Steve Jobs[Update: I probably should have specified a timeline for this market reaction. There’s short term and long term. The market punished apple immediately in after market trading, as pointed out below. And yes, a week later, Apple’s stock is actually higher than it was last week, as Gruber points out, BUT that comes after a week where the overall market had a nice upturn. Apple doesn’t look so great in this perspective, where it appears slightly down compared to the market. But clearly, the most impact is going to come long-term, and that game has yet to play out].

With Steve Jobs stepping down as chief executive of Apple, and his leadership of the company apparently at an end, big clouds are gathering over the company’s future: Doubters will ask whether Apple can continue its storied excellence.

With Jobs’ withdrawal, the rap that has always dogged Apple — that its fortunes are too intimately tied to the genius of Jobs  — will come to the fore in a major way.

Even before the company gets a chance to prove otherwise, the stock market is almost certainly going to vote by sending the company’s shares down significantly. (Indeed, today, after Jobs’ resignation, Apple’s stock has already tanked 5.5 percent in after-hours trading.)

It’s far from certain that the resignation of Jobs is fatal, or even a major blow to the company. Apple’s talent pool is deep at all levels: executive, engineering, marketing, supply chain and retail. But it has lost a uniquely talented chief executive, one who charmed on stage with “reality distorting” presentations and inspired a generation of engineers.

Mr. No

Apple carries its special glimmer for a reason. It stems from the amazing design of its products, the focus on quality. And when you asked people where that consistency stemmed from, they inevitably said it came back to Jobs. Jobs was amazing. He liked to say that Apple’s products were “magical,” and if that’s the case, he was the marketing and technology magician behind the curtain.

Jobs was also known as Mr. No. He was adamant in resisting features that weren’t necessary. He’d say no to keyboards, because touch technology was enough — even though the vast majority of smartphones had keyboards and people would have thought it was crazy to drop them (the BlackBerry was then the dominant smartphone). He’d say no to multiple buttons on the front of the iPhone — it needed only one. Before that, he’d said no to floppy disks, and later, to optical drives. And Jobs inspired product guys across Silicon Valley, one reason why it was able to lure great employees.

Even outsiders were inspired. Aaron Levie, 25, founder and chief executive of, a fast-growing Silicon Valley company now reportedly valued at $500 million, said in response to the news about Jobs’ resignation: “That is depression central. That’s half my reason for being in the tech industry — was just watching this guy.” He added: “As a customer and fan of the company and the space, it’s obviously too bad as well. I think they’ll go on, they have a great product, but he was so revolutionary and I don’t think anyone will be able to match that.”

So if Jobs’ guiding spirit disappears from the company, is it possible that the company won’t unravel a bit, that it won’t get distracted?

It has huge challenges ahead. One of them is how to respond to the cloud revolution. Apple has been slow to show leadership in this area. Its iCloud service is still playing catch-up with the cloud initiatives being pushed by Google, Amazon, and even Microsoft. This isn’t trivial. The way apps work across devices, and the way data is stored and accessed by consumers and employees is emerging as one of the most important challenges for huge “platform” companies like Apple.

Jobs became such an icon because he was a rockstar product guy, one who was so devastating to competitors because also had a nose for business and marketing. This sort of mix in a leader is extremely rare, which is why you usually see the initial founders of Silicon Valley startups cede to more operationally focused leaders as the companies mature. Yahoo, Intel and Cisco are examples of this, and are the norm. There are few founders who have made it as far in both realms as Jobs has. Bill Gates, the founder of Microsoft, is comparable, but Gates didn’t have the design cred that Steve Jobs has.

Even a couple of years ago, it was still inconceivable that Apple could surpass the value of Microsoft on the stock market. Microsoft, the most valuable technology company until Apple passed it last year, had built out a huge ecosystem of developers, who built products for its all-pervasive personal computer platform. Apple was supposed to have been relegated to a niche computing company.

Reinventing Apple

But that all changed quickly, in an amazing story that unfolded over just the past decade. Under Jobs’ leadership, Apple built a “vertical” empire, where everything in its line of products was dictated by the relentless focus on quality. And it replaced the “horizontal” empire that Microsoft had constructed, based on the business prowess of Gates.

Jobs was pushed out of Apple back in 1985, when his first spurt of creativity and leadership came to an end and Apple was losing market share. Jobs lost a board fight, and John Sculley was appointed to replace him as CEO. However, Jobs’  banishment is credited by some for the source of the genius of his reign since 1996. By departing from the computer industry, Jobs was forced to get new perspective, and this undoubtedly played a role in letting him cut Apple from its ties to the past. After his company NeXT was bought by Apple, and Jobs returned, he brought with him a new philosophy favoring recognizable products and simple design. His experience at Pixar, as chairman, also gave him understanding of the entertainment industry. Indeed, it all became the recipe for Jobs’ incredible second act. He helped Apple launch the iPod music player in 2001. Then after building out its iTunes business model, Apple built a phone product on top of that, with the release of the popular iPhone in 2007. The mobile app revolution was sparked, and Apple left everyone in the dust.

As a result, Apple’s stock has climbed steadily over the past several years. It first became the most valuable company in the world just this month, when it surpassed Exxon for the first time. Apple first surpassed Google three years ago, a testament to how Apple’s business was on firmer ground than Google’s, which relies mostly on the search business (Apple, at about $350 billion, is now worth more than double Google’s $168 billion). Google’s forays into software and into mobile phones look very much like Microsoft’s — horizontal plays that remain open to design weaknesses. Google’s Android phones are a good example of this. Apple’s iPhones are pretty, and Google’s Android phones, while offering lots of cool features, remain universally criticized for their lack of attention to detail, and for compromising on key things like performance and battery life.

And then there’s Apple’s iPad, which first debuted in 2010. Apple was never supposed to be an “enterprise” company, or one that sold products to large companies. It was a consumer company. But surprisingly, by early this year, some 80 percent of Fortune 100 companies had already adopted the iPad in some form, according to Apple. It’s this last product that has helped pushed Apple to its global leadership position, and which helped lead HP — once the Silicon Valley icon of quality — to so stunningly kill off its own tablet operations.

The iPad was quite a final act. Jobs reportedly called it “the most important thing I’ve ever done.”

Handing off the torch

With Apple being such a design-driven company, the question is, who can carry the torch now? While Tim Cook, Apple’s new leader, doesn’t have Jobs’s charisma, it’s certainly not the end of the world that he’s likely to be running the company now. Cook has been at Apple for 13 years, and has fully absorbed its culture. And during Jobs’ six month temporary leave of absence in 2009, Apple’s stock rose 67 percent — under Cook’s leadership. The markets are used to Cook, so Jobs’ resignation won’t completely spook them. Anyway, this time had to come eventually.

“At the end of the day, there’s much more to Apple than any one individual, even if that individual is Steve Jobs,” said Gartner analyst Michael Gartenberg.

However, Cook obviously isn’t Jobs, and it’s going to be difficult for him to prove otherwise.

While Apple’s stock did well under Cook’s leadership in 2009, you could argue it was because of actions taken under Jobs’ tenure. That was the year where Apple’s iPhone overtook the world, creating and leading the vast market for smartphones, and forging a mad rush by developers to create mobile apps under the iPhone SDK. But that train was set in motion the year before. Similarly, Apple’s stock momentum this year partly reflects the success of the iPad, which was launched in April of last year. And while Cook led the Mac division within Apple, and was responsible for the release of the popular Macbook Air, it was Jonathan Ive who was the principal designer of the Macbook Air.

There’s no doubt the company is in for a few bumps over the next days as the market digests this news. The question is, how does this company find leadership that can keep pushing it into the uncomfortable future — one where it designs products that haven’t even been conceived of yet, and where the rest of the world has to constantly catch up. The question was already being asked before Jobs resigned. It’s now going to be haunting Apple loudly for the foreseeable future.

VentureBeat’s Matt Lynley contributed to this story.

VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Discover our Briefings.