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Jony Ive's departure from Apple 'leaves a major void in terms of innovation'

Apple (AAPL) shares slipped on Thursday as Jony Ive announced Wednesday his decision to leave the tech giant later this year. The departure of the company’s long-time chief design officer sparked mixed reactions from investors.

“The reality is, next to Jobs, no one had more of an influence in building the iconic Apple brand than Jony,” Wedbush Securities Equity Research Managing Director Dan Ives told Yahoo Finance. “It definitely leaves a major void in terms of innovation in Cupertino.”

When speaking to investors, Ives explained the key concern for investors is innovation going forward, “the question is what the next step is. It puts more pressure on Cook and Apple to be successful in services.” Ive’s biggest achievement was the iPhone design.

A majority of Apple’s profits and revenue for the next five to eight years will still stem from iPhone sales, said Ives, noting that even though services is becoming more important and “the linchpin to Apple’s valuation and growth going forward... They need to continue to put a fence around their backyard in terms of hardware innovation.”

Hardware is critical right now “in terms of the one-two punch with services,” especially with the introduction of 5G, said Ives. “Now they’re doing it without the pilot on the plane, in terms of Jony.”

A multi-pronged approach for Apple

D.A. Davidson Senior Research Analyst Tom Forte believes Ive’s departure isn’t going to be too damaging to Apple.

Ive’s departure is less impactful than it would have been five or 10 years ago, Forte told Yahoo Finance. “Apple's working on becoming less dependent on the smartphone. They're working on getting heavier into content, into advertising, into services.”

Forte believes Apple is at a “pivot point,” as it branches out to more services and the tech giant has what it takes to go into the next era “even with, potentially, this transition for Jony Ive to a consultant from employee.” (Apple will be Ive’s new design company’s first client.)

SAN JOSE, CALIFORNIA - JUNE 03: Apple CEO Tim Cook (L) and Apple chief design officer Jony Ive (R) look at the new Mac Pro during the 2019 Apple Worldwide Developer Conference (WWDC) at the San Jose Convention Center on June 03, 2019 in San Jose, California. The WWDC runs through June 7. (Photo by Justin Sullivan/Getty Images)
SAN JOSE, CALIFORNIA - JUNE 03: Apple CEO Tim Cook (L) and Apple chief design officer Jony Ive (R) look at the new Mac Pro during the 2019 Apple Worldwide Developer Conference (WWDC) at the San Jose Convention Center on June 03, 2019 in San Jose, California. The WWDC runs through June 7. (Photo by Justin Sullivan/Getty Images)

When it comes to competition in the services space, Forte believes it’s a multi-pronged approach for Apple. Forte explained to Yahoo Finance that rather than trying to find a new product or service that will replace their smartphones, the tech giant will focus on other initiatives.

“I look at content. I look at health care. I think that collectively, that can enable Apple to sustain sales growth, despite the maturity of the smartphone category,” he said. “And content will play a role there. But again, part of a consolidated effort.”

Taylor Locke is a producer for Yahoo Finance. You can follow her on Twitter @itstaylorlocke.

Read the latest financial and business news from Yahoo Finance

Watch the full interview with Tom Forte here

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