Return to the Little Kingdom_ Steve Jobs and the Creation of Apple - Michael Moritz [175]
The advertising campaign was simple and direct, which perhaps had more significance inside the company than outside. It said, in plain terms, that the company could not afford to mimic others but needed to forge its own path. Jobs also forced the company to act differently. He cut costs, forced substantial layoffs, killed entire product lines he deemed worthless, undifferentiated or insipid, such as printers or the Newton. He stopped licensing the Macintosh operating system to other manufacturers, limited the distribution of Apple products to all but the most rabid of its dealers, installed five of his executives from NeXT as pillars of his management team while keeping Fred Anderson as Chief Financial Officer, jettisoned most of the discredited board of directors and replaced them with practical, hard-knuckled people he trusted, engineered a $150 million investment from Microsoft (that simultaneously ended years of legal bickering between the two companies, beefed up Apple’s cash position, and ensured the Internet Explorer browser a prominent place on Macintosh computers) and, within ten months, introduced a fresh line of Macintosh computers with his customary flirtatious flair. One year later, in the fall of 1998, Apple reported annual sales of almost $6 billion and a profit of more than $300 million, compared to sales of $7.1 billion and a loss of $1 billion at the time he took the helm.
Despite Jobs’ helmsmanship, the pop of the dotcom bubble, the recession of 2001 and the Mac’s small market share meant that Apple was still battling against the tide. Leaks had been caulked, useless crew members had been made to walk the plank, worthless cargo had been tossed overboard, but the vessel’s course had not been altered. This was reflected in the losses of 2001, the first red ink in three years. It was against this perilous backdrop that the iPod and Apple’s stores were birthed—both born of necessity and the sense that the company could not count on the kindness of others to foster its growth. Independent software developers, including companies such as Adobe, which had helped Apple create the desktop publishing market, were beginning to abandon the Macintosh; retailers, particularly the large stores, were either ignoring or neglecting Apple’s products. Jobs and his management team resisted the temptation to make large acquisitions—the normal way that large companies tend to try to escape testing times and which, almost always, starts with slide presentations promising the moon but ends with write-offs and recrimination. If Apple’s leaders uncovered a small product or promising team that could be quickly made productive and folded into an existing or nascent effort, they pounced. But for real growth they relied on their own wit and ingenuity.
The first example of Apple’s desire to fend for itself came with iMovie, software designed to help consumers manage and edit video, an application that, hitherto, might have been supplied by Adobe. Jobs’ conviction that video was the company’s freedom ticket meant Apple was almost blind-sided by the dawn of the digital music business. While Apple was presenting consumers with video software, tens of millions of people were discovering that music was available all around the internet. Websites such as Napster and Kazaa roused the ire of music publishers and record companies, but these spots on the internet, when combined with hundreds of models of portable mp3 players, spelled