Steve Jobs, once said of Sir Jonathan Ive: "If I had a spiritual partner at Apple, it's Jony."
That partnership is well and truly over today with Ive’s departure from Apple (AAPL - Free Report) . But while they were at the job, it yielded a host of products that excelled on “look and feel” while delivering amazing functionality. The iPod Mini in 2004, iPhone in 2007, MacBook Air in 2008, iPad in 2010 wowed users all over the world, making Apple the behemoth it is today.
After Jobs died, Ive oversaw the development of Apple Watch and AirPods, launched in 2015 and 2016, respectively in his role (since 2012) as head of both software and hardware development.
Those roles will again be split now between Evans Hankey who is the new VP of industrial design and Alan Dye, the new VP of human interface design. And unlike in the past, the two wont report directly to CEO Tim Cook, but to COO Jeff Williams.
Williams has been instrumental to the introduction of Apple Watch, so it’s a role he can ease into smoothly while continuing to take care of supply chain issues.
Little is currently known about Ive’s new design startup called LoveFrom that will become his new home, other than the fact that Marc Newson, a friend and collaborator at Apple, will join the firm, along with other creative folks from other disciplines. It will have clients other than Apple, although it appears that Apple will remain the main client.
In his parting statement Sir Ive says: "After nearly 30 years and countless projects, I am most proud of the lasting work we have done to create a design team, process and culture at Apple that is without peer. Today it is stronger, more vibrant and more talented than at any point in Apple’s history…
"The team will certainly thrive under the excellent leadership of Evans, Alan and Jeff, who have been among my closest collaborators. I have the utmost confidence in my designer colleagues at Apple, who remain my closest friends, and I look forward to working with them for many years to come."
So I couldn’t agree with Nehal Chokshi of Maxim Group, who says, "I would view it as Jony Ive looking to get paid market rates for his design expertise from Apple, with the right to allow other companies - not competitors to Apple - to leverage that expertise." I think there’s no bad blood here at all, especially nothing about pay. I think it’s more about allowing Ive to remain at the center of design, where his heart is, given Apple’s changed focus. This also lets him continue to serve Apple as and when it works out. I think that’s where the name “LoveFrom” probably comes from.
As Tim Cook says, “Jony is a singular figure in the design world and his role in Apple’s revival cannot be overstated, from 1998’s groundbreaking iMac to the iPhone and the unprecedented ambition of Apple Park, where recently he has been putting so much of his energy and care.” Cook added that “Apple will continue to benefit from Jony’s talents by working directly with him on exclusive projects, and through the ongoing work of the brilliant and passionate design team he has built.”
Investors are mourning the loss, sending the stock more than 1% down. But there really is nothing to fear. Jony is not saying goodbye, he’s just changing his chair.
Ive’s moving away from Apple seems to have been in the works for some time. In the last two years, he has been less focused on products and more on completing Apple’s new headquarters (Apple Park), as evident in some of Apple’s latest products. So while this may have come as a surprise to outsiders, including investors, Apple appears to have been preparing for his departure.
It’s also significant in terms of Apple’s own metamorphosis from a product-oriented company to a services-oriented one. If anything, this is recognition of big changes at Apple, where products will be important but not central to its future revenue.
Apple shares carry a Zacks Rank #3 (Hold). Peers with better ranks are Lenovo (LNVGY - Free Report) and HP (HPQ - Free Report) . You can also see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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