As Steve Jobs relinquishes the helm of the world's most valuable company, we look at the challenges facing Apple's leadership team.
In the wake of Steve Jobs's decision to step down as CEO of Apple, the question aimed at the executive team has been: 'How will you keep on making such fine products?' It will be a big challenge – the company is already on one of the longest winning streaks in consumer electronics history, dating back to Jobs's return in 1996.
The first thing to note is that Jobs is not actually leaving Apple. Health problems have forced him to move to the less demanding role of chairman. However, he can still be expected to have plenty of input into what the company brings to market.
In addition, Jobs has already taken three sizeable medical leaves of absence – in 2004, 2009 and he is currently on one that began in January this year. During them all, Apple performed excellently despite repeated shareholder pressure for more information about the CEO's condition.
It is easy to forget the significance of Apple being one of the most stable companies in Silicon Valley. It has a reputation as a pressure-cooker of a working environment while Jobs himself is anything other than a typical CEO. However, look more closely.
Of the ten men who make up Apple's senior management today, nine have more than a decade of service with the company. This is remarkable by the standards of either high technology or retailing. By comparison, average CEO tenure these days is something between five and seven years, across all industries, and trending down.
Apple should therefore, and for a reasonable time to come, be well set to retain the culture of innovation, detail and higher-end retailing that Jobs has sought to impose. He doesn't want for torch carriers in that respect. Moreover, there is no obvious dynastic element, with members of Jobs's family queuing up to control things, which is seen in business schools as the other big threat to near-term continuity.
There are product updates in the pipeline. The iPhone 5 is expected imminently. One network, Germany's Deutsche Telekom, is even taking pre-orders, pre-Apple's launch. Work on the iPad 3 is also well advanced and there will be a new generation of laptops and workstations emerging very soon.
'Apple's product development roadmap stretches into multiple years ahead and has been shaped both by Jobs and by the organisation he built. Jobs' departure won't affect Apple's product portfolio, quality, or competitiveness for a long time – if ever,' Forrester Research Consumer Products analyst JP Gownder has said.
So, where is the pressure point? Obviously, it lies with the competition, but for a company that sets so much store on increasing margins through branding and design the nature of that competition seems to be taking on as much a legal as a shopfloor flavour.
This is not entirely new. Steve Jobs has always been quick to call in attorneys when he feels Apple's intellectual property has been breached. Looking at some recent events – most specifically, the discovery of fake Apple Stores in China – it's hard not to be sympathetic to that view. However things are beginning to move up a notch, setting aside more egregious intellectual property rights (IPR) knock-offs.
In the last fortnight, Samsung, until now a close Apple partner and manufacturer of chips for the company's phones and tablets, found itself forced to pull its new Galaxy Tab 7.7 from the IFA consumer electronics show in Berlin, Germany, when a local court upheld a judgement in favour of Apple's claim that the Korean giant had copied fundamental features from the iPad and iPhone. Similar actions have been launched by Apple worldwide – as have a number of counter-suits by Samsung.
Some analysts now see a broader patent war brewing in the smartphone and mobile computing spaces. In May, Apple itself is understood to have quietly purchased a portfolio of wireless communications patents from Freescale Semiconductor (Freescale has confirmed that the patents were sold but will not formally cite Apple as the buyer).
More recently, Google acquired Motorola Mobility in a move that surprised some analysts. After all, wasn't Google committed to a multi-supplier model based around its Android operating system, so why had it suddenly bought one and thereby threatened to anger other partners such as HTC, LG and Samsung? Again, patents seem to be at the root of the deal.
Certainly, having refined the smartphone market and effectively created the tablet one, Apple feels a need to protect its own IP, but an additional element here may involve fending off the process of their commoditisation. Analysts believe we are not that far from tablets at $99 'giveaway' pricing to products that can sustain such tags.
Maybe then, this is the right time for Apple to make IPR a still greater priority. The company's ability to stay ahead of the curve on design is widely acknowledged. The supply chain is remarkably robust, with Taiwanese foundry TSMC apparently already in place to take over Apple's chip manufacturing from Samsung.
Such battles, though, do have a habit of being even more unpredictable than consumer purchasing patterns – let the litigant beware. *