American History 1988
Chapter 413 - 402: The Return of the Pirate King

Chapter 413: Chapter 402: The Return of the Pirate King

Apple Inc. in 1996 was in a parlous state, having lost the pioneering shine of its initial foray into the personal computer market.

Since Jobs was forced to leave, John Sculley, the man who sold sugary water, had not managed to bring Apple back to its former heights as he had hoped.

During his tenure at Apple, he experimented with the Newton digital assistant and various other computer models.

But the market’s response was lukewarm at best; nobody was interested in these cumbersome devices.

Consequently, as the company’s sales declined year by year, John Sculley was also compelled to leave Apple in 1993.

Michael Spindler, a veteran at Apple, succeeded him.

He had joined Apple’s European division in 1980 and had worked for the company for six months without pay.

This was not because the company was short of cash, but because, at the time, Apple did not know how to transfer funds from California to Belgium.

Spindler was a brilliant strategist; he was able to increase international business overseas at a time when Apple’s domestic sales were plummeting in the ’90s.

In two years, he raised overseas revenue from 400 million US Dollars to 1.2 billion US Dollars, which was a quarter of Apple’s total revenue at the time.

However, after taking over the mess left by John Sculley, Spindler too did not manage to perform any miracles for Apple.

To make the continually declining financial reports look better, he reduced Apple’s annual R&D budget by 100 million US Dollars and laid off a significant portion of the staff.

Honestly, after his overhaul, Apple looked quite decent, at least suitable enough to be packaged for sale or acquisition.

Indeed, Spindler thought perhaps selling Apple was the best option.

Nevertheless, his actions were bound to provoke strong objections from internal staff, who did not want the Apple brand to vanish and were, of course, opposed to layoffs.

In protest, many employees listed the names of those deeply missed on their screensavers and called it "Spindler’s List."

Spindler also proposed other ideas to save Apple, such as flooding the market with cheaper versions of the Macintosh.

He believed this would increase Apple’s market penetration, but this was not the case.

Cheaper versions of the Macintosh would only tarnish the brand and did not increase sales of the line.

"They created such a clone market, it swallowed their sales, but did not expand their base."

Tim Drex, an engineer at Apple at the time, said, "It was merely cheaper Macintosh, not more Macintosh."

This plan failed, and afterwards, Spindler left, and Gil Amelio became the next successor.

Gil Amelio, from National Semiconductor, had earned a reputation there as a turnaround artist.

He transformed a third-rate unreliable chip manufacturing company into an industry spearhead, a truly commendable feat.

However, when Gil Amelio took over Apple, he was shocked to discover that the board had played such a minimal role in controlling the situation.

Everyone seemed happily to accept the rosy future of Apple depicted by the company’s executives.

Yet, as far as Amelio knew, such claims lacked substantial evidence.

Like Spindler urging the board madly before his departure, "We have not turned the company around, we must sell it!"

Then many shareholders were tempted, even when Gil Amelio took over.

But when the latter looked into Apple’s finances and caught his breath, he had to tell the board that their hopes were dashed.

No one was willing to buy Apple Inc., for it was truly a derelict ship.

Spindler had promised that Apple would profit 150 million US Dollars in 1995, but the actual outcome was a loss of 69 million US Dollars.

Moreover, the company had accumulated over 1 billion US Dollars in unsold, now obsolete products that had to be scrapped.

Amelio once thought of changing all this, but Apple’s employees were not very cooperative.

For many, particularly those who had rekindled hope because of a technically oriented CEO among them,

Amelio was just another arrogant, high-salaried individual, sucking the lifeblood the company depended on to enrich his own pocket.

"When Apple was in dire straits, his actions gave the strongest impression that he was Nero!" said Larry Yaeger, an Apple researcher.

In 1996, that is this year, under Amelio’s direction, Apple embedded a highly visible advertisement in the movie ’Independence Day.’

Jeff Goldblum played the brave tech geek, using a PowerBook 5300 laptop.

He uploaded a computer virus into the central computer of the evil aliens’ mothership, thus lowering its defenses against a nuclear attack.

This scene, as the movie was released, spread all over the world.

To commemorate this event, Apple also changed its advertising slogan from "The power to be your best" to "The power to save the world."

Unfortunately, this did not turn out to be Apple’s shining moment; it instead marked the beginning of a nightmare.

Because of the embedded advertisement, this PowerBook laptop was highly anticipated by the market.

Just as Apple had delivered the first 1000 PowerBooks to eager retailers,

Shocking news emerged: two of the early products caught fire.

One at the home of an Apple programmer, and the other ignited at an Apple facility in Singapore.

"Apple’s main feature is its ease of use," noted Piet Hasbrook, then editor of "Computer Communications," "but if your computer can’t work, it obviously isn’t easy to use."

To salvage its reputation, Apple recalled 100 computers that had already been sold. After analysis, the cause of the fire was due to an overheated battery.

They replaced the faulty computers with more reliable batteries, but people found that the performance after replacement was only two-thirds of the original.

Apple apologized again and reduced the price of the brand new PowerBook by 100 US Dollars.

A series of misfortunes made Apple’s decision-making even more chaotic; they even planned to start a chain of Apple-themed restaurants to compete with the popular Planet Hollywood at the time.

This unreliable idea made its two partners waver at the last moment.

They sensed that tying themselves to such a struggling computer company could lead to disastrous consequences.

When one plan failed, Apple prepared to develop a new operating system, Copland, to compete with Windows 95.

But this was yet another disastrous choice, just like every other project at Apple at that time.

The project’s team also gathered a group of exceptionally smart individuals, but the collective intelligence of the team seemed to be less than the sum of all individual intelligences.

Every stage was a mess, and after numerous delays, the operating system died a natural death.

"They copied the discs for the developers’ version, but never sent them out," said Greg Robbins, with a complex expression.

"Just when these discs had been recorded and were about to be sent out in a few days, the project was cancelled."

After several failures, Apple, having expended a great amount of manpower and resources, could no longer withstand any more turmoil.

They were ready to purchase an operating system from Be Inc., whose founder, Louis Gassée, was a former Apple employee.

Gassée was very aware of Apple’s predicament, which had reached a dead end, so he decided to ask for the sky.

Two hundred million US Dollars, 15% of Apple’s stock, plus a seat on the board of directors.

"A man in the desert doesn’t haggle over the price of water," he said confidently.

And it was then that Jobs called the current CEO, Gil Amelio.

Just as he had unintentionally mentioned Microsoft to IBM’s chairman John Akers, he said that BeOS was completely unsuitable for Apple; the wise move was to buy NeXT and bring him back to the company he had founded.

Then... Amelio readily agreed.

Yes, it was that simple; he agreed to Jobs’s return.

The reasons were multifaceted, such as the French Gassée asking for too high a price, and Apple already couldn’t get any worse, so why not let Jobs stir things up a bit more?

In mid-December, Jobs, Amelio, and two other Apple executives met in a conference room on the eighth floor of the Apple campus.

The two parties quickly reached an agreement, and Apple acquired NeXT for 400 million US Dollars, and Jobs took over as CEO of Apple.

However, before being formally appointed, he would first lead Apple’s decision-making as an interim consultant.

And to show his commitment, Jobs took only a 1 US Dollar salary as his compensation for serving as CEO.

Actually, the amount of salary didn’t matter to him because NeXT belonged to him.

And of the 400 million US Dollars Apple paid to purchase NeXT, a significant portion was paid in stock.

Thus, the real benefit for Jobs was acquiring a portion of Apple’s stock.

This deal fulfilled Jobs’s long-standing wish and also left the board very satisfied.

They believed that Apple’s employees were exceedingly difficult to manage, as if there were ten thousand wild horses, each unaware of what a saddle was.

Perhaps only a maverick like Jobs could be their leader.

So, after 11 years of twists and turns, he returned to his former territory.

However, before he could familiarize himself with the current situation at Apple, an unexpected guest came to visit.

"Hi, Steve. Although we haven’t had many opportunities to interact, it was listening to your stories that brought me to Silicon Valley."

Dean, uninvited, sat down across from him with a smile.

"Price?" Jobs raised an eyebrow, a meeting that surprised yet didn’t seem completely unexpected to him.

"Call me Dean. It makes me feel like we’re already close partners," he easily took the coffee in front of him without any hesitation.

Jobs quietly observed the person before him. During the time he had been away from the center stage of Silicon Valley, the latter had become the focus of much attention.

Unexpectedly, Dean did not display the sharpness Jobs had imagined.

The young man’s vitality was indeed unmistakable, evident from his recent gestures, but that hardly matched his status as the wealthiest man.

This was the internet czar who toppled Gates from his pedestal and had Microsoft completely preoccupied?

"Steve, who, besides Apple’s former employees, is more welcoming of your return? It has to be me," Dean said, putting down his coffee and raising his eyes with a smile.

"If I’m not mistaken, Gates should have already talked to you before I arrived."

This time, a change finally appeared on Jobs’s face.