7 challenges in front of Apple

It is always tough to replace a leader. And it’s all the more tough, when the leader is an icon like Steve Jobs: the man who signifies his company for most. Other than, may be Bill Gates, no other CEO commands the following that Jobs has.

Often called the prophet of personal computer revolution, Jobs letter to his employees stating that he would take himself "out of the limelight" for six months after learning in the past week that his still vaguely defined health issues are more complex than I originally thought," has it seems conformed the worst fears of the technology industry. There has being rumours about Jobs’ health, a pancreatic cancer survivor.

With the company's driving force taking a four-month medical break, stormy weather seems to be looming over the company's future. Being the face of company which he co-founded in 1975, Apple may have to reel under tough times to cope up with Jobs absence.

Task seems tough for Tim Cook, who will oversee the company while Jobs takes medical leave. Cook, 48, had also filled in for Jobs before, during his cancer treatment in 2004. Here are some of the critical challenges that Apple will have to deal with without Steve Jobs.

One of the biggest challenges for Apple as well as the interim CEO is Jobs himself. As, to many people, Apple is Steve Jobs. In the 33 years since he co-founded Apple, Jobs has attracted the fervent devotion of his followers -- the Mac faithful, and more recently, iPod and iPhone fanatics. To them, Steve is a secular messiah; to his detractors, a cult-leader.

Apple's unmatched record of hit products has only been achieved under the famously tyrannical leadership of Jobs, whose obsession with sleek design and the hard to define "cool" factor of his gadgets is unique in the corporate world. Again and again, it is this aesthetic, and Jobs' commercial success exploiting it, that have distinguished Apple products from so many copycat competitors.

Investers

The markets have forever been hyper about Steve Jobs. As some say: Jobs sneezes, and Apple's share prices drop. This time too the markets didn't respond any differently. The company's share price dropped as much as 10 percent on the announcement of his medical leave.

There are also speculations that Apple Inc probably will be sued by investors unhappy with the company's about-face on the health of its visionary chief executive. Analysts and investors complained that Apple was slow to disclose Jobs' true medical status and to form a succession plan after his 2004 cancer treatment because of his crucial role in vetting the company's forward-looking designs.

However, legal experts said that the law is not clear on what duty the company has to disclose personal medical information of its CEO.

Also, in case if Jobs is not back at the helm and he misses Apple's own World Wide Developer Conference, analysts fear that share price will again tumble.

Need a product blockbluster

This year's Macworld had little surprises for Apple lovers. According to an analyst in San Francisco, "There were some innovative products, but no true blockbusters. People were bullish going into it, and now they're kind of taking money off the table."

Also, many analysts believe that Apple has no breakthrough announcement to make after the launch of its iconic device 3G iPhone. In 2008, Apple launched world's lightest and slimmest laptop, Macbook Air, at MacWorld. However, this year's Trade show saw no big unveiling.

Also, Jobs is an elite product developer whose name is on the patents for most of Apple's key products, including most notably its iPhone and iPhone 3G smart phones. Analysts fear that the lack of clarity over who will hold the reins in coming years could affect the company in many ways, including whether it can keep coming out with popular products like the iPod and iPhone.

Recession

The sudden absence of Steve Jobs couldn't have come at a more tough time for Apple. The troubled economy and weak consumer demand are bound to make the task of the interim CEO more difficult. Both economy and consumer spending seem to be going down.

According to figures from analyst firm Gartner, Apple's share of the US computer market fell to 8 per cent during the fourth quarter of 2008 from 9.5% in the third. It seems Apple is losing out to cheaper models thanks to the global recession.

Also, shares have fallen from a May 2008 high of $192.24, on worries about Jobs' health and the impact of the economic recession on demand for Apple's premium products.

Apple watchers are raising questions about what's really behind the swing in sentiment about the nature of Jobs' treatment in such a short period of time. Only last week, Jobs told Apple employees he was undergoing simple treatment, and he will stay on the job. A week later, Jobs disclosed that his treatments are now much more complex than expected, and require he take an extended leave of absence.

No succession Plan

The company remaining tight-lipped about a succession plan has only worsened the matter further. Though Apple named chief operating officer Time Cook as Jobs' interim successor, the paucity of details has not been taken too kindly by some Apple watchers.

"Basically, Apple has done everything wrong from a succession standpoint," said Marshall Goldsmith, author of the best-selling books on corporate succession plans.

Apple tried to answer the succession question during the recent Macworld developer conference in San Francisco, but the effort fell flat. The keynote featured a bevy of executives, most notably Senior Vice President Phil Schiller, who took over for Jobs as keynote presenter, making him an instant heir-apparent to some. Meanwhile, more than a dozen engineers and Apple vice presidents also got some stage time in one form or another.

Apple's behavior of late has made analyst wonder whether Apple even has a succession plan to begin. This despite the fact that the company is often praised by equity analysts for its deep bench.

Falling Sales

According to a recent report from research firm IDC, Apple has slipped from third place to fourth in US PC market share. The Mac producer is estimated to have shipped about 1.25 million computers to the country, dropping it from its previous position and lowering it from 9.1 per cent market share in the summer to 7.2. The company's sheer unit growth has also cooled from 32 percent year-over-year in summer to 7.5 percent.

However, Apple Inc reported a stronger-than-expected 26 per cent rise in quarterly profit in October 2008, spurred by strong sales of its 3G iPhone.

Apple posted a six-fold increase in iPhone shipments during the September quarter, the first since it released a faster, next-generation model. The company said it sold 6.89 million iPhones during the quarter, outpacing Blackberry-maker Research in Motion Ltd.

However, in India iPhone sales have not been particularly high. According to a media report, Apple has been able to sell no more than 12,000 iPhones in India as against an inventory of 50,000 that its two resellers in India -- Bharti Airtel and Vodaphone Essar -- had piled up.