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Apple’s Steve Jobs announces health hiatus

Apple Inc. co-founder and chief executive Steve Jobs said Jan. 14 he is taking a health hiatus until the end of June — just a week after the cancer survivor tried to assure investors and employees that his recent weight loss was caused by an easily treatable hormone deficiency. Apple’s chief operating officer, Tim Cook, will take over Jobs’ responsibilities while he is on leave, though Jobs said he plans to remain involved in major strategic decisions.

Jobs, 53, said in a letter a week earlier that he would remain at Apple’s helm despite the problem and that he had begun treatment. But in an eMail to employees Jan. 14, Jobs said he had learned "that my health-related issues are more complex than I originally thought."

Apple’s shares have surged and receded over the past year in step with rumors or news about Jobs’ health and gaunt appearance. The concern was high because Jobs has a hand in everything from ideas for new products to the way they’re marketed.

Cook is seen as one of Jobs’ most likely successors, along with Apple’s top marketing executive, Philip Schiller. American Technology Research analyst Brian Marshall said Apple’s Jan. 14 announcement tips the bets in Cook’s favor.

"The company has been soft-signaling to the Street for a while now that Steve Jobs is not going to be CEO forever," he said. "This will be sort of a trial period for Cook to be chief executive."

Jobs proved his technological genius long ago. Now Cook will provide some insight into whether Jobs was smart enough to groom an executive who can keep the shine on Apple even when Jobs isn’t around.

Those familiar with Cook and his contributions to Apple’s success are confident he will prove the Cupertino, Calif.-based gadget and computer maker isn’t a one-man show.

"Tim is as good as they come, an extraordinary executive," said Mike Janes, who worked with Cook for five years at Apple. "I don’t think there will be any disruption at all while Steve is away."

Cook, 48, is taking the reins of Apple for at least the next five months while Jobs takes a leave to deal with some "complex" health issues. It’s a road Cook has been down before, having run Apple for two months in 2004 while Jobs recovered from surgery for pancreatic cancer.

The temporary transition went so smoothly that Apple promoted him from executive vice president to chief operating officer in 2005. Cook has since become Apple’s top-paid executive, with a salary of $800,000 for the current fiscal year. (Jobs famously limits his salary to $1.)

Although Cook has been running Apple’s day-to-day operations for several years, he has happily remained in the background while the charismatic Jobs commanded the spotlight.

While Jobs rolled out hot products like the iPod and iPhone, analysts credit Cook for doing a masterful job figuring out the proper balance between supply and demand. His inventory management has played a pivotal role in Apple’s ability to accumulate $24.5 billion in cash and short-term investments — a huge asset in today’s credit crunch.

"As soon as he got there, Apple stopped making operational errors," said industry analyst Roger Kay of Endpoint Technology Associates. "They used to be like the Keystone Cops — they’d generate demand, but have no product."

But Cook’s skills still may not be enough to allay worries that Apple will lose its way if Jobs isn’t there to orchestrate the brainstorming that leads to the company’s market-changing products.

"You can’t have someone held up in every magazine as the best leader in the world and on the other hand say if he leaves it doesn’t matter," said Marshall Goldsmith, an executive coach who teaches at Dartmouth University. "If there was an announcement tomorrow that Jobs is being replaced by God, the stock price would still go down."

Although he is quiet, Cook is no shrinking violet. A devout cyclist off the job, Cook is a workaholic who devours energy bars throughout his long days at the office. Like Jobs, he can be demanding and expects his subordinates to have the answers about both big and small business issues.

"He has the ability to be looking at things from 100,000 feet one minute and then drill down to the windshield level the next," said Janes, who now runs FanSnap, a Web site that searches for tickets. "We used to say you could get the bends talking to Tim because he would dive down so deeply."

A native of Alabama, Cook graduated from Auburn University in 1982 with an engineering degree. He is said to still be a huge fan of Auburn’s football team.

Before joining Apple in 1998, Cook worked at IBM Corp. for 12 years and spent a short time at Compaq Computer.

Jobs isn’t the only business legend that Cook has gotten to know in his career. He also is a director at Nike Inc., where its founder, Phil Knight, remains chairman.

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