and staunch AT&T competitor Verizon Wireless (and lesser competitor Sprint) to sweat it out for years. Verizon finally got a CDMA iPhone 4 in February, while Sprint is reportedly getting an iPhone in the fall.

"Jobs changed the way that phone makers interact with carriers," Kagan noted. "Before the iPhone, carriers ruled. Now, Apple and Google rule."

No big opportunity for Apple rivals

Five industry analysts interviewed after Jobs announced his resignation mostly said that Jobs and Cook, his successor, can continue to inspire and motivate the Apple team during this transition period and beyond. They also said the near term won't necessarily be a time for Google, and Android developers and manufacturers of Android devices to try to seize a market advantage. Analysts held much the same view with regard to Microsoft and its big mobile ambitions but tiny market share with the Windows Phone operating system and its plans for Windows 8 on tablets.

Research In Motion might have the most to gain from a leadership shift at Apple, because of its latest innovations to the BlackBerry, especially the upcoming QNX operating system. RIM's smartphones and its PlayBook tablet have struggled to compete with the iPhone, the iPad and Android products, and the BlackBerry maker has lost some of its vaunted smartphone market share, which was first primarily made up of business users, analysts noted.

"Competitors who think they can exploit Jobs' departure ... are making a mistake," said Gartner analyst Michael Gartenberg in an email. "Apple's design team is unparalleled in the industry and will likely continue thriving under the leadership of Jonathan Ive," Apple's senior vice president of industrial design.

Apple's iPhone, iPad brain trust continues

Ive was described by BusinessWeek in 2006 as the "man behind Apple's design magic." He and Scott Forstall, senior vice president of iOS software (the operating system for the iPhone and iPad), have often appeared onstage with Jobs to introduce a next-generation iPhone or iPad. They are sometimes referred to as the brain trust behind the iPad and iPhone. The real question for Apple is how well they will work together with Cook at the helm, some analysts said.

However, Jack Gold, an analyst at J.Gold Associates, said he doesn't believe there's "any real change that will result from the departure of Jobs. He has set up the teams and staffed them with people who know how to move forward.... Cook has a record of being able to run the company."

Gold said other makers of mobile hardware and software "have an opportunity to catch up, but I don't think that would be directly related to Jobs leaving."

Gold wished Jobs good health, and said he hoped he can stay as chairman a long while to keep inspiring the company.

"CEO transitions for founders are fairly common," he said. "Strong personalities move on. Some seem to have little effect on the company's market position and some don't. In the case of Apple, Jobs has set up a mechanism that allows Apple to move forward without him at the helm day to day."

Carolina Milanesi, a Gartner analyst based in Europe, also said she doesn't expect Jobs' departure as CEO to have much of an impact on the mobile market. "As far as I'm concerned, tomorrow will be business as usual in Cupertino. Apple continues to be the benchmark," she said. "Competitors will be foolish to think that they can take advantage of any momentary loss of direction."

"There is no question that Steve's charisma will be hard, if not impossible, to replace," she added. "But there is more to Apple than Steve Jobs as far as product design, planning and execution."

Kagan, the independent analyst, said that even though Jobs has been a key ingredient behind the iPhone and the iPad, the entire company has had years to prepare for his departure, since the time Jobs was first diagnosed with cancer in 2004.

"If Jobs resigned six years ago, his departure would have been an earthquake," Kagan said. "This time, they have been preparing, so it may just be a tremor."

Still, Kagan acknowledged that it's easy to wonder what could happen. "Steve Jobs drove much of the change in the mobile industry," he said. "What could have changed that won't change now, going forward? Good question. We may never know."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

Copyright © 2011 IDG Communications, Inc.

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