Sculley Steps Down as Apple Chairman : Widely Expected Move Is One in Series of Shake-ups at PC Maker


John Sculley, the one-time Pepsi marketer turned technology visionary, resigned Friday as chairman of Apple Computer Inc., ending a 10-year tenure with the company that he helped turn into a powerhouse seller of easy-to-use computers.

The departure, which had been widely expected since Sculley, 54, relinquished his duties as chief executive on June 18, was announced a day after the company reported anemic profits for its fourth quarter and the exit of Robert Puette as president of the key Apple USA division.

Apple named as Sculley's successor A. C. (Mike) Markkula Jr., 51, a technical wizard and entrepreneur who raised the venture capital to found Apple and was its first chairman, from 1977 to 1981.

Markkula has held the vice chairman's title for several years. As chairman, he will still take a back seat to chief executive Michael H. Spindler, Sculley's successor in the top spot, who has brought rapid change to a company caught in the downdraft of falling personal computer prices.

In a sign that Wall Street might think the worst times are behind Apple, the company's shares rose $4.50 to $28.25 in heavy trading on Nasdaq.

Puette was the latest casualty in a shake-up of executives and board members that began in June, when Apple began suddenly slipping into a financial quagmire resulting from a brutal price war in the personal computer business and some strategic business mistakes, many of them blamed on Sculley.

When Sculley gave up his post as chief executive, the company and he steadfastly maintained that it was his idea to focus on strategy and leave the day-to-day running of the company to Spindler.

Last month, however, a wrongful-dismissal lawsuit filed by ousted board member Albert A. Eisenstat alleged that Sculley had been forced to step down and that the board and he had engaged in an elaborate cover-up. Eisenstat said it became clear to directors last spring that Sculley had lost his focus on day-to-day operations and that the company needed a full-time CEO. Discussions were then held with Spindler, who expressed his desire to have the job, the suit added.

Apple, based in Cupertino, has said the allegations are without merit.

In recent days, Sculley had insisted to a Business Week reporter that he had no plans to leave Apple altogether, even though he had been shopping for office space in Greenwich, Conn., and has voiced interest in starting his own company. He is said to be interested in an entertainment or multimedia venture. An Apple spokesman said Sculley was not available for comment Friday.

Since relinquishing his day-to-day role at Apple, Sculley has been traveling to promote the company's recently introduced Newton Messagepad, a hand-held communicator that is a pet project of his but has been plagued by software errors and poor publicity.

Sculley took on the task of running Apple in 1983 at an earlier crossroad, when the company needed stable leadership after its headline-grabbing start-up phase. The company has grown apace since then--from $600 million in annual sales to $8 billion.

He and co-founder Steve Jobs--whose vision of the easy-to-use Macintosh computer accounts for most of the company's success--had a cozy partnership until 1985, when Sculley pushed Jobs out in a bitter power battle.

That action and others alienated Sculley from the Silicon Valley technical community, which has criticized him for missing the chance to make the Mac a broad-based industry standard, a role taken on by Microsoft Corp., and for being late to market with products such as a notebook computer, a color Macintosh and a low-cost Mac.

"I think it was sort of apparent he had lost interest in actively participating in Apple," co-founder Wozniak said in an interview. "He has probably been approached by a million companies."

Wozniak praised Sculley for taking over the company at a difficult time and making the Mac "a more viable product."

Sculley has pooh-poohed speculation that he would head a big company such as Eastman Kodak Co., although Wozniak, who spends much of his time teaching computer skills to elementary school students, said Kodak "makes sense" because of its work in digital photography, a technology "that would change our lives."

Bio: A.C. (Mike) Markkula Jr.

With the resignation of John Sculley as chairman of the board of Apple Computer Inc., Armas Clifford Markkula Jr., one of the firm's founders, ascends to the chairmanship.

Age: 51

Hometown: Los Angeles.

Education: Bachelor's and master's degrees in science, both from USC.

Career Highlights: Markkula lined up venture capital to start Apple Computer with Steven Jobs and Stephen Wozniak in 1976. He served as its first chairman--from 1977-81--and has been a director since 1977. He was named CEO in 1981 but stepped aside for John Sculley in 1983. Previously, Markkula was marketing manager for Intel Corp. and Fairchild Camera & Instrument Corp.'s semiconductor division. He also was a member of the technical staff at Hughes Aircraft's R&D; laboratory and was co-founder of Echelon Corp., a Palo Alto producer of computer chips that talk to one another.

Hobbies: His passion is skiing. He founded Volant Ski Corp., a Boulder, Colo., ski maker, in 1990.

Family: Married, with two children. Markkula lives in Woodside, Calif. His main source of wealth is Apple Computer stock, worth something under $200 million.

Quote: "The utopia for Echelon is that you'll be able to walk into any hardware store and any gadget you buy will have one of our chips embedded in the base."

The Career Path of John Sculley

Always a whiz at marketing, John Sculley has succeeded most of all at marketing himself. It's a task he can tackle anew now that he has resigned as chairman of Apple Computer Inc. Not that there's any big rush; Sculley is quite wealthy.

1963: Joins Marschalk Co. in New York City

1967: Joins Pepsi-Cola Co. as director of marketing

1970: Becomes company's youngest vice president, responsible for marketing

1974: Named president of PepsiCo Foods, and will transform the money-losing operation into a profitable enterprise

1977: Becomes chief executive of Pepsi-Cola Co. and launches the widely acclaimed "Pepsi Challenge" campaign of blind taste tests; will succeed for awhile in ousting Coca-Cola as the nation's No. 1 soft drink

1983: Apple Computer co-founder Steven Jobs asks: "Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?" Sculley becomes chief executive of Apple, getting a $1-million signing bonus, $1 million in annual pay and options on 350,000 shares of Apple.

1985: Dismisses executive vice president Jobs amid lagging sales and dissension among Apple employees

1986: Named chairman of Apple. Under his leadership, Apple's annual sales explode to $7.9 billion in 1993--from $982 million in 1983.

1993: Resigns from Apple

Sources: Dataquest; Current Biography Yearbook

Researched by ADAM S. BAUMAN / Los Angeles Times

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