The conversations weren’t explicitly aimed at recruiting a new chief executive and were more of an informal exploration of the company’s options, said these people. The directors don’t appear to have been acting on behalf of the full board, some of these people said. Apple has seven directors, including Mr. Jobs.

It is also unclear whether Mr. Jobs was aware. In response to questions from The Wall Street Journal about the discussions, Mr. Jobs said Monday in an email, “I think it’s hogwash.” An Apple spokesman declined to comment.

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Now backing the measure: The Laborers’ International Union of North America and Institutional Shareholder Services, one of the most influential proxy advisory outfits around.

“ISS believes that shareholders would benefit by having a report on the company’s succession plans disclosed annually,” ISS said. “Such a report would enable shareholders to judge the board on its readiness and willingness to meet the demands of succession planning based on the circumstances at that time.”

That may be so, but according to Apple, which recommends shareholders vote against it, such a report would also give the company’s rivals unfair advantage by publicizing its objectives and plans and would undermine its efforts to recruit and retain champion executives. “The company takes succession planning seriously, and the board has adopted a comprehensive process to ensure continuity and maintain the superior quality of its management team,” Apple said in its 2011 proxy statement. “This process also allows flexibility to adjust to unanticipated changes in the market.”

What it doesn’t allow for is transparency, something investors might appreciate with Jobs now on his third medical leave from Apple.

As Oppenheimer analyst Yair Reiner said in a note raising his target price on the company’s shares to $425, “It’s no surprise when Apple tops expectations, but it’s fairly rare to see it trounce Street’s targets on almost every line. Bottom line: big as Apple is, it shows no sign of slowing, not with the Verizon iPhone launching in 2Q11 and China growth accelerating to 400% year-over-year.”

Piper Jaffray analyst Gene Munster raised his price target to $483 from $438, observing in a research note that this quarter was the first in three years in which Apple issued EPS guidance above Street consensus (10 percent ahead of the Street). “Apple’s vision for itself as a mobile device company has come to fruition,” he said. “[The company] guided the March quarter more aggressively than it typically guides the out quarter relative to the Street. We see this as sign that it is bullish on the prospect of the iPhone at Verizon.”

At Deutsche Bank, Chris Whitmore slapped a price target of $440 on AAPL. “Apple continues to show impressive growth despite its size and is well positioned to benefit from the confluence of three major product cycles, namely: iPad, Macs and iPhone,” he told clients. “These product cycles coupled with greater geographic expansion (Verizon iPhone, iPad 2, iPhone 5, China expansion, Carrier deals) increases our confidence in AAPL’s ability to continue to outperform.”

At Barclays, Ben Reitzes raised his target to $450 from $420 to account for higher unit sales across Apple’s product portfolio. His take on Q1: “This very strong quarterly report left no holes to punch in the fundamental story. We believe the above-consensus revenue and EPS guidance and new products to come bring potential for further upside. We continue to believe the company is in very capable hands with COO Tim Cook and the rest of the team.”

Raising his price target to $450 from $430, Goldman Sachs analyst Bill Shope said essentially the same thing. “While the news of Steve Jobs’ medical leave may continue to add some headwinds to the share price momentum in the near-term, we continue to believe improving underlying fundamentals and the strength of Apple’s overall management team will counter this uncertainty. In addition to the strength of the December quarter and the recent Verizon iPhone release, we believe the next-gen iPad launch and the June iPhone refresh will serve as critical catalysts in the first half of 2011.”

UBS analyst Maynard Um ratcheted his price target up to $465 from $415, predicting what “could be the largest pre-order & sales ever experienced by Verizon Wireless for the iPhone” and continued success for the iPad. Said Um, “Though there has been increasing concern with regard to ramping competition, we see Apple’s ecosystem and ease of use as offering a more compelling value proposition than its competitors today and expect its tablet market share to more closely match its iPod market share in the mp3 player market rather than its share in the more fragmented smartphone market.”

And, finally, there was Ticonderoga’s Brian White, who took a “F@&k Everything, We’re Doing Five Blades” approach and raised his target price to a staggering $550. That’s about 60 percent higher than the price Apple shares have been trading at recently, a target that if the company were to hit, would value it at $506.6 billion. Said White, “Despite Monday’s news regarding Steve Jobs’s medical leave of absence, we believe it will be difficult to keep Apple’s stock from reaching new highs given the much stronger than expected quarter and outlook reported by the company.”

Bullish, or another word with a lot of the same letters? Hard to say. But as you weigh that question, remember this: This is the 33rd consecutive quarter in which Apple has beaten estimates. And this time it beat them by $2 billion.

There will be those who are inclined to try to equate Jobs’s health issues with all kinds of near-term product implications, but such speculation is likely off base. While Jobs’s health may have been a factor in the timing of a couple of announcements, don’t expect his medical issues to substantially impact things like the next iPhone or iPad.

The company overall tends to operate on long lead times, so much of this year’s product plans are likely in the works and probably won’t be deeply affected. Jobs practically said as much in his brief statement.

Also, Jobs leaves Apple in extremely capable hands. Tim Cook has ably led Apple during Jobs’s prior medical leaves, and there is every reason to believe that this time will be no different.

Longer-term, though, is another question. Here is where it is hard to overstate the importance of Steve Jobs at the helm.

While Apple has a company full of talented workers, Jobs tends to be involved in major (and plenty of not-so-major) decisions in almost every area. He is a well-known perfectionist with a strong, sometimes maddening focus on having products done just so.

Those who understand Apple know that Jobs is not just a chief executive–he is also the de facto head of every department. If there is a tough call to be made about a product or a decision on the next marketing pitch, Jobs is the ultimate authority. He’s known to weigh in on all manner of more minor issues too. This attention to making every detail just so can make Jobs a tough guy to deal with, but is also key to a good part of the company’s success.

And even in the short term–although the same products are likely to come from Cupertino, whether Steve Jobs is there to introduce them or not–no one can sell like Steve. There’s a reason that satellite trucks line up for blocks anytime he has something to say.

Update, 1:35 p.m.: Just got done going on MSNBC talking about the situation (video posted below).

Ina Fried talks to MSNBC Dayside about Steve Jobs health
Uploaded by BeyondPixBroadcast. – Videos of the latest science discoveries and tech.

PREVIOUSLY

• Steve Jobs Asked for Privacy–and He Deserves It This Time
• Apple Shares Down Nearly 8 Percent in Frankfurt on News of Jobs’s Medical Leave
• Citing Health, Steve Jobs Steps Away From Apple, Again
• Apple Opposes Proposal on CEO Succession Planning
• Deutsche Bank Joins the Running of the Apple Bulls
• Jobs: “I’m Vertical, Back at Apple and Loving Every Day of It”
• Apple Investors Are Wusses
• When Steve Jobs Said “Stay Hungry. Stay Foolish,” He Did Not Mean This Foolish
• AAPL Sauce
• Apple’s Steve Jobs: “I Have Decided to Take a Medical Leave of Absence”
• The Entire Letter: Steve Jobs Explains His Health Problem: “Hormone Imbalance”–Predicts Recovery by Spring and Will Stay On as CEO
• Ain’t Nobody’s Business If Jobs Is or Isn’t

We’ll likely see a similar drop when it begins trading on the Nasdaq again tomorrow, though the company is expected to post another quarterly blowout when it reports earnings after market close. Atlantic Equities analyst James Cordwell suggests investors prepare themselves for a drop similar to the one Apple shares suffered after the announcement of Jobs’s first medical leave. “We’ve been here before at the start of 2009, so it’s probably going to be similar to that,” he told Reuters. “Operationally the company coped very well last time, but there’s a certain Jobs premium in the stock, and that will be the concern.”

And while that’s understandable, that concern is overblown. As I wrote back in January 2009, for investors to sell on news like this is just silly:

“Because if Jobs were to leave Apple–willingly or otherwise–people won’t suddenly stop buying Macs. The iPod won’t suddenly go the way of the Walkman and early adopters won’t suddenly lose interest in the next-gen iPhone. Nor will the Houdini-meets-Edison magic that Jobs has brought to Apple suddenly dissipate.

“Yes, Jobs’s sensibility pervades Apple’s culture and its products, but that culture and those products are not tethered to his health or day-to-day presence at the company. And Apple’s deep executive bench is more than capable of running it–and running it well–in his absence.

“iPhones worldwide will not stop working if something should happen to Steve–although apparently there are quite a few investors who believe this is indeed the case.

“Apple will endure–with or without Steve Jobs. There will be a post-Jobs era, and whether it begins this year or 20 years from now is of little consequence.”

PREVIOUSLY

• Steve Jobs Asked for Privacy–and He Deserves It This Time
• Apple Shares Down Nearly 8 Percent in Frankfurt on News of Jobs’s Medical Leave
• Citing Health, Steve Jobs Steps Away From Apple, Again
• Apple Opposes Proposal on CEO Succession Planning
• Deutsche Bank Joins the Running of the Apple Bulls
• Jobs: “I’m Vertical, Back at Apple and Loving Every Day of It”
• Apple Investors Are Wusses
• When Steve Jobs Said “Stay Hungry. Stay Foolish,” He Did Not Mean This Foolish
• AAPL Sauce
• Apple’s Steve Jobs: “I Have Decided to Take a Medical Leave of Absence”
• The Entire Letter: Steve Jobs Explains His Health Problem: “Hormone Imbalance”–Predicts Recovery by Spring and Will Stay On as CEO
• Ain’t Nobody’s Business If Jobs Is or Isn’t