Apple’s share price fell just 0.5 per cent in pre-market trading, trimming $4.5bn from its market value, as investors and analysts suggested Jony Ive’s departure was a natural transition for the company — and may be a chance for a shake-up.
“I’m sad to see Jony Ive go — it’s marking again the end of an unbelievable epoch,” said Dan Chung, chief executive and head of investments at Alger, a longtime Apple shareholder in New York.
But he added that the exit of Apple’s chief designer would make room for a new generation in the company’s internal design studio. “Giving an opportunity for talent to step up and shine might be better for the company.”
The unexpected change at the top of Apple’s ranks was seen as cutting one of the company’s strongest remaining ties with co-founder and chief Steve Jobs, with whom Sir Jonathan forged a close partnership that produced hit products like the iPod and the iPhone and set Apple on course to become the world’s most valuable company.
But in recent years, Apple’s business has become less dependent on the kind of iconic gadgets that Sir Jonathan, who was knighted by the Queen in 2012, helped to create.
“The simple answer is that it doesn’t change a thing in part because he hasn’t been as involved in the last four years,” said Gene Munster, analyst at Loup Ventures.
Carolina Milanesi, a consumer technology analyst at Creative Strategies, pointed to Sir Jonathan’s shift in recent years from focusing on Apple’s products to its physical environments, from retail stores to the company’s spaceship-like new corporate headquarters in Cupertino, which he helped design.
“It might be a natural desire to go off and do something else,” she said. “[At Apple] the team has the freedom now to do what they want. I don’t know how easy it would be as a designer, even someone close to him, to be in his shadow all the time.”
Some investors also suggested that a shake-up in the design ranks was overdue, following the maturing of the smartphone market and Apple’s hunt for new sources of revenue. In the seven years after Mr Jobs’ death in 2011, Apple more than doubled its iPhone revenues, to $166bn, but did little to create the new products to propel a new stage of growth. This year Apple has announced a push into subscription services, taking the focus away from the kind of gadgets and accessories that have been Sir Jonathan’s trademark.
“The world’s changed a lot in the last 20 years,” said Kevin Walkush at Jensen Investment Management, an Apple investor. “Was it getting stale? Maybe the departure is a good point for them to refresh their brand.” He added: “More innovation would be nice, not just in technology, but design as well.”
Apple’s potential next generation of innovative products, from self-driving cars to augmented reality glasses, are still in very early stages, making it a logical time for a transition, said Geoff Blaber, analyst at CCS Insight.
“Arguably it’s got to the point now it’s hard to see where he can really take design to a new level without a groundbreaking new product,” he said. “It’s quite clear that some of the realms they’re moving into, be it automotive, be it glasses, these things are going to take years to establish themselves, get to a commercial product.”
Rather than replacing Sir Jonathan as chief design officer, the heads of Apple’s user interface and industrial design teams will report to Jeff Williams, chief operating officer.
“The usability aspect [of] physical design in tandem with [user interface] design has always been a particularly prominent philosophy at Apple,” Mr Blaber said. “Arguably that challenge is going to become increasingly complex because you’ve got the services side as well. You are talking about services spanning music, video, iCloud, and managing all that with software. That’s where the roll-up into the COO becomes all important.”
Ms Milanesi likened the shift to Tim Cook taking over Apple’s top role from Jobs in 2011. “[Mr Cook] brought a whole different set of skills to the CEO role and I think that’s similar to what will happen with Jeff,” she said. “[Jeff] understands Apple very well and he has a great understanding of the overall product.”
But John Gruber, a longtime Apple blogger who has been a close watcher of the company, said “this organisational structure makes no sense to me” in a post on Thursday. “Someone needs to be in charge of design for Apple to be Apple and I can’t see how that comes from operations.”
One reason for the lack of a stronger Wall Street reaction to Sir Jonathan’s departure is that “a lot of people have never really appreciated Apple’s design-led culture, or that industrial design is the most important group at Apple”, said Neil Cybart, an analyst at Above Avalon.
He said that the management shuffles did not appear to signal any change to Apple’s underlying culture and the role design played at the company, but added: “I don’t think we’re really going to see the impact of this until years from now.”