The health of Apple Inc Chief Executive Steve Jobs will overshadow quarterly results on Tuesday from the consumer electronics powerhouse, whose iPhone and iPad excited holiday shoppers.

Apple shares, up 62 percent in the last 12 months, were down 3.4 percent in midday trade on Tuesday. That is far less than the estimated 11 percent drop in Apple shares after Jobs announced his last medical leave.

In European trading, its shares rose more than 4 percent, regaining some of the 6 percent lost after the announcement on Monday. Stock in rivals including Blackberry-maker Research in Motion and Motorola Mobility was up on Tuesday.

The world's largest technology company by market capitalization said on Monday that Jobs, 55, was taking a medical leave of absence without specifying a return date or detailing his condition.

Jobs' latest medical leave is clearly a negative, but that doesn't take away from an extraordinary company with a great team, said Shawn Kravetz, president of Boston-based hedge fund firm Esplanade Capital, which no longer holds a stake in Apple. But even great teams can lose their captains.

Aside from Jobs' health, the company is entering 2011 on a roll, a cash-generating machine with surging sales across its product lines. Wall Street has forecast Apple's quarterly revenue to rise more than 50 percent to $24.4 billion after a bumper holiday shopping season.

James Cordwell, an analyst at London-based Atlantic Equities, said investors were realizing Apple was more than Jobs. His absence is unlikely to affect the company's performance over the next two years or so, given the strong position they have in the market.

Other analysts, however, said Jobs' influence in the company he cofounded could not be overstated, particularly in guiding product development.

Steve Jobs is seen by the market to be a major force in Apple's strategic direction, said Richard Windsor, global technology specialist at Nomura. If his pancreatic cancer has returned, one could be quite worried.

Jobs' leave came nearly two years after he took a six-month break to undergo a liver transplant. He also took time off after pancreatic surgery in 2004.

WHAT'S UP WITH JOBS?

Apple has not dwelled on Jobs' health, and Jobs himself asked for respect for his privacy in a memo to employees made public on Monday.

In Jobs' absence, it will be up to chief operating officer Tim Cook to decide how much to tell investors about the absent chief executive, and what Apple plans to do with its $50 billion-plus pile of cash and investments.

Less of a showman than Jobs, the 50-year-old Alabama native was not expected to make any grand pronouncements. Cook is regarded as a safe pair of hands for the company, having stood in for Jobs twice before.

In Asia, tech shares gained, helped by hopes of a recovery in chip prices and expectations that nimble firms may slow the runaway success of Apple after the news on Jobs.

Shares of rivals rose. Motorola Mobility was up 3.5 percent at $34.94 on the New York Stock Exchange near midday on Tuesday, while U.S. shares of Blackberry-maker Research In Motion were up 1.4 percent at $65.70 on the Nasdaq.

Rivals' hopes could be misplaced, however. Apple's road map is all set and its iPhone 5 is ready to go, leaving little room for competitors to cut into its share, said Bonnie Chang, an analyst at Yuanta Securities in Taipei.

Avian Securities analyst Matthew Thornton called the rise in rival phone makers' shares an overreaction. I don't see any fundamental benefits to RIM or Motorola from the news, at least not in the near-to-intermediate term.

HUGE HOLIDAY SEASON

Apple's advantages are well-documented: the global spread of the iPhone, expected to sell more than 60 million units this year; the rise of the iPad which single-handedly created the tablet computing market; and continued strong growth from the resurgent Mac line of computers.

Wall Street's benchmarks for Apple's fiscal first quarter, which includes the holiday shopping season, are sales of roughly 15.5 million iPhones, 5.5 million iPads and 4 million Mac computers.

After the close of regular trading on Tuesday, Apple is expected to report earnings of $5.40 a share, according to Thomson Reuters I/B/E/S.

According to StarMine's SmartEstimate, which places more weight on recent forecasts by top-rated analysts, Apple should post EPS of $5.47 on revenue of $24.5 billion.

Even so, an out-sized surprise in Apple results has become an article of faith among investors. The company has beaten Wall Street's estimate by an average 29 percent over the past two years, and bested on revenue by 9 percent on average.

The only surprise in earnings is if there is anything less than glorious news, said Barry Jaruzelski, a partner at consulting firm Booz & Co, last week.

(Additional reporting by Georgina Prodhan and Paul Sandle in London, Clare Jim in Taipei, Sinead Carew and Yinka Adegoke in New York, Svea Herbst-Bayliss and Ross Kerber in Boston; Editing by Dhara Ranasinghe, Dave Zimmerman and Matthew Lewis)

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