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CHAPTER TWENTY-FOUR
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2 k# F. \2 _% Q0 r5 X# w' OThe Loser Now Will Be Later to Win
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Amelio calling up Wozniak as Jobs hangs back, 1997+ s' j v6 i( \ @
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1 V+ h# G6 t S0 QHovering Backstage ~: s! G4 ?* J- w; J! q, B7 y
h7 @" \# i, d/ y8 @“It’s rare that you see an artist in his thirties or forties able to really contribute something
) T4 s Z& s, A7 Ramazing,” Jobs declared as he was about to turn thirty.
& `0 l( P( h; ^1 S4 X1 dThat held true for Jobs in his thirties, during the decade that began with his ouster from
# T! ?% J5 l& M7 }Apple in 1985. But after turning forty in 1995, he flourished. Toy Story was released that& w: A5 x% r6 i( ?
year, and the following year Apple’s purchase of NeXT offered him reentry into the
. o" [" m! l/ lcompany he had founded. In returning to Apple, Jobs would show that even people over
; `( r5 y, C* {0 s. R& S; b5 M; Fforty could be great innovators. Having transformed personal computers in his twenties, he5 @' C2 w; j) K" o
would now help to do the same for music players, the recording industry’s business model,. f- v( o, u+ U, K
mobile phones, apps, tablet computers, books, and journalism.% E8 W2 T7 ?& N/ N9 l7 e2 j
He had told Larry Ellison that his return strategy was to sell NeXT to Apple, get, _5 ^, u" m' i+ Q1 B
appointed to the board, and be there ready when CEO Gil Amelio stumbled. Ellison may
, X* E. v M+ L9 dhave been baffled when Jobs insisted that he was not motivated by money, but it was partly
1 a, s4 f$ f5 `' P4 [0 `true. He had neither Ellison’s conspicuous consumption needs nor Gates’s philanthropic
" u0 s/ `0 p0 Y" l$ eimpulses nor the competitive urge to see how high on the Forbes list he could get. Instead* R& j4 c& s- Y1 R
his ego needs and personal drives led him to seek fulfillment by creating a legacy that
* K9 ~+ g4 _5 I8 |3 y; m: }would awe people. A dual legacy, actually: building innovative products and building a
- @2 ~1 J8 o& i6 l! Slasting company. He wanted to be in the pantheon with, indeed a notch above, people like
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Edwin Land, Bill Hewlett, and David Packard. And the best way to achieve all this was to
. `/ K& ]9 E7 i, \return to Apple and reclaim his kingdom.
/ O6 r9 N5 p8 l/ jAnd yet when the cup of power neared his lips, he became strangely hesitant, reluctant,
, h& f3 w6 F$ K; x& _: Gperhaps coy.
6 n8 L/ D3 m% h6 _8 f( GHe returned to Apple officially in January 1997 as a part-time advisor, as he had told& X1 f. l0 H( M6 ^
Amelio he would. He began to assert himself in some personnel areas, especially in
: J' z8 y( b& Z& lprotecting his people who had made the transition from NeXT. But in most other ways he( L* M4 G2 v0 I+ f0 z2 U* P: w& ^& {
was unusually passive. The decision not to ask him to join the board offended him, and he
7 [" o( Q& e0 C4 b/ y; A* ?2 tfelt demeaned by the suggestion that he run the company’s operating system division." q2 U/ r8 L% l0 N% g# N
Amelio was thus able to create a situation in which Jobs was both inside the tent and
% x& ~* `. r& g: L' f) {outside the tent, which was not a prescription for tranquillity. Jobs later recalled:
% z: |- }5 O! a3 d& y7 S/ a; w2 rGil didn’t want me around. And I thought he was a bozo. I knew that before I sold him5 z0 F! ?4 _/ Y) @& M) u
the company. I thought I was just going to be trotted out now and then for events like
3 V( r7 X& l/ {Macworld, mainly for show. That was fine, because I was working at Pixar. I rented an
* ~1 p6 S& x7 ^- E8 yoffice in downtown Palo Alto where I could work a few days a week, and I drove up to
( c# R8 [' |2 C7 ^2 s m3 \) MPixar for one or two days. It was a nice life. I could slow down, spend time with my family.
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Jobs was, in fact, trotted out for Macworld right at the beginning of January, and this: R/ k. R( U6 s+ A3 n1 S. D) j
reaffirmed his opinion that Amelio was a bozo. Close to four thousand of the faithful
1 X+ r8 k- h! w+ ~fought for seats in the ballroom of the San Francisco Marriott to hear Amelio’s keynote
. y7 {; W3 n; O, d% yaddress. He was introduced by the actor Jeff Goldblum. “I play an expert in chaos theory in
! s2 b- Z- G6 yThe Lost World: Jurassic Park,” he said. “I figure that will qualify me to speak at an Apple8 j: z# i" g$ D4 O
event.” He then turned it over to Amelio, who came onstage wearing a flashy sports jacket
4 y, R; j* }. t* fand a banded-collar shirt buttoned tight at the neck, “looking like a Vegas comic,” the Wall8 m( {+ O. h' L/ x
Street Journal reporter Jim Carlton noted, or in the words of the technology writer Michael
* i8 k. W( j9 i* u' b% rMalone, “looking exactly like your newly divorced uncle on his first date.”
- v( d1 e* q( Y4 hThe bigger problem was that Amelio had gone on vacation, gotten into a nasty tussle) ?5 I/ C. l' u; g# `4 n" L
with his speechwriters, and refused to rehearse. When Jobs arrived backstage, he was upset
) w8 x- Q" a2 \+ I: X; l( t, bby the chaos, and he seethed as Amelio stood on the podium bumbling through a disjointed; Y' b- o5 G4 V! t# X: n( a6 _
and endless presentation. Amelio was unfamiliar with the talking points that popped up on0 O# X8 m% X% d, l. N
his teleprompter and soon was trying to wing his presentation. Repeatedly he lost his train
2 a& g) n) m; |8 M! x5 Sof thought. After more than an hour, the audience was aghast. There were a few welcome
/ Y2 J* e$ T. B; I, z) ibreaks, such as when he brought out the singer Peter Gabriel to demonstrate a new music1 H. o; P6 R6 [; L- i. L6 W" H4 w
program. He also pointed out Muhammad Ali in the first row; the champ was supposed to2 p( @/ x' y5 k
come onstage to promote a website about Parkinson’s disease, but Amelio never invited
5 x6 |8 L/ E; c6 C- _& q y8 rhim up or explained why he was there.
% Z# e2 A, }" F! i1 [Amelio rambled for more than two hours before he finally called onstage the person, w2 Y- I; B ], x% e
everyone was waiting to cheer. “Jobs, exuding confidence, style, and sheer magnetism, was0 r# J( d( s5 b2 L# d
the antithesis of the fumbling Amelio as he strode onstage,” Carlton wrote. “The return of0 [$ d# d% E, B \/ |* u, W
Elvis would not have provoked a bigger sensation.” The crowd jumped to its feet and gave( L' g2 L8 y8 a+ u- f. T
him a raucous ovation for more than a minute. The wilderness decade was over. Finally
+ V0 r% g& y: l" h8 h z" r! f1 dJobs waved for silence and cut to the heart of the challenge. “We’ve got to get the spark ' a# o1 J! I @' B& |9 z
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& |' b( T2 }) e k6 ]( z5 gback,” he said. “The Mac didn’t progress much in ten years. So Windows caught up. So we
; a! X5 P: \5 V# j. ghave to come up with an OS that’s even better.”) Y B2 \( I& R4 A7 n
Jobs’s pep talk could have been a redeeming finale to Amelio’s frightening performance.
/ ]6 l9 J! H0 v3 k; ?2 f) zUnfortunately Amelio came back onstage and resumed his ramblings for another hour.
; F- l" @& R/ J/ u8 V' P* {' EFinally, more than three hours after the show began, Amelio brought it to a close by calling& `# Q2 U f. A( z6 X0 G _. q
Jobs back onstage and then, in a surprise, bringing up Steve Wozniak as well. Again there
% w3 g0 [! x% K: `, x0 X' E) Q s1 jwas pandemonium. But Jobs was clearly annoyed. He avoided engaging in a triumphant6 o2 S, \) O2 v; [# \9 x* ]
trio scene, arms in the air. Instead he slowly edged offstage. “He ruthlessly ruined the
1 h9 J6 t* B4 ~+ C2 rclosing moment I had planned,” Amelio later complained. “His own feelings were more
! P2 R6 i& o7 H4 } jimportant than good press for Apple.” It was only seven days into the new year for Apple,
( N6 Y7 A, d. \) L2 Q3 Xand already it was clear that the center would not hold.
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Jobs immediately put people he trusted into the top ranks at Apple. “I wanted to make sure
% m9 U/ P2 b& N9 W/ kthe really good people who came in from NeXT didn’t get knifed in the back by the less$ |+ M9 M5 @. H7 R6 C3 O& Q
competent people who were then in senior jobs at Apple,” he recalled. Ellen Hancock, who
- n8 ^2 ^# u; }" l5 o7 x+ ~7 jhad favored choosing Sun’s Solaris over NeXT, was on the top of his bozo list, especially
& y4 h, F+ C. K( H6 Vwhen she continued to want to use the kernel of Solaris in the new Apple operating system.
. l4 R4 S y" d1 u% Y1 Y3 y+ NIn response to a reporter’s question about the role Jobs would play in making that decision,
7 k0 S n1 \) P( L* |she answered curtly, “None.” She was wrong. Jobs’s first move was to make sure that two
% _0 |3 `( |1 \: Q& }) @3 u" t/ xof his friends from NeXT took over her duties.
2 E/ A2 Q* y& W) r" qTo head software engineering, he tapped his buddy Avie Tevanian. To run the hardware8 f2 I' Q' a7 M0 V3 v
side, he called on Jon Rubinstein, who had done the same at NeXT back when it had a
% s O% j7 W% s! {/ \hardware division. Rubinstein was vacationing on the Isle of Skye when Jobs called him.
?; l% U, F4 j4 ?) t6 q2 q“Apple needs some help,” he said. “Do you want to come aboard?” Rubinstein did. He got+ v9 h* }' u1 x6 Y X' @+ ]$ H
back in time to attend Macworld and see Amelio bomb onstage. Things were worse than he
0 N! G4 j8 O1 Pexpected. He and Tevanian would exchange glances at meetings as if they had stumbled z% P; [# k2 x
into an insane asylum, with people making deluded assertions while Amelio sat at the end2 c5 o5 `; [7 V+ }7 ~
of the table in a seeming stupor.2 M4 N* p. ]- \+ [9 ]/ ^
Jobs did not come into the office regularly, but he was on the phone to Amelio often.9 J) \$ U. y2 u, P9 N" O2 M$ B. E% z
Once he had succeeded in making sure that Tevanian, Rubinstein, and others he trusted
- M, z* q8 _$ T4 R1 y+ Pwere given top positions, he turned his focus onto the sprawling product line. One of his- J# t/ V( X |1 [: D
pet peeves was Newton, the handheld personal digital assistant that boasted handwriting
~3 n( W5 N/ vrecognition capability. It was not quite as bad as the jokes and Doonesbury comic strip3 k* K( z4 A) z7 o; ~
made it seem, but Jobs hated it. He disdained the idea of having a stylus or pen for writing
" b* q. Z3 n: ?. _2 g$ Kon a screen. “God gave us ten styluses,” he would say, waving his fingers. “Let’s not invent( i) r! v" ~6 h
another.” In addition, he viewed Newton as John Sculley’s one major innovation, his pet. d+ u+ x- w- O: w1 X8 f/ N
project. That alone doomed it in Jobs’s eyes.& z: K M9 K% N8 t" U
“You ought to kill Newton,” he told Amelio one day by phone.8 R6 E( N1 s* u$ g% ?
It was a suggestion out of the blue, and Amelio pushed back. “What do you mean, kill
; a7 d6 m+ U3 Qit?” he said. “Steve, do you have any idea how expensive that would be?”+ F4 ~* Q. S V+ m8 @ b% f
“Shut it down, write it off, get rid of it,” said Jobs. “It doesn’t matter what it costs.
% x5 d! K" ]" N6 y* m' N) aPeople will cheer you if you got rid of it.” " B* V# v$ p, B3 D8 Q" q
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“I’ve looked into Newton and it’s going to be a moneymaker,” Amelio declared. “I don’t8 I% d7 N- E7 ^8 Y- }
support getting rid of it.” By May, however, he announced plans to spin off the Newton
5 T$ l% y0 @3 P* C" g1 Jdivision, the beginning of its yearlong stutter-step march to the grave.) O! i" J3 h: z; {
Tevanian and Rubinstein would come by Jobs’s house to keep him informed, and soon
' X& ~7 |1 R) C9 U5 \much of Silicon Valley knew that Jobs was quietly wresting power from Amelio. It was not! c& \8 M* j: h2 ~
so much a Machiavellian power play as it was Jobs being Jobs. Wanting control was# j q4 O; ~7 z5 N) @' h( g. F R) T* ^
ingrained in his nature. Louise Kehoe, the Financial Times reporter who had foreseen this
( ^ e* \% ~9 S4 `7 e- D% r4 h( g4 swhen she questioned Jobs and Amelio at the December announcement, was the first with
; a7 @2 p3 v/ E5 ~; m3 |; ]the story. “Mr. Jobs has become the power behind the throne,” she reported at the end of5 v4 n/ F. \7 U0 s# p# t
February. “He is said to be directing decisions on which parts of Apple’s operations should
- n" @- w) F m1 a5 ibe cut. Mr. Jobs has urged a number of former Apple colleagues to return to the company,4 c4 H% b4 k- Y) m7 K
hinting strongly that he plans to take charge, they said. According to one of Mr. Jobs’
. G8 t) d1 E: s% S* iconfidantes, he has decided that Mr. Amelio and his appointees are unlikely to succeed in
- S$ A4 n. q7 Z, D( o( j5 M7 o7 c- h5 hreviving Apple, and he is intent upon replacing them to ensure the survival of ‘his, P4 L9 `* Z9 s& v7 k
company.’”( G, L% M, N2 O m& W: B
That month Amelio had to face the annual stockholders meeting and explain why the1 i9 r4 A0 p9 @" H
results for the final quarter of 1996 showed a 30% plummet in sales from the year before.
7 P; n2 ?2 t2 u0 p% o/ EShareholders lined up at the microphones to vent their anger. Amelio was clueless about
/ O0 u2 @+ S( g* B$ e% p8 ]# I* Thow poorly he handled the meeting. “The presentation was regarded as one of the best I
. Q" `/ C3 K' z- m nhad ever given,” he later wrote. But Ed Woolard, the former CEO of DuPont who was now
9 v g8 i X" ]+ B6 Y. l2 d! ~$ }1 {the chair of the Apple board (Markkula had been demoted to vice chair), was appalled.
; ?( M( a& j) Z- @6 U“This is a disaster,” his wife whispered to him in the midst of the session. Woolard agreed.* K7 ^: M/ M% y2 }
“Gil came dressed real cool, but he looked and sounded silly,” he recalled. “He couldn’t
0 c8 @. Y9 b7 D! i- ?4 D0 O5 |6 Lanswer the questions, didn’t know what he was talking about, and didn’t inspire any! S5 _0 n0 _3 V2 W; G# l) G# D
confidence.”- n# y5 u0 {8 M
Woolard picked up the phone and called Jobs, whom he’d never met. The pretext was to3 e$ k u; h" x3 h A
invite him to Delaware to speak to DuPont executives. Jobs declined, but as Woolard
2 `) i$ j6 T. Precalled, “the request was a ruse in order to talk to him about Gil.” He steered the phone- i0 h0 c! ~* e! z5 E
call in that direction and asked Jobs point-blank what his impression of Amelio was.1 W) z _2 [ g! {
Woolard remembers Jobs being somewhat circumspect, saying that Amelio was not in the
% O; z- X& \* Dright job. Jobs recalled being more blunt:+ a2 {# U% [. E
I thought to myself, I either tell him the truth, that Gil is a bozo, or I lie by omission.
; s) }/ z3 F m9 P8 m( EHe’s on the board of Apple, I have a duty to tell him what I think; on the other hand, if I tell
& P4 [9 x& }. M: n% Whim, he will tell Gil, in which case Gil will never listen to me again, and he’ll fuck the! N E; @% g# n; H4 X4 S/ F
people I brought into Apple. All of this took place in my head in less than thirty seconds. I
/ r4 L [+ r. J. x tfinally decided that I owed this guy the truth. I cared deeply about Apple. So I just let him! G- e, S* C4 Z6 _- H+ t
have it. I said this guy is the worst CEO I’ve ever seen, I think if you needed a license to be" K- Z; B/ M9 a$ e4 u$ U
a CEO he wouldn’t get one. When I hung up the phone, I thought, I probably just did a
' z: h' c. C: n8 _9 ]2 Dreally stupid thing. 4 m+ j' e( u( k2 C
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. l( V& |8 ^' E2 UThat spring Larry Ellison saw Amelio at a party and introduced him to the technology
7 _* f! f7 P( zjournalist Gina Smith, who asked how Apple was doing. “You know, Gina, Apple is like a
) Y# g9 R: R/ U% G( mship,” Amelio answered. “That ship is loaded with treasure, but there’s a hole in the ship.
, u, [# I, Z2 V+ _# jAnd my job is to get everyone to row in the same direction.” Smith looked perplexed and
$ ^$ |0 v) q" c, [5 H- X7 h8 G+ o! |3 Hasked, “Yeah, but what about the hole?” From then on, Ellison and Jobs joked about the# |4 a& B5 G, r4 X0 N# @
parable of the ship. “When Larry relayed this story to me, we were in this sushi place, and I
3 N2 ^9 M# E- a6 V, y0 c1 A' zliterally fell off my chair laughing,” Jobs recalled. “He was just such a buffoon, and he took, E; d. a0 t7 M; ?; L" y
himself so seriously. He insisted that everyone call him Dr. Amelio. That’s always a
+ a& j! T! z% Lwarning sign.”6 _2 P/ E$ B% b. j
Brent Schlender, Fortune’s well-sourced technology reporter, knew Jobs and was: r- P H- u* S5 @+ j5 @3 b* q
familiar with his thinking, and in March he came out with a story detailing the mess.5 F2 Y2 Y* ?$ z& d" Y% F% X
“Apple Computer, Silicon Valley’s paragon of dysfunctional management and fumbled+ d. ^5 j4 T, J; `
techno-dreams, is back in crisis mode, scrambling lugubriously in slow motion to deal with
! Q7 f4 Y& y; \# p7 e% B jimploding sales, a floundering technology strategy, and a hemorrhaging brand name,” he
, f5 g0 \+ r& |4 \wrote. “To the Machiavellian eye, it looks as if Jobs, despite the lure of Hollywood—lately
& x+ f7 z# Y6 A7 k' n( Fhe has been overseeing Pixar, maker of Toy Story and other computer-animated films—
+ }0 _9 q W+ v5 _0 Qmight be scheming to take over Apple.”, @: P- F# G3 Z; v0 Z- w
Once again Ellison publicly floated the idea of doing a hostile takeover and installing his
: y) f+ t2 V6 c0 ~# Z& K6 ]“best friend” Jobs as CEO. “Steve’s the only one who can save Apple,” he told reporters.+ z, P- Y5 m& b- h+ G
“I’m ready to help him the minute he says the word.” Like the third time the boy cried- A$ w' f1 T6 p
wolf, Ellison’s latest takeover musings didn’t get much notice, so later in the month he told! ^ |+ r3 I7 x7 }% J( @ H2 c/ W
Dan Gillmore of the San Jose Mercury News that he was forming an investor group to raise
3 q+ K8 c) B( I h l1 @# g$1 billion to buy a majority stake in Apple. (The company’s market value was about $2.3
$ `; ~+ e& ^' L4 E/ _billion.) The day the story came out, Apple stock shot up 11% in heavy trading. To add to
% ^4 G& p( }$ A6 F8 h( H3 ~the frivolity, Ellison set up an email address, savapple@us.oracle.com, asking the general S6 R! U5 ^; x/ x. ^
public to vote on whether he should go ahead with it. p8 [1 ^. X( E) K- v9 l( E7 C
Jobs was somewhat amused by Ellison’s self-appointed role. “Larry brings this up now
- Q( c- y/ j3 W# }' l* Cand then,” he told a reporter. “I try to explain my role at Apple is to be an advisor.” Amelio,
" t" @+ f4 p' Y5 @however, was livid. He called Ellison to dress him down, but Ellison wouldn’t take the call.
7 F% I8 T2 D' m7 E4 n' ISo Amelio called Jobs, whose response was equivocal but also partly genuine. “I really
) T0 K0 P0 N7 }, i1 Sdon’t understand what is going on,” he told Amelio. “I think all this is crazy.” Then he4 k' k9 g. {; w. I# ~+ ^
added a reassurance that was not at all genuine: “You and I have a good relationship.” Jobs
I5 O) r8 k9 y2 L% ycould have ended the speculation by releasing a statement rejecting Ellison’s idea, but
) T, @$ G% ?3 ?5 ?, y9 cmuch to Amelio’s annoyance, he didn’t. He remained aloof, which served both his interests, K- [5 a# o {
and his nature.
/ L- I! I0 q# T5 R7 qBy then the press had turned against Amelio. Business Week ran a cover asking “Is Apple
: I" @' w$ j. \% V3 L- y$ b3 H$ [Mincemeat?”; Red Herring ran an editorial headlined “Gil Amelio, Please Resign”; and
: e8 t/ z! f. I3 @4 vWired ran a cover that showed the Apple logo crucified as a sacred heart with a crown of, r l1 K: G$ a1 @" r$ X: |8 w
thorns and the headline “Pray.” Mike Barnicle of the Boston Globe, railing against years of+ ]2 a, z( l% D1 I$ E' o6 T
Apple mismanagement, wrote, “How can these nitwits still draw a paycheck when they) U+ G- N( V7 n% ~3 H
took the only computer that didn’t frighten people and turned it into the technological
. i3 K+ R+ C: X8 s5 Mequivalent of the 1997 Red Sox bullpen?”
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; v/ I) M2 @3 D3 X2 X7 H2 j& p8 WWhen Jobs and Amelio had signed the contract in February, Jobs began hopping around
( Y5 E" x. `* j! z" d9 Xexuberantly and declared, “You and I need to go out and have a great bottle of wine to6 e7 D/ V) L- y" W7 X; Y
celebrate!” Amelio offered to bring wine from his cellar and suggested that they invite their. Q; U# u- c7 z" Q1 w
wives. It took until June before they settled on a date, and despite the rising tensions they
' S- e- f/ \9 Q! N# P; p- L" iwere able to have a good time. The food and wine were as mismatched as the diners;
. @5 v( _# I( N, R& k# \Amelio brought a bottle of 1964 Cheval Blanc and a Montrachet that each cost about $300;
4 I4 D2 i8 ?8 g5 z2 tJobs chose a vegetarian restaurant in Redwood City where the food bill totaled $72.
3 T/ c- I7 L8 V c+ CAmelio’s wife remarked afterward, “He’s such a charmer, and his wife is too.”
* |/ P' J! U2 [Jobs could seduce and charm people at will, and he liked to do so. People such as Amelio
* B4 z3 ]5 ^" z, W7 ]* x1 [7 Iand Sculley allowed themselves to believe that because Jobs was charming them, it meant
0 p$ e- q% T+ I! {" Othat he liked and respected them. It was an impression that he sometimes fostered by- X! F, l/ D: w9 s1 E/ J
dishing out insincere flattery to those hungry for it. But Jobs could be charming to people. Q! S2 F/ J% j' o6 g2 m
he hated just as easily as he could be insulting to people he liked. Amelio didn’t see this
Y4 P/ k6 C) M. _5 M; G) | cbecause, like Sculley, he was so eager for Jobs’s affection. Indeed the words he used to! Y; J5 q' G. B, w! s: @3 _; C/ O) [
describe his yearning for a good relationship with Jobs are almost the same as those used% I: }$ o) E+ \9 F, {. s
by Sculley. “When I was wrestling with a problem, I would walk through the issue with
: g& g) P& Z6 B7 shim,” Amelio recalled. “Nine times out of ten we would agree.” Somehow he willed
8 t, z5 i4 M4 n8 x" s1 L+ @himself to believe that Jobs really respected him: “I was in awe over the way Steve’s mind
, e* W o1 A. |& Mapproached problems, and had the feeling we were building a mutually trusting
% r, e, Z5 P0 B5 Yrelationship.”6 T. e5 o+ L( ]5 S
Amelio’s disillusionment came a few days after their dinner. During their negotiations,. a/ h' ^6 ]$ G" R
he had insisted that Jobs hold the Apple stock he got for at least six months, and preferably M' K6 j. U$ ~' U
longer. That six months ended in June. When a block of 1.5 million shares was sold,
! N$ J4 D4 i5 ?, ~6 m. E. xAmelio called Jobs. “I’m telling people that the shares sold were not yours,” he said.
4 \4 I; i2 C! C* D7 _7 a0 s“Remember, you and I had an understanding that you wouldn’t sell any without advising us
8 E+ s. m0 ~( v8 M: Mfirst.”
6 E; S \9 f5 b) I* C4 s4 P“That’s right,” Jobs replied. Amelio took that response to mean that Jobs had not sold his! S8 ]: ^3 x! |- Z, k
shares, and he issued a statement saying so. But when the next SEC filing came out, it- Z% R/ x Y6 N
revealed that Jobs had indeed sold the shares. “Dammit, Steve, I asked you point-blank
$ C* Z" n0 b; b: R6 t, [& m7 w5 Kabout these shares and you denied it was you.” Jobs told Amelio that he had sold in a “fit of" H8 f; H3 J% A, U$ A
depression” about where Apple was going and he didn’t want to admit it because he was “a5 y0 M! z! e! F
little embarrassed.” When I asked him about it years later, he simply said, “I didn’t feel I
2 k9 w8 u5 f6 o# z7 _( d+ ]! Mneeded to tell Gil.”
9 k& F, l% S; q% N j6 |( EWhy did Jobs mislead Amelio about selling the shares? One reason is simple: Jobs
3 `* i5 h$ j5 t6 ^' {sometimes avoided the truth. Helmut Sonnenfeldt once said of Henry Kissinger, “He lies
8 i, P: {$ v5 j9 i* x N6 Inot because it’s in his interest, he lies because it’s in his nature.” It was in Jobs’s nature to% q% [) x) m& P% _) O5 V7 r: c
mislead or be secretive when he felt it was warranted. But he also indulged in being" D0 V( h- y1 z. t3 J* [
brutally honest at times, telling the truths that most of us sugarcoat or suppress. Both the
( I9 g- j5 u3 d- C% ndissembling and the truth-telling were simply different aspects of his Nietzschean attitude+ s, C0 _; q8 v& A O
that ordinary rules didn’t apply to him.. @& P6 U5 m" M# X3 h
- J% Z( z6 _/ O3 Y- b3 e C; P( PExit, Pursued by a Bear
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: ], ?$ \8 E. B( H+ r: o# j/ M( [$ e3 u/ r9 k1 a1 D7 D5 @# h
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Jobs had refused to quash Larry Ellison’s takeover talk, and he had secretly sold his shares
& C% m( v6 B" ]+ H7 t* v- _and been misleading about it. So Amelio finally became convinced that Jobs was gunning
7 I! W# n" _7 r8 N( r2 [for him. “I finally absorbed the fact that I had been too willing and too eager to believe he
) V" n9 N! K: v* bwas on my team,” Amelio recalled. “Steve’s plans to manipulate my termination were
! Y* g+ ^! d) J: a% Q3 lcharging forward.”* ~1 j! v d/ [9 d9 Z" F
Jobs was indeed bad-mouthing Amelio at every opportunity. He couldn’t help himself.
4 H9 A- R; }7 w; W* b; DBut there was a more important factor in turning the board against Amelio. Fred Anderson,
9 }: b9 U6 z+ m0 {the chief financial officer, saw it as his fiduciary duty to keep Ed Woolard and the board) r& I' @; G* c* L+ b# y6 ~
informed of Apple’s dire situation. “Fred was the guy telling me that cash was draining,1 g8 R" P3 C, U0 T1 I
people were leaving, and more key players were thinking of it,” said Woolard. “He made it
# Y B: B' M: [& _2 `" Y: @$ C, O. ?clear the ship was going to hit the sand soon, and even he was thinking of leaving.” That( G0 b! y4 G& A1 q$ W3 ~, U6 _
added to the worries Woolard already had from watching Amelio bumble the shareholders# b- f' K' V9 X' K4 v Z
meeting.
4 ~5 p$ F" g' g& bAt an executive session of the board in June, with Amelio out of the room, Woolard3 \4 A0 j) B7 C% O/ k/ Q" F6 {
described to current directors how he calculated their odds. “If we stay with Gil as CEO, I
( p! V/ f+ J( f0 @5 Tthink there’s only a 10% chance we will avoid bankruptcy,” he said. “If we fire him and
) {6 W- i! B, \* hconvince Steve to come take over, we have a 60% chance of surviving. If we fire Gil, don’t$ _: d$ g/ c* |8 A6 ]# B* {. \
get Steve back, and have to search for a new CEO, then we have a 40% chance of
. S$ m* D2 |7 u0 o1 y Usurviving.” The board gave him authority to ask Jobs to return.& h0 W' n+ N/ F; A, g5 @
Woolard and his wife flew to London, where they were planning to watch the
/ s p0 t" _5 w) \- JWimbledon tennis matches. He saw some of the tennis during the day, but spent his1 B* N2 r8 n2 A. w; ]
evenings in his suite at the Inn on the Park calling people back in America, where it was
5 c2 h$ K/ [. a$ _% a$ p4 r4 h; idaytime. By the end of his stay, his telephone bill was $2,000.
; }$ F8 Y' g. q/ D1 F9 m3 FFirst, he called Jobs. The board was going to fire Amelio, he said, and it wanted Jobs to) w! U% n) b3 E6 n1 u
come back as CEO. Jobs had been aggressive in deriding Amelio and pushing his own6 o" s+ ?) L" S
ideas about where to take Apple. But suddenly, when offered the cup, he became coy. “I: U" Z% A5 [4 k: |* S- U, ]
will help,” he replied.# C) |/ N. t( E, o% J! s) u: @
“As CEO?” Woolard asked.% ?2 Z" k7 \! q
Jobs said no. Woolard pushed hard for him to become at least the acting CEO. Again' m7 K' a) L; w( H4 Q
Jobs demurred. “I will be an advisor,” he said. “Unpaid.” He also agreed to become a board# A* G1 v2 _* ?% l6 u7 r; S" h& A
member—that was something he had yearned for—but declined to be the board chairman.: y# X/ e# r9 c" H$ t! J
“That’s all I can give now,” he said. After rumors began circulating, he emailed a memo to+ H5 y: L% N8 W" X1 j9 F e) N2 H
Pixar employees assuring them that he was not abandoning them. “I got a call from Apple’s
* F$ e9 ]% I* m# T# E2 Iboard of directors three weeks ago asking me to return to Apple as their CEO,” he wrote. “I
# c$ O. \( \: Y$ z! J2 Ydeclined. They then asked me to become chairman, and I again declined. So don’t worry—
4 }4 b) w! e7 b! G: h, Ythe crazy rumors are just that. I have no plans to leave Pixar. You’re stuck with me.”
. ^$ m/ s* J' S8 X% n. c( eWhy did Jobs not seize the reins? Why was he reluctant to grab the job that for two
2 O% Q" m0 z2 edecades he had seemed to desire? When I asked him, he said:, I* z# ^' F, a
We’d just taken Pixar public, and I was happy being CEO there. I never knew of
9 M! q( B3 g$ p1 {4 K8 D' I, {! xanyone who served as CEO of two public companies, even temporarily, and I wasn’t even1 r/ @3 D. w7 l% z' J
sure it was legal. I didn’t know what I wanted to do. I was enjoying spending more time
3 T; }% ]( V f# H6 B% [with my family. I was torn. I knew Apple was a mess, so I wondered: Do I want to give up) v P" K$ l( D3 w7 C5 x
this nice lifestyle that I have? What are all the Pixar shareholders going to think? I talked to % \" m% H9 E! {* o& r4 }* f' T3 Z
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2 ?' e6 O* L2 |$ N+ P6 C2 L9 A- x e
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$ N2 T: z7 x6 apeople I respected. I finally called Andy Grove at about eight one Saturday morning—too
" S3 j+ C- R$ g2 e7 U) |5 j' @: Fearly. I gave him the pros and the cons, and in the middle he stopped me and said, “Steve, I' S. j, k2 w6 X; |3 k
don’t give a shit about Apple.” I was stunned. It was then I realized that I do give a shit! b8 k: @0 B" \, {
about Apple—I started it and it is a good thing to have in the world. That was when I6 \" { e4 N+ _: }/ S3 a& ]. g. J' D# ^
decided to go back on a temporary basis to help them hire a CEO.7 K, k6 x8 }/ K1 }- T: i% R
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The claim that he was enjoying spending more time with his family was not convincing. He
# y3 K6 G% @; B" p! Dwas never destined to win a Father of the Year trophy, even when he had spare time on his
H# |1 A/ t( l3 G6 g* [3 J5 p9 phands. He was getting better at paying heed to his children, especially Reed, but his7 P9 G7 i5 A6 L) k' n
primary focus was on his work. He was frequently aloof from his two younger daughters,
# D' ?: L( Y! q/ x+ u% E" _! ?( Sestranged again from Lisa, and often prickly as a husband.. {. U3 |; [# B! L. U9 S
So what was the real reason for his hesitancy in taking over at Apple? For all of his
4 D" x3 x3 V0 k6 ?willfulness and insatiable desire to control things, Jobs was indecisive and reticent when he- b& Q1 m# n2 n9 L3 c! B
felt unsure about something. He craved perfection, and he was not always good at figuring/ Y, _! p/ l |% F$ i% z. V' U
out how to settle for something less. He did not like to wrestle with complexity or make
; a; \# H% e" Y2 q5 R$ `accommodations. This was true in products, design, and furnishings for the house. It was% t) ^/ _/ B+ m+ r
also true when it came to personal commitments. If he knew for sure a course of action was
3 H, i+ l* L) h1 H1 }! dright, he was unstoppable. But if he had doubts, he sometimes withdrew, preferring not to4 f# x6 V8 J" g+ h
think about things that did not perfectly suit him. As happened when Amelio had asked him
( Q% a/ A! {# Z) f0 ]9 I* nwhat role he wanted to play, Jobs would go silent and ignore situations that made him
0 n# X8 o6 A+ Buncomfortable.
4 b# k* G& F' _! f8 u0 ]' ~1 v' vThis attitude arose partly out of his tendency to see the world in binary terms. A person
+ @9 X, H7 m' ~* \5 }& |" R* n) ^was either a hero or a bozo, a product was either amazing or shit. But he could be stymied a7 I; d3 A( y z" \( O' p
by things that were more complex, shaded, or nuanced: getting married, buying the right
( x8 _. a5 \; O7 G+ ^6 \" d" Psofa, committing to run a company. In addition, he didn’t want to be set up for failure. “I
3 q; Y$ Q4 V Z9 U; G2 ythink Steve wanted to assess whether Apple could be saved,” Fred Anderson said.
. v0 k; A6 t. J, v; y; iWoolard and the board decided to go ahead and fire Amelio, even though Jobs was not
2 _* m& _0 p4 q) e, o' cyet forthcoming about how active a role he would play as an advisor. Amelio was about to
+ z9 J8 b/ a0 }- k# `! `+ {go on a picnic with his wife, children, and grandchildren when the call came from Woolard
; ?8 o2 t- u$ }3 R: C& L- B0 \% R( kin London. “We need you to step down,” Woolard said simply. Amelio replied that it was
. K9 f( i) Y1 i) fnot a good time to discuss this, but Woolard felt he had to persist. “We are going to
, H& p/ _: ]+ bannounce that we’re replacing you.”
! R. S; E6 F6 z' Q2 f" f% RAmelio resisted. “Remember, Ed, I told the board it was going to take three years to get
* W1 L7 c% u- `! T# _* Q" Xthis company back on its feet again,” he said. “I’m not even halfway through.”
' G0 B0 H2 K$ @: @$ y5 r“The board is at the place where we don’t want to discuss it further,” Woolard replied.$ O3 `$ E ] | R# d+ |
Amelio asked who knew about the decision, and Woolard told him the truth: the rest of the
- z! r# T+ j7 y4 g* B c/ vboard plus Jobs. “Steve was one of the people we talked to about this,” Woolard said. “His
6 J' D3 b8 s3 l gview is that you’re a really nice guy, but you don’t know much about the computer
2 {$ ~' k6 X: w C: S2 Z" \# Xindustry.”6 o% a# x: M: e% z) g' A
“Why in the world would you involve Steve in a decision like this?” Amelio replied,
& P6 K2 V' r* zgetting angry. “Steve is not even a member of the board of directors, so what the hell is he 7 b& X f7 `5 S4 i
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doing in any of this conversation?” But Woolard didn’t back down, and Amelio hung up to
- c8 o+ D/ ~! b) |/ E/ Gcarry on with the family picnic before telling his wife.& U6 _) }8 Q8 r1 ]% i; c6 @
At times Jobs displayed a strange mixture of prickliness and neediness. He usually didn’t
- i$ i! `5 W' o0 d- Qcare one iota what people thought of him; he could cut people off and never care to speak4 X; c8 C6 ~9 w' B& `
to them again. Yet sometimes he also felt a compulsion to explain himself. So that evening- V2 G! g' x6 p. ^$ a$ a9 n
Amelio received, to his surprise, a phone call from Jobs. “Gee, Gil, I just wanted you to1 c' ^8 B% H/ T5 |# U
know, I talked to Ed today about this thing and I really feel bad about it,” he said. “I want
$ N# l# Z, C7 Y. C% B& `7 lyou to know that I had absolutely nothing to do with this turn of events, it was a decision
* I. [& |' O+ m1 ~: ^, Ythe board made, but they had asked me for advice and counsel.” He told Amelio he
1 }. e2 N3 H) Q$ f. x$ q u3 krespected him for having “the highest integrity of anyone I’ve ever met,” and went on to; u3 i9 F M5 ]
give some unsolicited advice. “Take six months off,” Jobs told him. “When I got thrown
5 k0 q( e; o, ` f4 q0 c9 oout of Apple, I immediately went back to work, and I regretted it.” He offered to be a
! t7 d! i3 E- Y$ Lsounding board if Amelio ever wanted more advice.. S; Y1 }7 m% [5 r2 D6 b. q
Amelio was stunned but managed to mumble a few words of thanks. He turned to his
2 ^' J+ C8 y; Z$ _2 d& d, Zwife and recounted what Jobs said. “In ways, I still like the man, but I don’t believe him,”! t& i* W, g! p2 Z
he told her.4 x5 w$ \2 y7 j
“I was totally taken in by Steve,” she said, “and I really feel like an idiot.”
5 p( G/ U0 t M! O% K% h8 {" j“Join the crowd,” her husband replied.0 l( ~+ ]5 S+ F6 j6 H
Steve Wozniak, who was himself now an informal advisor to the company, was thrilled+ X2 p! L( s9 c" P8 q' j
that Jobs was coming back. (He forgave easily.) “It was just what we needed,” he said,
1 M0 t3 S& i" Z+ V) v8 p“because whatever you think of Steve, he knows how to get the magic back.” Nor did
* A0 L; k9 i1 X" E" K( \Jobs’s triumph over Amelio surprise him. As he told Wired shortly after it happened, “Gil
' R8 d, H; V+ S) H, jAmelio meets Steve Jobs, game over.”1 {; v" Y' K/ H( @- c) i5 J! @/ [2 k
That Monday Apple’s top employees were summoned to the auditorium. Amelio came in* O$ [; x9 e$ z8 N; y Z
looking calm and relaxed. “Well, I’m sad to report that it’s time for me to move on,” he
4 o1 A* _2 V" C) zsaid. Fred Anderson, who had agreed to be interim CEO, spoke next, and he made it clear
. ?7 v& V. O9 S! [0 rthat he would be taking his cues from Jobs. Then, exactly twelve years since he had lost
8 A6 T9 G8 Q9 @5 J- ]- ^5 ~, A" @" zpower in a July 4 weekend struggle, Jobs walked back onstage at Apple.
9 z! L3 T' j/ a' eIt immediately became clear that, whether or not he wanted to admit it publicly (or even
0 B/ u2 s) Q5 k4 v1 b: e5 Oto himself), Jobs was going to take control and not be a mere advisor. As soon as he came. a( H7 K0 O9 b
onstage that day—wearing shorts, sneakers, and a black turtleneck—he got to work. o0 c: H( e2 R1 j, M" Q' h
reinvigorating his beloved institution. “Okay, tell me what’s wrong with this place,” he0 ?# P1 @( d- S8 {; s: R
said. There were some murmurings, but Jobs cut them off. “It’s the products!” he answered.
4 I7 O' w5 r2 \“So what’s wrong with the products?” Again there were a few attempts at an answer, until; G) f8 |0 w5 C
Jobs broke in to hand down the correct answer. “The products suck!” he shouted. “There’s
# z' J% U& `; F$ [* d4 |no sex in them anymore!”" G' C; X- F9 Y
Woolard was able to coax Jobs to agree that his role as an advisor would be a very active
' t( V; @( |2 l& ^4 [- uone. Jobs approved a statement saying that he had “agreed to step up my involvement with
* q) W1 g- M+ Y( f$ ?5 Q5 TApple for up to 90 days, helping them until they hire a new CEO.” The clever formulation
+ ^' Z% A- x# i& c" Z" A; ?that Woolard used in his statement was that Jobs was coming back “as an advisor leading
* {2 e9 ?7 D5 K/ v' @7 u9 F' Lthe team.”
7 O2 i. K6 N1 c+ N+ G( OJobs took a small office next to the boardroom on the executive floor, conspicuously
) I! }6 z" E$ t3 O, _6 ^) ]eschewing Amelio’s big corner office. He got involved in all aspects of the business:
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7 m9 u8 X0 n1 }8 r
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# ^; |7 c+ o: ?8 e) Y" C# Eproduct design, where to cut, supplier negotiations, and advertising agency review. He
0 f- `! D3 L. w* R. w, b7 rbelieved that he had to stop the hemorrhaging of top Apple employees, and to do so he( M! P }0 @* x) c9 j
wanted to reprice their stock options. Apple stock had dropped so low that the options had. \6 G1 d$ {/ q8 R" p
become worthless. Jobs wanted to lower the exercise price, so they would be valuable, x$ r- p& p, @# N5 }+ G% a
again. At the time, that was legally permissible, but it was not considered good corporate
, q- A5 [0 v6 B2 ]3 Q3 z& mpractice. On his first Thursday back at Apple, Jobs called for a telephonic board meeting
5 }. q; s5 a6 K' e3 uand outlined the problem. The directors balked. They asked for time to do a legal and
) H! c# W& X% o& Nfinancial study of what the change would mean. “It has to be done fast,” Jobs told them.' A. L1 {; v0 f& a1 z" J, Y
“We’re losing good people.”, j7 e0 B1 F. \- i! V; G! Y7 u0 h
Even his supporter Ed Woolard, who headed the compensation committee, objected. “At
* B8 S( F& c/ NDuPont we never did such a thing,” he said.
+ [9 a8 e# A: [“You brought me here to fix this thing, and people are the key,” Jobs argued. When the
" K" p L9 i9 @* t2 I& B7 Gboard proposed a study that could take two months, Jobs exploded: “Are you nuts?!?” He: ?( } l$ F1 S0 S
paused for a long moment of silence, then continued. “Guys, if you don’t want to do this,
' n; H; T9 a: c( M9 d( A, lI’m not coming back on Monday. Because I’ve got thousands of key decisions to make that
' S6 v1 |! y8 H8 `/ ware far more difficult than this, and if you can’t throw your support behind this kind of, z2 B& y0 r8 W M! P
decision, I will fail. So if you can’t do this, I’m out of here, and you can blame it on me,+ B- A! m3 a) E
you can say, ‘Steve wasn’t up for the job.’”
4 M6 ^2 L4 @! A' z5 \6 Y5 f( jThe next day, after consulting with the board, Woolard called Jobs back. “We’re going to
' [3 O; q/ O: i, D& kapprove this,” he said. “But some of the board members don’t like it. We feel like you’ve
! ]- F, g7 N" r9 ^' Z& fput a gun to our head.” The options for the top team (Jobs had none) were reset at $13.25,
% v7 K- E' i& u+ z8 O! C) rwhich was the price of the stock the day Amelio was ousted.
5 \# e8 k% h! m3 [; D% Q5 j0 yInstead of declaring victory and thanking the board, Jobs continued to seethe at having to' S$ v0 n1 z* D6 R! y0 a$ j
answer to a board he didn’t respect. “Stop the train, this isn’t going to work,” he told
2 A. K0 u$ X+ K: B' V1 A* _Woolard. “This company is in shambles, and I don’t have time to wet-nurse the board. So I" @" J8 s2 K2 E; c, S0 u
need all of you to resign. Or else I’m going to resign and not come back on Monday.” The' Q! S6 u$ F Z/ S
one person who could stay, he said, was Woolard.+ ?2 a" i8 m& G% Q9 e9 U9 E: a
Most members of the board were aghast. Jobs was still refusing to commit himself to2 p0 l# D' @# {# i' F+ p a# o
coming back full-time or being anything more than an advisor, yet he felt he had the power
7 c0 o5 E7 _+ l$ R W* Yto force them to leave. The hard truth, however, was that he did have that power over them.
# e1 y; Q7 ], K0 ` W" f, M, eThey could not afford for him to storm off in a fury, nor was the prospect of remaining an4 C. x( ?0 r2 |8 d3 ~4 u
Apple board member very enticing by then. “After all they’d been through, most were glad
+ u- |0 G# B: @( S$ x" z- z' N$ Jto be let off,” Woolard recalled.
( F8 S, Q5 F) aOnce again the board acquiesced. It made only one request: Would he permit one other
, b8 p+ ?5 Z$ |# k- d. [( x3 @director to stay, in addition to Woolard? It would help the optics. Jobs assented. “They were$ e: A- |: ^9 [
an awful board, a terrible board,” he later said. “I agreed they could keep Ed Woolard and a4 g5 W0 P$ M" q8 J3 ]* ~
guy named Gareth Chang, who turned out to be a zero. He wasn’t terrible, just a zero.* X L, I2 o- x' C2 d
Woolard, on the other hand, was one of the best board members I’ve ever seen. He was a
/ u4 t1 i* ?; ~- C7 Uprince, one of the most supportive and wise people I’ve ever met.”3 ^# K7 {- k/ ]3 X6 S8 M+ }2 R
Among those being asked to resign was Mike Markkula, who in 1976, as a young
: }+ h6 i8 a6 V8 w, }, d5 Vventure capitalist, had visited the Jobs garage, fallen in love with the nascent computer on
% p+ N! h! u, @7 `3 cthe workbench, guaranteed a $250,000 line of credit, and become the third partner and one-9 R! o9 R/ W h# x j
third owner of the new company. Over the subsequent two decades, he was the one G1 O. d" i k
J& P, u3 ~: z0 h b
0 D7 g$ C7 o7 o, ^4 \) k
6 F1 Q- G( J1 g! |
" }/ u' Y1 H1 J' O1 H5 c1 n+ M, C5 i6 l; x5 T/ j- v( B
* p+ ~% k! t/ c& B# u4 ?- f7 }3 a5 ?: o* M. m. _" f: ^: L
( Q4 Z7 Z9 D+ B: q! M. N
1 v$ h+ e9 }$ K; a- L+ \constant on the board, ushering in and out a variety of CEOs. He had supported Jobs at( h6 z8 c$ D0 G
times but also clashed with him, most notably when he sided with Sculley in the. ~# P' l' N. r4 v. \' x; _
showdowns of 1985. With Jobs returning, he knew that it was time for him to leave.5 f5 D n$ P% |% ^9 B- a
Jobs could be cutting and cold, especially toward people who crossed him, but he could' ]0 [, B2 D3 R- Z# B7 G
also be sentimental about those who had been with him from the early days. Wozniak fell% G$ i$ p0 l) j6 \/ q
into that favored category, of course, even though they had drifted apart; so did Andy6 q6 p" A$ W8 D2 D$ G% [* @
Hertzfeld and a few others from the Macintosh team. In the end, Mike Markkula did as
: H% ]3 G ]; E: p7 b1 h- m) vwell. “I felt deeply betrayed by him, but he was like a father and I always cared about him,”5 n; I5 d8 i+ x, K( L! s+ N
Jobs later recalled. So when the time came to ask him to resign from the Apple board, Jobs
' }0 [5 Q$ H. r8 L, ~2 {2 |drove to Markkula’s chateau-like mansion in the Woodside hills to do it personally. As8 B* G2 [ b0 K/ Y6 f
usual, he asked to take a walk, and they strolled the grounds to a redwood grove with a
6 k1 m5 U- l2 k) Q, H+ ?2 Xpicnic table. “He told me he wanted a new board because he wanted to start fresh,”
4 s3 @' P2 ]! O6 K. _1 f" w( [Markkula said. “He was worried that I might take it poorly, and he was relieved when I
2 S* w/ ~( K. ~0 k1 Fdidn’t.” x0 J+ T1 Y! f7 \
They spent the rest of the time talking about where Apple should focus in the future. A, [) z* H x4 w
Jobs’s ambition was to build a company that would endure, and he asked Markkula what& S$ Q7 \' T& q! `8 W4 ~( P
the formula for that would be. Markkula replied that lasting companies know how to \+ O a+ v, M: H" B1 W
reinvent themselves. Hewlett-Packard had done that repeatedly; it started as an instrument
; L+ L" n' v0 b, w" Mcompany, then became a calculator company, then a computer company. “Apple has been
) |/ p; a2 f/ d" H2 ksidelined by Microsoft in the PC business,” Markkula said. “You’ve got to reinvent the
. n# b D B; ~3 lcompany to do some other thing, like other consumer products or devices. You’ve got to be3 K2 f8 K! d9 w" i6 f$ J* n
like a butterfly and have a metamorphosis.” Jobs didn’t say much, but he agreed.5 M$ T8 t& y5 M: o. c
The old board met in late July to ratify the transition. Woolard, who was as genteel as' j; {0 z. \* G6 Q! y
Jobs was prickly, was mildly taken aback when Jobs appeared dressed in jeans and, \: j! t( H+ B3 e2 G, o% w
sneakers, and he worried that Jobs might start berating the veteran board members for( v( C8 v1 i6 f) v
screwing up. But Jobs merely offered a pleasant “Hi, everyone.” They got down to the
* L b A! M `4 b: ^business of voting to accept the resignations, elect Jobs to the board, and empower Woolard- i- I! e# X0 F3 D6 c& A
and Jobs to find new board members.9 Y# w! R/ e8 H9 U+ i4 L# o: ~, M
Jobs’s first recruit was, not surprisingly, Larry Ellison. He said he would be pleased to# z3 H e! B N7 s% k' Y' t! |) h
join, but he hated attending meetings. Jobs said it would be fine if he came to only half of. J) H g( w, V1 j% e9 E
them. (After a while Ellison was coming to only a third of the meetings. Jobs took a picture
4 \1 e% O/ k9 E6 |of him that had appeared on the cover of Business Week and had it blown up to life size and
q2 Y6 p! O! v, _7 B# |pasted on a cardboard cutout to put in his chair.)
8 \1 A3 [. T$ f7 u8 p8 KJobs also brought in Bill Campbell, who had run marketing at Apple in the early 1980s
8 f5 S ~- ]; E8 K4 F) sand been caught in the middle of the Sculley-Jobs clash. Campbell had ended up sticking: S7 W4 h. q; P' G1 Y
with Sculley, but he had grown to dislike him so much that Jobs forgave him. Now he was
% b/ f/ @7 b1 i9 Wthe CEO of Intuit and a walking buddy of Jobs. “We were sitting out in the back of his) Z# B. N% Y6 i
house,” recalled Campbell, who lived only five blocks from Jobs in Palo Alto, “and he said5 N }5 V1 J" u5 i k
he was going back to Apple and wanted me on the board. I said, ‘Holy shit, of course I will8 y$ k: K) h, s# r/ ^
do that.’” Campbell had been a football coach at Columbia, and his great talent, Jobs said,
0 M6 ]" {+ |1 V0 \was to “get A performances out of B players.” At Apple, Jobs told him, he would get to
I/ Z' [6 F: `+ X' gwork with A players. $ d4 n x4 W Q* |* h
9 s4 }0 W- |; s# |, w* L% u o% H
/ o8 C, ?/ m4 |2 m8 \* O' V
% x( \- o- [. I1 f' q D8 I0 {1 m7 d6 o, ]7 K* `- Y0 @0 ^9 o4 L- V# r
2 `' w. p0 ]* S! ?1 u1 q' y
- d A# u1 v! a$ k
2 c3 x6 t0 @' h2 i- N) n3 e
/ p0 [' X4 b3 Z2 x# p D1 ~7 N) Y7 _% k9 P9 q H
Woolard helped bring in Jerry York, who had been the chief financial officer at Chrysler
; n6 K: | p6 g9 }9 Eand then IBM. Others were considered and then rejected by Jobs, including Meg Whitman,$ D1 F( }; C$ w9 q% ^. v' K0 B$ G: r) w
who was then the manager of Hasbro’s Playskool division and had been a strategic planner
+ V4 I4 u8 X: F% l- {at Disney. (In 1998 she became CEO of eBay, and she later ran unsuccessfully for governor
: b1 n4 U" C$ `of California.) Over the years Jobs would bring in some strong leaders to serve on the! w, z. _! {3 Z$ w' W% K
Apple board, including Al Gore, Eric Schmidt of Google, Art Levinson of Genentech,7 h7 d3 D# l7 X6 b
Mickey Drexler of the Gap and J. Crew, and Andrea Jung of Avon. But he always made
, S% M6 ], } i! Hsure they were loyal, sometimes loyal to a fault. Despite their stature, they seemed at times* u) w5 I0 B9 Y+ Y
awed or intimidated by Jobs, and they were eager to keep him happy.
! y# Z2 w( X- \( w. R2 U% j$ b4 }At one point he invited Arthur Levitt, the former SEC chairman, to become a board
# C$ [" m$ c" zmember. Levitt, who bought his first Macintosh in 1984 and was proudly “addicted” to0 P( p; T9 z: n/ B5 C8 y! l
Apple computers, was thrilled. He was excited to visit Cupertino, where he discussed the# K3 C# K, W8 t: M' E+ v
role with Jobs. But then Jobs read a speech Levitt had given about corporate governance,6 M6 Z _' `9 b% I+ q
which argued that boards should play a strong and independent role, and he telephoned to
) m& g5 r3 F7 q, C: B" E. Hwithdraw the invitation. “Arthur, I don’t think you’d be happy on our board, and I think it5 W" u A9 |8 B& u' a
best if we not invite you,” Levitt said Jobs told him. “Frankly, I think some of the issues; g. Y( W. r4 M: {/ B! M
you raised, while appropriate for some companies, really don’t apply to Apple’s culture.”" U/ n; @# I: p4 l7 D
Levitt later wrote, “I was floored. . . . It’s plain to me that Apple’s board is not designed to' V* G( f B- ~* [; B# ~; a
act independently of the CEO.”1 H. a# E2 B. D r; x1 q; A
, D9 Y$ B% e/ G7 mMacworld Boston, August 1997& ^" l: e) t; e& q
. x& ]7 O( ]1 X
The staff memo announcing the repricing of Apple’s stock options was signed “Steve and
7 c/ s5 }( \9 Q, u3 y$ Othe executive team,” and it soon became public that he was running all of the company’s& \5 {5 I! V0 P, o9 ^9 K% ~7 y: R
product review meetings. These and other indications that Jobs was now deeply engaged at
3 Q" c' T! G! ?# ~/ T' c$ i2 ~Apple helped push the stock up from about $13 to $20 during July. It also created a frisson6 @5 `! ]5 x# p
of excitement as the Apple faithful gathered for the August 1997 Macworld in Boston.2 p I; n, w! d
More than five thousand showed up hours in advance to cram into the Castle convention
/ }, k# t/ }% r o& G5 Fhall of the Park Plaza hotel for Jobs’s keynote speech. They came to see their returning% E: Y K# `* ^& o9 @! U+ _0 Z; A
hero—and to find out whether he was really ready to lead them again.
$ H$ |- W! A2 V. q8 P0 q8 W* G4 fHuge cheers erupted when a picture of Jobs from 1984 was flashed on the overhead
( ~ I- K2 [% ?( Cscreen. “Steve! Steve! Steve!” the crowd started to chant, even as he was still being* I" r1 D4 P; Q( f) h
introduced. When he finally strode onstage—wearing a black vest, collarless white shirt,0 y7 h t. X5 ~5 m% T! G4 F) d7 j
jeans, and an impish smile—the screams and flashbulbs rivaled those for any rock star. At
7 \1 a* h0 L* h* R& n% N b: Mfirst he punctured the excitement by reminding them of where he officially worked. “I’m- e1 J- i k. }0 \* m. l7 ~, [
Steve Jobs, the chairman and CEO of Pixar,” he introduced himself, flashing a slide
B; P. |, k: jonscreen with that title. Then he explained his role at Apple. “I, like a lot of other people,
" o2 {5 P. O! x+ p- hare pulling together to help Apple get healthy again.”
% ~7 S) }+ k5 h8 y6 ]- K" ?But as Jobs paced back and forth across the stage, changing the overhead slides with a" T+ ]: j( E) I1 W
clicker in his hand, it was clear that he was now in charge at Apple—and was likely to
* ?) v: d# n1 l: h: g/ dremain so. He delivered a carefully crafted presentation, using no notes, on why Apple’s
0 l( X& j- J1 s9 Vsales had fallen by 30% over the previous two years. “There are a lot of great people at+ e3 @5 J3 ~- J# e5 @6 e6 ^
Apple, but they’re doing the wrong things because the plan has been wrong,” he said. “I’ve 1 s1 G* f( y: x4 ]/ b$ z( [
2 e- @# P J5 S% ?8 j6 g! v) x
4 H: n; O' ~9 h9 e& Q' `7 E
/ z) c) [) W, ^$ B! ?
6 L, d4 w4 a9 m( [& t, J$ e# O! q( {, ]" f: @
* f4 P+ B- {7 B, g7 }1 V: U4 i
3 i7 O- B6 W6 P' B. e3 @" _
6 W: x/ @; ~7 r( L
A3 g. E" [8 L: A( x& H" q* kfound people who can’t wait to fall into line behind a good strategy, but there just hasn’t
$ }# v5 u0 r6 ?( u& ~' ?9 fbeen one.” The crowd again erupted in yelps, whistles, and cheers.& t, p2 s3 {" f" b
As he spoke, his passion poured forth with increasing intensity, and he began saying
1 Z' p2 w/ M6 K) }" I; G3 y“we” and “I”—rather than “they”—when referring to what Apple would be doing. “I think8 w% F2 S$ ?- r* o" e' q
you still have to think differently to buy an Apple computer,” he said. “The people who buy8 h7 d V5 ^# V/ x% S4 O5 T5 g* \. c3 T
them do think different. They are the creative spirits in this world, and they’re out to0 G% n- u. a# @: Q' R; h
change the world. We make tools for those kinds of people.” When he stressed the word
9 l* |& O( ~( R5 M$ [7 d6 V9 ?“we” in that sentence, he cupped his hands and tapped his fingers on his chest. And then, in
% H/ v7 S8 K9 z/ G( |9 d, g0 z. dhis final peroration, he continued to stress the word “we” as he talked about Apple’s future.
$ l0 S) U8 S" C% [“We too are going to think differently and serve the people who have been buying our |" e7 z* A' n$ X9 m: k, y/ n) I
products from the beginning. Because a lot of people think they’re crazy, but in that/ ?& w3 S' D6 D) c/ d
craziness we see genius.” During the prolonged standing ovation, people looked at each
+ J* H6 @2 w P' D8 r q6 [other in awe, and a few wiped tears from their eyes. Jobs had made it very clear that he and
3 f% ?. u( ~4 A/ D8 ]5 Y; T* g* fthe “we” of Apple were one.
! o% g% ?, V3 L( E. r6 F5 u5 t5 ], B' A8 r- U5 q
The Microsoft Pact: Y, @* D. U/ Q7 D7 d3 `* Y
E: R7 \, A) \& N. J! M) Z( dThe climax of Jobs’s August 1997 Macworld appearance was a bombshell announcement,' }/ ~' j% H/ ?4 @: s! G; b
one that made the cover of both Time and Newsweek. Near the end of his speech, he paused) S& F8 I: p( Q) I( b2 ^+ S
for a sip of water and began to talk in more subdued tones. “Apple lives in an ecosystem,”
3 i# v! F5 T3 _ Z7 ~he said. “It needs help from other partners. Relationships that are destructive don’t help
; l6 o" a) a6 q+ J. o0 f4 j4 ~anybody in this industry.” For dramatic effect, he paused again, and then explained: “I’d
/ {2 A7 l2 b( u- {; o; B" U( flike to announce one of our first new partnerships today, a very meaningful one, and that is
! a' {* b6 p6 T6 K* @one with Microsoft.” The Microsoft and Apple logos appeared together on the screen as( w" z3 p+ L) E
people gasped.
, H# f# B. |+ eApple and Microsoft had been at war for a decade over a variety of copyright and patent
% M! K; k* [- X% H2 d% v8 r4 sissues, most notably whether Microsoft had stolen the look and feel of Apple’s graphical" l( M" d. u) N. h6 k8 a
user interface. Just as Jobs was being eased out of Apple in 1985, John Sculley had struck a% b6 { N: X+ c" b5 ]
surrender deal: Microsoft could license the Apple GUI for Windows 1.0, and in return it, @. `7 ~$ r N9 s
would make Excel exclusive to the Mac for up to two years. In 1988, after Microsoft came
$ M# Q$ }( S9 Yout with Windows 2.0, Apple sued. Sculley contended that the 1985 deal did not apply to6 ~ w5 F3 T; J2 G$ \( G: i
Windows 2.0 and that further refinements to Windows (such as copying Bill Atkinson’s. x% Q2 M8 ^9 q, B3 u
trick of “clipping” overlapping windows) had made the infringement more blatant. By 1997
a# s8 Z" T8 x ]) ^Apple had lost the case and various appeals, but remnants of the litigation and threats of8 {' I9 c' s8 c7 s+ a: M1 p
new suits lingered. In addition, President Clinton’s Justice Department was preparing a9 B0 F" L# v, [5 K, t6 C
massive antitrust case against Microsoft. Jobs invited the lead prosecutor, Joel Klein, to
- L8 O' P5 b) Y; J( b% VPalo Alto. Don’t worry about extracting a huge remedy against Microsoft, Jobs told him
$ |6 n4 i8 w) Y) m3 T& ^' R+ _. Vover coffee. Instead simply keep them tied up in litigation. That would allow Apple the
5 | \0 l/ Z9 v* lopportunity, Jobs explained, to “make an end run” around Microsoft and start offering
" u2 n) D: I& Xcompeting products.5 @! y9 G1 B) L0 O' E, ?0 v
Under Amelio, the showdown had become explosive. Microsoft refused to commit to" j! a3 O1 Y7 F% e, i8 L0 V
developing Word and Excel for future Macintosh operating systems, which could have
4 a! o6 ?2 m/ f* Mdestroyed Apple. In defense of Bill Gates, he was not simply being vindictive. It was 2 U D2 a$ Z' `5 @
& } h! L/ @4 J" }/ R
. }7 e/ a* ]$ b6 X( J9 D3 E, [9 G: m2 I+ N* U$ `/ } V0 j7 Y. \
8 \# S8 T" y: _! e5 W' r k
5 D) ~1 C L) A7 w2 ?2 W. }% l; ~/ [- I
# `& Q! J! N2 s7 |
' H1 [7 s' R5 p t E* c( B3 q& t( n* ]" L
understandable that he was reluctant to commit to developing for a future Macintosh
- F H R( }# Woperating system when no one, including the ever-changing leadership at Apple, seemed to" n' W5 u) U) b) e
know what that new operating system would be. Right after Apple bought NeXT, Amelio
/ X- O) K5 T8 I4 L6 [7 F' wand Jobs flew together to visit Microsoft, but Gates had trouble figuring out which of them
: _! Q' M6 ?7 R9 g2 Pwas in charge. A few days later he called Jobs privately. “Hey, what the fuck, am I6 A# v& q& j' ]( S, N1 g4 K
supposed to put my applications on the NeXT OS?” Gates asked. Jobs responded by
* p9 g F) R9 ~8 K“making smart-ass remarks about Gil,” Gates recalled, and suggesting that the situation+ l$ x9 I# |7 [& D0 U/ ?2 b6 _
would soon be clarified./ b" o* f! j5 q3 O* G; H
When the leadership issue was partly resolved by Amelio’s ouster, one of Jobs’s first
6 N H8 J+ V: Y$ @6 K* _6 n8 S( w! jphone calls was to Gates. Jobs recalled:( z5 n4 w5 D8 R4 i0 `. K* T) S
I called up Bill and said, “I’m going to turn this thing around.” Bill always had a soft
) U" i: g8 _# ]) N, Y8 ^5 D+ Espot for Apple. We got him into the application software business. The first Microsoft apps
) A* n8 A* j; gwere Excel and Word for the Mac. So I called him and said, “I need help.” Microsoft was) x2 m1 X) o' L; S6 v3 x2 Z( [' e
walking over Apple’s patents. I said, “If we kept up our lawsuits, a few years from now we
9 I& X. w; p" w6 k' jcould win a billion-dollar patent suit. You know it, and I know it. But Apple’s not going to9 Q+ j; g3 d4 B2 Z! e
survive that long if we’re at war. I know that. So let’s figure out how to settle this right c# W t( c- v1 |9 t
away. All I need is a commitment that Microsoft will keep developing for the Mac and an
) @3 r% G8 i5 k8 r$ {$ \$ ginvestment by Microsoft in Apple so it has a stake in our success.”
! m! o" |) C( [, |2 w& ^* A3 K' r' }0 |7 X, ^
: j1 b. w. K: J: Q2 ]
0 O: G2 y5 F0 o* ~0 C
7 z: a# S3 \& [ gWhen I recounted to him what Jobs said, Gates agreed it was accurate. “We had a group of. k! L2 o; ^' H& J& e, Q6 f
people who liked working on the Mac stuff, and we liked the Mac,” Gates recalled. He had
0 [; r$ G5 y$ I% r3 Obeen negotiating with Amelio for six months, and the proposals kept getting longer and! h* Q; G4 m$ \' S0 y
more complicated. “So Steve comes in and says, ‘Hey, that deal is too complicated. What I8 v9 E3 E# P& f8 ^# H
want is a simple deal. I want the commitment and I want an investment.’ And so we put
2 s& P; e1 Y3 p6 d3 [that together in just four weeks.”2 y, W, y( H# r, E4 r B
Gates and his chief financial officer, Greg Maffei, made the trip to Palo Alto to work out5 w8 A$ `' [" m: s' {" P
the framework for a deal, and then Maffei returned alone the following Sunday to work on$ _6 D0 M2 v2 x/ D, K
the details. When he arrived at Jobs’s home, Jobs grabbed two bottles of water out of the
6 U8 Z. B% z2 q+ H) @refrigerator and took Maffei for a walk around the Palo Alto neighborhood. Both men wore
/ u- O$ f: o9 Mshorts, and Jobs walked barefoot. As they sat in front of a Baptist church, Jobs cut to the3 h: ?, {( \) H, p
core issues. “These are the things we care about,” he said. “A commitment to make
& K8 i. q) ?; ^software for the Mac and an investment.”
& P. F5 |+ V" O) p6 d, s$ VAlthough the negotiations went quickly, the final details were not finished until hours9 i m" X: ]& r+ ~8 {7 a' Z$ L# n
before Jobs’s Macworld speech in Boston. He was rehearsing at the Park Plaza Castle when& O- B" x6 G" D1 `
his cell phone rang. “Hi, Bill,” he said as his words echoed through the old hall. Then he
, H8 N) j' R) Owalked to a corner and spoke in a soft tone so others couldn’t hear. The call lasted an hour.' `% y2 w" k# [7 ]" } g* M
Finally, the remaining deal points were resolved. “Bill, thank you for your support of this
* E8 G0 L$ Y$ E, P( }% C4 Wcompany,” Jobs said as he crouched in his shorts. “I think the world’s a better place for it.”$ x$ s, {$ v8 \6 O; ~* b
During his Macworld keynote address, Jobs walked through the details of the Microsoft
) l9 g6 ~) T; Z; Ddeal. At first there were groans and hisses from the faithful. Particularly galling was Jobs’s
/ F! B( D% y) X' K0 m* e$ H7 iannouncement that, as part of the peace pact, “Apple has decided to make Internet Explorer + E2 e/ E. X3 y( ~1 ]. K
7 A y) ]4 T! `( F/ i/ ?8 R' `0 N7 V# j
% h/ g! b2 x6 V9 F" c8 v8 L7 L7 j+ ^& W
( E2 Q7 F$ W3 p- {0 o5 @. u. l1 O5 Y# `% u/ C4 J
$ u2 m; f! r3 Z3 B; h
- Y/ i5 L9 O4 J* U3 B. E" H: e5 v1 Z4 d0 p9 w
its default browser on the Macintosh.” The audience erupted in boos, and Jobs quickly
0 M) s+ z( F" F8 P, g8 H5 W: Gadded, “Since we believe in choice, we’re going to be shipping other Internet browsers, as5 I, \& p7 A8 o- ]6 M3 Q9 @
well, and the user can, of course, change their default should they choose to.” There were
+ K: @% K7 }# ~. G. N, Asome laughs and scattered applause. The audience was beginning to come around,# A% ^. B6 ^7 D. y- I/ o
especially when he announced that Microsoft would be investing $150 million in Apple and
9 p0 S6 p& V# U3 Hgetting nonvoting shares.
9 Z; O" S9 L7 W3 t* H8 JBut the mellower mood was shattered for a moment when Jobs made one of the few
/ S0 ^" z, L" P& t, P# Jvisual and public relations gaffes of his onstage career. “I happen to have a special guest
/ _+ U5 t& ]/ [9 U! |% \8 Zwith me today via satellite downlink,” he said, and suddenly Bill Gates’s face appeared on
& T$ ^0 r+ m; `! Wthe huge screen looming over Jobs and the auditorium. There was a thin smile on Gates’s) M* o3 |2 U& b. {
face that flirted with being a smirk. The audience gasped in horror, followed by some boos
' ]0 {1 n0 I% ?, zand catcalls. The scene was such a brutal echo of the 1984 Big Brother ad that you half
, g9 u0 i/ v" N+ \expected (and hoped?) that an athletic woman would suddenly come running down the' s$ }+ T; w- j9 P# P4 A8 a0 U
aisle and vaporize the screenshot with a well-thrown hammer.
! x3 S9 l- D# ?, }( _+ K5 WBut it was all for real, and Gates, unaware of the jeering, began speaking on the satellite5 f/ S4 G: v' a5 [2 r
link from Microsoft headquarters. “Some of the most exciting work that I’ve done in my3 o4 Z) u1 [$ h8 E4 S8 f
career has been the work that I’ve done with Steve on the Macintosh,” he intoned in his
- r: R1 a3 N# {2 f! Ghigh-pitched singsong. As he went on to tout the new version of Microsoft Office that was- T& N+ ]2 h' Y
being made for the Macintosh, the audience quieted down and then slowly seemed to
# K1 U2 Y2 Y, ?. p- Maccept the new world order. Gates even was able to rouse some applause when he said that8 F3 z0 \$ c7 d2 N
the new Mac versions of Word and Excel would be “in many ways more advanced than6 n1 u$ B; z- b- }
what we’ve done on the Windows platform.”
" A4 b6 s, W% FJobs realized that the image of Gates looming over him and the audience was a mistake.
' e E3 x2 e% G7 T“I wanted him to come to Boston,” Jobs later said. “That was my worst and stupidest
d V2 K( G- Y" Ostaging event ever. It was bad because it made me look small, and Apple look small, and as; u# l5 m% [1 r2 z7 A
if everything was in Bill’s hands.” Gates likewise was embarrassed when he saw the) Z: o1 X! N: L' K8 |+ {
videotape of the event. “I didn’t know that my face was going to be blown up to looming' K# F( u, Z3 V* _- x5 S5 V
proportions,” he said.1 |5 O7 i' p# Q- J' u
Jobs tried to reassure the audience with an impromptu sermon. “If we want to move
4 P8 @9 V5 a" b8 p1 a7 x! |5 R ^) Xforward and see Apple healthy again, we have to let go of a few things here,” he told the
/ X8 i7 K. v3 u( l0 _ e; Y. Gaudience. “We have to let go of this notion that for Apple to win Microsoft has to lose. . . . I: C% t6 g7 L2 ]; N7 I
think if we want Microsoft Office on the Mac, we better treat the company that puts it out
4 {/ d4 g* L6 C' C+ X; M5 nwith a little bit of gratitude.”8 @' P; M4 E9 w4 }
The Microsoft announcement, along with Jobs’s passionate reengagement with the
4 X; k6 S- V ]; x! icompany, provided a much-needed jolt for Apple. By the end of the day, its stock had
. |: X1 K9 u) h# l' B% d' t k f, Zskyrocketed $6.56, or 33%, to close at $26.31, twice the price of the day Amelio resigned." }6 w; ?; q" I# m6 Q
The one-day jump added $830 million to Apple’s stock market capitalization. The company
+ y3 N9 c) j' e! J: L# kwas back from the edge of the grave./ w" X6 T: Z2 ]( r
7 A) B: d) W- ~$ L4 b; l+ x
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CHAPTER TWENTY-FIVE 2 x+ ^7 ^6 P3 J9 H8 g' I6 [
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