UPDATE 1-RESEARCH ALERT-Oppenheimer downgrades Apple to perform

Wed Dec 17, 2008 7:54am EST

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Dec 17 (Reuters) - Oppenheimer & Co downgraded Apple Inc (AAPL.O) to "perform" from "outperform" and said it can no longer recommend the stock as a long-term investment until Apple disclosed the state of CEO Steve Jobs' health or elaborated a viable plan for eventually transferring power.

Apple said on Tuesday that Chief Executive Steve Jobs will not deliver the keynote address at the Macworld trade show next month, reviving some investors' concerns about the state of his health and sending the company's shares down 3 percent. [ID:nN16287306]

Investors have been concerned about the cancer survivor's health after he appeared thin at another product launch in June. In 2004, Jobs, 53, said he had undergone successful surgery to remove a rare type of pancreatic cancer. In September, Jobs, who is often perceived as irreplaceable as Apple's leader, appeared thin but jaunty as he introduced new iPod digital music players.

"Whatever the reason, the unexpected announcement has underscored the greatest risk to Apple's long-term success -- its dependence on Jobs' health and its apparent lack of a succession plan," Oppenheimer said in a note to clients. A sudden departure of Jobs could leave Apple in disarray as its success has depended on placing concentrated bets on a small handful of products, each filtered and shaped by his singular vision, the brokerage said.

Without an institutional framework for making these decisions, Apple may not be able to effectively place and follow through on the bets its business model depends on, it added.

The brokerage also removed its price target on the stock.

Shares of Apple were down 4 percent at $91.45 in trading before the bell. They closed at $95.43 Tuesday on Nasdaq. (Reporting by Amiteshwar Singh in Bangalore; Editing by Jarshad Kakkrakandy)

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