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Article from SFGate.

Steve Jobs, Apple’s iconic co-founder and the visionary behind many of its best-selling products, resigned as CEO on Wednesday, saying he could no longer fulfill his duties.

Jobs, who underwent surgery for pancreatic cancer in 2004 and had a liver transplant in 2009, has been on medical leave from Apple since January. His resignation raised new fears that his health may have worsened.

“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know,” Jobs, 56, wrote in a letter to Apple’s board. “Unfortunately, that day has come.”

After Jobs submitted his resignation, Apple’s directors elected him to the board and made him chairman. Tim Cook, the company’s chief operating officer and its interim leader since January, was named CEO.

As evidence of Jobs’ perceived value to the company, Apple stock dropped 5 percent in after-hours trading, to $357.10.

Founded in 1976 in Cupertino by Jobs and Steve Wozniak, Apple helped spur the rise of personal computing with its Apple II and Macintosh computers. After being ousted from the company in 1985, Jobs returned to a near-bankrupt Apple in 1997 and spearheaded the creation of blockbuster devices like the iPod, iPhone and iPad.

Pop culture figure

Along the way, Jobs became a figure in popular culture, sought after for his insights into consumer desires and a marketing savvy that made him an unofficial evangelist of the digital age. A noted perfectionist, he is credited with having an impeccable sense of design, leading to products that have inspired devotion among users and generated hundreds of billions of dollars in revenue for the company.

As a result, Apple has become the rare company to successfully reinvent itself multiple times. Roughly two-thirds of the company’s profits now come from devices that didn’t exist five years ago. This summer, for the first time, Apple briefly surpassed Exxon Mobil to become the world’s most valuable company. It is currently No. 2.

“Steve Jobs is the greatest leader our industry has ever known,” said Salesforce.com founder Marc Benioff, who worked under Jobs at Apple, in an e-mail. “It’s the end of an era.”

Analysts said that few changes in Apple’s business will be evident right away.

“The actual product road map that Steve has already approved goes through 2015,” said Tim Bajarin, president of research firm Creative Strategies, who has followed Apple for 30 years. “In the short term, it should mean nothing. Even though Steve is critical for a lot of the vision, let’s keep in mind that he’s still alive and still chairman. He can still influence vision.”

During his most recent medical leave, Jobs has continued to make appearances at Apple events. In March he took the stage at the Yerba Buena Center for the Arts to unveil the iPad 2, and in June he appeared at Apple’s Worldwide Developers Conference at Moscone Center to announce the coming iCloud service.

“In his new role as chairman of the board, Steve will continue to serve Apple with his unique insights, creativity and inspiration,” said Apple board member Art Levinson, chairman of Genentech, in a statement.

Long-term prospects

Still, questions linger about Apple’s long-term success. Sachin Agarwal, who worked at Apple as a developer for video-editing software Final Cut Pro from 2002 to 2008, said one of Jobs’ greatest assets was his willingness to say no – to delay or even abandon products that failed to meet his exacting standards.

Agarwal, who has since created the blogging and publishing platform Posterous, said friends at Apple have expressed concerns about the company’s future.

“I just don’t think anyone else in the company has shown, at least outwardly, that level of pushback and that quality standard,” he said, referring to Jobs. “I’m chatting with my Apple friends and there’s a lot of thought about it right now: ‘What do we do with our stock? What’s the company going to look like?’ ”

The attention now shifts to Cook, 50, who joined Apple in 1998. The Alabama native, who had previously worked at Compaq, quickly gained a reputation for being an operational genius – ensuring that the company made only as many products as it could sell, which made its supply chain the envy of the industry.

“The board has complete confidence that Tim is the right person to be our next CEO,” Levinson said. “Tim’s 13 years of service to Apple have been marked by outstanding performance, and he has demonstrated remarkable talent and sound judgment in everything he does.”

Jobs also struck an optimistic note.

“I believe Apple’s brightest and most innovative days are ahead of it,” he wrote in his letter to the board. “And I look forward to watching and contributing to its success in a new role.”

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Here is an interresting outlook from SF Gate.

“Corporate profits may grow at the slowest pace of the year in the third quarter as an economic recovery that’s short on jobs and consumer demand curbs income at companies from Chevron Corp. to 3M.

Earnings at Standard & Poor’s 500 index companies may rise 25 percent in the three months through September, compared with projected gains of 34 percent for the just-ended second quarter, according to analysts’ estimates compiled by Bloomberg. Per-share earnings rose 52 percent from January through March.

“We’ve got players out there that are suffering from Armageddon hypochondria,” said James Paulsen, chief investment strategist of Wells Capital Management in Minneapolis, which oversees $375 billion. Instead of portending an economic crisis, the slower profit growth is “your commonplace, very normal mid-cycle soft patch in the recovery.”

Financial market turmoil has increased risks to the recovery, the International Monetary Fund said Thursday, while predicting the world economy will grow 4.6 percent this year, the most since 2007. In the United States, the S&P 500 dropped 12 percent from April through June as unemployment averaged 9.7 percent and new home sales slumped to the lowest pace on record in May.

Companies in the Stoxx Europe 600 index may post average profit gains of 57 percent this year, dwindling to 22 percent in 2011, based on analysts’ estimates compiled by Bloomberg. Luxury carmakers such as Daimler are benefiting from the euro’s slide against the dollar, while the euro’s weakness against the yen may have curbed earnings at Japanese technology firms.

Sales at nonfinancial companies will be the best indicators of the economy’s health worldwide, said Sinan Akiman, chief investment officer at Istanbul-based Garanti Asset Management, which oversees $4.2 billion.

“If there is no, or very limited, increase in sales of nonfinancial companies, that means the economy is still not recovering,” Akiman said. “We should especially look at big retail industry companies.”

In the United States, earnings gains for S&P 500 companies will continue through the second half of 2010 and average 34 percent for the full year, analysts surveyed by Bloomberg project.

“Our economy is beginning to repair itself, but it’s by no means ready to run a marathon,” said Matt McCormick of Cincinnati-based Bahl & Gaynor Inc., which has $2.8 billion under management. “I do see earnings growth, but it’s not going to be broad-based.”

Alcoa, the first company in the Dow to report earnings for the second quarter, may post a profit for the first time in three quarters today. Financial companies are predicted to post an average gain of 54 percent in the third quarter, with increases of 36 percent for information technology firms and 39 percent for energy companies. The estimates all represent declines from the quarter that ended in June, when those sectors are projected to have grown 84 percent, 53 percent and 73 percent, respectively.

In energy, fuel demand may be stunted at Chevron, Exxon Mobil and ConocoPhillips, the largest U.S. oil companies. New York oil futures, which traded as high as $87.15 a barrel in May, dropped to as low as $71.09 this month.

Analysts have trimmed estimates for financial companies in the past month in response to weaker revenue from trading and investment banking.

“There won’t be any standout companies reporting to the upside, and there could be some real shockers on the downside,” said Dick Bove, a Lutz, Fla.-based analyst at Rochdale Securities. Investment banking, trading and retail sales of financial products “suffered severe reversals from the first quarter,” when four of the largest U.S. banks reported zero days of trading losses, Bove said.”

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Here is a report from SF Gate.

“Apple, long the scrappy but innovative challenger to dominant Microsoft, has passed its rival in market capitalization, becoming the most valued technology company in the world.

The shift in fortunes became official at the close of the stock market Wednesday, when Apple’s market capitalization – the sum of its outstanding shares multiplied by its stock price – finished at $222.07 billion, ahead of Microsoft’s at $219.18 billion.

Though the distinction is merely a milestone, it culminates an amazing turnaround for Apple, which was given up for dead in 1997, when Apple founder Steve Jobs returned as CEO. Apple is now the second most valuable company in the United States after Exxon Mobil.

“This has got to be not only one of the greatest comeback stories, but success stories of the last 20 years,” said analyst Tim Bajarin, president of Creative Strategies. “You see companies coming back from the dead, but not to the point where they achieve this staggering financial position.”

Since September 16, 1997, when Jobs returned as CEO and Apple shares traded at $5.49 per share, the stock has surged 4,346 percent and now trades at $244.11 per share. Over the last five years, Apple’s stock has grown about 600 percent while Microsoft’s managed a modest 5 percent growth.

The shift validates Apple’s strategy of focusing on smart phone and tablet technology, which is on track to eventually outgrow the traditional PC business.

Michael Mace, who worked at Apple for 10 years prior to Jobs’ return, said Apple held the upper hand in the rivalry with Microsoft before being passed in the early 1990s. He said after that point, most employees gave up any hope of rivaling Microsoft financially.

“When a company runs away from you, you usually don’t get a chance to run them back down,” said Mace, a consultant with Rubicon Consulting. “But what Steve (Jobs) has managed to do is produce a series of seminal, meaningful, market-changing products.”

Apple found new life by remaking itself as a mobile company. While it continues to snag more PC market share from Microsoft’s Windows operating system, it is setting the pace of innovation in mobile devices.

Starting with its iPod media players in 2001 and more recently with the iPhone in 2007, Apple has become a leader in building the kind of portable devices that appeal to users. Apple’s iPods command more than 70 percent of the digital-player market, while the iPhone represents a quarter of the smart phones in the United States.

Now, with the iPad tablet selling a million units in its first month, Apple is leading that market as well.

“Apple is sitting on a gigantic business that’s just taking off,” said Leander Kahney, editor of the Cult of Mac blog, who’s written several books on Apple.

Meanwhile, Microsoft has struggled to grow beyond its roots in PC operating systems and applications. Its Zune media player and Windows Mobile operating system are not clicking with consumers. On Tuesday, the company announced a management shakeup in its gadgets and games division.”

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