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Apple's Jobs to take medical leave

CEO says health issues 'more complex than originally thought,' to be sidelined until end of June.

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By Ben Rooney, CNNMoney.com staff writer


NEW YORK (CNNMoney.com) -- Apple Inc. CEO Steve Jobs said Wednesday he will take a leave of absence from the computer and music-player maker because of health issues.

Jobs, who announced last week that he suffered from a hormone imbalance that caused him to lose weight, said he will be away from the job until the end of June.

"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," Jobs said in a statement.

Jobs said curiosity over his personal health was a distraction and that his health-related issues have become "more complex" during the past week.

Tim Cook, the company's chief operating officer, will be responsible for Apple's day-to-day operations, according to the statement.

Apple (AAPL, Fortune 500) shares fell 8% to $78.40 in after-hours trading. They were halted after closing down $2.38 to $85.33 in Wednesday regular-hours trading.

Jobs, a co-founder of Apple, returned as chief executive more than a decade ago and has become closely associated with the company's overall identity.

Speculation about his health has been widespread for months, reaching a crescendo when it was announced he would not appear at Apple's annual Macworld product showcase in San Francisco last week.

Just as Macworld opened, Apple released a letter from Jobs to employees describing his illness, in which he said he would take a less active role in the company while recuperating.

"It's clearly a negative development but not a complete shock," said Shebly Seyrafi, an analyst at Calyon Securities in New York.

The timing of Wednesday's announcement is "frustrating" for investors because it comes so soon after Jobs disclosed that his health problems were treatable with "a simple change in diet," according to Seyrafi. Still, Apple has a "deep bench" of executive talent, and Cook is certainly a capable leader, he added.

Jobs is the "soul of apple," said Seyrafi. "But founders move on and Apple is a bit larger than Steve Jobs."

Meanwhile, Apple is set to report fiscal first-quarter results next week. Analysts expect the company to report earnings of $1.39 per share, down 21% from earnings of $1.76 per share a year ago.

"Apple's business is suffering," said Trip Chowdhry, an analyst at Global Equities Research in San Francisco. "They haven't had any home runs recently, and they're suffering from macro conditions too," he said.

In October, Apple said sales of Macintosh computers in the fourth quarter rose 21%, while iPod sales were 8% higher than year-ago levels. In the third quarter, however, Mac sales were nearly twice as high and iPod sales were up 12% year over year.

Many analysts are concerned that Apple's reluctance to cut prices could drive sales down even further as the weak economy has undermined many consumers' purchasing power.

On Wednesday, the National Retail Federation said holiday sales for the combined November-December months fell 2.8%. The trade group had originally forecast holiday sales for that period to grow 2.2%.

Separately, the Commerce Department said retail sales tumbled 2.7% last month, compared with a revised 2.1% drop in November. Economists surveyed by Briefing.com on average had forecast a decrease of 1.2% for December. To top of page

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