Is Steve Jobs irreplaceable?
There’s no doubt that Steve Jobs made Apple what it is today. 15 years ago the company was ailing financially and received a bail-out from—Microsoft. It had been a niche supplier of computers for schools, never penetrating the business market. Investors had written it off. The stock went nowhere for a long time
Then came the iPod, iTunes, the iPhone, and the iPad. Apple redefined the music business, which had been in flux due to Napster and file-sharing. Apple dominated the smart-phone market, turning “app” into a word, and making everyone’s phone unique. And it created a whole new class of computer, the tablet, via the iPad.
Unquestionably, Steve Jobs was critical to all of these innovations. Undoubtedly, he was intimately involved in planning of each of these creations. But just as clearly, Apple is now a cash machine. It has no debt, $30 billion in cash, annual sales of $100 billion, and a 30% profit margin. It’s sales growth may slow—indeed, the law of large numbers says it has to slow—but slower isn’t stopped.
Steve Jobs has been a transformational figure—someone who re-made an entire industry. He has been compared to Walt Disney, whose vision fundamentally changed the leisure industry. After Walt Disney passed on, his company never had the same magic. But it has still been highly profitable over the years.
Charles DeGaulle famously quipped that the graveyards are full of indispensible men. Steve Jobs may be one-of-a-kind, but Apple will continue.
Douglas R. Tengdin, CFA
Chief Investment Officer
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