Why Is Steve Jobs Skipping MacWorld?

Apple's true believers are being put to the test. Late Tuesday the company announced that Steve Jobs will not be giving the keynote address at the annual Macworld Conference and Expo. Apple also said that Phil Schiller, its top marketing guy, will be giving the keynote this coming year, and that this will be the last Macworld in which Apple will participate.

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• Steve Jobs: Not Dead Yet

Jobs has battled pancreatic cancer and has been looking exceptionally thin since the summer. Rumors that he'd be skipping the event had circulated for days. Still, the announcement itself was about as shocking as hearing that Barack Obama would be skipping the Inauguration and sending Joe Biden in his stead. (See pictures of Steve Jobs on the job.)

Steve Dowling, an Apple spokesman, deflected any questions about Jobs' health. When asked if Jobs canceled because of illness, Dowling said, "Phil is giving the keynote because this is Apple's last year in the show, and it doesn't make sense for us to make a major investment in a trade show we will no longer be attending." Asked again about Jobs' health, Dowling gave a similar answer, never using the word Jobs or anything related to his condition.

It's difficult to find a company of Apple's caliber whose fortunes are so closely tied to the health of its CEO. Apple is Jobs and Jobs is Apple. Unless he makes a public appearance, it's likely that the news will continue to hammer Apple's stock, which took a beating Monday after analysts downgraded it. (It dropped more than 2.5% within a few hours of the announcement.) A report by the NPD Group, which tracks retail sales, showed that Apple store sales declined 1% in November compared with a year ago, even at a time when PC sales increased 2%. Analysts, extrapolating to the pending post-holiday doldrums, when No One Will Buy Anything Ever Again, deemed this significant. If people stop buying stuff, that goes double for expensive stuff. And Apple occupies the premium space in the computing world. Jobs has famously and consistently refused to dance the price-cutting limbo with PC makers. As recently as October, he told analysts he wasn't "tremendously worried" that recession-wary customers would flock to $300 PCs. (See the top 10 iPhone applications.)

Apple fans had been hoping that Jobs would unveil a "netbook" at the upcoming Macworld, to be held the first week of January. Two years ago, at the same conference, he announced the iPhone, which has become the hottest thing in the computer world. Tens of millions of people will own one by the end of next year; before the recession hit, some analysts predicted that as many as 45 million folks would buy one. (That figure may hold as Apple moves into Wal-Mart at the end of the month.) Even at the current rate, 1 billion applications for the device could be downloaded by the middle of next year. That alone could generate as much as $1 billion in new revenues from applications; never mind how many more songs, movies and TV shows Apple will sell from the iTunes store to all those new iPhone users.

Of course, Jobs has been staging his own launch events with greater frequency during the past few years. And a number of Apple observers have pointed out that the company has been trying to get out of its relationship with IDG, which runs the Macworld trade show, for years. John Gruber, who runs the well-sourced Apple blog, Daring Fireball, said in an email that he's inclined to accept the press release at face value: "I think that the set-in-stone scheduling of Macworld Expo has always been a thorn in Apple's side. "January looks worse and worse as a month for major announcements," he said. "They need to make big announcements *before* the holiday quarter, not after."

Perhaps. Certainly, the successor to the iPhone, the iPhone 3G, was unveiled this summer at a developers' conference. But why wait until the last minute and raise the obvious questions about Jobs's health? The faithful are praying that Tuesday's announcement is exactly what Apple says it is, and not at all what it looks like.

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