The Second Coming of Steve Jobs - Alan Deutschman [120]
Around Thanksgiving, Steve Jobs was faced with an executive exodus, a scary glut of unsold computers—Apple’s inventory had swelled from five weeks’ worth of products to a daunting eleven weeks—and a moribund stock. Just when it seemed as though things couldn’t get much worse, he was publicly humiliated by his old archrival: John Sculley, speaking at an industry conference near San Francisco, garnered headlines when he said that Steve should consider merging Apple with another PC maker to ensure its survival. John’s comments were particularly ironic since during his own reign he had repeatedly tried to sell off or merge Apple—and failed. To be sure, John’s unsolicited suggestion, which was implicitly damning of Steve’s management, came after he made a bunch of praiseworthy comments. John said he had “nothing but true admiration” for Steve and added that Steve had “extraordinary insight into industrial design and manufacturing.” Still, the insult of the press printing advice from the rival who had pushed Steve out!
The nadir was near. On December 6, Apple stock fell 16 percent to $14.31 when Steve announced that Apple’s quarterly sales would be even lower than the already lowered expectations. He acknowledged that while part of the problem was the country’s sudden economic downturn and the industry-wide slump in PC sales, other troubles were of his own making, such as his blind spot about CD-RW drives and the misjudgments about the Cube. Speaking to a conference call of analysts and investors, Steve took a measured, reflective perspective: “I’ve been in high tech for twenty-five years now, and one thing I’ve learned is that no business goes up without interruption.”
As Christmas neared, Steve went from hero to zero in his media portrayals. When he was on top, he got away with his cavalier treatment of the press, but now that he was struggling again, the bad karma was haunting him. Graef Crystal, the most prominent expert on CEO compensation, wrote an article for the Bloomberg wire chastising Steve for his company-bought Gulfstream (which wound up costing Apple an eye-popping $90 million) and his potentially lucrative load of 20 million stock options: “All that monetary motivation seems to have backfired.” And CBS Marketwatch, a popular website for investors, named him as one of the year’s biggest executive losers.
The new year brought renewed hope beginning with MacWorld in San Francisco in early January. In his keynote speech, Steve expounded a theory for the overarching trends in technology and how Apple fit in. He said that the PC was entering its “third golden age.” First came the Age of Productivity in the 1980s, when spreadsheets, word processing, and desktop publishing were the most compelling applications. Then came the Age of the Internet in the 1990s with the flourishing of the World Wide Web and electronic mail. Now we were entering the Age of the Digital Lifestyle, when the Macintosh would serve as the hub for electronic devices such as CD players, MP3 players, cell phones, handheld organizers, digital cameras, and digital camcorders. The vision was Steve’s effort to make the Mac seem relevant at a time when many observers were talking about the “post-PC world,” when the real sales growth and excitement was about the proliferation of other digital gadgetry. The enigma, though, was why Steve didn’t put the Apple brand name on all those other consumer electronics products. Wouldn’t consumers rush to buy an Apple handheld gizmo or cell phone if it had the kind of design and marketing that Apple had put into the iMac? Couldn’t he transform Apple into a company like Sony—an innovative, design-driven, marketing-savvy operation that made all kinds of electronics, including but not limited to PCs?
Apple’s stigma eased somewhat in the early weeks of