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Just a week after revealing that he has a medical issue related to his 2004 pancreatic cancer surgery that caused him to lose weight, Apple CEO Steve Jobs said he's taking a medical leave until the end of June.
In an e-mail to Apple (AAPL) employees late on Wednesday, Jan. 14, Jobs said he had been informed in the past week that his health-related issues are "more complex than I originally thought" and that curiosity over his health was becoming too much of a distraction for his family and for Apple.
Jobs said: "In order to take myself out of the limelight and focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products, I have decided to take a medical leave of absence until the end of June."
Tim Cook, Apple's chief operating officer, will take over in Jobs' absence. But, Jobs explained, "as CEO, I plan to remain involved in major strategic decisions while I am out. Our board of directors fully supports this plan."
The news immediately spooked investors. Apple's stock price fell sharply, as much as 10%, in after-hours trading.
Worries about Jobs' health have been swirling since his appearance at an Apple iPhone launch last June, when reporters and others noticed that he looked particularly gaunt. But concerns deepened a few weeks ago after Jobs said he would not make his customary keynote address at the annual Macworld conference in San Francisco, which was held last week.
Then, on Jan. 5, Jobs announced that he was suffering from "hormonal imbalances" that were affecting his weight, but he indicated that relatively straightforward dietary changes over the coming months were expected to resolve the problem.
The concern over Jobs is not just because of his legendary status in tech but because he is seen, rightly or wrongly, as the one indispensable leader at Apple. He's seen as the chief driver of all of Apple's major products, from Macintosh computers, iPod music players, and iPhones.
The shock of Jobs' departure could be offset by Apple's operational health. Sales of Mac desktop and laptop computers continue to be strong despite the economic downturn. Market research firm IDC released its latest estimates on the state of the PC market on Jan. 14, suggesting that Mac sales grew 7.5% in the holiday quarter, while larger players such as Hewlett-Packard (HPQ) and Dell (DELL) saw their sales fall by 3% and 16%, respectively. IPod sales continue to hold their own, as well, though they have leveled off. All indications are that the iPhone is meeting, if not beating, expectations.
"Everything at Apple could not be running better," says Gene Munster, analyst with Piper Jaffray (PJC).
Investors will get a clearer picture of the company's performance during the crucial yearend period on Jan. 21, when Apple is due to release fiscal first-quarter results. The company is expected to say earnings rose to $1.41 a share, as sales increased to $9.9 billion, according to data compiled by Capital IQ.
With reporting by Arik Hesseldahl in New York.
Hof is BusinessWeek's Silicon Valley bureau chief.