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Apple : Time to value the biggest asset Jobs gave to the company

Jan. 17, 2011 12:04 PM ETAAPL
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Today, a media release announced that Steve Jobs took another medical leave of absence to focus on his health. However, he will remain the CEO of Apple and will only be involved in strategic decisions, while Tim Cook will then handle the day to day business. I assume that concerning the organization of the company, it will probably not change much from what has already been in place in the last several months. Tim Cook was already taking charge of the day to day business and Steve Jobs was probably mainly involved in strategic decisions. Now, you could say that it just becomes official with the medical leave of absence.

What will happen next?

The structure of management described in their latest media release will probably become official in a couple of months, and it wouldn't be a surprising turn of event if Steve Jobs stepped down as a CEO and move to Chairman of the Board, letting Tim Cook become both CEO and Board Member. The market will probably sell on the news, but this media release may help ease the probable switch.

And .... ?
The market believes that Steve Jobs is Apple and Apple is Steve Jobs. It was still true a couple of years ago, however this idea is completely wrong today. It is clearly the time to value the biggest asset Steve Jobs gave to the company : a way of thinking, a way of working.

A lot of people think that Apple succeeded mainly thanks to Steve Jobs, for he had the idea to create the Ipod, the iPhone, the iPad etc. They are missing the true big picture around the company. What really generated the success of Apple is the new culture in the company : the culture of success and quality.

What Steve Jobs provided to the company :
- A Top level Management in the industry  : Tim Cook as a COO, Jon Ive in charge of Design, Peter Oppenheimer as a CFO, Ron Johnson as SVP of Retail etc. All these people are the best available in the industry. They worked with Steve Jobs for already a couple of years and have now the "Steve Jobs' way of thinking".
- A Company culture of success and quality : Before Steve Jobs joined Apple again, the company wasn't focused, and you couldn't call Apple products quality products at that time. When Jobs came back, he helped the firm refocus and created a new identity, encouraging the development of a new culture of success and quality at every level of the company. Their target : meet actual demands and (future..) new demands of customers with top level products that would provide previously unmet user experience. This approach is now a way of working and thinking at Apple.

The design quality isn't the result of Steve Jobs ideas but the work of Jon Ive's teams, the cost structure of Apple that allows such strong margin and cost control isn't the effect of Steve Jobs' work but Tim Cook's team. As for the shopping experience or the experience when simply visiting an Apple Store is the result of Ron Johnson and his team's tremendous work. There are many other examples showing that today the great success of the company and concepts come from the entire Management and Apple employees and not only from one man.  To me, It is the legacy we need to remember concerning the great work Steve Jobs did and still does now as a CEO.

The market seems to ignore, forget or undervalue that aspect, and keeps thinking that Apple IS Steve Jobs. They will only find out it isn't true when margin, sales growth and quality new product releases will continue to hit the market with or without Steve Jobs as CEO of Apple ( we need to keep in mind that if Jobs resigned as a CEO, it would be likely that he would become the chairman of the board).

If a dip results from this news, Apple would become a wonderful long term buying opportunity. If the switch of power and responsibilities becomes even more official (with Jobs leaving his position of CEO) and generates more selling, it would become an even bigger buying opportunity.

There is however one thing for sure : It is very likely that Tuesday 18th January 2011 earning figures become historic (in a good way). The timing of the announcement of Jobs' medical leave may not have been random,  since the consequence of the news on the market has partly been offset by the release of Apple's amazing earning results.

Anyways, I wish -we all should wish- Steve Jobs a fast recovery as well as strength and peace to get trough his health issue. God Bless him and his family.

Disclosure : Long Apple

Disclosure: I am long AAPL.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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