Shares of Apple (AAPL) are under pressure this morning, falling below $600 after opening lower by 2%. Investors are getting their first chance to react to the leadership shake-up announced on Monday afternoon that mobile software developer Scott Forstall and retail chief John Browett are leaving the company next year.
Apple's share price fell back into correction territory last week and is now down over 15% since its peak on September 21st when iPhone 5 launched. (See Related: Apple Forecasts $52 Billion For Holiday Sales, Consumer Watch: iPad Mini vs. Other Tablets)
The management adjustments, outlined in an Apple press release, include promoting Jony Ive, who previously led the hardware design team, to a position overseeing all of design, including the software side that Forstall had been in charge of. In an email announcing the changes to Apple staff Tim Cook said they would "encourage even more collaboration between our world-class hardware, software and services teams at all levels of our company."
Some reports suggest that Forstall's demise at Apple came at the hands of the maps debacle that followed the release of the latest version of Apple's mobile iOS. According to the reports, Forstall refused to sign an apology for the glitch-prone software and now has been shown the door. (See Related: The Apple Maps Disaster Is Really Bad News For Apple's 'CEO-In-Waiting')
As for John Browett, according to several sources, including the website AppleInsider.com, the man brought in to replace Ron Johnson last January was seen by many as a strange choice from the start. Before coming to Cupertino, Browett ran a retail operation in the UK called Dixons which was repeatedly noted for having a horrible shopping experience. When he came to Apple Browett immediately began slashing staff at retail locations in an effort to increase margins even if it meant sacrificing the customer experience. Tim Cook will run the company's retail arm while the position is being filled.
It remains to be seen what the changes will mean for the company going forward but at least one analyst is already predicting the company will go "from a tech titan into a dinosaur" in about a year.
Despite a soft earnings report last week, many analysts and investors remain bullish on the company moving forward.
"One key off the Apple earnings report that was overlooked is their costs per unit haven't accelerated," says Brian Sozzi, chief equities analyst at NBG Productions. "That's encouraging to see and I like that looking ahead to 2013." (See Related: Ignore Apple's Quarter, Analyst Says the Stock Is Still a 'Buy')
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