Greatly Exaggerated

Thursday, 11 September 2008

At Tuesday’s annual iPod/iTunes special event, Steve Jobs both (a) served in his usual role as showman, and (b) appears to be just as thin as he was at WWDC in June, when his appearance sparked rumors that he was seriously ill. Like it or not, his appearance and health remains a big story in the major media. The coverage of Tuesday’s event from the technology columnists for both of the U.S.’s leading news magazines — Josh Quittner at Time (headline: “Steve Jobs: Not Dead Yet”) and Dan “Fake Steve” Lyons at Newsweek (who persists in referring to Jobs as “Dear Leader”) — was focused squarely on Jobs, not the day’s product announcements.

The speculation is not wholly unfounded. If Apple and Jobs do not wish to discuss the details of his health other than in the broadest of terms (e.g. “doing just fine”), that leaves the outside world with only a few cold hard facts, one of which is what our eyes tell us — that Steve Jobs has lost a tremendous amount of weight — and another is that he had surgery for a rare, treatable form of pancreatic cancer in 2004. The other fact we know is that The New York Times reported that Jobs had a second “surgical procedure” earlier this year, “to address a problem that was contributing to a loss of weight.”

The good news, such that it is, is that there are explanations other than a recurrence of cancer that would explain these facts. The pancreaticoduodenectomy (a.k.a. “Whipple procedure”) Jobs underwent in 2004 to treat his pancreatic cancer can lead to complications which require intestinal surgery, which surgery can lead to digestive changes and significant, perhaps permanent, weight loss. The best and most informative speculation I’ve seen is this piece on ScienceBlogs, written in late July by a pseudonymous surgeon. The details are unpleasant, and include severe diarrhea, nausea, and radical weight loss. But the conclusion is a good one:

What’s more important, though, is that Jobs’ appearance (at least as far as I can tell from the limited information that I have) is almost certainly not due to a recurrence of his tumor, and it’s not something that can’t be fixed. Chances are Jobs will be fine, and will remain as cantankerous, arrogant, dictatorial, and wildly visionary as ever for many years to come.

The author speculates that the procedure Jobs underwent this year is a Roux-en-Y, which according to Wikipedia is the surgical procedure that forms the basis for gastric bypass. Gastric bypass is a procedure that helps the obese lower their weight to a normal level. Steve Jobs was, if anything, already on the thin side before having surgery. We don’t know because Jobs won’t say, but this is my best guess as to what the deal is with Jobs’s weight loss.

In a post-event interview with CNBC’s Jim Goldman Tuesday, Jobs reiterated that he’s “doing just fine”, but admittedly could “stand to gain 10 or 15 pounds”. Goldman then reports:

I asked [Jobs] about the rampant speculation and rumors on the blogosphere about the issue, and whether he was surprised by it. Where did he think it all came from, I asked. He picked up his briefcase and told me it was from “hedge funds with a big short position in Apple.”

I think a little context here might be helpful. He said it in passing. It wasn’t as if he was lobbing some specific grenade on Wall Street. I didn’t follow up with which funds he was talking about because it wasn’t relayed to me that way. He just said matter-of-factly that it’s what he thought. Or felt. Nothing specific on which to base it, or maybe there was, but he didn’t share that with me.

I don’t have a problem with Jobs’s assertion that the specific details of his health are a private matter. But this sort of speculation regarding the cause of his weight loss is inevitable in the absence of full disclosure. What made matters worse is that, in the aftermath of WWDC, Apple PR put forth the claim that Jobs’s gaunt appearance was the result of “a common bug”. That seemed so Kremlin-esque, so clearly an insufficient explanation, that it’s understandable that some people, including investors, jumped to the worst-case conclusion.

Jobs actually broached the rumors regarding his health on stage at the beginning of the event, standing beneath a slide that read “The reports of my death are greatly exaggerated”, a deft way of using Bloomberg’s accidental publication of their canned obituary as an excuse to assert publicly that he’s not going anywhere. Well-played.

Quittner and Lyons don’t seem to be buying it, though. Lyons, on his weblog:¹

But Dear Leader remains alive and well (see photo above). Oh, and they’ve got some upgraded iPods and a new version of iTunes. Seriously? That’s it? I’m still trying to figure out why they held an actual event today instead of just putting out a press release. As a fellow filthy hack commented to me after the big show, “Can you imagine if Sony did this?”

Afterward I wondered if the entire purpose of the event was simply to have a reason to put Dear Leader out in public. Thing is, Dear Leader, while definitely still alive, nonetheless looks frail. […] It’s hard to describe this but there’s something not quite right about the way Dear Leader walks. I thought maybe I was imagining this but another hack said he thought the same thing.

Quittner is of a mind with Lyons:

Apple’s big event today in San Francisco left many people wondering: What the heck was that all about? Normally, the great Steve Jobs uses his time on the podium to delight and surprise the masses. But today he gave little more than a preview of the new holiday line of iPods, and the TV ads that will accompany them.

You don’t have to be as cynical as me to understand the real reason this event was staged: It was so the world could watch Jobs swim the Yangtze River.

The obvious reason as to why Apple holds this event annually is “because they can”. They fill a room with press and analysts, and the press fills newspapers, magazines, and web sites with coverage of what Apple announces. If (to take Lyons’s example) Sony could do this, they would. But Sony can’t, because they don’t have iPod-caliber players, or iTunes-caliber software, or an iTunes Store-caliber service. They have none of those, and Apple has all three.

Quittner and Lyons are either ignorant or are being disingenuous. To claim that this week’s event was in any way not normal is to ignore the fact that Apple has scheduled an event just like Tuesday’s during September every year since the iPod debuted in 2001.² Eight years in a row. Take it to the bank that there will be another such iPod/iTunes event on a Tuesday in mid-September 2009, too.

Some years the announcements are more significant than others. Last year’s introduction of the iPod Touch was a bigger deal than this year’s introduction of the updated iPod Touch. But you can’t expect a Touch-like leap forward every year. In the eight years Apple has held this event, I’d say the coolness factor of this week’s news falls squarely in the middle: the new Nano is a complete redesign (and it’s already winning rave reviews); Apple is positioning the iPod Touch as a major handheld gaming platform; and the “genius” suggestion engine is a useful addition to iTunes.

What gives resonance to the rumors regarding Jobs’s health is the suspicion that if he were terminally ill, that this is how he’d play it, denying it until the end. He’s intensely secretive and private, and the backstory regarding his original diagnosis and surgery, as reported by Peter Elkind at Fortune, is that he didn’t announce it publicly until after he’d had surgery on July 31, 2004 — eight months after the cancer was originally diagnosed in October 2003.

But that suspicion doesn’t stand up to scrutiny. If Apple’s board of directors knows Jobs’s full bill of health, it would be illegal for them to stand by and allow Jobs and Apple’s PR department to make statements to the contrary. And if the board does not know Jobs’s full bill of health, they’re neglecting their legal responsibilities. There’s a difference between 2004, when Jobs and Apple kept his original cancer diagnosis a secret, and what Lyons is suggesting now, which is that Jobs is lying. The difference is that lying about this would constitute securities fraud. Under this scenario, Jobs himself would no longer be around to take the rap for it, but the members of Apple’s board would be.

So consider this: What if instead of holding Tuesday’s event, Apple had instead done just what Lyons and Quittner propose, and announced this week’s news via press release? What would Lyons have written then? My guess is he would have jumped on it as evidence that Jobs was too ill to take the stage, and that his hubris was now harming Apple and its shareholders by robbing the company of the free publicity these events generate.