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CHAPTER TWENTY-FOUR
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THE RESTORATION 1 z6 O4 L* M: k$ f9 E. t3 K+ `
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/ @7 ~5 ~, D' Z# A% g! A" a1 \The Loser Now Will Be Later to Win+ \: u1 ?: N0 ]: e9 b
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Amelio calling up Wozniak as Jobs hangs back, 1997
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4 |/ T/ `+ l! D
$ X3 k9 w6 I2 `& p& f3 ?1 QHovering Backstage8 M: z* S7 s- H/ k# R( q: B
8 g! ~1 L% b4 m4 k“It’s rare that you see an artist in his thirties or forties able to really contribute something
7 [0 Q2 E9 j/ v$ g+ ?0 Iamazing,” Jobs declared as he was about to turn thirty.
) H, d) n9 j! g1 c$ X6 lThat held true for Jobs in his thirties, during the decade that began with his ouster from+ h. x2 {7 V" L! R- X6 G
Apple in 1985. But after turning forty in 1995, he flourished. Toy Story was released that0 p1 F. s! N+ V4 \" R/ d
year, and the following year Apple’s purchase of NeXT offered him reentry into the
1 {2 g6 [3 E6 ^/ W* ] o4 i% mcompany he had founded. In returning to Apple, Jobs would show that even people over$ {9 G) U: G5 D6 i6 L
forty could be great innovators. Having transformed personal computers in his twenties, he! `( Y: p$ c0 Q% ^# Z+ l7 W
would now help to do the same for music players, the recording industry’s business model,; a% s; I$ W: E( _
mobile phones, apps, tablet computers, books, and journalism.
' L( x. q# Y, fHe had told Larry Ellison that his return strategy was to sell NeXT to Apple, get
$ p2 B/ b" e! r; m7 S, Pappointed to the board, and be there ready when CEO Gil Amelio stumbled. Ellison may- }9 ^1 M5 h6 s Q9 a* E
have been baffled when Jobs insisted that he was not motivated by money, but it was partly% N( D0 ]: n( L6 c
true. He had neither Ellison’s conspicuous consumption needs nor Gates’s philanthropic
; N5 n+ T# D$ J8 dimpulses nor the competitive urge to see how high on the Forbes list he could get. Instead+ S" Z8 p4 d. c7 Z( v
his ego needs and personal drives led him to seek fulfillment by creating a legacy that
- z" q o5 l1 Y, }0 }8 t" iwould awe people. A dual legacy, actually: building innovative products and building a
$ E0 Z* W+ F/ c* tlasting 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
( z5 W; j! C, k4 J1 ?return to Apple and reclaim his kingdom.1 G' Q) `$ U7 x/ F4 d
And yet when the cup of power neared his lips, he became strangely hesitant, reluctant,7 h) Z) ?) {8 b4 y5 R
perhaps coy.
* y) d6 Y4 a" E; o" a% U1 IHe returned to Apple officially in January 1997 as a part-time advisor, as he had told o- w+ ^; P% k5 Q7 g3 N( J
Amelio he would. He began to assert himself in some personnel areas, especially in
0 }* f% L3 |4 eprotecting his people who had made the transition from NeXT. But in most other ways he
' N( C Q* q1 r" D/ nwas unusually passive. The decision not to ask him to join the board offended him, and he
/ ^( A Z; W8 l- J1 ~3 cfelt demeaned by the suggestion that he run the company’s operating system division.
: L7 S9 f( ]& I( `5 iAmelio was thus able to create a situation in which Jobs was both inside the tent and1 Z' a+ Y( c7 {. w: S. \; y9 M
outside the tent, which was not a prescription for tranquillity. Jobs later recalled:- }7 y6 ? C- G4 g1 D3 Z* j
Gil didn’t want me around. And I thought he was a bozo. I knew that before I sold him
+ K/ ?( F: p4 fthe company. I thought I was just going to be trotted out now and then for events like& w! X3 T+ l Y- V
Macworld, mainly for show. That was fine, because I was working at Pixar. I rented an
1 N* d" s0 {9 G' O) ?7 `office in downtown Palo Alto where I could work a few days a week, and I drove up to1 }" z3 T# h" W, e: A6 N
Pixar for one or two days. It was a nice life. I could slow down, spend time with my family.
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# }, I& Q p* K4 z8 L Q' `Jobs was, in fact, trotted out for Macworld right at the beginning of January, and this$ l: o F$ a, N2 d
reaffirmed his opinion that Amelio was a bozo. Close to four thousand of the faithful k* p3 ~! I7 @" ^8 o3 x
fought for seats in the ballroom of the San Francisco Marriott to hear Amelio’s keynote" y0 i/ G; `0 R7 o- B3 g- ]
address. He was introduced by the actor Jeff Goldblum. “I play an expert in chaos theory in
% m& Z2 ], t& O* ] rThe Lost World: Jurassic Park,” he said. “I figure that will qualify me to speak at an Apple$ Z& w7 N4 j- f! C q
event.” He then turned it over to Amelio, who came onstage wearing a flashy sports jacket. C: y4 J1 ]: v' \, k, C0 x7 Z
and a banded-collar shirt buttoned tight at the neck, “looking like a Vegas comic,” the Wall; n' U: ?; v+ \1 n4 Y. b+ t
Street Journal reporter Jim Carlton noted, or in the words of the technology writer Michael0 O- S/ j: M) |" ~
Malone, “looking exactly like your newly divorced uncle on his first date.”5 R5 G& @( [% O1 o" |/ Q- G7 n! p
The bigger problem was that Amelio had gone on vacation, gotten into a nasty tussle
/ w9 c8 g) `& Gwith his speechwriters, and refused to rehearse. When Jobs arrived backstage, he was upset3 X1 ?1 c. ^7 Q3 T: O/ G' K* |
by the chaos, and he seethed as Amelio stood on the podium bumbling through a disjointed J5 Y1 M; R8 ?
and endless presentation. Amelio was unfamiliar with the talking points that popped up on2 p r6 m% d+ [4 f
his teleprompter and soon was trying to wing his presentation. Repeatedly he lost his train
# S; ^) m* z/ Y- h/ _. zof thought. After more than an hour, the audience was aghast. There were a few welcome; R( a8 Q$ Y/ k% n4 B4 O
breaks, such as when he brought out the singer Peter Gabriel to demonstrate a new music( ?# G% u* z% G; R8 J
program. He also pointed out Muhammad Ali in the first row; the champ was supposed to
2 w, E# y9 u3 v( Q* z7 p$ Qcome onstage to promote a website about Parkinson’s disease, but Amelio never invited- W# h/ A; u6 }( m( S6 p/ J) M
him up or explained why he was there.6 q! m: p x1 {
Amelio rambled for more than two hours before he finally called onstage the person
0 n9 C/ l2 `1 leveryone was waiting to cheer. “Jobs, exuding confidence, style, and sheer magnetism, was
! K) P: h% K, z. cthe antithesis of the fumbling Amelio as he strode onstage,” Carlton wrote. “The return of2 a7 }6 ~. q2 ?4 \( ?
Elvis would not have provoked a bigger sensation.” The crowd jumped to its feet and gave5 m( m- W$ z1 g7 O5 m& t- H
him a raucous ovation for more than a minute. The wilderness decade was over. Finally) y3 p' }( r6 [- P# h# G
Jobs waved for silence and cut to the heart of the challenge. “We’ve got to get the spark
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back,” he said. “The Mac didn’t progress much in ten years. So Windows caught up. So we
$ a8 p8 b, [: x1 v( T ^% lhave to come up with an OS that’s even better.”
* H" T q# d5 Y2 `! i0 _Jobs’s pep talk could have been a redeeming finale to Amelio’s frightening performance.$ A! N/ J7 S7 L: L5 m
Unfortunately Amelio came back onstage and resumed his ramblings for another hour.
" S/ @+ x9 F* i0 h- Z# G- e8 ZFinally, more than three hours after the show began, Amelio brought it to a close by calling( v, |5 X8 M2 K$ r$ ?" K
Jobs back onstage and then, in a surprise, bringing up Steve Wozniak as well. Again there) N6 r8 E0 L2 L" J& T- h. u
was pandemonium. But Jobs was clearly annoyed. He avoided engaging in a triumphant
$ B1 r9 z: R: j7 Ltrio scene, arms in the air. Instead he slowly edged offstage. “He ruthlessly ruined the( h4 z4 ^8 q% r+ C: M
closing moment I had planned,” Amelio later complained. “His own feelings were more5 `3 |( M- ?' [% J+ H- }$ w n
important than good press for Apple.” It was only seven days into the new year for Apple,
7 ~5 k6 i# i" O% c! a/ a) f' J. pand 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
# k8 b$ e, H& ]1 Z" ?the really good people who came in from NeXT didn’t get knifed in the back by the less# T9 ^# q7 M1 L' p# K5 g: `, ~
competent people who were then in senior jobs at Apple,” he recalled. Ellen Hancock, who
# J; R0 S% T# p, S+ Chad favored choosing Sun’s Solaris over NeXT, was on the top of his bozo list, especially2 j# q- Z7 d) c) R' Y) a
when she continued to want to use the kernel of Solaris in the new Apple operating system.7 |, I. _! A. {& \" X8 n
In response to a reporter’s question about the role Jobs would play in making that decision,
3 D' {" q0 n: f' X/ J" Qshe answered curtly, “None.” She was wrong. Jobs’s first move was to make sure that two
$ K+ e$ o; Z2 q& B' lof his friends from NeXT took over her duties.% C7 V, T- [# x
To head software engineering, he tapped his buddy Avie Tevanian. To run the hardware2 m5 \8 m! [9 m% L! @
side, he called on Jon Rubinstein, who had done the same at NeXT back when it had a
! Q; N0 D- x7 _" Z- ahardware division. Rubinstein was vacationing on the Isle of Skye when Jobs called him.$ {7 L1 T: x2 F {: J( l
“Apple needs some help,” he said. “Do you want to come aboard?” Rubinstein did. He got6 W3 Y$ b& Z0 ~" H! C7 C" `
back in time to attend Macworld and see Amelio bomb onstage. Things were worse than he& X# N, ]' b9 J4 h- B
expected. He and Tevanian would exchange glances at meetings as if they had stumbled
$ N5 Y J J9 minto an insane asylum, with people making deluded assertions while Amelio sat at the end! Q! g9 L2 @: |- A) J# o# r
of the table in a seeming stupor.3 \* D3 H, a( M+ V R! `9 k# e( X0 Q
Jobs did not come into the office regularly, but he was on the phone to Amelio often.5 c g9 h7 j" _2 r& H" ~. t
Once he had succeeded in making sure that Tevanian, Rubinstein, and others he trusted4 T5 J7 K/ ~4 k9 o' r. e
were given top positions, he turned his focus onto the sprawling product line. One of his
e" ?/ b6 e% B0 Npet peeves was Newton, the handheld personal digital assistant that boasted handwriting( X% _0 e; X; W; z. w' i
recognition capability. It was not quite as bad as the jokes and Doonesbury comic strip
) E+ q& l( f% v; D/ jmade it seem, but Jobs hated it. He disdained the idea of having a stylus or pen for writing% p w- T- O \+ |, t" w c! }8 f# a
on a screen. “God gave us ten styluses,” he would say, waving his fingers. “Let’s not invent
; M% l, V3 U' l( d+ l5 S4 K, ^another.” In addition, he viewed Newton as John Sculley’s one major innovation, his pet
& i' o0 g0 t2 R. K; |% gproject. That alone doomed it in Jobs’s eyes.! Z Z& D& p- x: r
“You ought to kill Newton,” he told Amelio one day by phone./ O8 r8 F+ O* M8 u) ]
It was a suggestion out of the blue, and Amelio pushed back. “What do you mean, kill
- e7 v3 N0 ^7 u6 \ }& v" Nit?” he said. “Steve, do you have any idea how expensive that would be?”5 N9 L% B _: B+ S
“Shut it down, write it off, get rid of it,” said Jobs. “It doesn’t matter what it costs.$ g2 b' e# ?; w R/ H0 N& t- N( q
People will cheer you if you got rid of it.” . ]& d! p) b8 l
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“I’ve looked into Newton and it’s going to be a moneymaker,” Amelio declared. “I don’t$ H9 Z0 ]8 g( L" t, k# r( H
support getting rid of it.” By May, however, he announced plans to spin off the Newton# K1 P: }- _7 ?' j, X
division, the beginning of its yearlong stutter-step march to the grave.
- q% P; J+ d7 ~, t+ VTevanian and Rubinstein would come by Jobs’s house to keep him informed, and soon8 F8 r7 l- \7 u) i6 `
much of Silicon Valley knew that Jobs was quietly wresting power from Amelio. It was not& R+ n- e, J+ v* H4 P5 O) K. }
so much a Machiavellian power play as it was Jobs being Jobs. Wanting control was
; t$ M! G+ g" g* Bingrained in his nature. Louise Kehoe, the Financial Times reporter who had foreseen this
- t: V- x6 H/ J) r; t0 v# q% o& Zwhen she questioned Jobs and Amelio at the December announcement, was the first with
8 P8 ?& Q" y1 s j# ethe story. “Mr. Jobs has become the power behind the throne,” she reported at the end of4 W0 p# ^" ]( ^8 b
February. “He is said to be directing decisions on which parts of Apple’s operations should
5 N* k3 v' Q; U+ E# r# P0 Qbe cut. Mr. Jobs has urged a number of former Apple colleagues to return to the company,9 Y$ z1 \+ t" t# f8 h, I: a8 X, W
hinting strongly that he plans to take charge, they said. According to one of Mr. Jobs’- V8 H! V0 y9 H8 d; V' E' ^& d
confidantes, he has decided that Mr. Amelio and his appointees are unlikely to succeed in
+ p- C' m- U( f1 t4 }reviving Apple, and he is intent upon replacing them to ensure the survival of ‘his+ n) P+ _4 V K. I* L2 {
company.’”4 J, d* _( k5 u3 G4 d
That month Amelio had to face the annual stockholders meeting and explain why the* ]+ L% c4 X& Y! [; b
results for the final quarter of 1996 showed a 30% plummet in sales from the year before.
" z: f8 H( l7 h# L3 L. qShareholders lined up at the microphones to vent their anger. Amelio was clueless about& b, l: C, J( d: `+ w6 d
how poorly he handled the meeting. “The presentation was regarded as one of the best I3 \2 P0 ?3 X; K" B( Z7 D; l
had ever given,” he later wrote. But Ed Woolard, the former CEO of DuPont who was now
+ d8 Y) H! c5 w, h$ i% s5 k' `2 Sthe chair of the Apple board (Markkula had been demoted to vice chair), was appalled.
1 c2 b. u0 e4 I* b0 l Q' d“This is a disaster,” his wife whispered to him in the midst of the session. Woolard agreed.' Q: E- W( ]$ e" Y, L$ T
“Gil came dressed real cool, but he looked and sounded silly,” he recalled. “He couldn’t
, i0 R) F) @, K( Z. S% Fanswer the questions, didn’t know what he was talking about, and didn’t inspire any! V9 z3 d: x n5 z
confidence.”' `9 j$ K( O# i5 h3 |9 z9 X
Woolard picked up the phone and called Jobs, whom he’d never met. The pretext was to
# t# k/ r( t# ^$ a6 H4 }% y finvite him to Delaware to speak to DuPont executives. Jobs declined, but as Woolard8 f* d5 O2 c+ t$ t( o
recalled, “the request was a ruse in order to talk to him about Gil.” He steered the phone
7 w- [, ^" ^4 jcall in that direction and asked Jobs point-blank what his impression of Amelio was.4 X( k1 e9 |1 i: H, |# |
Woolard remembers Jobs being somewhat circumspect, saying that Amelio was not in the
" E+ R1 d) G& _8 q& ]: Qright job. Jobs recalled being more blunt:
% O3 c0 C" e+ ~5 F! D/ }I thought to myself, I either tell him the truth, that Gil is a bozo, or I lie by omission.
0 l% w9 X6 _- \3 U, dHe’s on the board of Apple, I have a duty to tell him what I think; on the other hand, if I tell, R% M3 v/ y- B3 [6 S1 J
him, he will tell Gil, in which case Gil will never listen to me again, and he’ll fuck the6 T j/ Y' [ K
people I brought into Apple. All of this took place in my head in less than thirty seconds. I' s: v, j) n# q/ t9 ~+ B
finally decided that I owed this guy the truth. I cared deeply about Apple. So I just let him
2 u2 r" `7 m- L4 `have it. I said this guy is the worst CEO I’ve ever seen, I think if you needed a license to be/ ?" ^ z4 l0 o. J' }4 }$ ?& k
a CEO he wouldn’t get one. When I hung up the phone, I thought, I probably just did a# D. K$ |4 f- @3 X4 g
really stupid thing. 6 E5 @( b4 h: \# Y; E; G- h
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1 [3 l* Q6 E% F. I; E: ~That spring Larry Ellison saw Amelio at a party and introduced him to the technology1 o6 X( B+ a m* u, \
journalist Gina Smith, who asked how Apple was doing. “You know, Gina, Apple is like a
6 N U1 x* y5 R( Q" e9 E$ B9 S2 f1 Oship,” Amelio answered. “That ship is loaded with treasure, but there’s a hole in the ship.5 Z) }5 T+ m- u
And my job is to get everyone to row in the same direction.” Smith looked perplexed and5 d. S" @9 `% v" A
asked, “Yeah, but what about the hole?” From then on, Ellison and Jobs joked about the' A* H$ F2 s$ ]6 Y/ w
parable of the ship. “When Larry relayed this story to me, we were in this sushi place, and I
! w( R) Y m- I, r: ~literally fell off my chair laughing,” Jobs recalled. “He was just such a buffoon, and he took
3 ?6 G8 H5 Q8 k! Q! T5 N5 S5 ~himself so seriously. He insisted that everyone call him Dr. Amelio. That’s always a
( U; t7 A3 A7 }1 H. Uwarning sign.”
+ ]5 o0 v# y$ Y4 b& t6 lBrent Schlender, Fortune’s well-sourced technology reporter, knew Jobs and was0 `3 [( ~6 |7 o1 h
familiar with his thinking, and in March he came out with a story detailing the mess.) v& A6 n2 v/ @+ i- f# f! |
“Apple Computer, Silicon Valley’s paragon of dysfunctional management and fumbled0 @2 A, x& J4 x/ @3 h
techno-dreams, is back in crisis mode, scrambling lugubriously in slow motion to deal with% ?4 a5 R0 y: M8 G0 m& ]9 e
imploding sales, a floundering technology strategy, and a hemorrhaging brand name,” he; ^* j$ d- J) x# c- Y+ V) X" T
wrote. “To the Machiavellian eye, it looks as if Jobs, despite the lure of Hollywood—lately# p3 d# U9 Y4 A8 h6 ^
he has been overseeing Pixar, maker of Toy Story and other computer-animated films—- h ?; ^+ U! W5 {6 `) q
might be scheming to take over Apple.”
$ c; O8 c0 A; ^* b( E2 p- jOnce again Ellison publicly floated the idea of doing a hostile takeover and installing his1 p; m S/ g3 x* f6 i
“best friend” Jobs as CEO. “Steve’s the only one who can save Apple,” he told reporters.7 X0 `9 w% }" D. [; W
“I’m ready to help him the minute he says the word.” Like the third time the boy cried
H" D% }' O1 o4 J/ T* M: w; H" {wolf, Ellison’s latest takeover musings didn’t get much notice, so later in the month he told
, S8 O" _: j% S! j4 {' WDan Gillmore of the San Jose Mercury News that he was forming an investor group to raise. P6 \4 K! V# {, L2 U S* `
$1 billion to buy a majority stake in Apple. (The company’s market value was about $2.3
, I) z( }% {4 M& a2 ~7 a9 y- G) Kbillion.) The day the story came out, Apple stock shot up 11% in heavy trading. To add to+ R q# L6 E3 a4 C6 F! m
the frivolity, Ellison set up an email address, savapple@us.oracle.com, asking the general
0 [& `* b: G( Y% z$ \public to vote on whether he should go ahead with it.1 c! F! {: ^8 Q: e7 F2 B
Jobs was somewhat amused by Ellison’s self-appointed role. “Larry brings this up now7 m X, S9 d6 _: @
and then,” he told a reporter. “I try to explain my role at Apple is to be an advisor.” Amelio,
6 F6 l o5 C$ ~4 F& D. v8 yhowever, was livid. He called Ellison to dress him down, but Ellison wouldn’t take the call.' C: R: X! h6 J( R! ^
So Amelio called Jobs, whose response was equivocal but also partly genuine. “I really0 t2 `2 M, _/ l0 S6 O0 y
don’t understand what is going on,” he told Amelio. “I think all this is crazy.” Then he
) {( p. n5 ]0 ]8 y; Dadded a reassurance that was not at all genuine: “You and I have a good relationship.” Jobs8 I3 s8 @' d; P `( ? p. B
could have ended the speculation by releasing a statement rejecting Ellison’s idea, but
: z O. N1 \7 t7 Qmuch to Amelio’s annoyance, he didn’t. He remained aloof, which served both his interests: h+ r4 t/ T+ F7 I8 L1 o
and his nature.
+ \. ?) m7 y9 HBy then the press had turned against Amelio. Business Week ran a cover asking “Is Apple& Y% ?# f7 {/ S6 ~+ b' D" J: n
Mincemeat?”; Red Herring ran an editorial headlined “Gil Amelio, Please Resign”; and& H( w; }! @& y
Wired ran a cover that showed the Apple logo crucified as a sacred heart with a crown of
8 i% {8 J$ Y9 X. T1 l, {thorns and the headline “Pray.” Mike Barnicle of the Boston Globe, railing against years of
9 S7 T0 p o0 Z& [Apple mismanagement, wrote, “How can these nitwits still draw a paycheck when they/ z, }' H2 [0 E
took the only computer that didn’t frighten people and turned it into the technological
% y J. v; I' h4 r2 g0 @equivalent of the 1997 Red Sox bullpen?”
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When Jobs and Amelio had signed the contract in February, Jobs began hopping around! m4 I# @+ N: G V
exuberantly and declared, “You and I need to go out and have a great bottle of wine to7 w; L5 e; F. q5 ?9 Z, w
celebrate!” Amelio offered to bring wine from his cellar and suggested that they invite their7 \2 k5 L: X, `) P9 t0 `
wives. It took until June before they settled on a date, and despite the rising tensions they
; |$ E, e" y6 Vwere able to have a good time. The food and wine were as mismatched as the diners;
; n1 N9 D1 |1 O; h5 z3 I/ @& cAmelio brought a bottle of 1964 Cheval Blanc and a Montrachet that each cost about $300;
) O1 Y% l- i p k4 X4 mJobs chose a vegetarian restaurant in Redwood City where the food bill totaled $72.5 L- s* Y- F! b) t* Y: e
Amelio’s wife remarked afterward, “He’s such a charmer, and his wife is too.”! F; {: ~6 S: ?
Jobs could seduce and charm people at will, and he liked to do so. People such as Amelio
# N8 T7 A, _7 l2 x' land Sculley allowed themselves to believe that because Jobs was charming them, it meant
6 N/ I% v: Y; }! q1 M! Q3 pthat he liked and respected them. It was an impression that he sometimes fostered by9 p' c, X% F. K H
dishing out insincere flattery to those hungry for it. But Jobs could be charming to people
4 Z) E) x" c; Y+ r" Ghe hated just as easily as he could be insulting to people he liked. Amelio didn’t see this
6 ?# S" _4 _+ t1 k Nbecause, like Sculley, he was so eager for Jobs’s affection. Indeed the words he used to
1 |2 C3 s4 Q8 |9 @4 o0 n* r$ \8 Tdescribe his yearning for a good relationship with Jobs are almost the same as those used
1 b+ P0 z# J2 ~/ A7 Z) |by Sculley. “When I was wrestling with a problem, I would walk through the issue with
5 I$ N4 Z$ L8 i1 v5 ]8 Lhim,” Amelio recalled. “Nine times out of ten we would agree.” Somehow he willed
' [3 {6 q `7 b7 b; O- Xhimself to believe that Jobs really respected him: “I was in awe over the way Steve’s mind! _' i2 P3 L* I. G9 c W
approached problems, and had the feeling we were building a mutually trusting
5 n) Q6 S8 p7 N" P. Zrelationship.”
4 G/ u( h8 ~9 v- m) YAmelio’s disillusionment came a few days after their dinner. During their negotiations,
- n9 g' l; O# `" V( g3 B$ \ Mhe had insisted that Jobs hold the Apple stock he got for at least six months, and preferably4 g( p/ `, |9 n5 i7 N, z
longer. That six months ended in June. When a block of 1.5 million shares was sold, X, g2 q- j( ]- e4 S
Amelio called Jobs. “I’m telling people that the shares sold were not yours,” he said." {) Z. b! x- t
“Remember, you and I had an understanding that you wouldn’t sell any without advising us
$ i% \1 f4 t) R$ E; ~first.”! j4 i/ a, x/ s# j" q" L
“That’s right,” Jobs replied. Amelio took that response to mean that Jobs had not sold his
# D; B# k: ]6 ]" u) v6 V; y l( Kshares, and he issued a statement saying so. But when the next SEC filing came out, it4 p7 q" t1 F( l/ a; r+ J
revealed that Jobs had indeed sold the shares. “Dammit, Steve, I asked you point-blank
* V6 t9 S# e8 B( _( a9 eabout these shares and you denied it was you.” Jobs told Amelio that he had sold in a “fit of! X% `# F9 H6 x8 {' H. n
depression” about where Apple was going and he didn’t want to admit it because he was “a
$ t1 ~% M' U; P4 Z* Glittle embarrassed.” When I asked him about it years later, he simply said, “I didn’t feel I' y5 `3 a, U4 q3 h
needed to tell Gil.”
+ t- c( s) o K, T6 _+ B" t! CWhy did Jobs mislead Amelio about selling the shares? One reason is simple: Jobs
& Z/ {- q- ~# a- `6 j$ I/ R Ysometimes avoided the truth. Helmut Sonnenfeldt once said of Henry Kissinger, “He lies* ]: {4 s, U. ~- |' f! S
not because it’s in his interest, he lies because it’s in his nature.” It was in Jobs’s nature to5 ^! J3 {8 E0 ]7 j& A _5 }
mislead or be secretive when he felt it was warranted. But he also indulged in being6 X( ?0 Q! D+ T7 Z+ ]$ [
brutally honest at times, telling the truths that most of us sugarcoat or suppress. Both the
$ X7 Z% C0 r* x4 V# s, vdissembling and the truth-telling were simply different aspects of his Nietzschean attitude
$ D. Z+ _" B/ s7 R8 I/ {& cthat ordinary rules didn’t apply to him.- x' w& F6 H+ H* J2 o) a1 Y
# u7 E7 c/ ^! i- S, X% LExit, Pursued by a Bear . g9 K* @' h0 D6 e. d; v
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8 e) i5 @3 K, a! G) C, ]1 t) tJobs had refused to quash Larry Ellison’s takeover talk, and he had secretly sold his shares
6 B9 h$ s* L$ R6 D$ S+ z8 @% Mand been misleading about it. So Amelio finally became convinced that Jobs was gunning
" [2 n/ e$ r3 }3 u+ ifor him. “I finally absorbed the fact that I had been too willing and too eager to believe he: g& a. F/ u* t- y% \6 c/ f, G. B
was on my team,” Amelio recalled. “Steve’s plans to manipulate my termination were
: n3 n, ^" Q" C* M. G# Scharging forward.”+ O4 Q5 V' x7 F. B' l
Jobs was indeed bad-mouthing Amelio at every opportunity. He couldn’t help himself.
) ]% u' F1 S5 t0 m+ N ~& cBut there was a more important factor in turning the board against Amelio. Fred Anderson,
* [) ^4 t, T4 g5 s K# {0 f" Wthe chief financial officer, saw it as his fiduciary duty to keep Ed Woolard and the board l- l- w" |2 L! w: l5 T/ _1 c* _. Y7 U
informed of Apple’s dire situation. “Fred was the guy telling me that cash was draining,
! K# x7 V- x- q* M' B0 f2 npeople were leaving, and more key players were thinking of it,” said Woolard. “He made it7 `+ ~" s$ Z- y- q: b* t
clear the ship was going to hit the sand soon, and even he was thinking of leaving.” That
/ b; z L4 a' i4 y% \ E6 j @' gadded to the worries Woolard already had from watching Amelio bumble the shareholders! B! I) N$ }6 P( { }: D
meeting.
- X/ u) h) Y2 s/ k @At an executive session of the board in June, with Amelio out of the room, Woolard
8 V' t8 ~) ` U. ?: Q: k# q1 X! C7 tdescribed to current directors how he calculated their odds. “If we stay with Gil as CEO, I
% j7 J/ n# p: b# m4 _; ]/ M6 \, [6 ^" Ythink there’s only a 10% chance we will avoid bankruptcy,” he said. “If we fire him and
/ b, w+ S$ |9 ^ ^+ ]( F$ kconvince Steve to come take over, we have a 60% chance of surviving. If we fire Gil, don’t, @ O% K8 T. g, a2 ]
get Steve back, and have to search for a new CEO, then we have a 40% chance of
, P! e) R0 Q" X% s( f* M' ` ^surviving.” The board gave him authority to ask Jobs to return. x; F& }. l% g5 j9 }, i
Woolard and his wife flew to London, where they were planning to watch the
* s, E" a6 H/ i5 s, ]9 u% f- JWimbledon tennis matches. He saw some of the tennis during the day, but spent his* a1 O Z: _5 h1 Q @ F: M) L
evenings in his suite at the Inn on the Park calling people back in America, where it was* t; _# f [; T# C" [+ n. N
daytime. By the end of his stay, his telephone bill was $2,000.
6 _; ~4 |/ N0 ZFirst, he called Jobs. The board was going to fire Amelio, he said, and it wanted Jobs to
% p5 [' k( [# W5 e! y7 W2 h9 g9 ?come back as CEO. Jobs had been aggressive in deriding Amelio and pushing his own
% O, B1 `% }3 Z) ~, N" ]7 E# P6 yideas about where to take Apple. But suddenly, when offered the cup, he became coy. “I' Y" v( M& b- j! U' O
will help,” he replied.8 F7 M6 B( Y1 L, C& [! r4 |) X
“As CEO?” Woolard asked.
. I+ }1 q" M! z2 pJobs said no. Woolard pushed hard for him to become at least the acting CEO. Again
+ s! f+ Y0 m# b, E0 |1 M& o! yJobs demurred. “I will be an advisor,” he said. “Unpaid.” He also agreed to become a board% @' C" ?5 s t7 O8 ?
member—that was something he had yearned for—but declined to be the board chairman.: z& g! S; D _& j) O/ g# t9 v) h& \6 l
“That’s all I can give now,” he said. After rumors began circulating, he emailed a memo to) O" _# ~- m) b" H
Pixar employees assuring them that he was not abandoning them. “I got a call from Apple’s" j, X4 n7 w' B G; L5 i: o% V
board of directors three weeks ago asking me to return to Apple as their CEO,” he wrote. “I+ w7 `3 ]8 u0 o: e1 N& T5 X' s9 K
declined. They then asked me to become chairman, and I again declined. So don’t worry—8 e% ?! s+ k3 z: O
the crazy rumors are just that. I have no plans to leave Pixar. You’re stuck with me.”
' q2 K# W7 t7 P, N6 z. m5 PWhy did Jobs not seize the reins? Why was he reluctant to grab the job that for two
/ e# B9 C4 ^+ x6 Fdecades he had seemed to desire? When I asked him, he said:
0 f6 p9 _, e p+ e0 y& q" ]We’d just taken Pixar public, and I was happy being CEO there. I never knew of* W$ z0 X0 v; M. o' i, z
anyone who served as CEO of two public companies, even temporarily, and I wasn’t even
/ D. r. J1 }- s) k; z5 I# Vsure it was legal. I didn’t know what I wanted to do. I was enjoying spending more time, H# }: o, n! u" o" i7 x7 @( R
with my family. I was torn. I knew Apple was a mess, so I wondered: Do I want to give up) V: Z, k+ L+ z- q
this nice lifestyle that I have? What are all the Pixar shareholders going to think? I talked to
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people I respected. I finally called Andy Grove at about eight one Saturday morning—too
* x. C% m$ D) C# W/ f/ C y" ^: U7 v$ nearly. I gave him the pros and the cons, and in the middle he stopped me and said, “Steve, I9 f$ ^: }( Z8 O( w3 ?4 E( z
don’t give a shit about Apple.” I was stunned. It was then I realized that I do give a shit9 C1 F, Y1 C! Z; n/ U
about Apple—I started it and it is a good thing to have in the world. That was when I
* a0 m, `, C# L) c8 B7 {5 Ddecided to go back on a temporary basis to help them hire a CEO.
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% V8 S J( q; Q8 g& E7 [5 _; DThe claim that he was enjoying spending more time with his family was not convincing. He5 Z7 `/ w: \3 o* g
was never destined to win a Father of the Year trophy, even when he had spare time on his
, |, e0 {1 g0 K: yhands. He was getting better at paying heed to his children, especially Reed, but his
Z& T' T- f3 K3 @) _primary focus was on his work. He was frequently aloof from his two younger daughters,
, S4 f, i' [& s/ j& e6 d7 F; Vestranged again from Lisa, and often prickly as a husband. n/ o' }$ Q. @$ [8 r% H* a0 j
So what was the real reason for his hesitancy in taking over at Apple? For all of his2 ^1 N% m% u3 x% V$ u3 G7 m' U7 f
willfulness and insatiable desire to control things, Jobs was indecisive and reticent when he
! w' i$ D& \( s1 d9 c% ^& C3 c8 Q ^felt unsure about something. He craved perfection, and he was not always good at figuring6 N" Q6 }% _+ d* B0 G
out how to settle for something less. He did not like to wrestle with complexity or make% ] S" o6 V4 Q# d4 S% k
accommodations. This was true in products, design, and furnishings for the house. It was
. }. g7 L0 a1 [ r) ]4 xalso true when it came to personal commitments. If he knew for sure a course of action was
% o0 h7 |, Y5 V; h) Aright, he was unstoppable. But if he had doubts, he sometimes withdrew, preferring not to! r6 g$ P% T$ _
think about things that did not perfectly suit him. As happened when Amelio had asked him) K* P- D* [) J& S5 [' m9 W5 r
what role he wanted to play, Jobs would go silent and ignore situations that made him
1 y- H; C- H8 b* Uuncomfortable.5 {) k3 ]2 X0 V- Y! K/ ^# W7 n
This attitude arose partly out of his tendency to see the world in binary terms. A person3 n0 v# W5 j4 K5 x0 x2 T
was either a hero or a bozo, a product was either amazing or shit. But he could be stymied6 E0 j# N( f; u! W4 p5 [
by things that were more complex, shaded, or nuanced: getting married, buying the right
. y8 A. Q6 M5 v+ ?+ Zsofa, committing to run a company. In addition, he didn’t want to be set up for failure. “I
+ p# K& ~" x% r7 k8 l, m* F0 [think Steve wanted to assess whether Apple could be saved,” Fred Anderson said.# I4 x, ]) G7 h! k
Woolard and the board decided to go ahead and fire Amelio, even though Jobs was not
9 c! B$ h. R( J3 {+ k$ p- ?6 fyet forthcoming about how active a role he would play as an advisor. Amelio was about to
, o: R+ Q. L: X$ a, ^; m' ugo on a picnic with his wife, children, and grandchildren when the call came from Woolard% [& x' b* m0 {* Q% F* [
in London. “We need you to step down,” Woolard said simply. Amelio replied that it was
4 r' u4 V' X7 o5 w2 vnot a good time to discuss this, but Woolard felt he had to persist. “We are going to
4 E; t* ?- i) h' ]# Wannounce that we’re replacing you.” m9 ]8 ]& |7 V9 R- e
Amelio resisted. “Remember, Ed, I told the board it was going to take three years to get0 P7 L6 c& h# t, @8 Q: B1 \
this company back on its feet again,” he said. “I’m not even halfway through.”# P6 h, |: A% ]9 Z" i) ]% n/ V* N
“The board is at the place where we don’t want to discuss it further,” Woolard replied. C2 C( m m% n3 q! \, a# I: G4 y
Amelio asked who knew about the decision, and Woolard told him the truth: the rest of the( H ?5 d- M) f1 N% q8 Y
board plus Jobs. “Steve was one of the people we talked to about this,” Woolard said. “His
& H$ B7 x; |7 _ Q L4 B' Hview is that you’re a really nice guy, but you don’t know much about the computer4 l. t5 f' K; U4 T: E% C
industry.”
+ E- T. \! h" P6 n2 k/ [( D“Why in the world would you involve Steve in a decision like this?” Amelio replied,, D/ T: U: e+ g2 [% q( S/ S
getting angry. “Steve is not even a member of the board of directors, so what the hell is he
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" [0 W: b! n! l$ Y* {/ O i$ k! | X8 W4 j& p \
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_8 P5 W. i4 ?; n% gdoing in any of this conversation?” But Woolard didn’t back down, and Amelio hung up to
/ o9 Y1 d/ O. T2 y* ?6 l5 Dcarry on with the family picnic before telling his wife.6 T+ q9 a0 p0 H
At times Jobs displayed a strange mixture of prickliness and neediness. He usually didn’t
6 ?$ `6 @- m( A2 f2 e2 D- l1 kcare one iota what people thought of him; he could cut people off and never care to speak+ e2 h' t3 T+ X( E. C3 X
to them again. Yet sometimes he also felt a compulsion to explain himself. So that evening
7 Z4 M& C/ F/ l u% f! bAmelio received, to his surprise, a phone call from Jobs. “Gee, Gil, I just wanted you to
9 Z& S" d( S# ^9 Eknow, I talked to Ed today about this thing and I really feel bad about it,” he said. “I want6 _- q1 o! ^2 J, Z4 ^0 c* [3 p
you to know that I had absolutely nothing to do with this turn of events, it was a decision/ {. k; b, u; C
the board made, but they had asked me for advice and counsel.” He told Amelio he
" E& G% }8 U9 f; C! }respected him for having “the highest integrity of anyone I’ve ever met,” and went on to8 H! T! r7 G6 p. r9 H: N1 ?$ W
give some unsolicited advice. “Take six months off,” Jobs told him. “When I got thrown# n9 J. r+ r U$ q Z
out of Apple, I immediately went back to work, and I regretted it.” He offered to be a" m. ~6 o0 l' ]
sounding board if Amelio ever wanted more advice.3 h0 [6 ?3 |. y- C$ _3 q
Amelio was stunned but managed to mumble a few words of thanks. He turned to his
( k& ?9 \: D- `' ^: @wife and recounted what Jobs said. “In ways, I still like the man, but I don’t believe him,”0 i( b* l8 z! V4 E" g
he told her.4 P7 b: J6 t; `* m# [
“I was totally taken in by Steve,” she said, “and I really feel like an idiot.”
1 ^/ S! m( ?( y. o D“Join the crowd,” her husband replied.2 ]1 _; m! {6 J6 v# h7 _% M
Steve Wozniak, who was himself now an informal advisor to the company, was thrilled, Q" H! ^; F0 X) j# @6 D
that Jobs was coming back. (He forgave easily.) “It was just what we needed,” he said,/ a4 p# u; J) a9 _ |
“because whatever you think of Steve, he knows how to get the magic back.” Nor did
9 d, K9 B b$ K+ f/ a% RJobs’s triumph over Amelio surprise him. As he told Wired shortly after it happened, “Gil' W/ P: I! ?. ^: V1 Y' y
Amelio meets Steve Jobs, game over.”
" s Y, B. l5 Q3 s1 v- rThat Monday Apple’s top employees were summoned to the auditorium. Amelio came in; Y* w9 S$ h) r2 s- t
looking calm and relaxed. “Well, I’m sad to report that it’s time for me to move on,” he
. l! [0 V5 Q* F4 R4 E; c( z% bsaid. Fred Anderson, who had agreed to be interim CEO, spoke next, and he made it clear! `+ C* o. V, f1 f5 U2 q
that he would be taking his cues from Jobs. Then, exactly twelve years since he had lost
$ D2 L! y3 C3 jpower in a July 4 weekend struggle, Jobs walked back onstage at Apple./ W/ }# Q6 \/ X( c
It immediately became clear that, whether or not he wanted to admit it publicly (or even
- P% H6 c* s( x4 K4 c' Jto himself), Jobs was going to take control and not be a mere advisor. As soon as he came- t; E& @2 f, y, W" b: |( l; O. u
onstage that day—wearing shorts, sneakers, and a black turtleneck—he got to work
; |# P( Y6 v6 W3 T( t3 Sreinvigorating his beloved institution. “Okay, tell me what’s wrong with this place,” he) z" L1 q( ^8 Y q1 v1 t
said. There were some murmurings, but Jobs cut them off. “It’s the products!” he answered.5 b. }% W9 U5 u- k7 \1 j' A
“So what’s wrong with the products?” Again there were a few attempts at an answer, until
: X4 z. r2 v1 q( p: VJobs broke in to hand down the correct answer. “The products suck!” he shouted. “There’s% {% X. U4 k$ v# T& B" [! t
no sex in them anymore!”
& a6 C4 j% D3 O* X t$ k" zWoolard was able to coax Jobs to agree that his role as an advisor would be a very active
5 l( G8 m7 }1 {- s( Xone. Jobs approved a statement saying that he had “agreed to step up my involvement with
9 }/ B" Z/ k$ `: O4 Z% GApple for up to 90 days, helping them until they hire a new CEO.” The clever formulation8 Q3 \" f2 m, T2 s3 s: ^- Q
that Woolard used in his statement was that Jobs was coming back “as an advisor leading
# q; i6 F% e" F( p7 uthe team.”
3 T& r4 m4 O' U' H% J- {0 HJobs took a small office next to the boardroom on the executive floor, conspicuously
+ Q2 a2 `6 F$ V5 b. F1 W3 B m4 Veschewing Amelio’s big corner office. He got involved in all aspects of the business:
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7 h; i* O! ~3 B: S- J ^: [product design, where to cut, supplier negotiations, and advertising agency review. He ` w& D! p* C
believed that he had to stop the hemorrhaging of top Apple employees, and to do so he
: r7 t! e ?. wwanted to reprice their stock options. Apple stock had dropped so low that the options had
`& m* ?& H) R! {become worthless. Jobs wanted to lower the exercise price, so they would be valuable
; u0 R: K1 U: D; M2 c" x& vagain. At the time, that was legally permissible, but it was not considered good corporate: Z' I( u3 Q0 a+ p) C2 \9 G
practice. On his first Thursday back at Apple, Jobs called for a telephonic board meeting
: [8 F! B0 j8 v' f7 Land outlined the problem. The directors balked. They asked for time to do a legal and
! i, |6 v7 K- ^financial study of what the change would mean. “It has to be done fast,” Jobs told them.
2 h) D# `" Y* `“We’re losing good people.”6 _0 q) k! f* B4 A; D. F
Even his supporter Ed Woolard, who headed the compensation committee, objected. “At
( q0 V- t/ N# G# R* _DuPont we never did such a thing,” he said.
9 o# F, O. |* \: I) e, Y“You brought me here to fix this thing, and people are the key,” Jobs argued. When the
$ ?: T5 J2 K4 Z* c9 O- @4 n. |board proposed a study that could take two months, Jobs exploded: “Are you nuts?!?” He" |' y1 U* A7 U; y0 G) W+ D
paused for a long moment of silence, then continued. “Guys, if you don’t want to do this,
' m, i0 j. I, h. fI’m not coming back on Monday. Because I’ve got thousands of key decisions to make that( m* ^/ c6 g& b! R W2 K
are far more difficult than this, and if you can’t throw your support behind this kind of y% C: z6 B+ X
decision, I will fail. So if you can’t do this, I’m out of here, and you can blame it on me,
; _' J1 O% O4 L" N* g1 T- G7 Ryou can say, ‘Steve wasn’t up for the job.’”. f, ?+ a* h- H. Z
The next day, after consulting with the board, Woolard called Jobs back. “We’re going to
+ P% F9 d4 {+ N) [! p( zapprove this,” he said. “But some of the board members don’t like it. We feel like you’ve
, E0 I. s( S1 ^$ F7 Eput a gun to our head.” The options for the top team (Jobs had none) were reset at $13.25,+ S* p7 `9 x5 @
which was the price of the stock the day Amelio was ousted.
2 O5 ^, N* l% l% FInstead of declaring victory and thanking the board, Jobs continued to seethe at having to
6 w5 ~+ Z+ X, J! v; `+ hanswer to a board he didn’t respect. “Stop the train, this isn’t going to work,” he told
9 Y# Q) l' f4 N: Q4 BWoolard. “This company is in shambles, and I don’t have time to wet-nurse the board. So I2 x6 }2 k) Z- @. j8 W" h
need all of you to resign. Or else I’m going to resign and not come back on Monday.” The* w8 W: T" T( `5 G( C+ X
one person who could stay, he said, was Woolard.
! ~! c2 A+ B( {' }: q; P+ {Most members of the board were aghast. Jobs was still refusing to commit himself to7 p! j# I. m% t) P) |4 V! b
coming back full-time or being anything more than an advisor, yet he felt he had the power
8 M; ~. Z" U2 g' A( V9 ^to force them to leave. The hard truth, however, was that he did have that power over them.
. u' |, d% [7 V+ u0 G# q- X. GThey could not afford for him to storm off in a fury, nor was the prospect of remaining an
7 r# v/ u+ C% S* ?+ ]( pApple board member very enticing by then. “After all they’d been through, most were glad
% @( F( ^, t! Y, `' j/ r2 Uto be let off,” Woolard recalled., ~. _& P, E8 \! V5 J
Once again the board acquiesced. It made only one request: Would he permit one other# e! C% f0 r& n& T i `) a
director to stay, in addition to Woolard? It would help the optics. Jobs assented. “They were6 m4 f8 i d6 G/ N
an awful board, a terrible board,” he later said. “I agreed they could keep Ed Woolard and a H K. G: ?9 ]7 I3 v6 J6 u
guy named Gareth Chang, who turned out to be a zero. He wasn’t terrible, just a zero.7 \. r$ t* @. V
Woolard, on the other hand, was one of the best board members I’ve ever seen. He was a
) |4 T0 h. i# aprince, one of the most supportive and wise people I’ve ever met.”
9 ~, Y, G c7 `7 qAmong those being asked to resign was Mike Markkula, who in 1976, as a young U% h4 e% N \3 L7 d
venture capitalist, had visited the Jobs garage, fallen in love with the nascent computer on7 W9 ?& L1 e& Q7 O' c6 T6 n6 ]
the workbench, guaranteed a $250,000 line of credit, and become the third partner and one-
* T% C w4 s6 s* p+ cthird owner of the new company. Over the subsequent two decades, he was the one . c, S/ H" s. f/ L
, I9 F0 q" R6 d( b
3 h" \7 V% M7 w% b1 F( i4 A0 j9 |, v+ z* y- _" |( e& |
% B9 U d* m1 r/ H1 m
( e( {& A2 R: w5 P" l1 H
9 m0 y! j0 @# W* I7 D; R; V7 r" L! C8 g: \7 f3 I4 i
: O2 e3 @! ?6 e: J' d, b) N5 o9 G8 \7 l( U' e
constant on the board, ushering in and out a variety of CEOs. He had supported Jobs at7 }5 k! i$ o7 ?+ H3 y1 Z
times but also clashed with him, most notably when he sided with Sculley in the' y2 T6 Y+ U% h9 n
showdowns of 1985. With Jobs returning, he knew that it was time for him to leave.
5 L" y$ E( r6 l. e: OJobs could be cutting and cold, especially toward people who crossed him, but he could) ]6 q- l$ g' O- r% y( m0 ~/ E Y
also be sentimental about those who had been with him from the early days. Wozniak fell; ]7 {% R! c/ A# R. ~
into that favored category, of course, even though they had drifted apart; so did Andy
8 U2 T$ m3 E r* S" X& S- sHertzfeld and a few others from the Macintosh team. In the end, Mike Markkula did as+ c+ M9 u" s, ^& R
well. “I felt deeply betrayed by him, but he was like a father and I always cared about him,”- _( k, y1 o2 }; g7 F
Jobs later recalled. So when the time came to ask him to resign from the Apple board, Jobs: I9 t+ M' i% y
drove to Markkula’s chateau-like mansion in the Woodside hills to do it personally. As4 p/ ~" D0 e& |4 h
usual, he asked to take a walk, and they strolled the grounds to a redwood grove with a$ N- i6 `5 w. @3 e
picnic table. “He told me he wanted a new board because he wanted to start fresh,”
Y! Q* S$ W6 QMarkkula said. “He was worried that I might take it poorly, and he was relieved when I- G3 D- z0 u n0 J, M q
didn’t.”
1 l9 N, r3 o0 C4 DThey spent the rest of the time talking about where Apple should focus in the future.
0 U f4 ^' z+ q/ |0 j! }% \; a7 L; ^Jobs’s ambition was to build a company that would endure, and he asked Markkula what
$ s9 O9 y* E$ }3 ?: t* m5 o6 hthe formula for that would be. Markkula replied that lasting companies know how to6 z; l1 M8 B3 V1 b! }$ v8 ]
reinvent themselves. Hewlett-Packard had done that repeatedly; it started as an instrument" o% e8 X; t6 m) c0 l2 X: Y# @
company, then became a calculator company, then a computer company. “Apple has been2 E5 t* b) T8 d0 O$ M# m+ C
sidelined by Microsoft in the PC business,” Markkula said. “You’ve got to reinvent the# a) Y$ p; a2 [' ~* l
company to do some other thing, like other consumer products or devices. You’ve got to be
: h6 Q0 R* q7 Z( T) m% @0 P, A& Vlike a butterfly and have a metamorphosis.” Jobs didn’t say much, but he agreed.8 C! {( W, B- o) N. B
The old board met in late July to ratify the transition. Woolard, who was as genteel as" J2 y) X5 X! e& t" ?
Jobs was prickly, was mildly taken aback when Jobs appeared dressed in jeans and! n# H- ^" h" J- c5 g% |$ c/ T
sneakers, and he worried that Jobs might start berating the veteran board members for
, s& ^! O3 N* B, I( ~2 lscrewing up. But Jobs merely offered a pleasant “Hi, everyone.” They got down to the2 @5 l+ E" |: M8 e7 V
business of voting to accept the resignations, elect Jobs to the board, and empower Woolard
1 I3 p; E# }0 \' X t% C& J5 Uand Jobs to find new board members.0 ?5 |9 U9 {# F' _6 e
Jobs’s first recruit was, not surprisingly, Larry Ellison. He said he would be pleased to7 x+ R8 \& g4 ^/ J" J& B# E6 Z
join, but he hated attending meetings. Jobs said it would be fine if he came to only half of+ X2 {( M, i0 X9 f1 f: U- I
them. (After a while Ellison was coming to only a third of the meetings. Jobs took a picture
- Z% S6 a6 L& Hof him that had appeared on the cover of Business Week and had it blown up to life size and$ E% W2 E1 G% B& B/ e6 |) g
pasted on a cardboard cutout to put in his chair.), C( P7 c; J% N. R% H
Jobs also brought in Bill Campbell, who had run marketing at Apple in the early 1980s2 B- {0 S: M" I3 R J, e1 p
and been caught in the middle of the Sculley-Jobs clash. Campbell had ended up sticking9 m, y# g U7 g# J5 O" K8 O g
with Sculley, but he had grown to dislike him so much that Jobs forgave him. Now he was# m3 I% E8 t/ E
the CEO of Intuit and a walking buddy of Jobs. “We were sitting out in the back of his
( z- f* i# C# C: C qhouse,” recalled Campbell, who lived only five blocks from Jobs in Palo Alto, “and he said S7 r) R+ A1 N9 d6 R6 N. ]. W
he was going back to Apple and wanted me on the board. I said, ‘Holy shit, of course I will
7 P5 s' `( `+ \" p, e; Edo that.’” Campbell had been a football coach at Columbia, and his great talent, Jobs said,+ F6 K# m5 e& q: C/ O/ o
was to “get A performances out of B players.” At Apple, Jobs told him, he would get to1 Z, \4 z) V* t; s! {
work with A players. ; `: d6 j8 D$ I5 T+ B) t
- m5 {' M6 T0 T: c4 F m J) h5 n6 s
, n5 g7 j7 D- F" p' U5 |
* Z$ b3 S* q0 Z% h& V5 @
* R5 V7 E; B: V, W4 R- S1 ~' B3 o4 V4 s' p$ \9 u2 w* \; b9 M
- t: _& C6 A6 P G# F4 i
- I' s% P# y3 U0 W- n
6 ?0 S: B4 O- Z5 m3 [Woolard helped bring in Jerry York, who had been the chief financial officer at Chrysler
' B3 S& f7 x1 }0 K! l3 s$ xand then IBM. Others were considered and then rejected by Jobs, including Meg Whitman,
; H6 r% X+ R4 Jwho was then the manager of Hasbro’s Playskool division and had been a strategic planner
0 T8 j9 f" L8 W/ xat Disney. (In 1998 she became CEO of eBay, and she later ran unsuccessfully for governor& G( q' i& i4 L, V& Z+ m
of California.) Over the years Jobs would bring in some strong leaders to serve on the
8 G. S: y3 `2 I: C' v& oApple board, including Al Gore, Eric Schmidt of Google, Art Levinson of Genentech,
/ S8 V3 g' i8 m. b4 }0 U8 iMickey Drexler of the Gap and J. Crew, and Andrea Jung of Avon. But he always made! A+ F4 a8 S/ t$ y! W
sure they were loyal, sometimes loyal to a fault. Despite their stature, they seemed at times
* Z/ E* ^* k. Tawed or intimidated by Jobs, and they were eager to keep him happy.+ w9 y6 ~, F# }& E
At one point he invited Arthur Levitt, the former SEC chairman, to become a board
# M: u9 l3 P' ~7 S9 fmember. Levitt, who bought his first Macintosh in 1984 and was proudly “addicted” to
; ^. f* M4 v l" k3 T# XApple computers, was thrilled. He was excited to visit Cupertino, where he discussed the
" [" I( Z' f( A; n& L) Irole with Jobs. But then Jobs read a speech Levitt had given about corporate governance,
~: I3 j6 T6 Y4 Ywhich argued that boards should play a strong and independent role, and he telephoned to r: u$ }9 j5 K p. t
withdraw the invitation. “Arthur, I don’t think you’d be happy on our board, and I think it2 @' @2 F! w, S- r4 `
best if we not invite you,” Levitt said Jobs told him. “Frankly, I think some of the issues
5 f1 y. {$ C! x! K; U5 q+ dyou raised, while appropriate for some companies, really don’t apply to Apple’s culture.”
3 p$ F \7 K" T# ^2 x) P3 {Levitt later wrote, “I was floored. . . . It’s plain to me that Apple’s board is not designed to
9 j' I9 D9 I8 v9 v: N; j6 Gact independently of the CEO.”
" k S+ z! Z/ c' m0 {" P( C3 E* r0 t# Q/ _. P
Macworld Boston, August 1997
) e" M; y/ K l- H/ k/ F) U h) H( o' b
The staff memo announcing the repricing of Apple’s stock options was signed “Steve and
- }/ a) c/ R% d6 L" n1 K* Uthe executive team,” and it soon became public that he was running all of the company’s3 }6 D# O0 x: `! q
product review meetings. These and other indications that Jobs was now deeply engaged at7 W" C( y8 h. B
Apple helped push the stock up from about $13 to $20 during July. It also created a frisson
. |: [7 L9 e: [6 n+ \, jof excitement as the Apple faithful gathered for the August 1997 Macworld in Boston.
# q# b0 r1 ^/ h0 }/ E7 D9 `( O* o: N; oMore than five thousand showed up hours in advance to cram into the Castle convention
3 u2 Y+ ]2 ]. W e( i, c0 Khall of the Park Plaza hotel for Jobs’s keynote speech. They came to see their returning! V% [% p, k& U
hero—and to find out whether he was really ready to lead them again.
) [8 Y( u# I6 @% i# n( UHuge cheers erupted when a picture of Jobs from 1984 was flashed on the overhead" ?% u& q/ g5 t3 w. d0 u
screen. “Steve! Steve! Steve!” the crowd started to chant, even as he was still being
: g8 H. o) l1 ]& Wintroduced. When he finally strode onstage—wearing a black vest, collarless white shirt,
! @+ q+ O3 X( i4 |jeans, and an impish smile—the screams and flashbulbs rivaled those for any rock star. At
* }& Y+ n2 \# ~' y9 ]first he punctured the excitement by reminding them of where he officially worked. “I’m
7 O& d* F7 c" A% z5 r1 {Steve Jobs, the chairman and CEO of Pixar,” he introduced himself, flashing a slide
7 x, ]4 J/ r& m9 qonscreen with that title. Then he explained his role at Apple. “I, like a lot of other people,
4 m# Y p. v: kare pulling together to help Apple get healthy again.”
6 u. g2 `& `3 n& f% {5 vBut as Jobs paced back and forth across the stage, changing the overhead slides with a9 [0 T% C: _' G& e
clicker in his hand, it was clear that he was now in charge at Apple—and was likely to
1 n, x4 p. O4 F7 \0 Uremain so. He delivered a carefully crafted presentation, using no notes, on why Apple’s( }" D. ^. d* v2 J1 y
sales had fallen by 30% over the previous two years. “There are a lot of great people at
- T7 {$ [* I0 V7 mApple, but they’re doing the wrong things because the plan has been wrong,” he said. “I’ve
% I9 w6 J) M6 y" \$ c* O& f
* H$ A9 W- b& S3 P( z1 b
( l& b& Q9 ~! C1 h: u
' H# s( E& v" [, f! g& w" V" G0 @% t; M$ I' G7 D
: I( n; k: g& b+ s0 M$ x7 |9 I
% U, ~* m5 ]) C+ B3 L* c, \/ t& L1 |
; a+ ~5 V# U- t5 x: x$ _4 l& O) @, R0 f8 \2 y* V" {1 t
0 @1 f$ H* K7 R" }* G2 R& |found people who can’t wait to fall into line behind a good strategy, but there just hasn’t. b9 f; k# Q+ ?
been one.” The crowd again erupted in yelps, whistles, and cheers.
! \9 [3 H9 U' N% q" G4 XAs he spoke, his passion poured forth with increasing intensity, and he began saying( F& c+ O' v( K( y }5 v' w3 C; n) X# u
“we” and “I”—rather than “they”—when referring to what Apple would be doing. “I think; o: M) n" o* X) j
you still have to think differently to buy an Apple computer,” he said. “The people who buy
9 t$ k0 Q* P) H0 a4 c3 fthem do think different. They are the creative spirits in this world, and they’re out to
3 Z1 q2 |4 w& f/ Z5 J' Uchange the world. We make tools for those kinds of people.” When he stressed the word
3 K. f: S4 z: m. U' H# @“we” in that sentence, he cupped his hands and tapped his fingers on his chest. And then, in0 ^8 `% V$ s. Q$ l/ m
his final peroration, he continued to stress the word “we” as he talked about Apple’s future.0 m0 M4 Z3 `% Q$ S# I
“We too are going to think differently and serve the people who have been buying our+ O4 j) a& h. U: X* M/ w) C# b& m
products from the beginning. Because a lot of people think they’re crazy, but in that& O& ?8 j! x8 g. P6 C) y8 r. N
craziness we see genius.” During the prolonged standing ovation, people looked at each3 I ~# \ \5 w& ~ a$ H* J/ J
other in awe, and a few wiped tears from their eyes. Jobs had made it very clear that he and
9 G& s& ?# k! O) z2 c6 U" d5 Nthe “we” of Apple were one.
4 H7 [; N0 k0 l$ e1 D0 { Z; ]: X w* z7 E; L8 T' S
The Microsoft Pact
, u7 n/ S' ^7 f& b) G% M" H: P4 p7 r- N2 J& ~
The climax of Jobs’s August 1997 Macworld appearance was a bombshell announcement,8 ~/ U7 G |! C& L- Y+ ]
one that made the cover of both Time and Newsweek. Near the end of his speech, he paused
7 P6 E5 [" n. X' ofor a sip of water and began to talk in more subdued tones. “Apple lives in an ecosystem,”
* _+ Q7 F7 O7 x9 Yhe said. “It needs help from other partners. Relationships that are destructive don’t help
$ C Y! ]9 O: c" o3 J* w" ianybody in this industry.” For dramatic effect, he paused again, and then explained: “I’d$ z) E" d" e' O! O- X3 g
like to announce one of our first new partnerships today, a very meaningful one, and that is
- u' \6 U6 ]1 ^9 i& ?- q. Gone with Microsoft.” The Microsoft and Apple logos appeared together on the screen as
6 W7 `6 L# X! F3 c- h* Jpeople gasped.0 S. A) g0 g5 c( g! |
Apple and Microsoft had been at war for a decade over a variety of copyright and patent: @3 F m- e+ }5 }# b; G
issues, most notably whether Microsoft had stolen the look and feel of Apple’s graphical
& m4 {7 N+ [1 s, O* z e+ p5 _user interface. Just as Jobs was being eased out of Apple in 1985, John Sculley had struck a
, O& i/ ]% x" _& h/ vsurrender deal: Microsoft could license the Apple GUI for Windows 1.0, and in return it! d: c/ V: E+ ?5 q- F" V2 I+ `5 a
would make Excel exclusive to the Mac for up to two years. In 1988, after Microsoft came
( N+ e( x& i) i! O5 fout with Windows 2.0, Apple sued. Sculley contended that the 1985 deal did not apply to# s4 p! P/ H3 n4 r r1 V* |
Windows 2.0 and that further refinements to Windows (such as copying Bill Atkinson’s" f+ B' T6 ?; z! F0 U
trick of “clipping” overlapping windows) had made the infringement more blatant. By 1997. }% [ v3 q0 ~) L" |: X' T' m
Apple had lost the case and various appeals, but remnants of the litigation and threats of
/ x2 A; t* g/ n2 K' h0 Knew suits lingered. In addition, President Clinton’s Justice Department was preparing a- g, i- Y; B0 x% b; Z
massive antitrust case against Microsoft. Jobs invited the lead prosecutor, Joel Klein, to) u% C T8 R9 w+ ~. p4 g( L! b3 S7 a
Palo Alto. Don’t worry about extracting a huge remedy against Microsoft, Jobs told him
3 H$ s* |$ {$ ~2 E! X+ b) kover coffee. Instead simply keep them tied up in litigation. That would allow Apple the1 F1 T( V; W; Z' g* k; \9 D. h4 q
opportunity, Jobs explained, to “make an end run” around Microsoft and start offering
S. x1 k s" S) Hcompeting products.6 x2 ? C) L, ]( U/ j
Under Amelio, the showdown had become explosive. Microsoft refused to commit to
' j0 q$ [3 S; B0 `8 [/ b. xdeveloping Word and Excel for future Macintosh operating systems, which could have
6 z, m5 W) k; m: W8 y. | Pdestroyed Apple. In defense of Bill Gates, he was not simply being vindictive. It was
3 c- i+ J8 Q. D" I
+ n P* r: k/ a7 F
& Q- L9 J; B& Y( U |
2 ?8 }; }! V4 i- ]5 u8 c* G- Z
$ S5 q( I9 d) r: c# T5 p' _1 O$ ?* @: m1 p
% M1 G5 b" R9 f7 Y
1 S5 z( V' `) f' F0 s; n( o; @0 X+ Q6 t
4 |: P. m. P1 ~# ?4 {' g0 vunderstandable that he was reluctant to commit to developing for a future Macintosh# v5 V7 w( o2 d8 e- r) P# n
operating system when no one, including the ever-changing leadership at Apple, seemed to' P/ @7 B2 R! @' R2 k
know what that new operating system would be. Right after Apple bought NeXT, Amelio
5 F3 M" w0 i0 \/ i- c! C Mand Jobs flew together to visit Microsoft, but Gates had trouble figuring out which of them
" [! ~: f q0 z) L4 j c. wwas in charge. A few days later he called Jobs privately. “Hey, what the fuck, am I" o& F+ H' h5 J) ^( d
supposed to put my applications on the NeXT OS?” Gates asked. Jobs responded by) `* H) u2 d& c- r- C4 Z
“making smart-ass remarks about Gil,” Gates recalled, and suggesting that the situation
% g9 h- N; B: X& \) h/ pwould soon be clarified.8 V! K1 l! D% V9 _& l
When the leadership issue was partly resolved by Amelio’s ouster, one of Jobs’s first! _' k4 q, K6 F- f
phone calls was to Gates. Jobs recalled:! A! T: p( g q, i0 y% h% t) ]
I called up Bill and said, “I’m going to turn this thing around.” Bill always had a soft' b; Q6 b* z# M
spot for Apple. We got him into the application software business. The first Microsoft apps
: w, w; H$ E8 }were Excel and Word for the Mac. So I called him and said, “I need help.” Microsoft was
0 g2 \4 [; h$ s4 y* `walking over Apple’s patents. I said, “If we kept up our lawsuits, a few years from now we" \2 c3 u9 e+ r/ B3 d5 F4 U
could win a billion-dollar patent suit. You know it, and I know it. But Apple’s not going to
' u" O: z2 q3 H( V* W2 o" p) f8 wsurvive that long if we’re at war. I know that. So let’s figure out how to settle this right4 x2 ^7 Z( f& R$ [. j. S* o- A
away. All I need is a commitment that Microsoft will keep developing for the Mac and an
4 T; ^3 ^3 S5 M, G" }investment by Microsoft in Apple so it has a stake in our success.”2 V# N# w$ {5 G" U
/ m& |/ i3 }; z) [: g* v7 t c' n" g- J$ E1 j2 [! O6 C+ S) {
- e6 J. D% m6 R& h
+ E( `2 [( w! h+ EWhen I recounted to him what Jobs said, Gates agreed it was accurate. “We had a group of5 Q. [6 m' w" K' A" }
people who liked working on the Mac stuff, and we liked the Mac,” Gates recalled. He had
# u1 ~: G. l. R/ _$ z, c' Gbeen negotiating with Amelio for six months, and the proposals kept getting longer and
7 {% J: S5 s$ l( }more complicated. “So Steve comes in and says, ‘Hey, that deal is too complicated. What I
8 K( B) M! O* x) x2 _- M( E6 Swant is a simple deal. I want the commitment and I want an investment.’ And so we put# n1 G/ H/ H w# Z \: q) [
that together in just four weeks.”; E* F% F6 Q! B. I
Gates and his chief financial officer, Greg Maffei, made the trip to Palo Alto to work out) e4 p2 ^! G- \/ y& z4 I
the framework for a deal, and then Maffei returned alone the following Sunday to work on6 p9 o& ~* r' ~$ Y
the details. When he arrived at Jobs’s home, Jobs grabbed two bottles of water out of the
% u, N0 i, e# `" Z: `1 A* O' Srefrigerator and took Maffei for a walk around the Palo Alto neighborhood. Both men wore3 I0 E$ P+ Y2 {& ?1 q; i1 ~7 B
shorts, and Jobs walked barefoot. As they sat in front of a Baptist church, Jobs cut to the
4 i6 y' _% `" A& mcore issues. “These are the things we care about,” he said. “A commitment to make
2 x; a# W. M. x! w( n- K; Wsoftware for the Mac and an investment.”
) w- J7 [) H4 @* GAlthough the negotiations went quickly, the final details were not finished until hours
. B: t; W% a; i- H* F% Cbefore Jobs’s Macworld speech in Boston. He was rehearsing at the Park Plaza Castle when
; L$ R; z* c/ S! ^* I2 shis cell phone rang. “Hi, Bill,” he said as his words echoed through the old hall. Then he* m5 V, S; t S7 _
walked to a corner and spoke in a soft tone so others couldn’t hear. The call lasted an hour.
" H1 V q3 v7 C |6 m0 JFinally, the remaining deal points were resolved. “Bill, thank you for your support of this+ U' U& c$ q0 Q
company,” Jobs said as he crouched in his shorts. “I think the world’s a better place for it.”
% i* K" |5 \' ?/ O) x: d! i- tDuring his Macworld keynote address, Jobs walked through the details of the Microsoft
% X9 n0 p4 K1 A, [/ Xdeal. At first there were groans and hisses from the faithful. Particularly galling was Jobs’s
7 p# W6 ?) K" e, ?& e. O2 ^1 Lannouncement that, as part of the peace pact, “Apple has decided to make Internet Explorer
0 n8 V) V4 U {' D6 z: W" q g% W' b0 H
# T- X: X7 e+ n4 p/ V. r' K5 u
* p ^% g5 n% b7 u9 ?( i3 | M, R, m
- K7 P! R1 f. v8 _4 ]9 g) ?
; m. x( l$ W3 Z1 J. j) j
9 w8 h9 f# l9 u2 k
: i. _+ ^# Z8 D7 h O% {6 r; v3 Q; [6 b
its default browser on the Macintosh.” The audience erupted in boos, and Jobs quickly+ Y/ X l+ H1 u0 O, d/ t
added, “Since we believe in choice, we’re going to be shipping other Internet browsers, as
6 t- y, l7 p& U. z" W) |" |' zwell, and the user can, of course, change their default should they choose to.” There were
3 T: o8 F' W9 K3 r& |, Y2 {some laughs and scattered applause. The audience was beginning to come around,! ]# r$ g& J4 h; Q+ F+ y
especially when he announced that Microsoft would be investing $150 million in Apple and9 K" x4 f. V( {6 k7 F. V" r& {# ]2 o
getting nonvoting shares.# o, Z i# Z) h3 E( ~7 k$ [
But the mellower mood was shattered for a moment when Jobs made one of the few+ o5 ]( d% e4 {' ~! k! Y
visual and public relations gaffes of his onstage career. “I happen to have a special guest. {3 W5 l% W* S+ _. }( ]
with me today via satellite downlink,” he said, and suddenly Bill Gates’s face appeared on1 N4 n9 n: O. F
the huge screen looming over Jobs and the auditorium. There was a thin smile on Gates’s
; X! {: p1 i5 {( E; x' S Cface that flirted with being a smirk. The audience gasped in horror, followed by some boos
1 X- r0 i: n2 s; i. n( G5 [0 ^and catcalls. The scene was such a brutal echo of the 1984 Big Brother ad that you half% a4 U; f) n5 U) P7 S
expected (and hoped?) that an athletic woman would suddenly come running down the1 a% }% W0 M& \1 U4 P0 X- n) H
aisle and vaporize the screenshot with a well-thrown hammer.8 [0 F2 L6 R* W8 A
But it was all for real, and Gates, unaware of the jeering, began speaking on the satellite: }2 T. s' Z) q8 j, Q, t0 \
link from Microsoft headquarters. “Some of the most exciting work that I’ve done in my# D% Z: {. ?# q$ O7 E
career has been the work that I’ve done with Steve on the Macintosh,” he intoned in his
! ?/ C; ~* a8 f0 R3 a& Chigh-pitched singsong. As he went on to tout the new version of Microsoft Office that was* U1 K/ T1 V! k4 s. ?- }
being made for the Macintosh, the audience quieted down and then slowly seemed to5 u2 x; X) _! q5 E4 K- h
accept the new world order. Gates even was able to rouse some applause when he said that. f2 T+ s" U) h1 U! v, \& Z! V: L
the new Mac versions of Word and Excel would be “in many ways more advanced than+ c7 i3 |3 g; T$ d. d
what we’ve done on the Windows platform.”7 }( I1 i! K6 ?7 H3 J
Jobs realized that the image of Gates looming over him and the audience was a mistake.& {( x( ^) [' L( i) f4 T* C/ E
“I wanted him to come to Boston,” Jobs later said. “That was my worst and stupidest
$ g2 u9 R) j+ Q& Fstaging event ever. It was bad because it made me look small, and Apple look small, and as* _. Q& A Z' y' g( B" @2 T
if everything was in Bill’s hands.” Gates likewise was embarrassed when he saw the
" V1 }. D4 j" T* i+ Y6 Nvideotape of the event. “I didn’t know that my face was going to be blown up to looming
5 J) N! J9 t3 [. ^+ Dproportions,” he said.
8 D3 p6 E: q7 CJobs tried to reassure the audience with an impromptu sermon. “If we want to move
0 X+ Z) F6 I; ?4 a+ D. P& lforward and see Apple healthy again, we have to let go of a few things here,” he told the
: B1 W" ~. Y$ {+ v+ `' ^audience. “We have to let go of this notion that for Apple to win Microsoft has to lose. . . . I
- }2 g1 |+ h, R; T0 ythink if we want Microsoft Office on the Mac, we better treat the company that puts it out! W! s6 ~$ T# Z5 P) u+ x
with a little bit of gratitude.”7 g# I* O* G0 M- W. a9 ^/ l
The Microsoft announcement, along with Jobs’s passionate reengagement with the. v. O8 l4 B" {
company, provided a much-needed jolt for Apple. By the end of the day, its stock had
, Y/ D% \5 J- {, mskyrocketed $6.56, or 33%, to close at $26.31, twice the price of the day Amelio resigned.; X4 H- u6 N. l0 f" t$ g* B
The one-day jump added $830 million to Apple’s stock market capitalization. The company7 q% k3 N' `5 |8 O# R
was back from the edge of the grave.
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+ U6 v* L$ w+ Q/ x: _: f
4 r- B" ]' Q" Y2 I: rCHAPTER TWENTY-FIVE * C, U7 o. Y4 ?) ^" m/ L
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