Silicon Valley legend Steve Jobs, who has been on medical leave for an undisclosed condition since Jan. 17, resigned as chief executive of Apple Wednesday, saying he could "no longer meet" the duties and expectations of the job.
Interim CEO Tim Cook was immediately elevated to CEO, while Jobs, 56, will stay on as chairman of the board.
"I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple's CEO, I would be the first to let you know," Jobs said in a letter to "the Apple community" that was released by the company. "Unfortunately, that day has come."
While the move was stunning, it was not entirely unexpected. Apple investors appeared to be recovering from the initial shock, however. Apple shares were down $8, or 2.1 percent, at $368.16 in pre-market trading Thursday. That's half the loss seen in Wednesday's extended trading.
Jobs had been seen only rarely this year, including at a San Francisco event in March where he unveiled Apple's iPad 2, the hugely successful follow-on to its hugely successful tablet computer.Video: Tech world shaken as Jobs quits as Apple CEO
"His health clearly wasn’t improving and there was going to come a time when he was going to have to step aside,” said Rob Enderle, longtime technology analyst with Enderle Group.
Still, Enderle said it will be a blow for the company.
“Apple was designed around Steve Jobs, so there was really never going to be a great time for this,” Enderle said.
The move also could heat up competition in the already hyper-contentious smartphone market and provide an opening for rivals such as Samsung and HTC.
"Even before Steve Jobs' (resignation), Samsung was getting more and more optimistic that they can actually take on Apple in the smartphone arena," said Mark Newman, a former director of strategy at Samsung, where he worked for six years.
"The game is really now Samsung's to lose ... They are picking up market share because of the change in dynamics in the smartphone industry," added Newman, now a senior analyst for global memory and consumer electronics at Sanford C Bernstein.
Jobs' announcement triggered an outpouring of comments across the Internet from the company's legendary base of intensely loyal customers, many of them expressing concerns for the executive's health.Story: Cook has the skills to lead Apple, observers say
"I'm sad. He's the greatest entrepreneur ever," said Fred Wilson, a venture capitalist and principal of Union Square Ventures.
Jobs has suffered from health problems for at least seven years. In 2004 he took a leave of absence to get treatment for pancreatic cancer.
In January 2009 he took another leave, and it was later revealed that he received a liver transplant.
Cook, who has been at the company for 13 years, is widely respected as a strong No. 2 leader but hardly the visionary that Jobs is.
“He’s not that kind of a person and invariably that’s going to be a weakness,” Enderle said.
Jobs' story is virtually unparalleled in the annals of American business.
Pushed out of the company he co-founded in the mid-1980s, Jobs went on to found Pixar Animation Studios, the force behind some of Hollywood's most successful animated films. That company alone made Jobs a billionaire and was eventually acquired by the Walt Disney Co.
Jobs returned to Apple as CEO in the mid-1990s and presided over a string of hit products, refashioning the company as a maker of consumer products and integrated services including the iPhone and iPad as well as laptops and desktop computers.
The company's high-flying stock has more than tripled in value since 2009 and now Apple rivals Exxon Mobil as the most valuable American company with a market capitalization of nearly $350 billion. Jobs himself has a net worth of about $8.3 billion, ranking him No. 34 among the richest Americans, according to Forbes.Jobs' resigning after storied career
Although Jobs has been silent about his the details of his condition, his sudden departure, combined with his medical history, suggests that his condition has worsened to the point where he is “not in functional capability,” suggested Dr. Timothy Donahue, a doctor with the UCLA Center for Pancreatic Disease.
“It could potentially mean pain, lethargy, tiredness,” Donahue said, all of which would preclude running a global enterprise and even raise worries about Jobs’ survival.
Despite treatment for a neuroendocrine pancreatic tumor, first diagnosed in 2004, and a liver transplant, the cancer likely has re-emerged, Donahue said. In other patients who have liver transplants after neuroendocrine pancreatic tumors, the median survival rate is typically about two years.
“He’s pretty much reached the median survival,” Donahue said.
Industry analysts expressed confidence in Cook's leadership.
"The real takeaway is not to underestimate the bench," said Kevin Dede, analyst at Brigantine Adviseors. ""He's got an amazing cast supporting the operation of the company."
Still, analysts acknowledged that Jobs' departure adds a new element of risk and uncertainty to the company.
"It really does create uncertainty even though the execution may not falter given the company's deep product pipeline," said Ashok Kumar, an analyst with Rodman & Renshaw LLC. "But the headline risk is still there."
He expressed surprise that Jobs would leave so soon before the anticipated release of the iPhone 5.
"The fact that he is stepping down ahead of a much anticipated product release is not a good sign," he said.
Dr. Simon K. Lo, an expert in pancreatic disease at Cedars-Sinai Medical Center in Los Angeles, also speculated that Jobs’ cancer had returned, despite treatment in 2004 and 2009, prompting his decision to resign. He said such a move is typically wrenching for driven, dedicated professionals.
“Most of the high-powered patients are fighters and psychologically they want to work, so they fight to the last minute,” Lo said.
Enderle said he’s already heard of some Apple employees who left once it became apparent Jobs was not going to be able to return. He expects that will become a more significant issue for the company in about two years, when the current cycle of products starts to wind down.
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Full text of statement
Here is the full text of Jobs' letter, as released by Apple:
To the Apple Board of Directors and the Apple Community:
I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple's CEO, I would be the first to let you know. Unfortunately, that day has come.
I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee.
As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple.
I believe Apple's brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role.
I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you.
Msnbc.com's Allison Linn and JoNel Aleccia and Reuters contributed to this story.