Many expect Apple shares, which plunged 7 percent on Wednesday following the announcement, to be stung by the news. But some analysts say Jobs, though he will be missed in the short term, may not be as irreplaceable as many think.
In addition, the developments foreshadowed Jobs permanent departure soon, analysts say, and bolstered Chief Operating Officer Tim Cook's case as heir apparent.
Anticipation is mounting about the company's plans for 2009. A cheaper version of Apple's wildly popular smartphone -- dubbed the "iPhone nano" -- is widely said to be in the works. In addition, whispers persist that the company is working on some sort of ultra-portable device.
"You can't really dismiss the idea that if he would be gone from the company it would be a great loss, but there are a lot of innovative minds at Apple," said Ted Parrish, portfolio manager at the Henssler Equity Fund in Georgia, which owns Apple stock.
"The company is in a great position, its product cycle is strong and we would buy Apple on weakness associated with this news."
Jobs is universally viewed as the chief creative force behind the company's line of consumer-friendly products, which include Mac computers, the iPod and the iPhone, and is regarded as a master marketer and pitchman. As such, many fear his departure would deprive the company of its most vital and imaginative resource.
Indeed, Jobs return to Apple a decade ago sparked a period of remarkable growth and creativity, which helped keep Apple one step ahead of rivals in the brutally competitive consumer technology sector. Apple's product innovations have often laid the blueprint for its competitors to follow.
However, the company is now facing increased headwinds as consumers scale back spending due to the global economic slowdown. At the same time, Wall Street is clamouring for a new device to act as a catalyst for its stock.
Jobs said he would step aside until June to deal with his health issues, which turned out to be "more complex than originally thought".
Last week, Jobs said his marked weight over recent months was due to a hormone imbalance that was relatively simple to treat.
COO Cook stepped in to manage day-to-day operations and some analysts believe Jobs could formally hand over the reins of the company this year.
Oppenheimer analyst Yair Reiner said Jobs's announcement will have "zero" impact on the company's product plans for 2009. However, he said, a Jobs departure would affect ideas that are still being hatched.
"Over the least ten years he has been the person who has filtered and synthesized the collective genius of all of Apple's engineers ... he has picked and chosen the best and ripest ideas and played a critical role in fitting those great concepts into great products."
A DEEP BENCH
Jobs's revelation about his health came a week after Apple's relatively lackluster Macworld presentation, where it failed to launch any important new products, as it has in years past.
However, many analysts maintain the company has a deep bench, chock full of creative talent that can keep the company competitive.
Kaufman Bros analyst Shaw Wu acknowledged Jobs is one of the top innovators in the history of technology. But Wu is not worried about Apple's future, he said, because much of what Jobs brought to the company has now been institutionalised in its DNA.
"Apple is going to do well ... there's a lot of people at Apple who are responsible for its success."
Broadpoint.AmTech analyst Brian Marshall mentioned Jonathan Ive, Apple's senior vice president of industrial design, as another important person behind the company's success. He expects Apple to continue to innovate.
Some analysts warned markets were perhaps putting too much focus on Jobs' health swings, when the world's largest economy is dealing with its worst financial crisis in decades.
"What's more important is the overall economy and people's ability to pay $1,000 for an Apple notebook or pay $75 or $300 for an iPod or pay $200 for an iPhone," said Mike Binger, fund manager at Thrivent Financial, which owns Apple shares.
"That's more pertinent to where the stock is going to go than how involved Steve is on a day-to-day basis."