Apple co-founder Steve Jobs has resigned as chief executive seven months after going on medical leave and asked the board to name chief operating officer Tim Cook as his successor.

More than those of any other company, Apple’s fortunes and products have been closely associated with Mr Jobs, who gives final approval on all major initiatives. His health concerns have been nearly as big a driver of stock movements as Apple’s rapidly growing profit. The shares fell more than 5 per cent in after-hours trading following the news.

The company, which briefly passed ExxonMobil this month to become the world’s largest company by stock market value, released a short letter from Mr Jobs in which he said that the day had come when he could no longer serve as chief executive and that he wished to remain Apple’s chairman.