-Tom Dunmore is editor-in-chief of Stuff magazine. The opinions expressed are his own.-

Yesterday, Apple unveiled the latest version of its wildly popular iPhone. And it was quite a show, despite the absence of Apple's usual ringmaster Steve Jobs.

The keynote speech at Apple's Worldwide Developers Conference in San Francisco was heaving the massed ranks of the global media, hyped by rumours of mini iPhones, touschscreen Macs and Steve Jobs' early return from sick leave.

In the end, Apple's hardware announcement was more prosaic - the new iPhone 3G S looks exactly the same as the old iPhone 3G but is faster, has a better camera, and offers voice control.

But it quickly became clear to the audience that the iPhone is about much more than hardware. Developer after developer took to the stage to show off their new software, which ranged from multiplayer games to a medical application that allows doctors to remotely monitor a patient’s vital signs.

There are already 50,000 programs available from the iTunes App Store, and the 40million iPhone and iPod Touch users have each downloaded an average of 25 apps - taking the total downloads to over 1billion since the App Store launched less than a year ago.

Many app downloads are free, but plenty of developers are making a good living from selling their wares to this growing audience, and the new iPhone 3.0 software - due out on June 17 - will allow them to charge for updates and subscriptions from within their applications.

The new iPhone software also enables turn-by-turn satellite navigation - which is destined to be a huge success, judging by the demonstration of iPhone software from TomTom.

And because iPhone 3.0 software is a free upgrade for existing iPhone users, there's already a massive market for any new applications taking advantage of its new features.

Meanwhile Apple's biggest rivals are preparing to release smartphones that are arguably technically superior to the iPhone. Nokia's N97 will be released in the UK on June 19th - the same day as the iPhone 3G S - while Palm's Pre has just hit the US market. Both iPhone rivals feature their own application download stores - but neither has the iPhone's momentum. And without a vibrant community of developers, a smartphone is little more than a complicated way to make phonecalls.

The iPhone is changing the shape of the mobile phone market. The technical specification of a handset is no longer the key selling point - the hardware is now just a platform, and it's the software that's built upon it that really counts.

Until rival platforms develop a critical mass of users and developers, Apple can continue to turn small changes to the iPhone into great leaps towards global domination.

– Dana Radcliffe is a Day Family senior lecturer of business ethics at the Johnson School at Cornell University. The views expressed are his own. —

Are a CEO’s health problems a private matter? Or does he or she have an obligation to disclose them to investors and other stakeholders?

These are questions Apple and its iconic co-founder and chief executive Steve Jobs have had to face ever since he was diagnosed with a rare form of pancreatic cancer in 2003.  Happily, the disease proved to be treatable with surgery, which Jobs underwent in 2004.  But shareholders didn’t learn that Apple’s chief had been ill until he sent out an email to employees, announcing that he had had cancer but was now “cured.”

The issue of what, if anything, the company should disclose about its CEO’s health concerns resurfaced last summer, when Jobs spoke at Apple’s annual developers conference.  There he appeared, as the New York Times put it, “unusually thin and haggard.”  Reacting to the inevitable rumors that Jobs was ill again, the firm’s public relations department reported that he was suffering from “a common bug.”

A PRIVATE MATTER

However, according to the Times’ John Markoff, Jobs told some associates that he was experiencing “nutritional problems.”  Moreover, people close to Jobs told Markoff that in early 2008 he had a surgical procedure to treat a problem related to his weight loss.  Yet, in July, in a conference call after the release of Apple’s quarterly earnings statement, a senior officer deflected an analyst’s question about Jobs’s health, calling it “a private matter.”

Not surprisingly, investor uncertainty about whether Jobs would be able to continue as CEO was reflected in sharp fluctuations in the price of Apple’s stock.  In December, the worries intensified when the company said that Jobs would not give his much-anticipated annual keynote address at Apple’s Macworld conference.  At first, the reason offered by a spokesman was that the firm would not take part in the event after 2009.  That “explanation” only fueled the rumors.

So, last week, Jobs responded by issuing a statement.  About his weight loss, he said doctors had finally determined that it was due to a “hormone imbalance”—a “nutritional problem” whose remedy “is relatively simple and straightforward.”  This announcement seemed to calm investors, with Apple’s stock price rising by 4 percent.

Then, this week, Jobs emailed Apple employees that he had just learned that “my health-related issues are more complex than I originally thought.”  Consequently, he said, he is taking a six-month medical leave of absence, although he will “remain involved in strategic decisions while I am out.”  The news alarmed investors, as shares dropped 7 percent in late trading.

Clearly, Apple and its chief executive have not been diligent in keeping investors, employees, and other stakeholders informed about the state of Jobs’s health.  Should they have been?

LEGAL VS ETHICAL POINT OF VIEW

From a legal point of view, the company has a duty to disclose information that is “material”—i.e., facts a reasonable investor would need to know in order to make an informed decision about whether to buy or sell the company’s stock.  Materiality can be difficult to establish, and if litigation ensues, lawyers will argue at length over exactly what Apple should have revealed and when.

But, from an ethical point of view, the answer seems less arguable.  To be sure, Steve Jobs, like anyone else, has a right to keep details about his health problems private.  But an individual’s right to privacy is not absolute.  In this case, it has to be balanced against obligations Jobs and his board of directors have to Apple’s stakeholders, especially its shareholders, employees, and customers.

Since Steve Jobs returned to Apple in 1997, its breath-taking success has been due in no small part to his visionary and aggressive leadership.  Many investors worry (rightly or wrongly) that Apple would not be as innovative and market-savvy without Jobs’s famously tight control over its direction and operations.  Apple well knows all this—indeed, the company has shrewdly leveraged the immense admiration and popularity Jobs enjoys, encouraging the identification of Jobs with the Apple brand.  So, by design, investor confidence in Apple has been based to a considerable degree on confidence in Jobs’ leadership.

In general, the company has an ethical obligation to alert investors—and other stakeholders—to serious risks to the company’s health.  Because Apple and its CEO have actively encouraged “the Apple community” to associate the company’s success with his leadership, they have an obligation as well to keep stakeholders apprised of serious risks to Jobs’s health.

– Eric Auchard is a Reuters columnist. The opinions expressed are his own –

“There’s probably no God” runs the slogan of an advertising campaign humanists are running on buses across Britain. But if the supreme being has his doubters, few question the importance of Steve Jobs to Apple Inc.

In a letter to employees on Wednesday, the Apple co-founder said he would take himself “out of the limelight” for six months after learning in the past week that his still vaguely defined “health issues” are “more complex than I originally thought.”

While Jobs paints his absence as a temporary medical leave — he retains the Apple CEO title even as he steps aside — his departure leaves a spiritual void at a company most people think of as inseparable from the man.

The miraculous career of the prophet of the personal computer revolution, the self-made billionaire known for a career of second acts, draws frequent religious parallels: one biography of him is entitled “The Second Coming of Steve Jobs”.

In the 33 years since he co-founded Apple, Jobs has attracted the fervent devotion of his followers — the Mac faithful, and more recently, iPod and iPhone fanatics. To them, Steve is a secular messiah; to his detractors, a cult-leader.

Apple’s unmatched record of hit products has only been achieved under the famously tyrannical leadership of Jobs, whose obsession with sleek design and the hard to define “cool” factor of his gadgets is unique in the corporate world. Again and again, it is this aesthetic, and Jobs’ commercial success exploiting it, that have distinguished Apple products from so many copycat competitors.

On some level, anyone who has ever admired an Apple product harbors a little bit of the “design Nazi” in his soul. Managers who have endured Jobs’ withering demands to create nothing but “insanely great” products may have absorbed this.

But is culture enough to overcome a vacuum of leadership? Much as Microsoft Corp has become a smaller place since Bill Gates has wound down his role at the software giant and Apple adversary, Jobs can only be sorely missed.

How far can a company, its executives, engineers and salespeople go on the mantra, “What would Steve Jobs think?”

To be sure Tim Cook, Apple’s chief operating officer, is taking over Jobs’ daily responsibilities and Jobs said he will retain strategic oversight of the company’s direction while on leave. The pipeline of product innovation looks well-stocked.

If it’s a question of the man being bigger than the company, then Apple, which popularized the personal computer, the personal digital assistant and the handheld music player and is staking its claim on reinventing the mobile phone and, perhaps even, eventually, the television, is in big trouble.

CONTEMPLATING THE UNTHINKABLE

Inside Apple, the delicacy of Jobs’ planned absence was summed up in the innocuous headline given the company’s most dramatic announcement in years: The bombshell press release was simply entitled: “Apple Media Advisory.”

As if the only interested audience were baying reporters.

The news comes as a shock, but little surprise. It caps more than a year of widespread concern over the health of Jobs, aged 53 and a survivor of pancreatic cancer. More recently, his gaunt appearance and dramatic weight loss have added to the worries.

The immediate reaction to Jobs’ departure notice was a 6 percent decline in Apple stock. But the shares have fallen 60 percent after touching $200 at the end of 2007. It’s difficult to separate the impact of Steve Jobs’ health mysteries from the general decline all stocks have seen since then.

Wall Street analyst Shaw Wu argues that while Jobs deserves a lot of credit for the revival of Apple, “we believe the company has a deep bench and its culture of innovation and execution has more or less been institutionalized.”

Not so fast. Recall the dark years of Apple history starting sometime after 1985 and lasting until he returned in 1997. The famous Apple culture remained in place but product missteps and management in-fighting were the result.

The success of Apple has rarely been its technical innovation or engineering rigor. In that sense Cook is simply a placeholder. The company’s hit products all share a fascination with functionality and beauty that is unmatched in other gadgets. It is Jobs’ taste, his commitment to design and his micro-management of talent that drives Apple.

Jobs has pulled together Apple after the years of drift. That he has done so by being a control freak with a clear vision does not diminish his accomplishments. It’s hard to imagine how his despotism will be replaced.

– At the time of publication Eric Auchard did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund. For previous columns, click here. –