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Archive for the ‘Economics’ Category

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Yeah, OK. He’s not completely “jobless,” per se. After resigning as Apple’s CEO, Steve Jobs is taking role as Chairman of the company’s board of directors; Tim Cook is now Apple’s new CEO. His resignation has been all the talk for the past twelve hours on major news networks and economists are already trying to put in their two cents as to what will become of the world’s most valuable company. (Well, it’s now back down to the #2 spot on the stock market because of its recent hit in stocks.)

Those who play the stock market game are already starting to panic over his resignation; after all, Steve Jobs is seen as the very soul of Apple Inc. since he had retaken over the company just when it was near bankruptcy and had set it back on track to become one of the greatest financial successes in history. Apple had taken a blow to extended trading by 7%, today.

Are shareholders overreacting to Steve Job’s resignation? I would indeed think so. People are making these headlines appear as if Steve Jobs is completely retiring from the company all together, which is obviously not the case. As chairman of the board of directors, he will still be in a position to provide input into company decisions. What? Do people honestly think Tim Cook is going to be left all alone to run Apple Inc. with little insight as to where to take company next? Of course not.

Besides, Tim Cook already has a good history with the company. He joined the company only a year after Steve Jobs had reclaimed the company and has been working along side him ever since. In 2004, Steve Jobs had been diagnosed with a rare cancer and was on leave for a month; during this time, Tim Cook was temporarily in charge of Apple Inc. and its stock had seen a significant increase during this single month. Cook has always been the man for the job whenever Mr. Jobs had taken medical leave, and I don’t think this time is any different.

Apple’s most recent hit to the stock market was expected — fairly inevitable. It’s natural for consumers to respond hastily and sell stock as soon as possible without knowing what lies in store for the company. But what about the intermediate term after Steve Job’s resignation? The shock will be short-lived, and then Apple will reclaim consumer confidence in its company by continuing to perform well under Tim Cook’s supervision. Thus, I think we’re bound to see consumers start buying Apple’s stock again in a short amount of time — that’ll be the aftershock; the media attention will only get individuals to pay closer attention to where the company goes, and shareholder confidence in the company will be reinforced. (Especially since Apple already has an agenda of products scheduled for release in three years’ time.) In no time at all, Apple Inc. will be back on top of the world.

But what about the company’s rivals? The most notable one is South Korea’s Samsung, which saw a 1.58% increase in its Stock Price Index hours after Steve Job’s resignation. Investors (again, amidst the panic) are now looking for the potential company that will trump over Apple Inc. Samsung and Apple have been in legal battles for the past few years over product hardware, software, and supplies — particularly related to smart phone competitiveness. But this is exactly why I myself¬†would not be selling my Apple shares & immediately thrashing it into new hands. Apple is a large company; a large company that runs on many wheels, not just one. It is also a successful company because it is innovative. The company is competitive in not just smart phones (which is pretty much ALL of Samsung…), but also in the music industry, hand-held devices, computers hardware and software, etc. The fact that Apple Inc. can bring so much to the table in terms of what they offer in products is what makes them such a highly valued company. Out of all the companies competing in the electronics industry, I doubt Apple would be the first to run out of ideas.

This news of hasty stock decisions by shareholders, however, could spark a new round of competition between the bitter rivals in electronics. Apple Inc. is, indeed, becoming the world’s monopoly for electronic devices. Would some competition between the two be a good thing for the global economy? Definitely.

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