Apple's Jobs Takes Medical Leave

Just a week after reassuring investors and employees about his health, Apple Inc. AAPL -1.43 % Chief Executive Steve Jobs disclosed he has a "more complex" medical condition and would take a leave of absence until the end of June.

Mr. Jobs's disclosure, in a letter directed to Apple employees, provided no details about what was ailing him and raised fresh questions about a company that is so closely identified with its co-founder. Apple shares fell 7% in late trading on the news.

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Jobs spoke at the Apple Worldwide Developers Conference in June. But he did not attend Macworld earlier this month. Reuters

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Mr. Jobs, 53 years old and a pancreatic-cancer survivor, said he was passing day-to-day management of the Cupertino, Calif., company to Chief Operating Officer Tim Cook. Mr. Cook filled in for Mr. Jobs in 2004 when the Apple chief took a leave to battle his cancer.

"As CEO, I plan to remain involved in major strategic decisions while I am out. Our board of directors fully supports this plan," Mr. Jobs wrote in his letter.

Last week, Mr. Jobs said he was suffering a "hormone imbalance" that had caused dramatic weight loss, but said he had begun "relatively simple and straightforward" treatment and would continue as CEO.

A person familiar with the situation said that Mr. Jobs didn't have a recurrence of cancer and that he was taking a leave of absence because the treatment to fix the problem of not being able to absorb proteins was more complex than initially believed.

His health has been closely scrutinized by Wall Street since his bout with cancer, which Mr. Jobs said has been treated successfully by surgery. Concerns about his health were reignited last year when he appeared on stage at an event looking gaunt and intensified last month when he said he would skip the Macworld trade show earlier this month.

Mr. Jobs didn't immediately respond to a request for comment. Apple board members declined to comment or couldn't immediately be reached. An Apple spokesman declined to provide more details about Mr. Jobs's health.

The disclosure immediately sparked new concerns about how much information Apple was keeping to itself on Mr. Jobs's health. Medical and corporate-governance experts earlier this month had challenged Mr. Jobs's disclosure about a hormone imbalance as too general and had criticized Apple for not providing fuller background on the state of the CEO's health. Several medical experts suggested the hormone imbalance could be related to the tumor surgeons removed from Mr. Jobs's pancreas.

The announcement raises questions about "whether we have been getting the full story for the past year" about Mr. Jobs's health, added Jeffrey Sonnenfeld, a senior associate dean at Yale University's School of Management. Wednesday's letter "is less forthcoming" than the Jan. 5 one, but the Apple leader should have revealed "what the new health issues are."

Apple declined to comment, but in the letter, Mr. Jobs says that he just learned "during the past week" that the health-related issues are more complex than he had thought.

Mr. Jobs's health is key to Apple. Mr. Jobs co-founded Apple in 1976, was dismissed in a boardroom coup in 1985 and began a second leadership stint at Apple in 1997. He is deeply involved in all aspects of the company's business and is widely credited for reviving the then-struggling computer maker in the late 1990s with hit products such as the iMac desktop computer. More recently, Apple has churned out the iPod digital music player and the iPhone and cemented a place as a leading consumer-electronics maker.

The news, released after U.S. markets closed, caused Apple's shares to drop $6 to $79.33 in after-hours trading. Apple shares traded at $85.33, off $2.38, at 4 p.m. on the Nasdaq Stock Market.

Some investors said they were reeling from the disclosure. Charlie Wolf, a financial analyst with Needham & Co., said the "Steve Jobs health" factor could cause the stock to fall an additional 10% to 15%. He added, however, "If it were life threatening, I would anticipate that Steve would have resigned or the board would have called for his resignation."

"This is the biggest wake-up call for the investor community to come to the reality that there will be a post-Steve Jobs Apple," added Gene Munster, an analyst with Piper Jaffray. "The most important question from the stock perspective is will product innovation continue, and there's no reason to think it won't."

While Mr. Jobs takes an unusual hands-on role in design decisions, people familiar with the company's inner workings say the company's design team should be able to keep churning out innovative products, barring an exodus of top talent.

Mr. Jobs serves more like an "editor in chief" in refining and improving ideas for Apple gadgets, according to former Apple executives such as Bill Bull, a retired Apple engineer who worked for Mr. Jobs in the 1980s and again in the late 1990s. The hands-on work of Apple's innovations depends more directly on subordinates such as Jonathan Ive, an Apple senior vice president who oversees the company's industrial design team. His group is primarily associated with the physical look and feel of products, such as the unusually slender Macbook Air.

Scott Forstall, another senior vice president, leads the team responsible for the iPhone's operating system and other software. Other crucial figures at Apple now include Ron Johnson, senior vice president of Apple retail, who has masterminded the success of Apple's stores, the hip electronics emporiums that have played a crucial role in the growth of the iPod and Macintosh in recent years.

Mr. Cook, who now assumes day-to-day responsibility, is a longtime lieutenant. He joined Apple in 1998 after stints at Compaq Computer Corp. and other companies and was charged with straightening out the messy operations of the Silicon Valley company.

Mr. Jobs has publicly talked before about how the prospect of death spurs him on. In a commencement speech he gave at Stanford University in June 2005, Mr. Jobs told the crowd that "no one wants to die. Even people who want to go to heaven don't want to die to get there. And yet death is the destination we all share."

He added, "Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life."

—Joann S. Lublin, Jacob Goldstein, Nick Wingfield contributed to this article.

Write to Yukari Iwatani Kane at yukari.iwatani@wsj.com