Apple's Credibility Problem

Jan. 6.09 | About: Apple Inc. (AAPL)

For some time now, there has been speculation that Steve Jobs was sicker than either he or Apple (NASDAQ:AAPL) wanted to admit. At first, the company said that he simply had “a bug,” and then when the company announced that he would not be doing his usual keynote speech at Macworld — a speech so associated with him that it has come to be known as a “Stevenote” — the company denied it had anything to do with his health. Now, we know that this was untrue. Steve himself has confirmed that he is unwell as a result of a “hormone imbalance,” and that he is working on getting better.

Before anyone flames me for not caring about the man or his family, or for prying into what should be personal affairs, or for being “ghoulish” — as someone accused me of being the last time I wrote about the Apple founder’s health — let me just say that I have nothing but respect and admiration for Steve Jobs and what he has done for Apple, and I hope that he gets over his recent health problems and lives a long and happy life. But that doesn’t mean his health, or lack thereof, isn’t of public interest.

I’ve said this before, and I’ll say it again. Kara Swisher and others can argue that his health is no one’s business, and that’s a very sweet sentiment, but it’s just plain wrong. As John Byrne of Business Week noted on Twitter yesterday, there is a premium of anywhere from 15 to 25 per cent built into Apple’s share price because Steve Jobs is the CEO. If he were to disappear, it would remove billions of dollars in market value overnight. If that doesn’t qualify as a “material fact,” then I don’t know what does.

If it’s material, then Apple has to disclose it. And the statement from Jobs is effectively an admission of that. By extension, when the company said he wasn’t sick — and got CNBC to repeat this assertion — it was putting itself at risk of breaching SEC disclosure rules. But now that Steve has come clean everything is settled, right? Hardly. If anything, Apple’s wishy-washy approach to this whole issue over the past few months raises more questions about the company’s credibility than it answers.