Apple Shares Fall as Design Chief Jony Ive Plans Exit
June 28 2019 - 11:12AM
Dow Jones News
By Dave Sebastian
Apple Inc. shares ticked lower after the iPhone maker said its
design chief Jony Ive is leaving the company later this year to
form his own independent design firm.
The Cupertino, Calif., company's stock fell 1% in early trading
Friday to $197.80.
Mr. Ive, who has been at the helm of the design team since 1996,
helped design the iPhone, which has driven Apple's sales and profit
for most of a decade. Mr. Ive also oversaw the development of key
products such as the iPod, iPad and MacBook.
Mr. Ive's planned new company, named "LoveForm," will count
Apple among its main clients, Apple said Thursday.
His departure marks the end of an era at the iPhone maker as it
shifts to an emphasis on services from product development. Sales
and earnings for the quarter ended in March slipped from the prior
year -- its first drop in more than two years. The two measures had
fallen in the holiday quarter for the first time ever, the company
said in January.
Investors may question Apple's ability to retain leading
industrial design after Mr. Ive's departure, but his exit comes at
a "sensible time" when the smartphone market is slowing, Nomura
Instinet analysts said in a note to investors Friday. As sales have
largely plateaued for the iPhone, the company is seeking new
avenues for growth, largely from the sale of app software,
entertainment content, financial tools and other services.
"He represents a particularly strong connection to Apple iconic
heritage given his intimate role in developing many of Apple
seminal products" and his tight bond with late Apple co-founder
Steve Jobs, the analysts said. "His departure, therefore, should
prompt such nostalgia."
Nomura Instinet, which referred to the move as a "sentimental
negative," maintained its target price of $175 a share on Apple
stock.
Wedbush analysts said in a note Thursday that while there are
questions about Apple's product innovation, they aren't overly
concerned about Mr. Ive's exit because he'll be working closely
with the firm going forward. Wedbush said Apple remains as the most
safe among its large technology peers as regulators and legislators
raise potential antitrust issues.
Wedbush maintained its outperform rating on Apple stock and a
share-price target of $235.
Dow Jones & Co., publisher of The Wall Street Journal, has a
commercial agreement to supply news through Apple services.
Write to Dave Sebastian at dave.sebastian@wsj.com
(END) Dow Jones Newswires
June 28, 2019 10:57 ET (14:57 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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