An absent Jobs turns 54 as Apple faces recession

Happy birthday, Steve Jobs.

The Apple co-founder and CEO turns 54 today. Jobs, whose poor health has worried shareholders and fans of its hip products alike, will skip the company's annual shareholders' meeting tomorrow, Bloomberg News reported. Since Jobs hasn't missed the event since he rejoined the company in 1997, and because he gets the lion's share of the credit for many of the company's innovations, his absence will carry plenty of symbolic significance. Can Apple succeed without its visionary CEO at the helm?Even setting aside Jobs' health issues -- he began a six-month leave of absence last month after learning his condition was "more complex" than originally thought -- Apple is facing something of a crossroads.

A year ago, Mac sales were exploding, growing 51 percent in the first quarter of 2008 compared with a year earlier. But the rate of growth has fallen in every quarter since, and analysts expect that sales won't match last year's pace in the first three months of this year. Early signs suggest they're right: January sales were weak, falling 6 percent, compared with a 16 percent jump for computers running Microsoft Windows, according to NDP Group, a research firm.

IPod sales have suffered, too. Sales of the stylish digital music player fell 16 percent last quarter compared with the same period a year ago. At $3.37 billion, they represented nearly a third of Apple's quarterly net sales, rivaling Macs, which brought in $3.55 billion. Thanks to the success of the iPhone, however, iPods have become less important as a source of revenue.

The flagging economy certainly isn't helping. Apple's products are a lot more expensive than similar offerings by its rivals. While prices for both its computers and music players have fallen in the last year, it is still dealing in premium goods. That strategy preserves margins, but it may backfire during a recession that has seen consumers dramatically pare their spending.

The company's desktop computers are also in need of updating, analysts say. The last new iMac model appeared last April, and the Mac mini hasn't been changed since August 2007.

Given all that, it's not surprising that its stock price has suffered. Apple (AAPL) shares have fallen 27 percent in the last year through yesterday's close, and at $86.95, they're trading at less than half of their December 2007 peak of nearly $200.

For now, maneuvering Apple through these challenges while Jobs is on leave will be Tim Cook, the company's chief operating officer and acting CEO. The hordes of Mac enthusiasts, bloggers and analysts who watch the company with near-obsessive passion will parse his solo act at tomorrow's shareholders' meeting. A virtuoso performance would reassure the company's fans and take some pressure off Jobs to return quickly. That would make quite a nice birthday present.

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