Steve Jobs was the founding father of the US multinational Apple Computers along with Steve Wozniak. The share value of Apple increased tenfold from $10 to $100 when Steve Jobs just took over the reins after a 12-year absence. Such is the customer confidence Jobs had built around himself.
When the iPhone was introduced to the market, the company set a record of sorts when the shares jumped to about $97.60 per unit of share. This iPhone is a combination of the ordinary mobile phone and the iPod and can be used to listen to music and watch videos at the convenience of a mobile phone. The iPod and other music devices alone constitute 50% of Apple’s sales. It should be noted that Cingular Wireless of the AT&T Corporation offered to distribute the gadget before even the model was available for visualization.
The introduction of the iPhone marked a pivotal moment in the tech industry, revolutionizing how consumers interacted with mobile devices. It combined the functionalities of a phone, a music player, and an internet communicator, setting a new standard for smartphones. The anticipation and subsequent release of the iPhone showcased Jobs’ ability to understand and shape consumer desires, pushing technological boundaries and creating products that people did not even know they needed until they saw them.
Legal Troubles and Potential Implications
But what if government investigators implicate Jobs in Apple’s backdating-of-stock-options scandal?
The Cupertino, California-based company’s own investigation, led by Apple director and former U.S. Vice President Al Gore, exonerated the CEO. While Jobs had been aware of and recommended some backdating, the investigation said he hadn’t benefited from the grants and didn’t “appreciate” the accounting implications, which in the end forced Apple to reduce its profit over the past nine fiscal years by $84 million.
Jobs clearly would have benefited from a suspect grant in 2001 if it hadn’t been subsequently canceled. The option was recorded as approved at the now-famous board meeting that didn’t occur on Oct. 19 of that year. Apple recorded $20 million in stock-based compensation as a result of this grant.
That option and another grant to Jobs were canceled in early 2003, when the CEO was given restricted stock totaling 10 million shares, adjusted for a split. This maneuver was seen by some as a strategic move to align Jobs’ incentives with the long-term performance of the company, though it also raised questions about corporate governance and the transparency of executive compensation.
Worst Case Scenario and Market Reaction
Federal investigators may not be as kind to Jobs as the Gore committee. In early October, several news organizations, including Bloomberg, reported that U.S. prosecutors in San Francisco were looking into Apple’s backdating. Legal experts say they expect that the U.S. Securities and Exchange Commission also is looking into the company’s actions.
If the government decides Jobs isn’t so innocent, Apple directors will face a dilemma. Do they fire their indispensable man? Other companies caught up in the backdating mess have.
Firing Jobs would undoubtedly send Apple shares plummeting as investors who consider Apple and its CEO as one bail out as quickly as they had jumped aboard.
When the Gore report came out Dec. 29, for instance, relieved investors pushed Apple shares 4.9 percent higher to $84.84. Jobs’s latest public appearance flashing the iPhone bumped up the stock from $85.47 on Monday to yesterday’s close of $95.80.
Transformation and Rebranding of Apple
Jobs has changed the image of Apple from a niche manufacturer of personal computers to a company with its ear to the latest in consumer electronics. Jobs played to this idea this week when he changed the name of the company from Apple Computer Inc. to Apple Inc., reflecting the company’s broader focus beyond just computers.
Investors clearly expect the new iPhone to build on the success of the iPod, which accounted for $9.6 billion of Apple’s $19.3 billion in sales in the year ended last Sept. 30, including iTunes music sales and iPod services and accessories.
The introduction of the iPhone was not just a technological innovation but also a significant rebranding effort for Apple. It positioned the company at the forefront of the consumer electronics market, blending cutting-edge technology with sleek design and user-friendly interfaces. This rebranding was pivotal in changing public perception and broadening Apple’s appeal beyond its traditional base of creative professionals and tech enthusiasts.
Product Innovation and Legal Challenges
Two versions of the new cell phone with a built-in camera, Web browser, and touch-control screen went on sale in the U.S. market in June for $499 and $599. The more expensive model has twice the capacity of the cheaper one.
Cisco Systems Inc. has sued Apple over the rights to the iPhone name. Still, even with another name, the device would be one produced by Apple and Jobs.
The lawsuit from Cisco Systems over the iPhone name highlights the competitive and often contentious nature of the tech industry. Despite the legal challenges, Apple’s brand strength and Jobs’ leadership ensured that the product launch proceeded successfully, demonstrating the company’s resilience and strategic agility.
Potential Consequences for Apple’s Leadership
Which brings us back to the problem Apple directors would face if the government implicates Jobs more deeply in the backdating business. Jobs has told the CNBC financial TV channel that he is “to some extent” responsible for Apple’s backdating.
If the board has to fire Jobs, the perception among investors might be that Apple will never be the same. Start placing your bets.
The potential firing of Jobs would not just be a loss of a key executive but also a symbolic blow to the company’s innovative spirit. Jobs’ vision and leadership were seen as integral to Apple’s identity, and his departure could have led to a crisis of confidence among investors, employees, and consumers.
The Legacy of Steve Jobs
Steve Jobs’ impact on Apple and the tech industry at large cannot be overstated. His return to Apple in 1997 marked the beginning of a period of unprecedented innovation and growth for the company. Products like the iMac, iPod, iPhone, and iPad redefined their respective markets and set new standards for design and functionality.
Jobs’ philosophy of integrating hardware and software, his emphasis on user experience, and his ability to foresee and shape technological trends made Apple a leader in multiple industries. His approach to product development, marketing, and brand management created a loyal customer base and a strong corporate identity.
Conclusion
Steve Jobs’ leadership transformed Apple from a struggling computer manufacturer into a global powerhouse in consumer electronics. His vision and innovation drove the development of groundbreaking products that changed the way people interact with technology. Despite legal challenges and potential implications from the backdating scandal, Jobs’ legacy remains one of extraordinary achievement and lasting impact. The company’s success under his guidance highlights the importance of visionary leadership in driving technological advancement and corporate growth.