Return to the Little Kingdom_ Steve Jobs and the Creation of Apple - Michael Moritz [162]
From early days, Apple had cracked down hard on its dealers, and after a while, almost every senior Apple executive managed to upset or ruffle one of them. It was the sort of tussle that often exists between the factory and the field, with the former pushing as hard as it can to boost sales and the latter pulling as hard as possible to extract concessions and incentives. It was a cat-and-mouse game. Jobs, with his graphic sense of reality, explained, “We’ve got each other by the balls.” The head of Computerland, Ed Faber, explained that Apple had, after a time, tried to “control dealers with muscle.” Apple was quick to offer dealers discounts if they bought in quantity. The strategy was calculated to make dealers sell more machines by making sure they always had some in stock and weren’t caught short. Dealers, who didn’t want to bear the costs of financing, complained vigorously. One dealer explained, “There were too many semiconductor industry salesmen and not enough people with retail experience. They more or less said, If you don’t want to do things exactly the way we want to do them, then screw you.’”
The head of Apple’s sales, Gene Carter, countered dealers’ complaints about pressure by issuing the sort of platitudes that might have come from a Detroit automobile executive: “Apple Computer, its distributors and retailers all want to make money and the way to make money is by selling the product.” In the middle of 1982 he elaborated further: “We are the golden egg. Every dealer wants the Apple because it has a high profile. Dealers know if you don’t carry the Apple there must be something wrong with your store.”
In 1982 Apple also stopped supplying mail-order houses, cracked down on bootleggers who sold to nonauthorized dealers, and dumped Computerland which was once the mainstay of their distribution network and had once been such an object of desire that Apple had started some tentative discussions about a merger. Apple was trying to control which Computerland stores carried its products so they wouldn’t interfere with other Apple dealers. At the time Ed Faber said, “We cannot say to people, ‘You’re at the mercy of this manufacturer.’”
The press also started to feel the results of the flush of power. When a trade newspaper, Infoworld, published a copyrighted story that was said to describe Apple’s future product plan, the editor received several telephone calls from Jobs in which he successively argued that publication would severely damage Apple, called the story only partially accurate, denounced the reporter as “a criminal,” offered a “real nifty two-page ad” if the story was held, and offered to pay the costs of stopping the print run. Apple’s attitude toward the press was made clear in a memo that was circulated within the company. After a run of analytical stories that contained whiffs of criticism appeared in the months following Apple’s public offering, a memo was distributed by Fred Hoar, the vice-president of communications. It complained that journalists often took matters out of context by misquoting executives and compressing what they had to say. The memo read in part:
SUBJECT: ADVERSE PUBLICITY
Recently Apple has been the subject of some stories in the press which cannot be considered “puff” pieces . . . i.e., they do a fairly negative job of reportage. . . . It is in the scheme of things that bad news makes better copy than good news, and also that many, if not most, reporters have trouble conveying subtlety and complexity, much less their editors.
If journalists were one focus for contempt, so were Apple’s competitors. One by one other companies