Apple Shares Slip Following Executive Shake-Up

The markets, newly reopened after Hurricane Sandy closed them for two days, are finally having their say about the recent management overhaul at Apple, and the reaction is unsettled, to say the least.

Shares of Apple fell more than 2.5 percent, to $587.70, in early trading Wednesday morning, as investors responded to the departures of iOS chief Scott Forstall and retail head John Browett. An understandable response to one of the biggest shake-ups Apple has seen since the ouster of former CEO Gil Amelio in 1997. But likely a short-lived one. By and large, analysts remain confident of Apple’s prospects going forward. Said the ISI Group’s Brian Marshall, “We believe if the company can be successful without Steve Jobs, it can be successful without Scott Forstall.”

Piper Jaffray analyst Gene Munster took a similarly positive view, noting that Monday’s announcement is as much about who’s staying as who’s leaving.

“We believe that yesterday’s announcement all but confirmed that (Jonathan) Ive will be with the company for the foreseeable future, putting to rest a recurring investor concern of an Apple without Ive,” he said. “This, combined with Tim Cook’s nine years remaining on his contract with Apple, suggests the two most critical management figures will be in place for the longer term. We think that despite the departure of Forstall who ran iOS development, iOS’s future is in good hands.”