NEWS ANALYSIS: The departures of software leader Scott Forstall and retail chief John Browett suggest trouble in Apple's management structure that could put the brakes on the company's phenomenal growth.
Apple has made the shocking announcement that not one, but two of its top executives have left the company
. Scott Forstall, Apple's senior vice president of iOS Software, is leaving. In addition, John Browett, who only took over Apple's retail efforts six months ago, has left. According to Apple, it doesn't have any plans to replace the men, but will assign other top executives to take over for them.
Apple made the not-so-surprising decision to announce the executives' departures Oct. 29, the day before the stock market closed for Hurricane Sandy. The move allowed the news to circulate among investors for a while and give Apple some time to control its messaging to the news media. Regardless, the news is a blow to Apple's entire executive team and could have profoundly negative consequences on the company, the sales success of its entire product line and perhaps bring to an end Apple's current unprecedented period of growth.
Don't believe it? Read on to find out why Apple's executive shake-up is bad news for customers, shareholders and Apple, itself.
1. Software is key
If Scott Forstall did anything at Apple
, it's prove that iOS really is the best way to implement a mobile operating system. With Forstall now gone, will Jonathan Ive, Apple's design guru, really be able to continue on that track? It's certainly possible. But Forstall was a key ingredient in Apple's mobile success.
2. The retail chain is rudderless
With John Browett now gone, Apple's retail division has been left rudderless. That's a real issue. Apple has been expanding rapidly around the world, and in the last month alone, has opened a few new stores across China and Asia. Without a leader, can its aggressive retail expansion continue?
3. Shared roles are never good ideas
According to Apple, it has decided to divvy up among the other executives the responsibilities that Forstall and Browett took on. That means Forstall's duties will now be handled by Ive and iTunes lead Eddy Cue. But sharing duties is never a good idea, especially in a company as large and dynamic as Apple. In far too many cases, executives get overworked and they start losing focus. Hopefully, that won't happen here.
4. Investors will grow worried
Although it's often overlooked in Apple's world
, investors have a major impact on the company's business. With two executives departing, might Apple's vaunted share price come crashing down far more than Cook and his fellow executives would like? Don't ever forget the power and importance of shareholder sentiment.