By Franklin Paul

While Apple shares fell 5 percent from their previous Nasdaq close, the decline was not as steep as the 10 percent in after-hours trading Wednesday after Jobs said he would take a leave of absence until the end of June as his health problems were "more complex" than he had thought.

"We believe that the corporate strategy that Jobs implemented, including a strong emphasis on product design, will remain intact as Jobs will still be making strategic decisions," UBS analyst Maynard Um wrote in a research note.

"We believe the leadership team Jobs assembled is more than capable to continue to execute the strategy both near and long term," he wrote.

Apple said Chief Operating Officer Tim Cook will take over day-to-day operations but Jobs, 53, a pancreatic cancer survivor, would remain involved in major strategic decisions.

The company's shares were down $4.33 at $81.00 in morning trading on the Nasdaq. The stock has erased all of the gains it made since Jobs unveiled the iPhone in early 2007.

Shares have fallen from a May 2008 high of $192.24, on worries about Jobs' health and the impact of the economic recession on demand for Apple's premium products.

But Cross Research analyst Shannon Cross said Cook can handle the CEO role and that Apple has in recent years hired well in its executive ranks. Apple's board should show its confidence by launching a $10 billion stock buyback plan, she said.

"This is the rainy day, so use the funds," she said in a client note that estimates Apple ended 2008 with $26 billion in cash.

Nonetheless, analysts say the lack of clarity over who will hold the reins in coming years could affect the company in many ways, including whether it can keep coming out with popular products like the iPod and iPhone.

"Uncertainty about the ultimate succession plan could potentially sow tensions among executive management," Oppenheimer analyst Yair Reiner said in a client note. "An extended period of muddled executive leadership would almost surely impact product releases in 2010 and beyond."

Citing the uncertainty, RBC Capital analyst Mike Abramsky cut his rating on Apple shares to "underperform" from "sector perform," and slashed his price target to $70 from $125.

"Jobs is widely viewed as Apple's chief innovator, dealmaker, leader, deeply involved in minute decisions, inextricably tied to Apple's brand," he said.

"Jobs' being sidelined ... with no clear successor -- in our view raises risks to Apple's sustaining its stellar record of innovation going forward," he added.

(Reporting by Franklin Paul, editing by Tiffany Wu and Derek Caney)