all about TECH

Apple needs to delegate Steve Jobs’s power more formally to someone else. Mr. Jobs, Apple’s chief executive, is handing day-to-day control to the company’s chief operating officer, Tim Cook, because of health issues. Yet he retains his chief executive title. This is the third such move, and this time the handover is indefinite. However painful, a more formal transfer to an acting chief executive would have been better.



Both Apple and its shareholders can take comfort in the fact that the last two transfers, also to Mr. Cook, took place smoothly. Apple’s operations showed no signs whatsoever of impairment under caretaker management.

Mr. Cook has worked at Apple for more than a decade and has been chief operating officer for several years. He’s clearly a safe pair of hands and more — in total, he was paid $59 million last year. Moreover, Mr. Jobs has promised to retain control over big strategic choices.

But Mr. Jobs’s fitness is, sadly, an increasing concern. The company hasn’t said exactly what the current matter is, but this latest setback follows previous treatment for pancreatic cancer and an organ transplant. Furthermore, the open-ended nature of Mr. Jobs’s current respite will add to the worry for employees and investors alike.

In these circumstances, Apple would have been better served by explicitly naming Mr. Cook acting chief. That would leave Mr. Jobs as chairman, where he could retain say over the Apple’s strategic direction without the grueling daily chores of running the company.

That is where he is most valuable anyhow. Such a division would provide clarity and give Mr. Cook a proper mandate, given the responsibility of overseeing a company with a $300 billion market capitalization.

Mr. Jobs plays an outsize role at Apple. He is arguably the best executive in technology. But his reputation also depends on keeping the company on the soundest footing possible, even if that means formally loosening his grip.

Looser Renminbi

American lawmakers are again agitating about the perceived weakness of China’s currency as Hu Jintao, the Chinese president, prepares to visit Washington this week. Liberalization isn’t, however, only about letting the country’s currency, the renminbi, float more freely.

Chinese companies may soon be allowed to use their domestic currency to buy foreign assets and companies, according to a new pilot plan announced by the People’s Bank of China last week. There are plenty of restrictions, and a global rash of renminbi-denominated deals is a distant prospect. But the move is an important step.

China’s leaders want the renminbi to become a global currency and, to prove it, they have loosened several strict controls. First came rights for foreigners to hold deposits in renminbi and to buy and sell goods. Some $10.3 billion of trade was renminbi-settled in October. And deposits in Hong Kong hit 280 billion renminbi ($42 billion) in November. Both measures were tiny six months earlier.

The latest move is a sensible follow-up. China’s outbound investments were negligible until around 2004, but by 2009 they hit $56 billion. Greater risk-taking on the part of investors, and lighter Chinese regulation, could elevate that figure rapidly. Meanwhile, if investment flows to companies and countries that already buy from China, money that goes out through mergers and acquisitions could come back through trade.

It’s not clear, though, which non-Chinese vendors will want to be paid in renminbi. In many cases, currency can’t easily be taken back across the border. Some emerging market companies or governments may accept the renminbi, perhaps because they feel that favorable treatment from China depends on doing so.

Others may be reluctant, because there’s not much to be done with the currency besides put it in low-yielding deposit accounts. Banks are developing more renminbi-denominated investment products. But this will take time. The 20 billion of renminbi-denominated bonds issued in November paled next to the 60 billion renminbi of new deposits in Hong Kong.

For most holders of the Chinese currency, though, the main appeal is still a one-way bet on its appreciation. That’s hardly the spirit in which internationalization was intended. ROBERT CYRAN and JOHN FOLEY

For more independent financial commentary and analysis, visit www.breakingviews.com.