Return to the Little Kingdom_ Steve Jobs and the Creation of Apple - Michael Moritz [172]
Within less than two years familiarity began to breed contempt—a situation complicated by the fact that while Sculley bore the CEO title, Jobs was the Chairman of the company. Disagreements occurred. Sniping and backbiting broke out and the dissension became so intense that in 1987 Sculley, disgruntled, displeased, exasperated and exhausted by Jobs, orchestrated the latter’s dismissal from the company. Sculley’s tenure at Apple lasted until 1993, and for part of that time the external reviews, at least as posted by Wall Street analysts, were favorable.
In the decade Sculley spent at Apple sales grew from less than $1 billion a year to more than $8 billion a year. On the surface, this looks like a wonderful record. But the reality was far different. Sculley benefited from a powerful force—the massive demand for personal computers. This sort of market growth conceals all types of shortcomings, and it is only when the rate of change slows or the economy contracts that the real cracks become visible.
During Sculley’s time at Apple, the company was outgunned by the brute force of IBM, then by the cunning maneuvering of the industry’s arms merchant, Microsoft, which made the operating system that it had licensed to IBM available to all comers. This led to a proliferation of what were labeled “IBM compatibles”—some made by startups like Compaq, others by established players like DEC and still more from cost-conscious Taiwanese companies such as Acer. These machines shared two traits: the hardware was built around microprocessors from Intel, and their operating systems were furnished by Microsoft. Apple, in the meantime, counted on chips from Motorola (and later IBM) and had to labor hard to convince programmers to write software for the Macintosh, whose market share dwindled as the years slipped by. Apple was fighting on two fronts with weak allies against the vast budget of Intel—in an industry where engineering and capital counted for a lot—and the legions of programmers who had discovered they could build a business atop Microsoft DOS and its successor operating system, Windows. Part of Sculley’s response was to gradually increase Apple’s prices in an effort to maintain profit margins—a ploy that propped up earnings for a while but eventually foundered.
While pesky newcomers attacked, inventiveness withered inside Apple. The company that had led the industry with color on the Apple II, a graphical user interface with the Macintosh, desk-top publishing and laser printing, integrated networks, and stereo sound stopped leading. As Sculley departed, amidst a flurry of recrimination prompted by his affection for the limelight and dalliance with the national stage, the cupboard was bare. The spark of imagination, or, more particularly, the ability to transform a promising idea into an appealing product, had been extinguished. Apple introduced no meaningful new products in the decade Sculley spent at the helm. The computers that did appear bore sterile names such as Performa, Centris and Quadra. Computers with more memory, larger screens and bigger disk drives do not count for lifetime achievement awards. The Newton, a small, digital organizer championed by Sculley in his self-appointed role as Apple’s Chief Technology Officer, amounted to little more than an expensive doorstop. In an autobiography, published in 1987, Sculley—in what now seems like a very accurate assessment about the gulf between his capabilities and the Founder he displaced—savaged Jobs’ ideas of the future by writing, “Apple was supposed to become a wonderful consumer products company. This was a lunatic plan. High tech could not be designed and sold as a consumer product.”
When Sculley was fired, Apple was in peril. Windows 3.0, introduced by Microsoft in 1990, was not as elegant as the Macintosh software, but it was good enough. As Sculley returned to the East Coast, Apple’s