For second time in two years, Jobs is forced out of Apple by ill health

Steve Jobs, Apple's visionary leader (EPA)

Steve Jobs has dropped a bombshell on Apple, the company he co-founded, announcing to employees yesterday that he is to take a leave of absence on medical grounds after overcoming two serious conditions in the past six years.

Mr Jobs, who helped to set up the company in 1976 after dropping out of college, emailed staff yesterday telling them: "The board of directors has granted me a medical leave of absence so I can focus on my health."

In his short memo, he added: "I will continue as chief executive and be involved in major strategic decisions for the company. I love Apple so much and hope to be back as soon as I can."

His surprise announcement, in which he did not expand on the condition or its seriousness, sent shockwaves through the technology industry and immediately raised speculation over Mr Jobs's future and that of Apple itself.

Carolina Milanesi, an analyst at the research firm Gartner, said: "Jobs's love for Apple means that he would step aside if he felt he couldn't perform his duties. At the moment it is far too early to say."

Mr Jobs has moulded the company in his image following his return 14 years ago, spearheading the staggering rise in its value from $2bn to almost $320bn. Shares stood at a record $345 on Friday and yesterday's announcement came when the US markets were closed to celebrate Martin Luther King Day.

Apple will hope to avoid the 10 per cent sell-off that occurred after Mr Jobs's last announcement of medical leave in January 2009, but after-hours trading in Frankfurt saw the company's shares down by more than 7 per cent. It is also set to announce its first-quarter results, which are expected to be positive following strong sales of the iPad, after the US markets close tonight. Mr Jobs has had to endure more speculation over the state of his health than any CEO in recent times. Industry experts have started paying as close attention to his physical appearance at recent Apple launches as the new products on display.

In October 2003 he was diagnosed with pancreatic cancer, although details emerged only the following year after he revealed he was to step back from the company to fight the disease after a special diet had failed to cure it. Fears about his health resurfaced several years later, with commentators noting his gaunt features and weight loss.

In 2009, days after denying his ill health to shareholders, Mr Jobs revealed he was to take a leave of absence of six months. His exact issues were not disclosed, although it emerged his treatment had culminated in a liver transplant. He returned to the company that summer and made his first public appearance in September of that year, as ebullient as ever about the company's products.

The latest mutterings about the state of Mr Jobs's health came at the end of last week, when it was announced that the launch of Rupert Murdoch's iPad-only newspaper The Daily – which had been scheduled to take place tomorrow in San Francisco – had been indefinitely delayed. Mr Jobs had been set to appear on stage at the event alongside Mr Murdoch.

Apple's chief operating officer Tim Cook, who joined the company from Compaq in 1998, will step up to cover Apple's day-to-day operations in Mr Jobs's absence – just as he did the last time the CEO was ill.

Many inside and outside Apple have picked Mr Cook as the natural successor. The company believed Mr Cook had done such a good job last time around that it paid him a $5m cash bonus with $52.3m in stock options.

Ms Milanesi said: "Tim did really well. If the question is whether the company can flourish without Steve Jobs, the answer is probably yes. Jobs calls the shots, and nothing happens without his say so, but you need a good team in place around you. And Apple has that."

Mr Jobs rejoined Apple in 1997, more than a decade after he lost a power struggle for control. His second stint has seen Apple launch the iPod, iTunes, the iPhone, which set the bar for all rival smartphone companies, and then the iPad.

The men covering jobs' job

Tim Cook

During each of Jobs's medical absences, Cook has been handed the Apple reins and is seen by company insiders, shareholders and analysts as a safe pair of hands. "I have great confidence that Tim and the rest of the management team will do a terrific job executing the exciting plans we have in place for 2011," Jobs said yesterday.

Paul Schiller

While Cook was in charge, Schiller was the public face of Apple. A charismatic character who joined Apple in 1997, he will take over Jobs' highly lauded keynote presentations at product launches, a role he has covered during Jobs' previous absences.