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# p; E& l8 J9 y, s) }/ FCHAPTER TWENTY-FOUR2 N' `- F# @' J; |8 m8 f2 p
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THE RESTORATION
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, H0 M% P0 \- I/ u2 V2 fThe Loser Now Will Be Later to Win
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Amelio calling up Wozniak as Jobs hangs back, 1997
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. J) o+ X( M0 B) oHovering Backstage
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. e# `3 U# K& K5 m& G: |" C“It’s rare that you see an artist in his thirties or forties able to really contribute something8 X7 Z0 I+ ]. ^; K6 B
amazing,” Jobs declared as he was about to turn thirty.
, H& W% Q; `% |) ?+ |- ZThat held true for Jobs in his thirties, during the decade that began with his ouster from: p# d1 k% a, H! j: s+ ^
Apple in 1985. But after turning forty in 1995, he flourished. Toy Story was released that) R- n5 u% m/ F( O* }% p; A
year, and the following year Apple’s purchase of NeXT offered him reentry into the/ L& X: J9 `# `4 m3 z" D7 T1 d
company he had founded. In returning to Apple, Jobs would show that even people over
% g d. N1 t) R7 l- eforty could be great innovators. Having transformed personal computers in his twenties, he+ ^8 O7 f; j; \- Q9 P6 e) j( t
would now help to do the same for music players, the recording industry’s business model,
1 y& O0 |- q4 q* ?7 Umobile phones, apps, tablet computers, books, and journalism.7 g* C4 e6 z, E+ m' j" \
He had told Larry Ellison that his return strategy was to sell NeXT to Apple, get) [; h0 r" a# z
appointed to the board, and be there ready when CEO Gil Amelio stumbled. Ellison may
, e( V; b1 l6 `/ n! L. Chave been baffled when Jobs insisted that he was not motivated by money, but it was partly
m5 |; _0 }' |: ^9 }; Ptrue. He had neither Ellison’s conspicuous consumption needs nor Gates’s philanthropic
( f+ \3 I( O# Oimpulses nor the competitive urge to see how high on the Forbes list he could get. Instead
. `! R$ o" f7 }his ego needs and personal drives led him to seek fulfillment by creating a legacy that
. ^3 }7 P( K1 K( v) y6 Fwould awe people. A dual legacy, actually: building innovative products and building a" u6 I1 e( B9 C
lasting company. He wanted to be in the pantheon with, indeed a notch above, people like ! c4 O( p, }/ R X; }7 V- w) T
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Edwin Land, Bill Hewlett, and David Packard. And the best way to achieve all this was to
* m, l. J9 j' N2 ureturn to Apple and reclaim his kingdom.: t A! p; i; Q- k. v
And yet when the cup of power neared his lips, he became strangely hesitant, reluctant,' B9 k- T( [* K* v% a" n _4 Q! _2 c
perhaps coy.
: _& {* g9 K; r1 qHe returned to Apple officially in January 1997 as a part-time advisor, as he had told% T. S+ b0 @( v1 _7 W& R" i+ J
Amelio he would. He began to assert himself in some personnel areas, especially in' M4 O6 p" R7 f: K3 Y( L/ ?1 J
protecting his people who had made the transition from NeXT. But in most other ways he
( j8 @) \' `3 v: iwas unusually passive. The decision not to ask him to join the board offended him, and he, c* x+ c. q( d0 V
felt demeaned by the suggestion that he run the company’s operating system division.
) s5 y8 q# O0 f& k9 CAmelio was thus able to create a situation in which Jobs was both inside the tent and( y# c/ m, m" P( D
outside the tent, which was not a prescription for tranquillity. Jobs later recalled:
1 t+ z7 \" G" A1 n6 nGil didn’t want me around. And I thought he was a bozo. I knew that before I sold him
" A6 y! b2 s9 k' y2 |the company. I thought I was just going to be trotted out now and then for events like
% ?' t2 t. h3 Z- V) aMacworld, mainly for show. That was fine, because I was working at Pixar. I rented an( r1 b: }( i5 t1 P
office in downtown Palo Alto where I could work a few days a week, and I drove up to5 {' `5 j9 |: h& {; F
Pixar for one or two days. It was a nice life. I could slow down, spend time with my family. ^& S V' H/ G; S9 p- y0 E/ a5 @8 H
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Jobs was, in fact, trotted out for Macworld right at the beginning of January, and this
* U) y" Q; p+ d6 A+ `: r ~- Xreaffirmed his opinion that Amelio was a bozo. Close to four thousand of the faithful$ A) z0 N/ Z5 Q7 P5 L
fought for seats in the ballroom of the San Francisco Marriott to hear Amelio’s keynote
" O l R( \* [) U% T* _0 E0 C+ vaddress. He was introduced by the actor Jeff Goldblum. “I play an expert in chaos theory in! S( ?# s2 k& F* w- B L3 A
The Lost World: Jurassic Park,” he said. “I figure that will qualify me to speak at an Apple
( H( r8 j4 ]! y* j3 bevent.” He then turned it over to Amelio, who came onstage wearing a flashy sports jacket
7 V* ]2 a2 g* B- k* Rand a banded-collar shirt buttoned tight at the neck, “looking like a Vegas comic,” the Wall9 ?# p$ J" t3 Y0 o
Street Journal reporter Jim Carlton noted, or in the words of the technology writer Michael( V. g2 B7 X. n: g" I
Malone, “looking exactly like your newly divorced uncle on his first date.”4 c& s1 ^$ [. a) T: _* r6 N7 Y3 V
The bigger problem was that Amelio had gone on vacation, gotten into a nasty tussle
( k/ v* c g& x9 o/ y3 c3 Pwith his speechwriters, and refused to rehearse. When Jobs arrived backstage, he was upset
& d5 p6 M6 n& `( x- b- ?by the chaos, and he seethed as Amelio stood on the podium bumbling through a disjointed/ m* I0 x* \0 v; }
and endless presentation. Amelio was unfamiliar with the talking points that popped up on
; i" D4 K8 ?/ W8 ^his teleprompter and soon was trying to wing his presentation. Repeatedly he lost his train
, ]# D$ n( M7 {. Gof thought. After more than an hour, the audience was aghast. There were a few welcome& R) v8 V/ `& E" Z
breaks, such as when he brought out the singer Peter Gabriel to demonstrate a new music* Y) b6 b3 W! T& R' u6 ~
program. He also pointed out Muhammad Ali in the first row; the champ was supposed to
+ _0 H; b, i: h) l- ]: @come onstage to promote a website about Parkinson’s disease, but Amelio never invited
: s6 y V! W! z* Zhim up or explained why he was there.
5 h. Q) z9 b( Z+ z1 q8 J- JAmelio rambled for more than two hours before he finally called onstage the person# w+ z0 `2 o( ` h! P! B; x/ t
everyone was waiting to cheer. “Jobs, exuding confidence, style, and sheer magnetism, was; D- M+ t [7 f9 w3 R j k
the antithesis of the fumbling Amelio as he strode onstage,” Carlton wrote. “The return of
7 Y6 y/ c) H2 ]Elvis would not have provoked a bigger sensation.” The crowd jumped to its feet and gave+ ~, o; q' u/ Y/ C, i
him a raucous ovation for more than a minute. The wilderness decade was over. Finally
6 r$ I. F5 M- @$ L7 I8 `3 |+ Z2 SJobs waved for silence and cut to the heart of the challenge. “We’ve got to get the spark
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, P( p$ i0 w5 t/ b, Xback,” he said. “The Mac didn’t progress much in ten years. So Windows caught up. So we. I( q3 x" S7 y& c V, U6 |- C
have to come up with an OS that’s even better.”
( X5 L" U; l- o2 [; \/ DJobs’s pep talk could have been a redeeming finale to Amelio’s frightening performance.. y6 M4 i0 o) ^( h
Unfortunately Amelio came back onstage and resumed his ramblings for another hour.
, Z; y4 w' G0 }( L4 h) Z( P9 z; VFinally, more than three hours after the show began, Amelio brought it to a close by calling: ?9 \* N& H5 L) ^( l W) J- b) ]: M @' d
Jobs back onstage and then, in a surprise, bringing up Steve Wozniak as well. Again there- h8 |; F" W. m6 P6 {5 B e9 p
was pandemonium. But Jobs was clearly annoyed. He avoided engaging in a triumphant
6 }8 }. B3 p) J, ?1 B) {* I" p7 }trio scene, arms in the air. Instead he slowly edged offstage. “He ruthlessly ruined the$ e6 T" j% X+ V1 u; w7 _% i
closing moment I had planned,” Amelio later complained. “His own feelings were more
" Z' O$ z& N4 Z8 f `" rimportant than good press for Apple.” It was only seven days into the new year for Apple,2 u/ E4 w7 v, U4 r
and already it was clear that the center would not hold.% x! |( Q5 s9 f; i3 Y" v
5 Q0 N5 M, A) ~8 T Z% @; [$ `1 JJobs immediately put people he trusted into the top ranks at Apple. “I wanted to make sure: u4 W. ?- }% ]5 @1 K
the really good people who came in from NeXT didn’t get knifed in the back by the less
1 S& V5 Q1 B4 {6 A! T1 pcompetent people who were then in senior jobs at Apple,” he recalled. Ellen Hancock, who' m) v, C& \; k0 Z. S
had favored choosing Sun’s Solaris over NeXT, was on the top of his bozo list, especially8 D, j2 }0 v& v% f9 _: r/ g5 {
when she continued to want to use the kernel of Solaris in the new Apple operating system.% e9 @- |0 p+ h. ]2 H
In response to a reporter’s question about the role Jobs would play in making that decision,) \* P9 _ z0 @/ `, u6 ]! ?) h
she answered curtly, “None.” She was wrong. Jobs’s first move was to make sure that two1 c( e+ d" ?% x& M. O: `0 w
of his friends from NeXT took over her duties.; y- |0 T9 J) q- y, u! O$ S/ W
To head software engineering, he tapped his buddy Avie Tevanian. To run the hardware
0 H+ ~4 p) _/ s2 F! p9 `side, he called on Jon Rubinstein, who had done the same at NeXT back when it had a i7 u! k* g+ g$ I- a+ W. S
hardware division. Rubinstein was vacationing on the Isle of Skye when Jobs called him.8 Z. y d m" k j( ^0 F& ?
“Apple needs some help,” he said. “Do you want to come aboard?” Rubinstein did. He got. ?# A. P0 y% c3 J- s- ~
back in time to attend Macworld and see Amelio bomb onstage. Things were worse than he
: _* X" z7 u$ @8 O! U4 U7 ~& x& k m$ wexpected. He and Tevanian would exchange glances at meetings as if they had stumbled
7 R3 k* d0 X9 L& V9 q7 Y6 k+ Qinto an insane asylum, with people making deluded assertions while Amelio sat at the end; m+ c5 j9 I7 ~& ~
of the table in a seeming stupor.
( Q) l( a) \# V$ h5 p4 o9 r# i4 wJobs did not come into the office regularly, but he was on the phone to Amelio often.
* E' t5 e/ w9 q ]: `Once he had succeeded in making sure that Tevanian, Rubinstein, and others he trusted
, }' R) x' D* [ Jwere given top positions, he turned his focus onto the sprawling product line. One of his
, ?0 Z% O* \& E+ P) ~+ `3 ppet peeves was Newton, the handheld personal digital assistant that boasted handwriting
6 ?4 ~2 ?( E; N4 e1 ?$ Vrecognition capability. It was not quite as bad as the jokes and Doonesbury comic strip8 U+ D$ ^# L+ L8 Y* b% S* @
made it seem, but Jobs hated it. He disdained the idea of having a stylus or pen for writing
+ n3 |4 o) I& Uon a screen. “God gave us ten styluses,” he would say, waving his fingers. “Let’s not invent/ S) g/ [8 U! l9 D5 [3 n+ i, O
another.” In addition, he viewed Newton as John Sculley’s one major innovation, his pet
: ?/ H; @8 R% bproject. That alone doomed it in Jobs’s eyes.
. R6 r" K8 g; O) h" `9 _. J“You ought to kill Newton,” he told Amelio one day by phone.
( z! e% \6 b) i! S, Z c: }It was a suggestion out of the blue, and Amelio pushed back. “What do you mean, kill2 w+ U) j6 g6 g) B) T- f
it?” he said. “Steve, do you have any idea how expensive that would be?”
. R5 P1 ~$ Z5 @5 w) G% V3 |5 G“Shut it down, write it off, get rid of it,” said Jobs. “It doesn’t matter what it costs.
; X- j# |- F) k# v' W; Q# q( mPeople will cheer you if you got rid of it.”
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“I’ve looked into Newton and it’s going to be a moneymaker,” Amelio declared. “I don’t: V, D* T) ^# N. c7 {4 z; V
support getting rid of it.” By May, however, he announced plans to spin off the Newton
& k6 E( l% o6 E, E; Bdivision, the beginning of its yearlong stutter-step march to the grave.
6 T3 r# ~3 J1 B! Q0 a+ m: l% zTevanian and Rubinstein would come by Jobs’s house to keep him informed, and soon
5 K" p% c. W9 z$ P0 G, u/ `much of Silicon Valley knew that Jobs was quietly wresting power from Amelio. It was not
: o2 y) `& W0 g0 c4 Q7 A" [4 J6 kso much a Machiavellian power play as it was Jobs being Jobs. Wanting control was
- k1 I K' d7 h1 [0 L- Yingrained in his nature. Louise Kehoe, the Financial Times reporter who had foreseen this
! c* X" p5 G, d N0 a. ^when she questioned Jobs and Amelio at the December announcement, was the first with% O! e7 M* z5 F4 l
the story. “Mr. Jobs has become the power behind the throne,” she reported at the end of
9 K! b6 ]% H) D$ M; e/ r, A8 nFebruary. “He is said to be directing decisions on which parts of Apple’s operations should
6 H: J$ k B' G% Ube cut. Mr. Jobs has urged a number of former Apple colleagues to return to the company,3 G. d. ?& u- ?
hinting strongly that he plans to take charge, they said. According to one of Mr. Jobs’
1 H$ c; |% \) G, ?+ @+ i f! gconfidantes, he has decided that Mr. Amelio and his appointees are unlikely to succeed in2 O% P: W0 b5 @+ Z
reviving Apple, and he is intent upon replacing them to ensure the survival of ‘his
8 U) F( ^1 r; @% b2 Ycompany.’”
8 O9 n' Z# y2 J( `That month Amelio had to face the annual stockholders meeting and explain why the5 w; b# }6 l, O' x" s
results for the final quarter of 1996 showed a 30% plummet in sales from the year before.
( P$ G) p7 @3 _8 g2 ]* j4 ZShareholders lined up at the microphones to vent their anger. Amelio was clueless about
1 I: d! \1 j; Q& h/ B# khow poorly he handled the meeting. “The presentation was regarded as one of the best I
6 \6 Y: L5 i1 A9 i! V/ u. jhad ever given,” he later wrote. But Ed Woolard, the former CEO of DuPont who was now
0 ~3 P X) c& t+ H* G5 z4 cthe chair of the Apple board (Markkula had been demoted to vice chair), was appalled.0 A% `6 M" b$ i- s
“This is a disaster,” his wife whispered to him in the midst of the session. Woolard agreed.: V# a, R3 i/ n2 {3 D( z
“Gil came dressed real cool, but he looked and sounded silly,” he recalled. “He couldn’t9 B# k6 U( q0 T3 A- C
answer the questions, didn’t know what he was talking about, and didn’t inspire any: d+ h- ^' ^3 H | k# {
confidence.”7 p- {% Y) ]! a3 f. ?8 a2 Q
Woolard picked up the phone and called Jobs, whom he’d never met. The pretext was to. j+ f4 Y* w% }' `
invite him to Delaware to speak to DuPont executives. Jobs declined, but as Woolard) Y: j: t* v& O, }" L
recalled, “the request was a ruse in order to talk to him about Gil.” He steered the phone5 t z* u2 s# n! X3 p
call in that direction and asked Jobs point-blank what his impression of Amelio was.
2 d: p! Z3 m5 h A- D' PWoolard remembers Jobs being somewhat circumspect, saying that Amelio was not in the
9 J- G& D1 u) ~5 t. Z1 e. `right job. Jobs recalled being more blunt:
7 |/ m# u) Z* H3 F3 ]$ {+ zI thought to myself, I either tell him the truth, that Gil is a bozo, or I lie by omission.# w: [ v. ?3 U& L- ~
He’s on the board of Apple, I have a duty to tell him what I think; on the other hand, if I tell) L6 n3 o5 f- I# @9 P6 S' Z- U. K
him, he will tell Gil, in which case Gil will never listen to me again, and he’ll fuck the* U' j& W" D. T: o2 O
people I brought into Apple. All of this took place in my head in less than thirty seconds. I
" X" _0 h- `9 g$ N" Q" ~finally decided that I owed this guy the truth. I cared deeply about Apple. So I just let him0 h: s& |& R( I( W4 T
have it. I said this guy is the worst CEO I’ve ever seen, I think if you needed a license to be
* e0 O4 r0 c. i/ t, d# J/ ~3 M7 Ma CEO he wouldn’t get one. When I hung up the phone, I thought, I probably just did a
$ r9 g/ h6 `% j. a/ s4 [really stupid thing.
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That spring Larry Ellison saw Amelio at a party and introduced him to the technology
4 A7 M1 r7 h+ v9 {8 [' |. vjournalist Gina Smith, who asked how Apple was doing. “You know, Gina, Apple is like a
/ k' F: R z3 ~* [ship,” Amelio answered. “That ship is loaded with treasure, but there’s a hole in the ship.2 M2 q8 f9 `# _0 d5 {. b/ G" M: ~
And my job is to get everyone to row in the same direction.” Smith looked perplexed and
- v/ ]9 T, H' R6 ^9 c" Gasked, “Yeah, but what about the hole?” From then on, Ellison and Jobs joked about the
# a% D% P4 n6 m6 ^6 ~parable of the ship. “When Larry relayed this story to me, we were in this sushi place, and I! N- b# ~: {0 G& Y2 p
literally fell off my chair laughing,” Jobs recalled. “He was just such a buffoon, and he took
) a) b" ^& c: b' Fhimself so seriously. He insisted that everyone call him Dr. Amelio. That’s always a
0 W; P! }+ o* c$ E7 z6 Pwarning sign.”
. x# _; _1 E& mBrent Schlender, Fortune’s well-sourced technology reporter, knew Jobs and was2 c( F4 I" X2 l- w7 g
familiar with his thinking, and in March he came out with a story detailing the mess.+ G2 V! _: B2 l) I1 b
“Apple Computer, Silicon Valley’s paragon of dysfunctional management and fumbled
% V" s @0 O5 u$ l& Atechno-dreams, is back in crisis mode, scrambling lugubriously in slow motion to deal with
. s c& k- r {( Simploding sales, a floundering technology strategy, and a hemorrhaging brand name,” he
# U" j4 @/ [# C+ k6 Fwrote. “To the Machiavellian eye, it looks as if Jobs, despite the lure of Hollywood—lately/ Q7 G# R0 p. f( b
he has been overseeing Pixar, maker of Toy Story and other computer-animated films—
) p- A3 y0 O* t9 ], U. y, C2 cmight be scheming to take over Apple.”
8 a2 Z* C' R$ k4 r; N8 O; _Once again Ellison publicly floated the idea of doing a hostile takeover and installing his2 Y* |9 D; t4 u" L3 @ [! G. G; _9 {
“best friend” Jobs as CEO. “Steve’s the only one who can save Apple,” he told reporters.$ D8 Q1 } ~6 [! O5 R. h, v
“I’m ready to help him the minute he says the word.” Like the third time the boy cried3 k( x2 \. @7 k+ V: c: C* g$ P6 i
wolf, Ellison’s latest takeover musings didn’t get much notice, so later in the month he told
+ [ D* a3 t; j- z+ [Dan Gillmore of the San Jose Mercury News that he was forming an investor group to raise5 V8 Z7 W3 C( o& L# f+ c& {
$1 billion to buy a majority stake in Apple. (The company’s market value was about $2.3
, [! T5 i% p& B( }- V% f3 x) h0 c8 kbillion.) The day the story came out, Apple stock shot up 11% in heavy trading. To add to
0 n4 n. H0 M+ E; Vthe frivolity, Ellison set up an email address, savapple@us.oracle.com, asking the general6 K* y' }; K$ @3 T
public to vote on whether he should go ahead with it.
) L( |5 C0 q1 G# n4 l- mJobs was somewhat amused by Ellison’s self-appointed role. “Larry brings this up now
% \ J7 n' c# c6 r6 Aand then,” he told a reporter. “I try to explain my role at Apple is to be an advisor.” Amelio,
. z. C9 N+ y3 thowever, was livid. He called Ellison to dress him down, but Ellison wouldn’t take the call., ^$ O) |6 F& Q, n& K b1 i/ i
So Amelio called Jobs, whose response was equivocal but also partly genuine. “I really9 t" v, `, ?3 n& r( u! f6 q. X
don’t understand what is going on,” he told Amelio. “I think all this is crazy.” Then he0 i; D: C3 i* F4 e
added a reassurance that was not at all genuine: “You and I have a good relationship.” Jobs" C. Y7 a! L# O! Y2 D- e
could have ended the speculation by releasing a statement rejecting Ellison’s idea, but
) ~/ K V5 G2 f( Qmuch to Amelio’s annoyance, he didn’t. He remained aloof, which served both his interests
4 n0 o2 _0 I5 Cand his nature.
' i4 w9 }8 z# O8 y5 k* V2 d7 TBy then the press had turned against Amelio. Business Week ran a cover asking “Is Apple
7 y2 x" B: J8 m* sMincemeat?”; Red Herring ran an editorial headlined “Gil Amelio, Please Resign”; and
* |0 j5 _) k! P, s$ B7 MWired ran a cover that showed the Apple logo crucified as a sacred heart with a crown of' `9 S3 D5 A$ b/ z
thorns and the headline “Pray.” Mike Barnicle of the Boston Globe, railing against years of7 ]) |7 D' ?$ C
Apple mismanagement, wrote, “How can these nitwits still draw a paycheck when they
' d1 n) D2 g$ Ltook the only computer that didn’t frighten people and turned it into the technological# Q, {6 [" Q% p- [+ H# T1 Z
equivalent of the 1997 Red Sox bullpen?” % \) J) w k( v) v
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+ ^8 @; l9 W+ ~9 ]8 e& H& ~
When Jobs and Amelio had signed the contract in February, Jobs began hopping around) z) X& m8 K: b: e; s" S7 u
exuberantly and declared, “You and I need to go out and have a great bottle of wine to% @7 ] q3 h0 v" d
celebrate!” Amelio offered to bring wine from his cellar and suggested that they invite their4 A& ^( D; r' Z* K, @
wives. It took until June before they settled on a date, and despite the rising tensions they
5 p# [1 P& v% ]: P3 b4 Q& jwere able to have a good time. The food and wine were as mismatched as the diners;
" s7 g( v8 D% r2 X" mAmelio brought a bottle of 1964 Cheval Blanc and a Montrachet that each cost about $300;0 X5 V: Y: S% q3 C* N" P
Jobs chose a vegetarian restaurant in Redwood City where the food bill totaled $72.5 s [. F0 h' D3 g3 _0 I1 I, z4 l
Amelio’s wife remarked afterward, “He’s such a charmer, and his wife is too.”
- t) {0 y+ z/ `0 DJobs could seduce and charm people at will, and he liked to do so. People such as Amelio1 ?: E% h+ Z$ Z( B2 i
and Sculley allowed themselves to believe that because Jobs was charming them, it meant8 [) N u( o6 D0 y0 q( M
that he liked and respected them. It was an impression that he sometimes fostered by+ E9 j7 h$ ^; ]
dishing out insincere flattery to those hungry for it. But Jobs could be charming to people
, k; O. n1 _+ y+ K' l( _/ Xhe hated just as easily as he could be insulting to people he liked. Amelio didn’t see this6 g& F2 K q& F% a, n+ O) v* B
because, like Sculley, he was so eager for Jobs’s affection. Indeed the words he used to: [- N' f9 C1 V- B* G0 n: P( n
describe his yearning for a good relationship with Jobs are almost the same as those used% l% T9 E" R' f. l
by Sculley. “When I was wrestling with a problem, I would walk through the issue with
9 j* g! V0 d9 w5 @him,” Amelio recalled. “Nine times out of ten we would agree.” Somehow he willed
" J! r; v3 L2 u+ ohimself to believe that Jobs really respected him: “I was in awe over the way Steve’s mind
; t+ j/ D N, s9 Eapproached problems, and had the feeling we were building a mutually trusting
8 w+ h6 C$ g1 v0 R2 p0 [4 n+ yrelationship.”
- v% X9 h6 v7 Q% r2 }) pAmelio’s disillusionment came a few days after their dinner. During their negotiations,
, A/ w( t$ c$ C0 uhe had insisted that Jobs hold the Apple stock he got for at least six months, and preferably
9 O+ C, R' _ Clonger. That six months ended in June. When a block of 1.5 million shares was sold,8 g$ r) W! s. T1 K
Amelio called Jobs. “I’m telling people that the shares sold were not yours,” he said.
- Q) h: d% `3 w' P“Remember, you and I had an understanding that you wouldn’t sell any without advising us% d0 d: `' q: h1 ]2 Q+ w9 v2 R- y
first.”
# n1 h3 K5 g1 g1 Y7 w/ i/ S3 N; }, W“That’s right,” Jobs replied. Amelio took that response to mean that Jobs had not sold his) v0 k# v/ r, T6 R- ^) h
shares, and he issued a statement saying so. But when the next SEC filing came out, it5 x6 y) r. i/ M6 M; z: S
revealed that Jobs had indeed sold the shares. “Dammit, Steve, I asked you point-blank. v: T. K# j0 I5 V- z
about these shares and you denied it was you.” Jobs told Amelio that he had sold in a “fit of
! a4 k4 q. y. s: u! p$ [) `. zdepression” about where Apple was going and he didn’t want to admit it because he was “a2 j0 g3 k/ a" u
little embarrassed.” When I asked him about it years later, he simply said, “I didn’t feel I
7 x3 y+ E6 f7 L. y) y/ z$ [needed to tell Gil.”
: C: P1 B& t3 B3 g) F iWhy did Jobs mislead Amelio about selling the shares? One reason is simple: Jobs
/ u, j& ?+ X) ?4 H- }sometimes avoided the truth. Helmut Sonnenfeldt once said of Henry Kissinger, “He lies I: F% r) p0 ^5 h2 ?& {
not because it’s in his interest, he lies because it’s in his nature.” It was in Jobs’s nature to
5 w: T3 |6 Q* Fmislead or be secretive when he felt it was warranted. But he also indulged in being3 I1 I2 n) q: }3 p7 {
brutally honest at times, telling the truths that most of us sugarcoat or suppress. Both the
, Z1 \; Y! H$ `# udissembling and the truth-telling were simply different aspects of his Nietzschean attitude
$ z; e/ U& l" S- R/ g' \that ordinary rules didn’t apply to him.2 e* Z/ R+ t. c$ x5 N. z0 I9 n
0 ]9 v8 e! [) v3 p( b+ F/ g4 `! M
Exit, Pursued by a Bear
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) l. |# h/ j- q1 QJobs had refused to quash Larry Ellison’s takeover talk, and he had secretly sold his shares' p$ M% b- Z7 C. R5 `0 \% b+ v
and been misleading about it. So Amelio finally became convinced that Jobs was gunning g. l" [- w0 D7 `. V
for him. “I finally absorbed the fact that I had been too willing and too eager to believe he! |, {# K: I2 i3 K; d8 d* {
was on my team,” Amelio recalled. “Steve’s plans to manipulate my termination were7 {8 g' z. b. @8 B0 c
charging forward.”
2 V N- C& ~/ X5 Z$ v0 l- F' aJobs was indeed bad-mouthing Amelio at every opportunity. He couldn’t help himself.
8 Y/ {7 Q. P9 s5 J* {' q+ bBut there was a more important factor in turning the board against Amelio. Fred Anderson,
* r% s. {+ X' i5 y1 l' j& \the chief financial officer, saw it as his fiduciary duty to keep Ed Woolard and the board
. \& B& K, }$ L+ `3 O0 }6 Jinformed of Apple’s dire situation. “Fred was the guy telling me that cash was draining,) }2 r8 \9 L) H9 }# ]3 t7 A8 Z* [
people were leaving, and more key players were thinking of it,” said Woolard. “He made it9 Q# V; M* w8 l \
clear the ship was going to hit the sand soon, and even he was thinking of leaving.” That. T# V, W; Z. E4 d; f5 D
added to the worries Woolard already had from watching Amelio bumble the shareholders* c6 `8 M7 c* J, [) p' e" M
meeting.7 R% c+ p. \$ y& C% _4 b
At an executive session of the board in June, with Amelio out of the room, Woolard: z) f% l/ ^+ `2 I: h
described to current directors how he calculated their odds. “If we stay with Gil as CEO, I
( _$ \; {% {6 c2 m( t" lthink there’s only a 10% chance we will avoid bankruptcy,” he said. “If we fire him and4 x/ G |3 X) X* ?3 i0 r
convince Steve to come take over, we have a 60% chance of surviving. If we fire Gil, don’t. q/ q0 j- R6 ]& }$ I3 A r
get Steve back, and have to search for a new CEO, then we have a 40% chance of0 O" z O* A5 s$ R" {2 z
surviving.” The board gave him authority to ask Jobs to return.& W" h& i8 O- D( O# G. K u
Woolard and his wife flew to London, where they were planning to watch the
* A I2 G' Y; ]6 T5 PWimbledon tennis matches. He saw some of the tennis during the day, but spent his2 {; s( S2 g4 H( S+ ?! v
evenings in his suite at the Inn on the Park calling people back in America, where it was3 u- [* I3 b* x$ a; H5 S% I, Y
daytime. By the end of his stay, his telephone bill was $2,000.
/ ?5 A$ U. N" E7 {& |) r- l; UFirst, he called Jobs. The board was going to fire Amelio, he said, and it wanted Jobs to
% J1 |! `' e# \) z. o4 g( bcome back as CEO. Jobs had been aggressive in deriding Amelio and pushing his own- L# K7 P2 p/ U* b
ideas about where to take Apple. But suddenly, when offered the cup, he became coy. “I
9 q6 D' q) H9 R7 Z4 x) Lwill help,” he replied.7 Q. x# U. t2 a; J
“As CEO?” Woolard asked.2 R6 V! L5 j: W ?
Jobs said no. Woolard pushed hard for him to become at least the acting CEO. Again
: t) t- h, z* V" E1 x/ q. Q+ @- UJobs demurred. “I will be an advisor,” he said. “Unpaid.” He also agreed to become a board% A; E1 Z7 f% \! @; B0 L7 b
member—that was something he had yearned for—but declined to be the board chairman.5 K) r7 r: Z, }* f2 l( ]
“That’s all I can give now,” he said. After rumors began circulating, he emailed a memo to
* k3 [; Q' _% }) @( M5 K5 a3 }Pixar employees assuring them that he was not abandoning them. “I got a call from Apple’s
+ l9 |- G) v, i vboard of directors three weeks ago asking me to return to Apple as their CEO,” he wrote. “I
/ E% ~* F( y4 y3 [declined. They then asked me to become chairman, and I again declined. So don’t worry—9 ^: B0 ]) E! f C4 O/ i: R
the crazy rumors are just that. I have no plans to leave Pixar. You’re stuck with me.”
! Y% x4 |$ Z3 V) _5 wWhy did Jobs not seize the reins? Why was he reluctant to grab the job that for two
* e0 h) Z0 M4 G( k- b0 G8 Odecades he had seemed to desire? When I asked him, he said:
& M# A ]/ L* k9 \/ t0 fWe’d just taken Pixar public, and I was happy being CEO there. I never knew of9 R; J5 I9 I& A6 q
anyone who served as CEO of two public companies, even temporarily, and I wasn’t even/ r/ A) _; b8 G% B
sure it was legal. I didn’t know what I wanted to do. I was enjoying spending more time5 o m, ^" E* g( Y( O( r8 x' }
with my family. I was torn. I knew Apple was a mess, so I wondered: Do I want to give up
+ g) S- E6 l8 _2 Q2 w* O; a3 ithis 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( t9 h6 a; p2 c4 D4 P
early. I gave him the pros and the cons, and in the middle he stopped me and said, “Steve, I2 D) S6 k& W8 q. A
don’t give a shit about Apple.” I was stunned. It was then I realized that I do give a shit$ N" D7 M) @5 \7 H' c, t$ k/ D
about Apple—I started it and it is a good thing to have in the world. That was when I
0 O/ |) X1 I' A, R1 t! zdecided to go back on a temporary basis to help them hire a CEO.2 h2 R/ s* {3 V7 E% {2 J- ~. L
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The claim that he was enjoying spending more time with his family was not convincing. He/ _, S' e: s. k
was never destined to win a Father of the Year trophy, even when he had spare time on his. k3 u3 z$ d, i5 c& J$ \. U
hands. He was getting better at paying heed to his children, especially Reed, but his6 ?, V7 m2 `( T2 A8 Z5 w G4 h
primary focus was on his work. He was frequently aloof from his two younger daughters,2 k' N4 W* w- K$ N3 e
estranged again from Lisa, and often prickly as a husband.
# T) t/ Z u4 @8 S7 E; ^" s J4 zSo what was the real reason for his hesitancy in taking over at Apple? For all of his+ Y, B3 Z. t8 }, a0 n
willfulness and insatiable desire to control things, Jobs was indecisive and reticent when he
* o9 W, H0 z4 j: Q. Q3 R0 nfelt unsure about something. He craved perfection, and he was not always good at figuring
, f x8 S$ G1 ]$ L- [( Q6 eout how to settle for something less. He did not like to wrestle with complexity or make
+ v* m, N2 {8 Qaccommodations. This was true in products, design, and furnishings for the house. It was" e: q: [$ {' q6 ^$ ?4 e
also true when it came to personal commitments. If he knew for sure a course of action was
9 J x2 g% c4 Gright, he was unstoppable. But if he had doubts, he sometimes withdrew, preferring not to# B9 [8 Z3 K, a& L2 \: d
think about things that did not perfectly suit him. As happened when Amelio had asked him& h5 {0 I$ z! d
what role he wanted to play, Jobs would go silent and ignore situations that made him2 g; S+ ?* t9 j/ S% d. D" ]1 T3 \1 E
uncomfortable.0 f& h) x7 E; U4 E9 S/ K
This attitude arose partly out of his tendency to see the world in binary terms. A person) t$ ?, R% W% @5 v
was either a hero or a bozo, a product was either amazing or shit. But he could be stymied
% [$ |/ Q% a! v. sby things that were more complex, shaded, or nuanced: getting married, buying the right. D1 V2 Y! h7 \" X, [: C
sofa, committing to run a company. In addition, he didn’t want to be set up for failure. “I
9 V* s6 ^! I5 f6 o- Athink Steve wanted to assess whether Apple could be saved,” Fred Anderson said.! { J, B& f! R2 n0 }, `- a
Woolard and the board decided to go ahead and fire Amelio, even though Jobs was not
0 a) P, a' l0 e/ ?yet forthcoming about how active a role he would play as an advisor. Amelio was about to
. N/ T7 a) Y- w2 \0 c' @, igo on a picnic with his wife, children, and grandchildren when the call came from Woolard
% F; P/ j. p6 h7 _. Q4 Ein London. “We need you to step down,” Woolard said simply. Amelio replied that it was
& v/ A( K3 @% U1 p$ R5 w+ |: Enot a good time to discuss this, but Woolard felt he had to persist. “We are going to' t& K, y/ i1 s, I
announce that we’re replacing you.”
8 g- V% m6 s# t0 F2 M, wAmelio resisted. “Remember, Ed, I told the board it was going to take three years to get7 S5 ]. U: P% S: `/ P4 g5 n
this company back on its feet again,” he said. “I’m not even halfway through.”
: y- p9 ~' @& Y. L“The board is at the place where we don’t want to discuss it further,” Woolard replied.1 Z; K# D/ b9 d: K" }, O" A5 w6 k6 Q
Amelio asked who knew about the decision, and Woolard told him the truth: the rest of the: O- q, j: E$ V3 V# @! n& ?0 r
board plus Jobs. “Steve was one of the people we talked to about this,” Woolard said. “His
! A( [. \1 C! k6 [" L( ]! [5 Wview is that you’re a really nice guy, but you don’t know much about the computer
% ?1 i/ g, Q/ I, i7 w; Kindustry.”
( A( G7 M1 r3 V7 f2 Z( I“Why in the world would you involve Steve in a decision like this?” Amelio replied,/ f- p2 }0 x/ v3 n2 \- k
getting angry. “Steve is not even a member of the board of directors, so what the hell is he 4 O \9 u- c* ~1 v# ~% P) u
) q: K; P2 |$ m8 u) H+ i- }: D8 s" |( v; f4 Y) _
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0 m+ ?* @+ y) {doing in any of this conversation?” But Woolard didn’t back down, and Amelio hung up to1 K' ~; J% ~/ r3 Q- u% j7 I5 f
carry on with the family picnic before telling his wife.
1 Y! o8 o5 S0 }' |. d. w uAt times Jobs displayed a strange mixture of prickliness and neediness. He usually didn’t
) N: V6 A5 N! u! T; fcare one iota what people thought of him; he could cut people off and never care to speak
9 |9 \+ o# F7 N! s; Pto them again. Yet sometimes he also felt a compulsion to explain himself. So that evening( S& ~+ c" W( _3 h
Amelio received, to his surprise, a phone call from Jobs. “Gee, Gil, I just wanted you to
6 K% a7 H, q- gknow, I talked to Ed today about this thing and I really feel bad about it,” he said. “I want
( K( }7 O( ?' R+ P( Hyou to know that I had absolutely nothing to do with this turn of events, it was a decision% @8 I" s# R! D$ r
the board made, but they had asked me for advice and counsel.” He told Amelio he
1 |8 F# T! A$ e7 y9 Z1 P1 rrespected him for having “the highest integrity of anyone I’ve ever met,” and went on to
1 f* H N3 L; w1 }# R% {give some unsolicited advice. “Take six months off,” Jobs told him. “When I got thrown4 _: i. C6 C% v R
out of Apple, I immediately went back to work, and I regretted it.” He offered to be a; }# ]$ ] d6 z! l+ F1 L1 o# \* \5 p- R
sounding board if Amelio ever wanted more advice.
$ j: l# m. e7 `) e% CAmelio was stunned but managed to mumble a few words of thanks. He turned to his
' W9 J; e- D/ f4 Swife and recounted what Jobs said. “In ways, I still like the man, but I don’t believe him,” f! ^: B N/ _0 u" t# \
he told her.
+ w7 i/ B7 y1 ^+ R7 Z0 d+ K0 `“I was totally taken in by Steve,” she said, “and I really feel like an idiot.”
/ O2 C/ S1 [; O9 I$ v" r“Join the crowd,” her husband replied.
, s0 l( o/ W! K+ V6 l. F8 R z) e/ M7 XSteve Wozniak, who was himself now an informal advisor to the company, was thrilled
, @3 u7 o" h$ {9 d( z3 \that Jobs was coming back. (He forgave easily.) “It was just what we needed,” he said,
" h( C7 n4 e' H& w“because whatever you think of Steve, he knows how to get the magic back.” Nor did6 E# E' V! q% v) R7 i
Jobs’s triumph over Amelio surprise him. As he told Wired shortly after it happened, “Gil
+ @2 n, B. ?$ P6 Y/ S5 r+ ~6 fAmelio meets Steve Jobs, game over.”2 v1 X6 s |1 {6 m a5 f+ K4 z) C
That Monday Apple’s top employees were summoned to the auditorium. Amelio came in' O0 e4 n: }9 J
looking calm and relaxed. “Well, I’m sad to report that it’s time for me to move on,” he
* Q1 z) D8 a! @% R8 {said. Fred Anderson, who had agreed to be interim CEO, spoke next, and he made it clear7 V% E" ~: | k& o! p, j w, H" t9 w
that he would be taking his cues from Jobs. Then, exactly twelve years since he had lost$ R$ g7 h: h `8 [4 E/ R! \! i G
power in a July 4 weekend struggle, Jobs walked back onstage at Apple./ i6 {* A- g. C5 z F# Q8 _# b
It immediately became clear that, whether or not he wanted to admit it publicly (or even
5 g3 ^, @ T9 s* `% y0 @" Z& z& bto himself), Jobs was going to take control and not be a mere advisor. As soon as he came4 @) J# m5 O+ C8 U
onstage that day—wearing shorts, sneakers, and a black turtleneck—he got to work* I0 ?2 |# m: V/ ^2 D
reinvigorating his beloved institution. “Okay, tell me what’s wrong with this place,” he- F( J3 p/ _& l# S7 ^1 b4 _# K9 X
said. There were some murmurings, but Jobs cut them off. “It’s the products!” he answered.& e# P0 M) \7 F% b- ^) I; a2 }
“So what’s wrong with the products?” Again there were a few attempts at an answer, until8 ^0 t/ W6 U8 e' }$ t
Jobs broke in to hand down the correct answer. “The products suck!” he shouted. “There’s
) K, X6 f3 b, e- K! o/ V Kno sex in them anymore!”
E" o. ^3 [' wWoolard was able to coax Jobs to agree that his role as an advisor would be a very active
9 H4 H1 z0 X! w, Bone. Jobs approved a statement saying that he had “agreed to step up my involvement with7 q2 |! a8 ?0 t. ?6 e: U
Apple for up to 90 days, helping them until they hire a new CEO.” The clever formulation- O* r9 Q; ]) |3 \/ H8 w
that Woolard used in his statement was that Jobs was coming back “as an advisor leading
! U& ^2 u/ _7 Wthe team.”
( f; H- o, c& h: ]5 s" QJobs took a small office next to the boardroom on the executive floor, conspicuously( B+ Y/ H" ~$ a6 R4 j
eschewing Amelio’s big corner office. He got involved in all aspects of the business: 4 P7 O" L8 X. R, V: P" {
V8 H) K5 d: ~
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$ U9 [/ j2 M. c' G Lproduct design, where to cut, supplier negotiations, and advertising agency review. He" N1 {- R7 f0 m2 y
believed that he had to stop the hemorrhaging of top Apple employees, and to do so he* a# ?: i/ A6 z
wanted to reprice their stock options. Apple stock had dropped so low that the options had
* ]8 h: x) U# M# c1 T3 Nbecome worthless. Jobs wanted to lower the exercise price, so they would be valuable/ @" |- U4 C/ H- F
again. At the time, that was legally permissible, but it was not considered good corporate( @3 |2 C0 _7 L& ]& ]& p& y E# V
practice. On his first Thursday back at Apple, Jobs called for a telephonic board meeting P# y% P7 e4 f
and outlined the problem. The directors balked. They asked for time to do a legal and
# K/ l: B* J) _) x0 ?/ \financial study of what the change would mean. “It has to be done fast,” Jobs told them.
7 A* H/ [; \2 R* E8 \- X( D r“We’re losing good people.”. G5 U1 n5 e+ G
Even his supporter Ed Woolard, who headed the compensation committee, objected. “At
- T; [( g4 s8 x2 r! i. x R4 JDuPont we never did such a thing,” he said.* @: s- I2 Q9 z C) S0 n
“You brought me here to fix this thing, and people are the key,” Jobs argued. When the7 ^, \6 W& Z7 P2 p4 U
board proposed a study that could take two months, Jobs exploded: “Are you nuts?!?” He6 v8 [! `6 y! \. w4 a& Z
paused for a long moment of silence, then continued. “Guys, if you don’t want to do this,
5 `2 b {1 e' K& s |I’m not coming back on Monday. Because I’ve got thousands of key decisions to make that: t9 \. s! Q9 ^9 t5 V- J" k
are far more difficult than this, and if you can’t throw your support behind this kind of
7 r. u7 }1 i; ]2 ydecision, I will fail. So if you can’t do this, I’m out of here, and you can blame it on me,. A' h6 y' i$ [5 Q
you can say, ‘Steve wasn’t up for the job.’”
4 t z6 {' V" X& q0 b( o: l& G! QThe next day, after consulting with the board, Woolard called Jobs back. “We’re going to
; n, O1 |2 @* N. ~4 I) {0 Wapprove this,” he said. “But some of the board members don’t like it. We feel like you’ve
4 K$ p/ M4 O/ E0 P5 Aput a gun to our head.” The options for the top team (Jobs had none) were reset at $13.25,
9 q+ B5 {# ?! _/ r- cwhich was the price of the stock the day Amelio was ousted.
4 r9 ?7 |- {% `! ]' w' VInstead of declaring victory and thanking the board, Jobs continued to seethe at having to
6 X- X# P# y- Z3 ^# z0 t. }% p4 P+ E$ canswer to a board he didn’t respect. “Stop the train, this isn’t going to work,” he told
; m4 P$ H1 h/ e% j& m7 {. B, nWoolard. “This company is in shambles, and I don’t have time to wet-nurse the board. So I# o W; Y4 i n+ |3 }( h4 [
need all of you to resign. Or else I’m going to resign and not come back on Monday.” The& v5 u/ n; r2 z+ q& {) k P
one person who could stay, he said, was Woolard.
/ p# s- j$ x5 k! O5 V9 SMost members of the board were aghast. Jobs was still refusing to commit himself to
( s, h7 f: Q) q! [/ F) z; B) xcoming back full-time or being anything more than an advisor, yet he felt he had the power
& |& J& u) d0 n, U: j+ y8 S7 vto force them to leave. The hard truth, however, was that he did have that power over them.$ \- C3 U& L h3 x0 N; V5 I9 R( \6 F
They could not afford for him to storm off in a fury, nor was the prospect of remaining an
' Z/ `4 `) B* a. T5 hApple board member very enticing by then. “After all they’d been through, most were glad. G- V( P/ L# D2 C3 `* b1 f" v
to be let off,” Woolard recalled.
. ]9 N8 J* F- Y2 {3 N) MOnce again the board acquiesced. It made only one request: Would he permit one other
8 h. a! {0 ?; B; B/ J& H0 y' Adirector to stay, in addition to Woolard? It would help the optics. Jobs assented. “They were l+ @+ w: [% L! `5 K/ y
an awful board, a terrible board,” he later said. “I agreed they could keep Ed Woolard and a' T" y" v" _1 p. c; m
guy named Gareth Chang, who turned out to be a zero. He wasn’t terrible, just a zero.
) m( f) G; j( sWoolard, on the other hand, was one of the best board members I’ve ever seen. He was a
/ V" O$ C% L0 mprince, one of the most supportive and wise people I’ve ever met.”
- n! S' Z, Q9 ~! \3 ^Among those being asked to resign was Mike Markkula, who in 1976, as a young
; `0 ]8 G$ J3 [) \venture capitalist, had visited the Jobs garage, fallen in love with the nascent computer on+ t% A( X0 Q! m) U. C. {% N
the workbench, guaranteed a $250,000 line of credit, and become the third partner and one-
* w" `- E# D, w4 k" n6 ithird owner of the new company. Over the subsequent two decades, he was the one 8 x) W* {, f) T7 h2 t5 z
: I8 e5 I7 {* {+ q5 S' g3 ?. ?' J3 \: a" p* i( t; V3 }, M
( H7 m! M4 t0 e4 c* Q# S
" j3 ?$ ?& k2 J, R; [
h% S: o; a) a2 z
8 v3 U, e4 v+ W; s
+ g2 F) B7 o# x' n1 q' ~9 j9 w I
4 r1 O3 w. M% N( B5 w. r$ \: _
constant on the board, ushering in and out a variety of CEOs. He had supported Jobs at# ^6 l" L, ^5 x2 Y4 J" f2 {. I* E
times but also clashed with him, most notably when he sided with Sculley in the
, e4 S! z8 B8 H1 ^! g/ xshowdowns of 1985. With Jobs returning, he knew that it was time for him to leave.1 E: _& M ?9 r5 B. X7 ?
Jobs could be cutting and cold, especially toward people who crossed him, but he could3 B$ O9 k! N" w0 U9 E: j( J* @+ t
also be sentimental about those who had been with him from the early days. Wozniak fell
0 j! t8 D# G! O9 \* s6 Finto that favored category, of course, even though they had drifted apart; so did Andy
w7 X' u5 G$ U9 w- AHertzfeld and a few others from the Macintosh team. In the end, Mike Markkula did as
" ]1 A6 A3 g) V$ H9 A5 T0 Z, qwell. “I felt deeply betrayed by him, but he was like a father and I always cared about him,”' Z N% E' n* R E" {
Jobs later recalled. So when the time came to ask him to resign from the Apple board, Jobs" I3 K6 V6 z5 N0 C9 w) G! o/ _
drove to Markkula’s chateau-like mansion in the Woodside hills to do it personally. As
7 Q1 n4 p; }# e. |9 y5 A+ |+ Zusual, he asked to take a walk, and they strolled the grounds to a redwood grove with a
e U0 J+ U% n0 ], Fpicnic table. “He told me he wanted a new board because he wanted to start fresh,”
' r: Y6 h( g$ }* \7 D. @4 V9 M7 IMarkkula said. “He was worried that I might take it poorly, and he was relieved when I1 C/ I+ N; h% d% [9 `3 Q) G% ^$ J
didn’t.”$ s: K3 u9 J0 e0 z4 S% d8 l. D( a
They spent the rest of the time talking about where Apple should focus in the future.% i9 }4 p5 r8 z8 z' ]9 X- j
Jobs’s ambition was to build a company that would endure, and he asked Markkula what* |) r& i1 I5 j5 W
the formula for that would be. Markkula replied that lasting companies know how to
3 t {' {3 y0 l( s$ o% y4 q! J8 ]reinvent themselves. Hewlett-Packard had done that repeatedly; it started as an instrument
& Y( z0 ]1 {& Z# l: R# Bcompany, then became a calculator company, then a computer company. “Apple has been
% F0 W9 C. t8 n1 s S' ysidelined by Microsoft in the PC business,” Markkula said. “You’ve got to reinvent the
5 p1 y9 ?; G; G+ {8 P- {' \) D4 F, Ocompany to do some other thing, like other consumer products or devices. You’ve got to be% w$ h1 b4 G9 c2 r
like a butterfly and have a metamorphosis.” Jobs didn’t say much, but he agreed. Y* W( v( c7 ^+ q) i) X* U) e
The old board met in late July to ratify the transition. Woolard, who was as genteel as( K1 Y: K3 [! L+ V& n$ b
Jobs was prickly, was mildly taken aback when Jobs appeared dressed in jeans and( n4 G0 W7 @0 u. {$ W! t
sneakers, and he worried that Jobs might start berating the veteran board members for! q- ? g }7 c
screwing up. But Jobs merely offered a pleasant “Hi, everyone.” They got down to the# d& K. l$ s* L1 h
business of voting to accept the resignations, elect Jobs to the board, and empower Woolard
% P# h- X, Z) D: T6 w8 }and Jobs to find new board members.- N2 |2 `. I; J
Jobs’s first recruit was, not surprisingly, Larry Ellison. He said he would be pleased to
6 i& f$ ?+ m+ Q% ]" ]' |) k. P0 yjoin, but he hated attending meetings. Jobs said it would be fine if he came to only half of% ~9 \, B% U+ S& l" H( j, u5 w
them. (After a while Ellison was coming to only a third of the meetings. Jobs took a picture
, \* Z/ W) u: d0 fof him that had appeared on the cover of Business Week and had it blown up to life size and/ @) L, T5 F1 _( o) C2 n
pasted on a cardboard cutout to put in his chair.)
3 N' }1 [2 A E2 r5 n. jJobs also brought in Bill Campbell, who had run marketing at Apple in the early 1980s
6 n- P: t( x5 ]; m3 D" H& E) ?" zand been caught in the middle of the Sculley-Jobs clash. Campbell had ended up sticking
# r' y0 t: ^ c7 u3 A6 ?( zwith Sculley, but he had grown to dislike him so much that Jobs forgave him. Now he was
' G8 [' S6 c4 L- `+ P1 zthe CEO of Intuit and a walking buddy of Jobs. “We were sitting out in the back of his
2 b; c# v+ t5 R0 q+ l$ M G2 v3 ~ Uhouse,” recalled Campbell, who lived only five blocks from Jobs in Palo Alto, “and he said
# ^2 P, k) L% g) }* r9 fhe was going back to Apple and wanted me on the board. I said, ‘Holy shit, of course I will: O8 C" K* X/ H
do that.’” Campbell had been a football coach at Columbia, and his great talent, Jobs said,
! j6 d, y! F! _) Jwas to “get A performances out of B players.” At Apple, Jobs told him, he would get to
: k. M) y, q: a, r1 Q8 W) Swork with A players. \5 Q7 P7 d! R6 `! w5 ~
( e0 e( d; [5 U, l3 B$ ^
, W( d6 W- t0 ]; x2 Z( u! t
7 h, m( n/ `1 f. o6 W( j
( F3 ]( ~6 G6 K; Z; N* w) Q( `5 K3 j" E5 H* O, [3 c" F4 T
4 m* d* v' L7 f4 A% _8 d% s* U( i
' W0 E6 V; U+ O7 b e7 M# j
; a( P) i& u; D& z8 M1 q4 O' P1 x5 T: l- U5 t% E; Y
Woolard helped bring in Jerry York, who had been the chief financial officer at Chrysler
7 p7 m7 g, K' G/ y% Y; o+ fand then IBM. Others were considered and then rejected by Jobs, including Meg Whitman,/ V& f& z5 R, S; x4 |
who was then the manager of Hasbro’s Playskool division and had been a strategic planner
0 C+ i, }3 F: @8 K Hat Disney. (In 1998 she became CEO of eBay, and she later ran unsuccessfully for governor$ E- Y2 O) B. i% w! |
of California.) Over the years Jobs would bring in some strong leaders to serve on the
5 J9 ?" @4 B6 f% M5 LApple board, including Al Gore, Eric Schmidt of Google, Art Levinson of Genentech,
# p2 z8 M9 ?8 S" M1 i9 G8 tMickey Drexler of the Gap and J. Crew, and Andrea Jung of Avon. But he always made" j, X0 G8 H! V; g7 X5 F6 C
sure they were loyal, sometimes loyal to a fault. Despite their stature, they seemed at times+ d3 ]& k d" k; p
awed or intimidated by Jobs, and they were eager to keep him happy.8 f( V* ?4 Z, |! g) f
At one point he invited Arthur Levitt, the former SEC chairman, to become a board- e4 d: J( \( e7 u
member. Levitt, who bought his first Macintosh in 1984 and was proudly “addicted” to6 |$ u ]# O4 R+ R) y2 H
Apple computers, was thrilled. He was excited to visit Cupertino, where he discussed the
; i _+ y5 O7 S. Y# urole with Jobs. But then Jobs read a speech Levitt had given about corporate governance,: I& t, J _3 o: V; L( R ~8 a
which argued that boards should play a strong and independent role, and he telephoned to9 O; e5 h. }1 Y
withdraw the invitation. “Arthur, I don’t think you’d be happy on our board, and I think it
& {" R: Q& |1 L! zbest if we not invite you,” Levitt said Jobs told him. “Frankly, I think some of the issues
, n0 p/ V+ O e! f" |2 |. {% cyou raised, while appropriate for some companies, really don’t apply to Apple’s culture.”/ V7 ~& x0 u5 {; U' n, F; W
Levitt later wrote, “I was floored. . . . It’s plain to me that Apple’s board is not designed to7 W* G4 l& s& L+ N
act independently of the CEO.” F- Y) [# x; N0 A5 g1 f
0 ?. N F( z6 g# Z
Macworld Boston, August 1997, O8 r* N2 z C0 n& f+ r, J" w; `
3 @& z# G6 n3 M4 e+ `$ j
The staff memo announcing the repricing of Apple’s stock options was signed “Steve and2 R; T& ]* A4 z( i4 t0 M! S
the executive team,” and it soon became public that he was running all of the company’s
1 K9 Y6 E# L1 Z* L3 x! Mproduct review meetings. These and other indications that Jobs was now deeply engaged at9 e Z' X( d7 N1 V9 S
Apple helped push the stock up from about $13 to $20 during July. It also created a frisson% u# W: T! K0 C/ R, v7 M! j
of excitement as the Apple faithful gathered for the August 1997 Macworld in Boston.
, G3 f6 j; ~0 J9 MMore than five thousand showed up hours in advance to cram into the Castle convention
b" m+ g* Z5 c! b7 z5 qhall of the Park Plaza hotel for Jobs’s keynote speech. They came to see their returning! u# t8 j5 r! E {: o
hero—and to find out whether he was really ready to lead them again.) b2 w3 {& v1 q4 P: z% ?
Huge cheers erupted when a picture of Jobs from 1984 was flashed on the overhead
! k+ x P$ w* W G* Y- U$ l. Z. xscreen. “Steve! Steve! Steve!” the crowd started to chant, even as he was still being% ^9 a8 m7 ?1 h6 s, y
introduced. When he finally strode onstage—wearing a black vest, collarless white shirt,' G- D* D0 w2 q. E% o
jeans, and an impish smile—the screams and flashbulbs rivaled those for any rock star. At/ ]$ i8 V- h3 A3 I
first he punctured the excitement by reminding them of where he officially worked. “I’m% Y ^( [+ ]6 y, C9 c9 `
Steve Jobs, the chairman and CEO of Pixar,” he introduced himself, flashing a slide3 p3 _) B; a: u
onscreen with that title. Then he explained his role at Apple. “I, like a lot of other people,
$ S0 u6 ~+ U! A4 H. n2 T, Dare pulling together to help Apple get healthy again.”
) O. J. ]; E o4 l# |3 b/ |But as Jobs paced back and forth across the stage, changing the overhead slides with a5 ]# c9 p# G. }1 a6 W$ _
clicker in his hand, it was clear that he was now in charge at Apple—and was likely to0 S1 f$ E/ ~3 t8 k& }: T
remain so. He delivered a carefully crafted presentation, using no notes, on why Apple’s
' ^( ~6 P/ ]1 V( @5 [3 L+ {sales had fallen by 30% over the previous two years. “There are a lot of great people at
. ]; P. `# @8 R1 a: o' L/ qApple, but they’re doing the wrong things because the plan has been wrong,” he said. “I’ve
3 H A/ _; U# g
: e- ?6 P; A# j/ q; |
0 B- r/ ~0 d4 J' {; o, _
7 u5 H+ z4 r9 H; ^: [2 B% V
& v0 S& |: O3 J' h2 g" `& m, s/ n4 u+ W& O
! o5 Q6 P R3 G2 @9 M
?2 y% O, }* |
1 M: K1 V! ]4 Y: u9 a6 J+ X0 ]5 ^! g, j( d/ T0 y3 {4 `+ u
found people who can’t wait to fall into line behind a good strategy, but there just hasn’t
6 ~, U, e: s# Z8 S S: Sbeen one.” The crowd again erupted in yelps, whistles, and cheers.; Y- A- ~' d8 L6 I9 r9 x
As he spoke, his passion poured forth with increasing intensity, and he began saying
5 f( t, m: z) j# g' I“we” and “I”—rather than “they”—when referring to what Apple would be doing. “I think
; w4 C* L% j$ t; E8 s, Yyou still have to think differently to buy an Apple computer,” he said. “The people who buy
8 D+ f9 t1 _1 A, k6 K3 h" [ G6 \9 Fthem do think different. They are the creative spirits in this world, and they’re out to' f& y/ M4 ~% T6 o
change the world. We make tools for those kinds of people.” When he stressed the word p6 [0 m( K+ [
“we” in that sentence, he cupped his hands and tapped his fingers on his chest. And then, in
0 J8 s7 Z) V& ohis final peroration, he continued to stress the word “we” as he talked about Apple’s future.* ?" U* ^) s% H* {
“We too are going to think differently and serve the people who have been buying our# L) r5 ^- U& `: B, T4 L
products from the beginning. Because a lot of people think they’re crazy, but in that B0 B6 L1 V" [8 }0 B: c
craziness we see genius.” During the prolonged standing ovation, people looked at each% R. d% Q' j1 C# p) f
other in awe, and a few wiped tears from their eyes. Jobs had made it very clear that he and& F7 v4 i/ c l' S, d, y1 x
the “we” of Apple were one.
! T' m6 v# v3 C
8 b# \" r6 x3 m o4 o6 FThe Microsoft Pact
5 n0 b& i5 t. i" U# W$ o; H( |& _, n- n+ E
The climax of Jobs’s August 1997 Macworld appearance was a bombshell announcement,9 B) _8 S1 U4 p' Y& Y3 w
one that made the cover of both Time and Newsweek. Near the end of his speech, he paused
* G' |, s! a6 f$ K7 a. Jfor a sip of water and began to talk in more subdued tones. “Apple lives in an ecosystem,”- f0 H0 Y8 A$ T6 ~5 z9 q. v( k
he said. “It needs help from other partners. Relationships that are destructive don’t help. `9 M6 G+ B* C) r9 {) r3 \: D
anybody in this industry.” For dramatic effect, he paused again, and then explained: “I’d
& Z% o% a* r& w( N/ k1 Q- |; tlike to announce one of our first new partnerships today, a very meaningful one, and that is
/ u: n" [& p+ r- ^one with Microsoft.” The Microsoft and Apple logos appeared together on the screen as7 J6 E/ w6 z& t! t, ?
people gasped.
8 p3 ^/ N0 i6 a* z) l& y" yApple and Microsoft had been at war for a decade over a variety of copyright and patent
& Q, d* j9 g+ s' t! I& rissues, most notably whether Microsoft had stolen the look and feel of Apple’s graphical" J6 i3 ? K1 z% G
user interface. Just as Jobs was being eased out of Apple in 1985, John Sculley had struck a
z4 t* \" h& Y. l( {; b4 X% Rsurrender deal: Microsoft could license the Apple GUI for Windows 1.0, and in return it6 r0 D! n+ l. }# K( I' n i3 h5 H/ y. F
would make Excel exclusive to the Mac for up to two years. In 1988, after Microsoft came! t$ ?. V' y* S `' ]& `9 n% |
out with Windows 2.0, Apple sued. Sculley contended that the 1985 deal did not apply to
) o, I8 Z( ~0 {$ W% j5 }6 rWindows 2.0 and that further refinements to Windows (such as copying Bill Atkinson’s/ p+ |! q' }; L& q7 K( |7 p7 G
trick of “clipping” overlapping windows) had made the infringement more blatant. By 1997
Y% c, q2 l y( R5 C5 CApple had lost the case and various appeals, but remnants of the litigation and threats of
+ B5 u3 b* t. S! N. k' |new suits lingered. In addition, President Clinton’s Justice Department was preparing a
% j" J; r! T4 _! l* O- X4 Omassive antitrust case against Microsoft. Jobs invited the lead prosecutor, Joel Klein, to
r' A0 _5 u% h4 D9 {/ mPalo Alto. Don’t worry about extracting a huge remedy against Microsoft, Jobs told him0 N* v5 b2 E3 H" T( B1 Q+ s
over coffee. Instead simply keep them tied up in litigation. That would allow Apple the
$ X% |4 h! {' I; X( z4 Wopportunity, Jobs explained, to “make an end run” around Microsoft and start offering
- W; L+ U+ L6 \: p( D1 ccompeting products.1 m6 ?" {9 L; I9 e( ~
Under Amelio, the showdown had become explosive. Microsoft refused to commit to
6 I/ T- a- J' Tdeveloping Word and Excel for future Macintosh operating systems, which could have
t' Z2 F8 N9 ?+ A& j9 tdestroyed Apple. In defense of Bill Gates, he was not simply being vindictive. It was
( k$ C* V, g0 a7 t+ w& F9 y" q. {3 ?6 m' B! `0 m. }0 e
5 t/ r1 n9 c5 O+ _1 f) Y3 p0 a& j0 z1 D6 I$ O4 X) X j) q3 e x
" O; s2 s2 S$ y& _9 x+ |# S
+ B( k4 X1 X/ \0 s8 ?1 ~- T$ l
7 G1 ~0 s* m6 |, c* z! n
1 w1 @% R, ]: R2 w' I+ \6 Q* Q* f6 X) F0 i
" n; G: ?9 K+ a& U8 {. W+ ~2 F
understandable that he was reluctant to commit to developing for a future Macintosh
; g+ C6 N' j2 W1 t1 H H Yoperating system when no one, including the ever-changing leadership at Apple, seemed to
% q) I& T& J& O7 _& \- g+ Tknow what that new operating system would be. Right after Apple bought NeXT, Amelio
! Z+ @: S, @5 Iand Jobs flew together to visit Microsoft, but Gates had trouble figuring out which of them
" i, m* A% Q2 Y$ K$ uwas in charge. A few days later he called Jobs privately. “Hey, what the fuck, am I/ H3 r# G4 H' |0 H: S
supposed to put my applications on the NeXT OS?” Gates asked. Jobs responded by
x# s! z9 G+ D+ B: H5 \9 R5 k( ?5 l“making smart-ass remarks about Gil,” Gates recalled, and suggesting that the situation6 l8 N7 v+ V4 p7 N
would soon be clarified.
- Y) x3 ]: t: E6 u% j' [# E4 NWhen the leadership issue was partly resolved by Amelio’s ouster, one of Jobs’s first
5 l9 G2 c1 ?$ u0 ]& H( E$ ophone calls was to Gates. Jobs recalled:
- }- n% B1 m* A0 v7 WI called up Bill and said, “I’m going to turn this thing around.” Bill always had a soft
; P# d6 Z+ c) f: F" cspot for Apple. We got him into the application software business. The first Microsoft apps
# {& k1 {1 D/ v4 }were Excel and Word for the Mac. So I called him and said, “I need help.” Microsoft was
( m2 I+ _$ u$ j! J; N. j/ Y% Nwalking over Apple’s patents. I said, “If we kept up our lawsuits, a few years from now we
1 c8 F6 c6 ] N7 j. o4 {! Bcould win a billion-dollar patent suit. You know it, and I know it. But Apple’s not going to9 p+ u" _. e* Z5 n' M# F
survive that long if we’re at war. I know that. So let’s figure out how to settle this right, t7 r6 U- W- B0 u. ]1 R I
away. All I need is a commitment that Microsoft will keep developing for the Mac and an
% _3 D Q _& l/ [* winvestment by Microsoft in Apple so it has a stake in our success.”; m& y& {/ ~# B( K( E v1 _
: a9 {/ F: |! ^4 Z9 d1 W% C E' o0 q8 K0 m
7 T+ U( C1 C+ Q! g. Q Q) C: N- F% v+ K' L8 {$ u
When I recounted to him what Jobs said, Gates agreed it was accurate. “We had a group of
( E, L$ S$ |' n! l0 L" bpeople who liked working on the Mac stuff, and we liked the Mac,” Gates recalled. He had
2 V3 w: |1 u" c0 b7 Abeen negotiating with Amelio for six months, and the proposals kept getting longer and
+ ?: ^3 m' E; L& S% Qmore complicated. “So Steve comes in and says, ‘Hey, that deal is too complicated. What I$ e* I( X& R% L) V( V
want is a simple deal. I want the commitment and I want an investment.’ And so we put2 `( g6 F0 X/ W' C
that together in just four weeks.”
; Y* R, d# }7 n; U( A% V" }Gates and his chief financial officer, Greg Maffei, made the trip to Palo Alto to work out
* q2 {& j# C) ~$ m' i* C+ uthe framework for a deal, and then Maffei returned alone the following Sunday to work on
' f9 q$ f* j7 Fthe details. When he arrived at Jobs’s home, Jobs grabbed two bottles of water out of the! D/ u+ [. o) j _9 P. N0 V7 Z
refrigerator and took Maffei for a walk around the Palo Alto neighborhood. Both men wore
7 ], F0 a* I9 ~5 H; pshorts, and Jobs walked barefoot. As they sat in front of a Baptist church, Jobs cut to the
9 _- V, {5 E. o! V7 p% V; wcore issues. “These are the things we care about,” he said. “A commitment to make
- M% s; q: D ~3 R9 b0 a; A0 jsoftware for the Mac and an investment.”& }6 s1 ~) N: x& c
Although the negotiations went quickly, the final details were not finished until hours2 n8 y/ }7 _1 F
before Jobs’s Macworld speech in Boston. He was rehearsing at the Park Plaza Castle when
. [: W* b2 |% k: q, n; w1 Mhis cell phone rang. “Hi, Bill,” he said as his words echoed through the old hall. Then he* p. x$ F% c" s
walked to a corner and spoke in a soft tone so others couldn’t hear. The call lasted an hour.- L+ [( k/ }& Y
Finally, the remaining deal points were resolved. “Bill, thank you for your support of this: N' u9 j; C6 M' {
company,” Jobs said as he crouched in his shorts. “I think the world’s a better place for it.”& g2 o4 M/ [3 G4 M
During his Macworld keynote address, Jobs walked through the details of the Microsoft
' T1 h$ a( n# y' Bdeal. At first there were groans and hisses from the faithful. Particularly galling was Jobs’s6 l0 n% K/ Q, E+ d- {5 C
announcement that, as part of the peace pact, “Apple has decided to make Internet Explorer
4 n" k5 g7 h- r# i+ d+ b% N
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0 x' y8 o1 U# X: }) K* d' g9 R
9 { u" P" I6 @* h. M" j8 K M1 M* }3 u2 P) H
2 i5 F! M& _ F. B* Z7 qits default browser on the Macintosh.” The audience erupted in boos, and Jobs quickly
4 M7 B( [' @( ?7 J5 |$ [) nadded, “Since we believe in choice, we’re going to be shipping other Internet browsers, as! q7 }1 V2 l& v5 q' q
well, and the user can, of course, change their default should they choose to.” There were: \# m9 ]+ K: F: J
some laughs and scattered applause. The audience was beginning to come around,
3 T2 G' }" y/ K2 S) r) aespecially when he announced that Microsoft would be investing $150 million in Apple and
0 m9 X" L3 x9 O2 vgetting nonvoting shares.1 t4 y' Z% d/ @* ?
But the mellower mood was shattered for a moment when Jobs made one of the few
0 O7 \8 |; B8 {9 b' U* w3 zvisual and public relations gaffes of his onstage career. “I happen to have a special guest
; a" s% I. H- ]2 C: {with me today via satellite downlink,” he said, and suddenly Bill Gates’s face appeared on
7 j. m' z2 k% [; F; X8 kthe huge screen looming over Jobs and the auditorium. There was a thin smile on Gates’s% r6 G, A$ a0 D. T) S; T$ A' g
face that flirted with being a smirk. The audience gasped in horror, followed by some boos1 K: N+ y. h, r: ^+ W
and catcalls. The scene was such a brutal echo of the 1984 Big Brother ad that you half$ A+ F: w, B, |1 `
expected (and hoped?) that an athletic woman would suddenly come running down the9 u5 J- \$ ?- s8 M
aisle and vaporize the screenshot with a well-thrown hammer.
4 L: k- }7 ^* M5 Q/ L2 z) e4 hBut it was all for real, and Gates, unaware of the jeering, began speaking on the satellite/ c. x" G% j$ z1 E
link from Microsoft headquarters. “Some of the most exciting work that I’ve done in my
& f4 u: K" h6 ^8 r+ J! H% Fcareer has been the work that I’ve done with Steve on the Macintosh,” he intoned in his
/ G, [7 V- n& m5 hhigh-pitched singsong. As he went on to tout the new version of Microsoft Office that was4 C, O/ g# ]; o6 a4 {# `
being made for the Macintosh, the audience quieted down and then slowly seemed to" j# K/ i2 v0 V3 H
accept the new world order. Gates even was able to rouse some applause when he said that* P3 |# u: v$ | U# R
the new Mac versions of Word and Excel would be “in many ways more advanced than8 J. w* i; K; }5 p$ K) D/ L
what we’ve done on the Windows platform.”
4 U$ c! q4 Q" \3 K5 L8 YJobs realized that the image of Gates looming over him and the audience was a mistake.
( k: ]8 S" h; B+ w( D0 E“I wanted him to come to Boston,” Jobs later said. “That was my worst and stupidest) P$ T1 v6 ]" o
staging event ever. It was bad because it made me look small, and Apple look small, and as5 ~8 q% l& s% j6 S' M9 M& e
if everything was in Bill’s hands.” Gates likewise was embarrassed when he saw the$ M9 p' k) }0 e8 j2 c+ r
videotape of the event. “I didn’t know that my face was going to be blown up to looming/ m% p" |- Y4 |8 r& ], r
proportions,” he said.
$ p! }" d/ Z$ G" uJobs tried to reassure the audience with an impromptu sermon. “If we want to move
, f. ~8 |/ c7 t) y$ {* Wforward and see Apple healthy again, we have to let go of a few things here,” he told the% M8 i0 Z8 h6 e% F3 E: }( G; z
audience. “We have to let go of this notion that for Apple to win Microsoft has to lose. . . . I
) l3 Z* s- J% P8 c) w" [think if we want Microsoft Office on the Mac, we better treat the company that puts it out
) g: s- Z9 [# Twith a little bit of gratitude.”6 k# e4 c" B6 O8 A. G; ?$ c
The Microsoft announcement, along with Jobs’s passionate reengagement with the* N! N; c5 U( D5 c! x
company, provided a much-needed jolt for Apple. By the end of the day, its stock had: i3 f4 i9 b8 S
skyrocketed $6.56, or 33%, to close at $26.31, twice the price of the day Amelio resigned.
& z% s' I7 Q |3 xThe one-day jump added $830 million to Apple’s stock market capitalization. The company
|7 D& e- f. c! }was back from the edge of the grave.
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5 R! S0 T4 L, H r4 _% n+ z
CHAPTER TWENTY-FIVE
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