Apple investors had more than a day to digest the company’s biggest management shake-up since the death of co-founder Steve Jobs more than a year ago. And they were clearly rattled.
Shares in Apple fell below $600 today on the first day of trading since the consumer technology giant’s surprise announcement late Monday when markets were closed due to Hurricane Sandy.
Apple announced that senior software executive Scott Forstall and retail head John Browett had been given their marching orders, the Financial Times reported. Forstall, one of the top executives at the company and previously considered a possible successor to chief executive Tim Cook, was behind Apple Maps software, which contained embarrassing errors and drew strong criticism from users, social media and investors.
The Wall Street Journal reported that Forstall was shown the door after he refused to sign a letter apologizing for the debacle. According to the WSJ, Forstall had argued that Apple could fix the problems without saying sorry — an argument that clearly didn’t go down well with Cook.
“The buggy and poor-performing Maps app, which displaced Google Maps as part of the iOS 6 launch, has been a black eye for Apple,” Mark Moskowitz, an analyst at JPMorgan Chase & Co., wrote in a research report cited by Bloomberg. “The one risk, in our view, is if Forstall potentially heads to a competitor such as Google or Microsoft to build out their mobile operating system prowess.”
Apple shares fell as much as 2.7 percent Wednesday. They were last trading down around 1.5 percent at $595.10 per share, outstripping losses in the broader market.
Browett, who joined Apple six months ago, was asked to leave after “failing to fit in” and making too many mistakes as head of the company’s retail unit. According to CNN, “Browett has had one stumble after another,” including cutting the number of workers in stores, which he later admitted was a mistake.