The announcement that Steve Jobs has been named interim CEO of Apple Computer means that the company is "treading water" and unlikely to make substantive changes, according to one industry analyst. But a second camp cautions against reading too much into the move by the newly revamped board of directors at its first meeting.
Whatever the thinking, there seems to be agreement that the action, taken last week, is hardly dramatic or surprising given that Jobs has effectively been running the company he founded in 1976 since Gil Amelio was ousted in July. Apple expects to hire a new CEO by the end of the year.
"I think part of the problem is that they can't find anybody responsible to take the job," says analyst Roger Kay of IDC. "You become the head of a company that's going south, what does that do for your resume?"
Apple announced a US$56 million loss in the third quarter of this year, which ended June 27. The announcement came on the heels of the departure of former CEO Gil Amelio in July and news that Microsoft would pump $150 million into Apple to try to help revive the ailing company.
But how far south Apple might continue to go remains to be seen and analyst Tim Bajarin of Creative Strategies, says it's too soon to ring the death knell. Moreover, the board's decision to name Jobs interim CEO is "a legal response to a fiduciary responsibility."
"You've got to be careful to not read too much into this," he says, noting that the board of directors, on which Jobs also serves, has a legal responsibility to put an employee of the company in charge during the search for a new leader.
Jobs had been working as a consultant to Apple, and according to a company statement made when Amelio resigned, was to be involved in production strategy, marketing and sales strategy and business partnerships.
Soon after Amelio's departure, however, Jobs released a memo to employees outlining plans to streamline spending. A halt was placed on sabbaticals, stock options became the main form of compensation beyond salaries and executives agreed to give up current and future cash-bonus plans in exchange for additional stock options.
Jobs also led the decision by Apple to cease agreements allowing competitors to produce and market Macintosh clones - a move some analysts view as tantamount to driving the last nail into the company's coffin.
"They have hard decisions to make, but they haven't made any of them. They laid off people," says Kay, himself a Macintosh user. "But the clone decision was really a disaster and that's the major decision they've made since Amelio left. Getting a new board is all well and fine, but that doesn't mean that they have done anything."
He calls decisions Jobs has made thus far "sheerly baffling" and suggests that the company needs new leadership, not a return to its past leadership.
Jobs was the board chairman when he left Apple in September 1985, three months after the company posted its first-quarterly loss, and not long after his relationship with president and CEO John Scully went sour. Soon after, Jobs started Next Software, which Apple acquired in December 1996 for $400 million.
Bajarin says he's heard nothing to suggest that Jobs is interested in being named CEO and has, in fact, said he doesn't want the job. He does expect that Jobs will continue to play a major role in the company.
"I believe that he will let whoever is the CEO function as a true CEO, but I believe his influence on the board will continue to be as it is," Bajarin says.
The board also announced that it expects to name Amelio's successor by the end of the year, which was the first indication of a likely timeframe. The executive search firm Heidrick & Struggles has been hired to help find a new CEO.
Apple announced the board's appointment of Jobs as interim CEO in a brief statement posted on its Web site. The statement says that the board "formalised" Jobs' role with its decision. The careful wording of the announcement is a sign that the board sought to acknowledge that Jobs "was basically the one who was driving the direction of the company," says Bajarin.
Apple spokeswoman Katie Cotton says that's why the statement was worded in that manner.
"The fact that he's been named interim CEO is an indication of the role Steve has been playing at the company," she said.
Cotton says that "the search (for a CEO) is going well."
Asked if it is likely that Jobs will wind up on the list of candidates for a permanent CEO, she said, "I'm not going to talk about hypotheticals or what might happen."