Steve Jobs has resigned as chief executive of Apple. The announcement, which was made last night, is not entirely out of the blue, as it is well known that Jobs has been suffering with serious health problems, including pancreatic cancer, since 2004.

The reins are now being passed to Tim Cook, and although Cook has shown himself well capable of leading the company during Jobs’ extended periods of sick leave, stock values for Apple plummeted overnight by as much as 7% at one point, as markets contemplated an Apple without Jobs.

Jobs Resignation

Unlike the departure of other top line executives from other companies, the rumor mill has been unusually silent. No one is talking about board-room dramas or daggers in the night. By all accounts this is a personal tragedy related directly to Jobs’ health, and the only speculation anywhere is just how bad his health actually is.

His resignation letter is telling in this respect. It says:

I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.

I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.

As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.”

He also says that he “look[s] forward to watching and contributing to its success in a new role”, and that he believes Apple’s brightest days are ahead of it.

Tim Cook Appointed

If the best has yet to come, there is little to worry about at Apple, but it is convincing markets and customers that will be problematic and the first challenge facing Cook.

Needless to say, in the statement issued by Apple following Jobs resignation, the board expressed complete confidence in Cook, who has been groomed for the position over a long period of time.

What is notable in the statement is the absence of any reference to Jobs’ health

To be sure, Jobs will stay on with Apple in what will probably be a nominal role as Chairman of the Board, but the question that will now plague Apple is how they will move into the future without Jobs, widely regarded as driving force behind its most innovative products, including the iPad and iPhone.

Can Cook Run Apple?

The question that everyone is asking themselves now is whether Tim Cook is up to the job. Stepping back a little bit, the question appears slightly redundant by virtue of the fact that he has been the de facto boss of bosses for a considerable length of time.

While it is hard to see where Jobs stepped out and Cook stepped in since Jobs first announced his illness in 2004, this year he has been firmly at the helm since January 17th, leaving him in charge of the iPad 2 launch in March, even if Jobs returned from his sick bed for the event.

And while for many it is reasonable to question Cook’s ability to step into some very big shoes, it also belies Cook’s own experience, which is extensive.

A former Compaq executive, he has made his mark as a mast of supply-chain management and has now been at Apple for 13 years.

During that time he has been involved in a number of roles, including manufacturing, distribution, sales and customer service, although he has yet to be tested in terms of product vision or innovation.

As Jobs chosen successor, reaction to his appointment has been largely positive, although it also remains to be seen as to whether he can rally the 50,000 employees worldwide in the same way Jobs did.

He is also stepping into the breach in very competitive times with Google’s Android now the biggest smartphone operating system, and although it appears to have beaten HP out of the market for tablets, it’s likely there will be other contenders in the coming years.

Apple’s expansion into the company that we see now was largely on Cook’s watch with the supply chain management skills ensuring that production has kept up with the extraordinary demand for iPods, iPhones and iPads.

Apple’s Prospects

The result is that after the initial shock many seem reassured of the medium term prospects of Apple.

Bloomberg financial news wire today, cites Kai-fu Lee, former head of Google operations in China and a former employee of Apple, as saying the change doesn’t materially change anything.

He said he didn’t believe it would impact the competitive landscape as Apple has dug itself an almost unassailable niche.

The only thing missing, or the only question is, will they spot the next big paradigm shift? he said.

And that’s the billion dollar question -- literally. Apple is secure product wise probably for the next two years, but what happens after that? If Jobs is so important to product concept -- and he has been -- what will Apple be without him product-wise?