Business Week

THE THREE ERAS AT APPLE


Business Week: February 5 1996
Department: Cover Story

The Jobs Era

Steve Jobs had a co-founder--Stephen Wozniak--and the venture capitalists who backed the company in 1977 immediately installed professional management. But Jobs dominated. Often brilliant, sometimes exasperatingly flaky, he imprinted Apple Computer with his distinctive, hip personality. By 1980, the company was the leading PC maker: It went public with the hottest IPO of the time, raising $96.8 million. There were fumbles, too: The Apple III office computer was a bug-infested flop. And Lisa, precursor to the Mac, was an expensive dud. Jobs's masterpiece, however, the 1984 Mac, was a stunner--with groundbreaking, easy-to-use software and a cool design. It was also severely underpowered and limited in expandability. The market balked, and in May, 1985, Jobs was pushed out of daily operations.

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The Sculley Era

Handpicked by the Chairman Jobs in 1983, John Sculley brought with him two decades of marketing experience from PepsiCo. As CEO, Sculley moved quickly to remedy the Mac's shortcomings by pushing for an open design. By 1987, the products was a smash hit. Apple pushed aggressively into high-profile corporate sales and expanded operations around the globe. But Apple entered the 1990s with an overpriced product line and a bloated, overperked executive staff. Microsoft Windows was gaining ground, and Apple's rate of innovation was slowing. Determined to catch the next technology wave, Sculley put himself in charge of research and development--and came up with the Newton personal digital assistant, a marketing and technical fiasco. In June, 1993, the board replaced Sculley with Michael Spindler, who had been running day-to-day operations as chief operating officer.

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The Spindler Era

Michael Spindler started off with a 2,500-employee layoff, the first move toward a new, low-margin business model. He ordered up inexpensive Macs for the surging home market and presided over the smooth transition to a new product line, based on the PowerPC chip. Secretly, Apple entered into buyout talks with IBM in late 1994. Publicly, the companies squabbled over a design for common PC hardware built around PowerPC chips. An abrupt downturn in Apple's fortunes came in 1995: Timid growth goals left Apple short of products. A stale PowerBook lineup halted gains in the notebook PC market, and top managers began leaving. The Christmas quarter was a disaster--even with price cuts, Mac sales were disappointing. January, 1996, brought news of a last-quarter loss of $69 million. Laying off 1,300 workers is just the first step in an overhaul that could include Spindler's ouster and/or even a sale of Apple.

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Copyright 1996 The McGraw-Hill Companies. All rights reserved.

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