Can Apple Thrive Without Steve Jobs?By David Morgenstern | Posted 2007-01-03 Email Print
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Opinion: Apple is defending CEO Steve Jobs as the company is under investigation by the feds. To some, he is Apple. But could the company make do without its very public leader?Ten years ago, give a week or two, Steve Jobs returned to Apple Computer, the company that he had co-founded in the now-hazy garage beginnings of the personal computer era. The company was a fiscal, organizational and technological mess.
Under Jobs' leadership, the company has regained a solid, if still small, foothold in the industry, still as a manufacturer of computers as well as prominently a seller of consumer A/V devices and content services. This turnaround was no small accomplishment. For many, it's a modern miracle, with Jobs being given the major share of the credit along with Svengalic status.
However, concern on the street grew in December that Jobs' tenure may come to an end, not by a coup by the board of directors as happened in 1985, but from legal troubles around stock options and perhaps a cover-up.
The latest scare stems from investigation of hundreds of companies, in and out of the tech field, for having backdated stock options. On Dec. 27, Law.com reported that federal prosecutors were examining whether Apple executives "apparently falsified" stock option documents.
On Dec. 29, Apple filed its quarterly and year-end reports and defended Jobs.
"The special committee, its independent counsel and forensic accountants have performed an exhaustive investigation of Apple's stock option granting practices," according to a joint statement by Al Gore, the chairman of special committee, and Jerome York, the chairman of Apple's Audit and Finance Committee.
At the same time, Jobs reportedly hired his own legal team to handle his personal defense. So, things could get uglier. Or not.
Before heading into Apple's existential questions about Jobs, let me give you a piece of Jobs' history that you may not know: His return was foretold by prophecy.
Near on 10 years ago, I was frantically tearing up a year-in-review special report due for the Jan. 6, 1997, print edition of MacWEEK. All the timelines and stories needed rewriting to accommodate the just-announced news of Apple's selection of Jobs and his NeXTstep OS. Throughout 1996, the word was that Jean Louis Gasse of Be and the company's BeOS were all but a done deal.
One assignment that I handed out for this special report was an interview about Apple's upcoming year with a local Silicon Valley psychic. If it was good enough for Nancy Reagan, why not for Apple?
Leander Kahney spoke to "intuitive consultant" Barbara Courtney. She said that she had clients at many tech companies, including Apple, Sun Microsystems, Hewlett-Packard and Motorola, as well as politicos in local and federal government. (And we wonder why things are the way they are?)
However, looking back on the story, Courtney fares well in the prediction department. Long before the announcement of the Apple-NeXT Software merger, the psychic predicted the return of a "shadowy figure from Apple's past," Kahney wrote.
Here's a snippet from the article: "I wonder who it is that left early on that might be coming back to the company?" Courtney pondered. "I don't get a name, but it feels like [someone from] when Apple was the newest and hottest thing on the block, someone at a higher level will get reinvolved again in the same capacity. It feels like someone is coming full circle."
Wow. Of course, she backpedaled a bit on this prediction when Leander quizzed her about Be, which at the time was reportedly leading the race. We can only assume that this outside information led her astray.
Who figured that Jobs would return? Nobody. The return of Steve Jobs was a super-secret held only in the top echelons of executive management.
In addition, she had a couple of other solid hitson the standing of then CEO Gil Amelio and his management team and the performance of Apple stock. Remember that at the time, Apple was still digesting its latest reorganization and in April had recorded a $740 million loss.
Courtney said pressure would break up the top executive team in the middle of 1997. "I don't see the team there now falling into place. I don't know who's leaving, but I would say there will be a change in one of those positions," she said in the story.
In that summer, Jobs commanded his own putsch of Apple's top ranks. Amelio and Ellen Hancock departed in July, and Jobs was named CEO shortly thereafter.
The psychic also suggested that Apple stock was a good investment, countering the doomsayers then in the media and analyst ranks. Apple has been called "dead" many times, including by the editors of PC WEEK, the successor publication to eWEEK.
"When people called me and said, 'Oh dear, I've got stock in Apple,' I told them to hang on to it. ... If I had more disposable income I would definitely buy stock in Apple," the psychic said then.
Apple's stock price was about $12 at that time in 1996; it closed around $85 the other day. It's also split twice since then. Here's a 10-year chart from InvestorGuide.com.
Next Page: The Steve Jobs difference.
With constant holiday looping of "It's a Wonderful Life" fresh in our memories, it's easy to wonder what might happen were Jobs removed from Apple's picture. (It wouldn't take much of an imagination to figure the changes in reality if Jobs hadn't been born at all, which is the character George Bailey uncovers in the movie.)
Still, even with Clarence the Angel in mind, it would be difficult to target Apple strategic decisions over the past 10 years where Jobs didn't make a personal difference. So, the Apple-Jobs/Jobs-Apple identification isn't hooey.
However, looking through the long list of accomplishments over the decade, it seems to me that there were a small number of decisions and events that only Jobs could carry out and be successful. These were momentsmost in the early part of his latest tenurethat relied upon Jobs' authenticity as a founder of the company as well as the communication that he still had a personal stake in Apple's direction.
Here's my shortlist for these crucial events:
Worse, were rumors that Microsoft might pull the plug on Mac development. Microsoft Office was the glue that kept the Mac holding on in some businesses and the enterprise. And MS Word was the leading word processor on the Mac (and still is) and was a central component for the professional content creation workflows on the Mac platform.
Jobs took the stage of the Boston Macworld Expo and rallied the audience of Mac VIPs, analysts and developers. This was no lovefest, however, and Jobs was greeted on many occasions with boos and catcalls.
The most reassuring thing to many that day was that Apple would settle its ongoing patent lawsuit with Microsoft, with Redmond guaranteeing Mac versions of Office for another five years. There were other parts of the deal, including a minor investment ($150 million) by Microsoft in Apple stock.
"Apple lives in an ecosystem. And it needs help from other partners; it needs to help other partners," Jobs said. "Relationships that are destructive don't help anybody in this industry as it is today. During the last several weeks, we've looked at relationships. One [relationship] stood out as one that hasn't been going so well, but has the potential to be great for both companies: Microsoft."
This message was greeted with a mix of applause and groans. The crowd grew more boisterous as Jobs ran through the details of the deal. You can hear some of the reaction on this YouTube video clip.
Still, Jobs kept his cool, and this message was generally accepted in the months that followed.
"We have to let go of the notion that for Apple to win, Microsoft has to lose. We have to embrace the notion that for Apple to win, Apple has to do a really good job. If we screw up, it's our fault," Jobs continued.
Next Page: Jobs keeps developers on the Mac and navigates the Intel transition.
Before the confab, MacWEEK reporters checked the pulse of developers, and the mood was dark.
"Apple has squandered the attention that I was willing to pay over the course of the past few years, and most especially during the past few months. It's time for me to pay attention to vial development platforms," one developer said, pointing to the Windows market.
Worse, when the NeXT squad arrived in Cupertino, they came as heroes riding in to save the day (meaning they were seen as conquerors by the existing Classic Mac and Copland teams). There was a lot of bad blood inside the software groups over who knew best for the Mac and the Mac interface.
It took Apple a good year and a half to sort out the road maps and to present a new vision for the future of the Classic Mac OS and the new Unix-based one, now called Mac OS X. The plan that Jobs presented in the spring of 1998 included a refined and workable plan to run Classic applications under OS X; Quartz, a new PDF-based graphics engine; and a laughable schedule that predicted the release of Mac OS X Version 1.0 in fall of 1999.
Jobs spent a lot of time at these conferences talking to developers in town-hall meetings. I witnessed one of these sessions, where he was very ingratiating to the audience. This personal effort helped restore the confidence of ISVsalong with increasing sales of iMacs and PowerMac hardware.
This transition could have gone terribly wrong. But it didn't. Apple now has a growing group of large and small developers writing for the platform, which is the largest base of Unix desktops.
For comparison with the dog days of 1997, there were some 4,200 developers from 48 countries at the 2006 WWDC in San Francisco, not counting the 1,000 Apple engineers. More than a half-million people are registered with Apple's Developer Connection site, the company said, although many of them must be enthusiasts, IT managers and other fellow travelers.
With this success, it's hard to remember back to the 2005 developers conference when Jobs revealed Apple's shift to Intel processors.
"It's good news, but one of the scariest things Apple has announced in long time," said Leonard Rosenthal, chief innovation officer at PDF tool vendor Apago, of Alpharetta, Ga., immediately after the 2005 WWDC announcement. While he said it was the "right decision," he told me that sales could take a hit. "There's big-time uncertainty."
Notice the comments of Eric Prentice, CEO of Dr. Bott, a Wilsonville, Ore., peripheral vendor. He worried over the number of times that Jobs had reiterated a line about Apple's health during the speech, as if that repetition were somehow a sign that the company really wasn't in good shape and that developers needed extra doses of assurance.
"But I have faith in Steve," Prentice said.
Again, we see the trust of the Mac community in the word of Steve Jobs. He said the transition would be good for the platform, and we buy the message.
Of course, I've left off many other important actions that Jobs had a hand in, and some readers may consider them even more important. But I've focused on something only Jobs seems to possess: the trust of the Mac industry.
So we return to the question: Can Apple do without Steve Jobs?
Perhaps the answer can be found in another question: Do we see the need for Jobs to spend this trust capital in the near future?
I don't see it. Is there a problem or looming transition on the order of OS X? Certainly not in the future move toward 64-bit computing. Or in content services on the consumer side.
The installed base appears content, although the summer's issues with the MacBook notebook may herald a concern for the future.
Mac sales are up, and Mac customers are purchasing software and peripherals. From what I hear from developers, Mac customers still purchase more third-party products than their Windows counterparts.
To succeed, Apple must continue to execute on its plans. That's what Jobs said in 1997. And that can be accomplished without Steve Jobs.
Please note that I'm not saying Apple would be better off without Jobs. No way. He's amazing and entertaining. I wish him only health and job security for the years ahead.
But the current FUD around his status should stop.
What do you think? Can Apple, the Mac and the iPod do without Steve Jobs? Let us know here.
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