Steve Jobs, after months of concern about his health and weight loss, said he is suffering from a nutritional ailment and that he plans to remain Apple Inc’s chief executive officer during his treatment.
“I have been losing weight throughout 2008. The reason has been a mystery to me and my doctors,” Jobs, who turns 54 in February, said today in a statement. “After further testing, my doctors think they have found the cause — a hormone imbalance that has been ‘robbing’ me of the proteins my body needs to be healthy.”
Jobs’s decision to talk openly about his health caps months of speculation that he may have to hand the CEO job to Chief Operating Officer Tim Cook Jobs, who had successful surgery for a form of pancreatic cancer in 2004, is seen by investors as critical to Apple’s future. After returning to the company in 1997, he turned the money-losing Macintosh computer maker into a consumer-electronics juggernaut with the iPod and iPhone.
“Steve is probably Apple’s greatest asset and its greatest risk,” said RBC Capital Markets analyst Mike Abramsky, who rates Apple “sector perform” and doesn’t own the shares. “This will alleviate a lot of the major concerns about him having something more serious.”
Apple, based in Cupertino, California, rose $3.09, or 3.4 per cent, to $93.84 in Nasdaq Stock Market trading at 10:26 am New York time. The shares fell 57 per cent in 2008.
“The remedy for this nutritional problem is relatively simple and straightforward,” Jobs said. “I will be the first one to step up and tell our board of directors if I can no longer continue to fulfill my duties.”
Although he has started treatment, Jobs said his doctors advised him that it may take until at least late spring to regain weight.
More From This Section
“There’s certainly a big sigh of relief that it’s not his cancer coming back,” said Michael Obuchowski, a portfolio manager at New York-based Altanes Investments LLC, which started buying Apple shares in 2006. “There’s just relief from knowing what is going on. For any investor, not knowing is the worst situation we can be in.”
Jobs, who co-founded Apple in 1976, transformed the company by updating the Mac with sleeker and thinner models, including the iMac in 1998 and the ultra-thin MacBook Air notebook last year. His focus on stylish and simple-to-use gadgets won over millions of buyers, turning the iPod media player and iPhone handset into best sellers.
“It is widely recognised both inside and outside of Apple that Steve Jobs is one of the most talented and effective CEOs in the world,” Apple’s board said in a separate statement. “If there ever comes a day when Steve wants to retire or for other reasons cannot continue to fulfill his duties as Apple’s CEO, you will know it.”
The board said Jobs has its “complete and unwavering” support. Directors include former US Vice President Al Gore and Google Inc CEO Eric Schmidt.
Speculation about Jobs’s health resurfaced in June after he appeared visibly thinner at Apple’s conference for developers. The company said at the time that he was suffering from a “common bug” and declined to discuss his health, saying it was a private matter. The speculation persisted as he continued to appear frail at company events later in the year, and investors responded by punishing the shares with each new report of Jobs’s ill health.
On October 3, an erroneous report on CNN’s iReport.com site said Jobs had suffered a heart attack, sending Apple’s shares down as much as 5.4 per cent and cutting the company’s market value by at least $4.8 billion in the first hour of trading. The shares recovered some of that loss after Apple said the report was untrue.
No Keynote Appearance
Last month, Apple said Jobs wouldn’t deliver the keynote address at the Macworld Expo conference in San Francisco this week -- ending an 11-year run and renewing speculation about his health. Jobs, wearing his trademark black turtleneck sweater and blue jeans, has used the Macworld show to unveil new products, including the iPhone in 2007.
The decision not to deliver the keynote “set off another flurry of rumors about my health, with some even publishing stories of me on my deathbed,” Jobs said today.
The company probably won’t introduce any major new types of products and instead will use Macworld to update its Mac desktops and software, David Bailey, an analyst with Goldman Sachs Group Inc., told investors in a Dec. 31 report.
Apple said Dec. 16 that Phil Schiller, senior vice president of worldwide product marketing, will speak tomorrow at Macworld in place of Jobs. The company also said this will be the last year it participates in the conference.
Hormone Imbalance
“I have given more than my all to Apple for the past 11 years,” Jobs wrote in the letter, which was addressed to the “Apple Community.” “Now I’ve said more than I wanted to say, and all that I am going to say, about this.”
Jobs said in 2004 he had undergone surgery for a form of pancreatic cancer called islet cell neuroendocrine tumor. Neuroendocrine tumor is less common than typical pancreatic cancer, which kills more than 30,000 people in the U.S. annually, doctors said.
The pancreas contains islet cells, which make the hormones insulin and glucagon, which both help keep blood sugar levels within a normal range, said Raji Annaswamy, an endocrinologist at Harvard Medical School in Boston. Neuroendocrine islet cell tumors can cause overproduction of either one, or other powerful hormones such as somatostatin or gastrin, which are involved in digestion.
“An imbalance in any of these hormones might lead to weight loss because of abnormalities in glucose and protein metabolism,” she said.
Slow-Growing Tumor
Tumors such as the one Jobs was thought to have are usually slow-growing, compared with typical pancreatic cancers that originate in the organ’s lining, said Simon Lo, director of the pancreatic and biliary diseases program at Cedars-Sinai Medical Center in Los Angeles. Patients whose cancer is diagnosed early and removed may live 10 years or longer, he said.
“It all depends on how aggressive the tumor is and how early it’s treated,” Lo said in a telephone interview. “Ten years is not unheard of, but that doesn’t mean that most people live 10 years.”
That’s in stark contrast to typical pancreatic cancer, which often kills its victims in six months to a year, Lo said. These cancers can spread extremely quickly to other organs, blocking and disrupting vital functions.
Possible Successors
Cook first came up as a possible heir in 2004 when he led Apple during Jobs’s month-long leave to recuperate from cancer surgery. His position as Jobs’s second-in-command was cemented in November 2005, when he was promoted to operating chief.
Schiller, Chief Financial Officer Peter Oppenheimer and retail chief Ron Johnson have also been cited by investors and analysts as possible successors to Jobs, a college dropout who started Apple in his family’s garage in Los Altos, California, on April 1, 1976, with Steve Wozniak.
During the past year, Jobs has uncharacteristically turned over the stage at new product introductions to his lieutenants. In October, when Apple unveiled new MacBook notebooks, he shared the podium with Cook and chief product designer Jonathan Ive.
While Apple hasn’t announced a succession plan, Jobs told shareholders in March that if he were to leave for any reason, the board could choose his replacement from Apple’s current management team.
Apple will report earnings later this month for its fiscal first quarter, which ended in December.
To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net