Inside Steve's Brain - Leander Kahney [10]
The Customers. Jobs figured Apple’s other major asset was its customers—about 25 million Mac users at the time. These were loyal customers, some of the most loyal customers of any corporation anywhere. If they continued to buy Apple’s machines, they would be a great foundation for a comeback.
The Clones. Jobs killed the clone business. The move was highly controversial, even inside the company, but it instantly allowed Apple to capture the whole Mac market again by eliminating the competition. Customers could no longer get a cheaper Mac from Power Computing or Motorola or Umax. The only competition was Windows, and Apple was a different proposition. Killing the clones was unpopular with Mac users who were becoming accustomed to buying cheap Macs from the clone makers, but the decision was the right strategic move for Apple.
The Suppliers. Jobs also negotiated new deals with Apple’s suppliers. At the time, both IBM and Motorola were supplying Apple with chips. Jobs decided to pit them against each other. He told them that Apple was only going to go with one of them, and that he expected major concessions from the one he chose. He didn’t drop either supplier, but because Apple was the only major customer of PowerPC chips from both companies, he got the concessions he wanted and, more important, guarantees of the chips’ continued development. “It’s like turning a big tanker,” Jobs told Time magazine. “There were a lot of lousy deals that we’re undoing.”18
The Pipeline. The most important thing Jobs did was radically simplify Apple’s product pipeline. In his modest office near the company’s boardroom (he reportedly hated Amelio’s refurbished offices and refused to occupy them), Jobs drew a very simple two-by-two grid on the whiteboard. Across the top he wrote “Consumer” and “Professional,” and down the side, “Portable” and “Desktop.” Here was Apple’s new product strategy. Just four machines: two notebooks and two desktops, aimed at either consumers or professional users.
Slashing the product pipeline was an extremely gutsy move. It took a lot of nerve to cut a multibillion-dollar company back to the bone. To kill everything to focus on just four machines was radical. Some thought it was crazy, even suicidal. “Our jaws dropped when we heard that one,” former Apple chairman Edgar Woolard Jr. told Business Week. “But it was brilliant.”19
Jobs knew that Apple was only a few short months from bankruptcy, and the only way to save the company was to focus keenly on what it did best: build easy-to-use computers for consumers and creative professionals.
Jobs canceled hundreds of software projects and almost all the hardware. Amelio had already killed nearly three hundred projects at Apple—from prototype computers to new software—and laid off thousands of workers, but he’d had to stop there. “There’s only so much cutting one CEO can do,” Oliver said. “There was tremendous pressure on him when he did that. It made it much easier for Steve to take the fifty projects that remained and cut them back to ten.”
Gone were the monitors, the printers, and—most controver sially—the Newton handheld, a move that prompted Newton lovers to protest with placards and loudspeakers in Apple’s parking lot. I give a fig for the Newton, one placard read. Newton is my pilot, said another.
The killing of the Newton was widely considered an act of vengeance on Sculley, who had ousted Jobs from Apple in the late 1980s. The Newton was Sculley’s baby, and here was Jobs knifing it to get revenge. After all, the Newton division had just turned its first profit and was about to be spun off into a separate company. A whole new industry for handhelds was springing up, which would soon come to be dominated by the Palm Pilot.
But to Jobs, the Newton was a distraction. Apple was in the computer business, and that meant it had to focus on computers. It was the same with laser printers. Apple was one of the first companies in the laser