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Apple's CEO resignation makes ripples in China

0 Comment(s)Print E-mail Xinhua, August 25, 2011
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Silicon Valley icon Steve Jobs' resignation from the top managing post of Apple Inc. has left many fans and industry analysts in China questioning the future of U.S. technology firm heavyweight.

Jobs' resignation ranked as the day's top hot topic on Sina Weibo, the country's most popular microblogging site, garnering 1.5 million posts by midday Thursday, just hours after the California-based company announced Jobs would be replaced by Tim Cook as Apple's Chief Executive Officer.

"If Jobs eventually leaves Apple, I will not buy Apple products any more," one Internet user wrote.

Concern for the IT legend's health also abounded.

"At this moment, I'm only concerned about Jobs' health. Wish him good luck in fighting illness and a tranquil period with his family," another Internet user wrote.

Wang Yuquan, chief consultant for market analysis firm Frost and Sullivan's China office, said Jobs' resignation is a serious blow to Apple and casts doubts on the company's innovation capabilities as Apple's success has been driven primarily by Jobs' innovations.

Wang predicted that, without Jobs at the core of Apple, the company could fall from its prime in three to five years.

Jobs, 56, is widely considered a symbol of the Apple brand. At 21, he and Steve Wozniak founded Apple Computer in a family garage in 1976. After a decade-long departure from the company, Jobs returned in 1996 and helped the near-bankrupt Apple hit its stride with powerful innovations in the development of smart-phones and tablet computers.

In August, Apple briefly surpassed Exxon Mobil Corporation to become the largest U.S. company in terms of market value, worth about 337 billion U.S. dollars at the time.

Over the years, however, Jobs' increasingly gaunt appearance spurred speculation about his weakening health. Apple's shares dropped about five percent on the U.S. stock market just hours after Jobs' departure was announced.

"Because Jobs himself accounts for a great deal of Apple's market value, his departure will affect the performance of the company's stock for a while," said Yan Bing, deputy head of Beijing-based Sino-Japanese Institute of 3G Application.

Liu Guanwu, an analyst with Analysis International, said he did not expect Apple's stock performance to improve anytime soon.

In China, the iPhone officially went on sale in October 2009 and the iPad debuted in April 2010. Since then, the gadgets' popularity has been immense and unflinching. Long queues are common at the four authorized Apple stores in Beijing and Shanghai and underground markets also thrive selling smuggled and knock-off iPhones and iPads.

Market analysis firm International Data Corporation estimates that Chinese consumers had purchased at least 800,000 iPads by the end of 2010.

Apple's revenue in the Chinese mainland, Taiwan, and Hong Kong reached 3.8 billion U.S. dollars in the second quarter of this year, six times the amount in the same quarter last year, according to media reports.

Sina Weibo began hosting a special section on Jobs' resignation Thursday and invited Internet users to participate in online surveys on the matter.

In response to the question, "How do you think Jobs' resignation will affect Apple?" more than 2,600 Internet users, or half of the survey respondents, said the company would lose its soul, while 1,789 people, or 35 percent of respondents, said the impact will be limited as long as Jobs stayed with the company.

While 31 percent of respondents polled in another survey said they would be "loyal Apple fans" with or without Jobs, another 49 percent said they still intend to buy the iPhone 5, and 20 percent said they would no longer buy Apple products.

Apple had previously announced that it would launch the iPhone 5 in September this year.

Industry analyst Kang Zhiyi with Donghai Securities said Apple's best-selling products, iPhones and iPads, would not have come out without Jobs. As Jobs will keep a position as board chairman, Apple's development strategy is not likely to be derailed, he added.

Chen Jinqiao, secretary-general of a panel of telecommunications experts with the Chinese Ministry of Industry and Information Technology, echoed Kang's thoughts.

"Jobs' innovations are now deeply rooted in Apple's corporate culture," Chen said. "The company also has a strong team. Cook got credit for running the company well at times when Jobs was on sick leave."

Chen also said Apple faces tremendous challenges from industry rivals and it will not be an easy task to maintain the company's market dominance.

Sun Peilin, an analyst with Analysis International, said many other manufacturers are tapping into the Chinese market in this sector, providing various types of products and reducing Apple's dominance.

In March, Apple rival Lenovo Group launched its first tablet computer, LePad, based on the Android 2.2 operating system. The product, starting at 3,499 yuan, comes in two versions that support WiFi and 3G services.

The second generation of LePad will hit the market in the fourth quarter of this year.

An iPad 2 obtained through authorized channels in China costs 3,688 yuan and supports WiFi, but not 3G services.

Chen Xudong, vice president of Lenovo, said the company will adopt a "multi-model" strategy in its battle with Apple in the tablet computer market and plans to take more than 30 percent of China's tablet computer market over the next two to three years.

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