Tuesday, January 18, 2011

What Apple (NASDAQ:AAPL) Loses without Steve Jobs

The murky cloud that always has surrounded an announcement by Apple (NASDAQ:AAPL) or Steven Jobs continues on, as the latest revelation that Jobs will be taking his third leave of absence over the last seven years didn't have any details included with it, although the assumption is it is connected to past ailments.

Needham says, "Apple announced that for the third time in seven years, Steve Jobs was taking a medical leave. The first in 2004 was to recuperate from an operation for pancreatic cancer while the second in 2009 was for a liver transplant. We think it’s reasonable to infer that the current leave is related to the previous two.

"As arguably the greatest innovator in the past century, Jobs has successively disrupted and redefined a series of industries, starting with the iPod in 2001, the iPhone in 2007 and most recently, the iPad in 2010...What Apple loses, then, in Jobs absence is the ability to redefine markets and industries going forward—in short, the option value of future innovations."

For today, even though the share price of Apple is weighed down on the leave of absence announcement by Jobs, the expected solid quarterly report will sure to cause at least temporary relief from the situation.

In anticipation of that, the share price of Apple has gradually rebounded after taking a big hit early in the trading session.

Needham & Company reiterates a "Buy" rating on Apple, which was trading at $339.37, down $9.11, or 2.61 percent, as of 12:20 PM EST. Needham has a price target of $375 on Apple.

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