Bitter Split at Apple Comes to Light : Sculley Says Jobs Won’t Be Missed
Apple Computer runs better without Steven P. Jobs than with him, Apple President John Sculley said Friday.
“Apple has been running now for three months without any involvement at all by Steve Jobs, and the consensus at the company is that things are going much better since the reorganization,” Sculley said in a brief interview before departing for an overseas trip.
Sculley, the man recruited by Jobs two years ago to be president, was commenting on the outlook for Apple without Jobs as chairman. The 30-year-old co-founder of Apple resigned as chairman Tuesday in a bitter falling out with directors and top management.
As for his once-close relationship with Jobs, Sculley said: “We’ve agreed to put the friendship aside.”
Sculley, 46, a former Pepsico marketing executive, said that the company feels no urgency about replacing Jobs as chairman and that no decisions have been made. He also said that the 9% of Apple’s outstanding shares of stock that Jobs still owns isn’t enough for him to instigate a successful takeover.
Jobs’ real duties at Apple ended last May, when directors headed off what Sculley confirmed was an attempted coup by Jobs and then stripped him of all operating responsibilities. Though he remained chairman, Jobs complained in his letter of resignation that there was nothing for him to do.
At the time, Apple tried to put the best possible face on Jobs’ demotion, saying that among his roles would be something called “champion of the Apple spirit.” But Sculley asserted Friday that the “vision” of Apple “doesn’t change whether he’s here or not.”
Though Sculley said he’s “not bitter,” he strongly hinted that Jobs has created legal problems for himself through the manner in which he disclosed plans for a new computer venture last week and then raided Apple of five key executives.
“To have got himself in this predicament is very sad,” Sculley said. “These are issues I can’t go into at this time, but there are some major issues regarding his fiduciary responsibilities as chairman.”
As recently as last fall, when the personal computer business was slowing down dramatically, Business Week magazine was calling Jobs and Sculley a high-flying “dynamic duo,” and there was no public hint of difficulties. But Sculley said it was shortly after that when a serious rift broke out between the two over how to run the company.
In the meantime, Apple said profits in its current quarter will fall as much as 61% below the year-earlier results but will be better than analysts expected because of the results of its recent cost cutting and improved sales of computers to schools.
The company said it expects to earn $12 million to $15 million in the fourth quarter ending Sept. 30. Revenue will be $390 million to $405 million, a drop of 15% to 18%.
Apple’s chief financial officer, David J. Barram, made the estimates in an interview with Dow Jones News Service. He said that plant closings and other steps had improved gross margins and added that “this isn’t a dramatic turnaround, but it is an improvement.”
The Cupertino, Calif.-based company, hard hit by a sudden slowdown in the personal computer market that began last year, lost $17.2 million in the April-June quarter, its first-ever quarterly loss. The loss included a one-time expense of $40 million stemming from the layoffs of 1,200 and the closing of three factories, including one in Garden Grove.
For the current quarter, analysts had expected Apple to break even or perhaps earn 10 cents a share on sales of $375 million or less.
