Cult. Company. Chaos. : Apple Computers Had It All First. But in Today’s World According to Microsoft, Can Anyone Put Them Back In the Game? That’s the Question Everyone’s Asking.

An enthusiastic crowd greeted Michael Spindler as he strolled onto the stage at San Francisco’s Moscone Convention Center one recent afternoon, and the dark-haired, thickset Apple Computer chief allowed himself a puckish grin. Nobody at the famed computer company has had much to smile about lately, what with the stagnant stock price and the embarrassing production problems and the relentless march of arch-rival Microsoft Corp., but here at least Spindler was among friends.

The youthful assembly, gathered for software-maker Macromedia Corp.’s annual conference, was made up mostly of artists and multimedia computer programmers who have long been loyal to Apple and its flagship computer, the Macintosh. It was a revival meeting of the Church of Apple, and Spindler was there to preach the gospel.

“With these very powerful and simple-to-use tools, we are tapping directly into the creative process,” he declared in his thick German accent. “We’re attracting poets, choreographers, writers, musicians, film directors. . . We have a heart for these people. . . These creative professionals want to preserve the integrity of their final product, their art. Apple stays with the creator to make them feel comfortable with this technology.”

He did the technology “demo,” showing how the latest Macintosh, with the help of a new accessory, can create a dramatic roller-coaster simulation of the type once possible only on a costly specialized workstation. The track undulated through three-dimensional space as the car raced along, offering the driver’s point of view. The crowd roared. He invited a couple of guests onstage--Mark Mothersbaugh, formerly of the rock band Devo, and computer game designer Jim Ludtke--and they showed some of their work, and the crowd roared again.

Karen McKee, art director of a Tulsa, Okla., multimedia company, voiced the unwavering convictions of the flock: “I never, ever deviate from the Mac platform.”

Soon enough, though, Spindler was leaving the church and facing another round of difficult questions about Apple’s problems. For every devoted Apple follower these days there are several more disaffected disciples, and they feel deeply betrayed. In their eyes, the company has shirked its responsibilities, squandered its sacred heritage and sullied some of the most promising computer technology ever developed. “It’s amazing how screwed up that place is,” says the chief executive of a major software company, who would speak only on the condition that he not be identified. “It makes me sick. It’s a waste of a great company.”

Almost from the day it was founded in the Silicon Valley 19 years ago, Apple has built computers far superior to anything else around--”insanely great,” in the memorable phrase of co-founder Steve Jobs. With the Apple II in 1977, the company essentially invented the personal computer industry, demonstrating that it was possible--and desirable--to build a powerful computer small enough and cheap enough to fit easily on a desk. Seven years later, with the Macintosh, it came up with a second revolutionary product, a personal computer that anyone could operate by pointing and clinking with a mouse. One major technological breakthrough is usually enough to build a company; two in such a short period is unheard of.

Yet today Apple finds itself with just 8% of the worldwide personal computer market, and many question whether it can survive on its own. It’s a big company, with more than $11 billion in annual revenues and 13,000 employees, but many industry watchers believe Apple is rapidly becoming irrelevant in a business controlled by software-maker Microsoft and computer-chip vendor Intel Corp. These two companies own the technology that’s used in more than 80% of PCs worldwide, including those made by IBM Corp. and Compaq Computer and just about every computer-maker other than Apple. And that’s a dangerous thing, because it means the hundreds of companies that write applications software--word processors and games and communications programs for surfing the Internet--are concentrating their efforts on Microsoft/Intel PCs. Without good software, PCs are nowhere, and that’s where many a skeptic believes Apple is headed.

“For years, when people asked me what kind of computer to buy, if it was for their home or a small business I always told them to get a Macintosh,” says Scott Cook, chairman of Intuit Inc., which makes the popular Quicken personal finance software. “Now I’m torn, but on balance I have to say get a [Microsoft] Windows machine. And I say that out of pain and disappointment and anguish.”

In truth, even today Apple has the technological capabilities, the customer base, the brand-name and the financial resources not only to survive, but to prosper. The world is infatuated with computer technology and culture as never before, and Apple still has what many consider to be the best computers around. What it doesn’t have, though--what it has never had--is the corporate culture and the managerial talent to fully exploit those assets. “The basic problem that Spindler has not been able to address is that Apple can’t walk and chew gum at the same time,” says longtime Apple-watcher Stewart Alsop, editorial director of the trade publisher Infoworld. “The company has never been able to manage itself.”

And that deficiency flows from the same traditions and values that made Apple great: a commitment to building great products, a respect for the views of even the lowliest engineers, and an abiding belief that the company is on a mission that goes far beyond simply selling computers. Apple acolytes have always said they were on a mission to change the world. But somewhere during the voyage from gutsy start-up to industry giant, these lofty values began to get in the way. High quality came to mean high prices. Empowerment evolved into insubordination. Belief in a higher calling transmogrified into an arrogant pretentiousness.

“At Apple, the focus is on building a product that the religious zealots think is an appropriate product, and then telling customers they’re cool if they like it, and that they’re dweebs and lowlifes if they don’t like it,” says Roger Heinen, formerly head of system software development at Apple and now a senior executive at Microsoft. “The religious fervor occasionally causes them to miss what’s going on in the market.” Added another former executive: “Apple is a cult, not a company. It’s always been that way.”

Spindler was named chief executive in 1993 to fix precisely these cultural and managerial problems. He was supposed to be the tough operating guy, the man who made the trains run on time. They even called him “The Diesel,” supposedly for his hard-driving style as head of Apple’s European operations.

And he clearly understands what needs to be done. “We have to be a lot more focused on things,” he said in a recent interview, pointing out the numerous individual market segments where Apple retains advantages and acknowledging the need to serve them better. “But how do you change behavior? That’s the one I’m working on now. But we can’t take the soul out of Apple. It’s a creative place, but in addition to that creativeness, we have to add the discipline and the focus to make this an enterprise that can sustain.”

But Spindler hasn’t delivered, at least not so far. Apple today shows all the signs of a company suffering a management crisis. Mistakes in forecasting demand left it without enough machines on store shelves earlier this year--and some much-needed gains in market share were thus lost. There have been two reorganizations within seven months, four senior executives have departed, and layoffs are imminent. A widely publicized October showdown with his own chief financial officer, the popular Joseph Graziano, left Spindler victorious but bloodied. Rumors that Apple will be sold are now swirling with ever-greater intensity: IBM, Hewlett-Packard, Oracle Corp. Motorola and Canon of Japan have all been cited as possible suitors.

For the moment, at least, Apple chairman A.C. (Mike) Markulla, long the behind-the-scenes power at the company, remains in Spindler’s camp. But many Apple-watchers believe the CEO--a highly intelligent but elusive man--has only a few more months to turn things around.

These sorts of histrionics are nothing new at Apple, which has always served up plenty of human drama along with its cutting-edge technology. Back in the early 1980s, Jobs himself raised a pirate flag over the building that housed the Macintosh development team, signaling a bitter split in the company between those who believed in the Mac and those who were still committed to the Apple II. Jobs subsequently recruited Pepsi executive John Sculley to bring adult supervision to an adolescent Apple--and before long Sculley had thrown Jobs out in a dramatic 1985 boardroom coup.

Sculley, a stiff, ambitious marketing strategist, was always an uneasy fit at Apple. But together with Jean-Louis Gassee, a brainy and charismatic Frenchman who headed product development, he appeared to be successful--at least for a time. He tolerated indignities of the sort that most chief executives would never put up with: a group of engineers even marched on his office in 1989 to protest his policies. But he did move the Macintosh technology substantially further along, broadening the product line, launching the popular Powerbook portables and building a strong identity for the Apple brand. By the time he was pushed out in 1993, Apple’s revenues had ballooned from less than $1 billion 10 years earlier to more than $7 billion.

In the fast-changing computer world, though, where immense fortunes are literally made and lost in a day, Apple’s seemingly impressive growth was actually a big disappointment. And to see why, one need only compare Apple with Microsoft.

Under the stewardship of Bill Gates, Microsoft has become everything Apple is not: a well-managed, highly focused company, committed exclusively to success in the marketplace, with massive profits and firm control over a broad swath of the PC industry. With the launch of Windows 95 earlier this year, it even usurped Apple’s position as the computer industry’s emissary to the pop culture world, renting a famous Rolling Stones song and blanketing the world with an unparalleled marketing blitz.

While Microsoft was buying out an entire run of the London Times and bathing the Empire State Building in its trademark colors, Apple was reduced to a series of plaintive press releases--”When you look at overall system features, Apple thinks it’s clear that a Macintosh is a more advanced, more useful computer than a PC with Windows”--and T-shirts that read “Been there. . . done that.” While a few loyalists pounded away on the Internet computer network proclaiming Apple’s continued superiority, many in the industry were amazed that a company could remain so out of touch: the fact that Apple pioneered many of the technologies that Microsoft uses in Windows 95 simply doesn’t matter. “Unfortunately, they are not at the center of anyone’s agenda anymore,” says Harry Wilker, senior vice president for product development at Broderbund Software, a leading publisher of education and multimedia programs. “My company now asks me to justify why we should do a Mac version of a product. Two years ago that never would have been asked.”

*

The complicated set of developments that shaped the course of the PC industry--and landed Apple in its current predicament--are easy to discern in hindsight, but they were anything but obvious at the time. The launch of the first PC itself in 1974 was hardly even noticed by the computer industry, let alone seen as a revolutionary development, and it was years before companies like IBM and DEC regarded them as anything but hobbyists’ toys.

But a few youths--a restless high school graduate named Steve Jobs, for one, and an ambitious Harvard freshman named Bill Gates--saw the possibilities. With an ingenious early computer designed mostly by partner Steve Wozniak, Jobs launched Apple in 1976, and the Apple II, released the following year, was a sensation. Gates, meanwhile, was busy writing software with partner Paul Allen, and he was in the right place when, in 1980, an aroused IBM decided it had better get into the PC business. The only way for the company to do that quickly was to procure components and software from outside sources, and it was Intel and Microsoft that won the contracts. The IBM PC was a sensation, too. But it was only a couple of years before IBM was reeling under the assault of “clone” vendors who could buy the same Intel chips and Microsoft software and sell their machines as IBM-compatible. By the mid-1980s there were many different types of PCs, but the dominant standard was the IBM-compatible standard--and the main alternative was the Macintosh.

At least from the time the Mac II was launched in 1987, it was clear the Mac was a far superior machine. Its revolutionary software operating system--featuring intuitive graphic icons, simple menus of commands and re-sizable “windows” in which different tasks could be performed in parallel--made it possible to use with virtually no training. The Mac had built-in sound capabilities, it could be hooked easily to other computers on a network, it handled color beautifully, and documents could be printed out on a then-revolutionary laser printer. The IBM-compatible computers had none of this. But they did offer something else: a comparatively low price-tag. While IBM-compatible machines could be had for $1,500 to $2,000, most Macs were in the $2,500 to $3,500 range. In corporate America, where IBM ruled, PCs quickly became the standard. Apple remained the outsider--but with the premium pricing it was making plenty of money.

By the late 1980s, though, many in the Apple community were worried about the company’s determination to keep prices high and to closely guard the technology. The Mac had found some lucrative niches, mainly in desktop publishing and education, and it had a strong following among creative professionals, but with prices so high it had no chance of penetrating a broader market. There were bitter confrontations with software developers, who desperately needed a larger base of Macintosh customers to create demand for their products. Marc Canter, a multimedia software pioneer who was often at odds with Apple management, likened the company to a little kid with a new toy who never let the other kids play. “They had the coolest thing around, but they would never share,” he says.

In fits and starts, an issue that had been floating in the background for years thus began drifting to the forefront: Should Apple license the Macintosh software? Microsoft was starting to make serious money licensing the MS-DOS operating system software to anyone who wanted to build an IBM-compatible computer. If Apple did the same thing with its far superior Macintosh software, a host of companies would soon be competing to build Macintosh “clones,” prices would fall, and the combined market share of the Mac and its clones would soar. Apple, not Microsoft, could control the standard for PC software.

Apple’s unwillingness to license the Mac software is now regarded as its key strategic blunder, relegating it to niche markets and opening the way for Microsoft to rule the PC industry. Sculley, Gassee and other executives could not see their way around the obvious danger that licensing posed--allowing other companies to build Macintoshes would create severe price competition. Apple at the time was making enormous profits on the Macintosh, about $1,500 a machine; if customers had the choice and opted to buy cheap Mac clones instead of the original, Apple would in effect be trading that profit for a software license worth perhaps $50. Gassee, who many hold responsible for the failure to license, says today that he was never opposed to licensing--he simply couldn’t see how the economic model would work. And people close to Sculley say that while he now acknowledges that the failure to license was a mistake, he also points out that there were technical barriers: unlike MS-DOS software and IBM-compatible hardware, the Mac system software was tightly integrated with the hardware. Licensing, indeed, flew directly in the face of Apple doctrine. The company was religiously committed to making the world’s best PCs, and the whole point of software was to make a PC work well. Licensing the software may have seemed easy and obvious in principle, but it was almost unthinkable in practice.

“It’s a difficult model to implement if you have not started out that way,” notes Del Yocum, chief operating officer of Apple from 1979 to 1989. He says it never even “surfaced to a decision point” during his tenure.

Even today, Apple’s inability to cope with the licensing question is painfully apparent. The company announced last year that it would finally license the Mac software, but thus far only five companies--and only one of any size--have been granted licenses. Gateway 2000, one of the largest and most efficient vendors of IBM-compatibles, was interested in a license, but Apple said no. Spindler says this was because Gateway, a mail-order vendor, would have undermined Apple dealers. He contends that Apple is not trying to limit licenses, it merely wants to ensure it can provide the necessary support to licensees, and that all of this will become much easier next year, when machines using a standardized hardware design become available. But many people--both inside Apple and outside--believe the real reason for the slow progress of the licensing effort is much simpler: fear of competition.

*

John Sculley liked to think of himself as a grand strategist, and in the summer of 1991 he negotiated a deal that made him look worthy of that billing: an alliance between Apple and IBM Corp. The venture would bring about “a renaissance of technical innovation,” Sculley proclaimed, uniting the companies in a common effort to create a brand-new personal computer standard. Apple’s next generation of Macintosh computers would use a microprocessor, or computer-on-a-chip, designed by IBM. Motorola, Apple’s previous chip supplier, would help develop and build the new Power PC chips, which were based on a major design innovation known as RISC. And two joint-venture companies, Taligent and Kaleida Labs, would be formed to develop next-generation operating system software and multimedia software, respectively.

The alliance was a most unlikely one, at least on a cultural level. Apple, after all, had entered the public consciousness with the legendary 1984 TV advertisement implying that IBM was nothing less than a totalitarian dictatorship. But both companies were starting to come to grips with a frightening fact: Microsoft’s Windows, the successor to DOS, was proving hugely popular. It gave IBM-compatible PCs some of the nicer features of the Macintosh, but at much lower prices. The partnership between IBM and Microsoft that had created the original DOS PC had unraveled in acrimony, and it was becoming clear that Intel and Microsoft were in firm control of the development of mainstream PC technology.

In characteristic fashion, Apple managed to make the IBM deal work brilliantly in certain respects, but miserably in others. The dangerous but critically important transition to the Power PC chip was extremely well-executed: the machines began shipping last year, and they’re widely seen as top-notch. Almost all Macs are now based on the Power PC.

But IBM still doesn’t build PCs based on the Power PC chip, and it doesn’t build Mac clones--as many expected it would by now. The joint ventures, conceived in haste and implemented over the objections of some of those most intimately involved, were something of a fiasco. Kaleida took a long time to get going, and then set off to develop a multimedia software language that would do everything but walk the dog. Predictably, the venture quickly bogged down, and it was finally closed for good last month. Taligent suffered similar problems--grandiose vision combined with poor execution--and many believe its days are numbered.

*

Dan Eilers, a trim, gregarious man who had been at Apple for 13 years, was preaching the revisionist gospel to a reporter one recent morning. Apple was truly changing its colors, he said, shedding the arrogance of the past and focusing on what customers really need.

“It’s a change from ‘create the products and then find the customers’--the classic Silicon Valley model for an early-stage company--to ‘pick our customers and then create for the customers,’ ” he explained.

No longer would engineering be off on its own, building machines that satisfied the traditional catechism of “insanely great” but did not necessarily appeal to the people who would buy them. Now Apple would really focus: education and desktop publishing and other markets where the company is strong would get special attention, and Apple would work harder at being a full-service company that sold lots of peripherals and services too.

To this end, Eilers had been assigned a few months earlier to build a new worldwide marketing organization. Together with some other operations he headed, the new group would total some 1,000 people, he said. “This is about a fundamental change in how we do business, and change, in a company this size, normally takes two to three years.”

Three days later, Eilers resigned.

Some insiders insist Eilers’ departure was a result of his friendship with Graziano, who had lost the October showdown with Spindler. Eilers and Spindler deny that, maintaining that it was simply more economical to integrate the marketing functions into the sales organizations, and thus Eilers’ job was redundant. Either way, though, the shake-up was a manifestation of the chronic instability and infighting that has always plagued Apple.

“Every nine to 12 months there’s a reorganization,” observes one former executive. “So you get eight months, or maybe six months, and then rumors start leaking about the next reorg, and then there’s a reorg, and then a layoff. It’s self-perpetuating, and it made it a very difficult place to work.”

And even when a reorganization is not on the horizon--or in the near past--current and former employees complain again and again of a culture that makes it impossible to manage. “It’s among the most political places I’ve ever seen,” says Nat Goldhaber, the first chief executive of Kaleida. “There’s a tremendous amount of infighting. They allow people at almost any level of the organization to oppose projects.”

Sometimes this results in great products. Frank Casanova, a director in Apple’s advanced technology group, recalls that a highly regarded 1990 Mac model, the IIfx, was a result of just such free-thinking. Managers didn’t believe that Casanova and his team could do what they were trying to do and ordered them to build something simpler. “So we worked on the conservative and boring one they wanted and kept the IIfx in the back room,” Casanova recalls, a twinkle in his eye. When it came time to ship the “conservative and boring” product, Casanova and his team wheeled out their baby--and it quickly became a big success.

But this way of going about things can also result in endless bickering and wasted resources. It’s a tricky balancing act--encouraging creativity while maintaining order and a sense of direction--and neither Spindler nor Sculley before him ever got it quite right.

Sculley talks privately of the immutable “DNA” of Apple, a genetic predisposition to chaos; he has told acquaintances that his biggest mistake at Apple was trying to fit in, rather than remaking the company in his own image. Sculley was thrown out because the board felt he was spending too much time building his own reputation and not paying enough attention to day-to-day operations. But Spindler hasn’t done a whole lot better.

“Spindler is not in control of the company,” Alsop says bluntly. “His whole attitude is excuses.”

Adds a software industry executive who once worked at Apple: “The leadership of the company has not gone to the mat sufficiently to say, ‘Either you’re on my team, or get the hell out of here.’ If we went over there we’d fire 80% of the people. I’m serious. They need someone like [Compaq Computer chief executive] Eckhard Pfeiffer to go in their and take names.”

The contrast between Pfeiffer and Spindler is instructive. Like Spindler, Pfeiffer was brought in from the European operations in 1993 because the board felt the incumbent chief executive was not running a tight enough ship. Compaq at the time faced a problem that seemed even more intractable than Apple’s: the company had risen to prominence building IBM-compatibles that were better than the originals, but it was pricing itself out of the market.

Compaq’s co-founder and longtime chief executive Rod Canion was firm in his conviction that Compaq could not compete on price without sacrificing quality. But Compaq chairman Ben Rosen disagreed: Out went Canion and in came Pfeiffer--and after a massive layoff and a painful period of reorganization, Compaq began to come back. Soon it was leading the industry’s price wars, and today the company is stronger than ever.

Apple, by contrast, continues to struggle with routine operations. It is much more price-competitive than in the old days, but profits have been anemic. The company is supposedly focused on gaining market share--and indeed it has registered a slight uptick this year, according to the latest market research reports. But it also misread demand so badly that earlier this year it had a backlog of unfilled orders estimated to be worth a startling $1 billion. A damaging brain-drain continues; former Apple executives and engineers now occupy key positions in most of the important companies in the computer industry.

Given the long history of management problems and missed opportunities, it’s remarkable that Apple hasn’t done worse than it has. The technical brilliance of the Macintosh is such that even today the company retains a strong following among the animators, video artists, musicians and avant-garde computer programmers who create CD-ROMs and other multimedia products. In education, the company’s laudable long-term commitment to making computers good teaching tools has yielded an estimated 65% share of the K-12 market, and a position in higher education that is only slightly less strong. In publishing, where people use Macs to handle color photographs and text and create pages for everything from newspapers and magazines to newsletters and advertisements, Apple’s success was more inadvertent but even more sweeping.

“I wonder as many people do whether Apple is really minding the store,” says John Cranfill, publishing technology director for the Dallas Morning News, where some 200 Macs are used to handle color pictures and graphics and produce page layouts for the daily business section. “But when I step back, it’s clear they have pushed the technology substantially further along. We’ve tried to use [IBM-compatible] PCs, and we just gave up. I read so much about Microsoft, but the reality is that in photography and page-building and advertising, it’s the Mac that works.”

From a purely technical point of view, indeed, the latest Macs are killers. Spindler deserves much credit for the nearly flawless transition to the new Power PC microprocessors. The old Mac software still works, and programs written specifically for the new machines fairly scream with speed and graphics performance. Exotic special effects popularized by big-budget movies such as “Terminator II” and “Jurassic Park” can now be produced on a Macintosh. In many corners of Hollywood, Apple rules. Even Apple’s critics agree that when it comes to ease-of-use and reliability, the Mac remains superior to Intel/Microsoft PCs.

Furthermore, Apple’s R&D; division--housed in the airy, green-tinted buildings of the company’s glistening new campus--continues to churn out important innovations. New extensions to the Quicktime multimedia technology, for example, make it possible to do video-conferencing on a PC without any extra equipment other than a small camera, or to take a three-dimensional tour of a physical space. Competence in image and sound technologies gives Apple the opportunity to be an important player in emerging areas such as interactive TV. An Apple box could sit on a TV set and manage the flow of hundreds of channels, some of which would enable the viewer to “talk” back by aiming a pointing device and clicking a button.

Similarly, the amazing development of the Internet computer network over the past 18 months portends a structural shift that plays to Apple’s strengths. The Mac, remember, was good at networking long before networking was trendy. And because of Apple’s penetration in higher education, where the Internet first blossomed, many of those who log onto the global computer network today do it with a Macintosh. Here again the company has made some poor moves: its E-World online service, launched last year, was ill-timed and badly executed. But the Internet boom is young and some of Apple’s new Internet software looks promising.

Another bright spot is a device called the Pippin, a kind of stripped-down Macintosh that will plug into a TV and sell for about $500. The machine won’t have a keyboard or floppy disk drive or many other standard PC components, but it will play multimedia CD-ROM software created for the Mac, and it will also function as a terminal for surfing the Internet. The notion of cheap, simple machines designed to exploit the power of networks has been the talk of the PC industry in recent months, and Apple may again be ahead of the technology curve. It is licensing the Pippin technology from the outset. The development of new categories of consumer computers could even breathe new life into the Newton, a hand-held, pen-operated computer that had a host of widely ridiculed deficiencies when it was introduced in 1993 but is now much improved.

Spindler talks optimistically about the many individual market segments where Apple is a leader, of the “sub-segments” in education and business and consumer computing, of the Apple “point of view”--graphic computing--that has already won out, and of “the beauty of the Internet: It’s an open standard, so here it doesn’t have to be Windows compatible.”

He warns against simplifying a complex industry into sound bites, and talks in a rambling manner that is the very opposite of the sound bite. He notes, justifiably, that Apple is judged differently from other computer companies. “When we’re good, we believe we’re already better than we are. And when we’re bad, they think we’re worse than it really is. It’s totally extreme in both senses.” He’s just returned from the company’s annual worldwide sales meeting, and he admits that employees were discomfited by recent bad publicity, but asserts they are feeling enthused now that they know “the truth.”

*

Still, the latest reorganization and pending layoffs have clearly left many at Apple with a sense of drift. “You go in there and it’s like, ‘who’s in charge?’ ” says a contractor who works at Apple. Markulla, who declined to comment for this story, sold about 20% of his stock in the company a few months ago--hardly a vote of confidence. Talk of a sale continues. And many computer stores, gearing up for what’s expected to be a blockbuster Christmas selling season, are virtually ignoring the Macintosh this year, encouraging the perception that Apple isn’t an important player anymore.

There is little consensus on whether an acquisition of Apple would make things better or worse. Any prospective buyer would face the same challenge that has so confounded the current management: How do you kill off the destructive elements of the Apple culture without killing the company entirely? More concretely, an IBM or a Hewlett-Packard or anyone else would be spending $6 billion or $7 billion to buy great but non-standard software technology, along with a hardware engineering and manufacturing operation that is less than a model of efficiency. And large acquisitions in the information technology industry have never worked very well. Still, sources say IBM made an offer for Apple a year ago and was rebuffed; it may yet come back around.

Original ideas on how to fix Apple’s problems are hard to come by. Alsop suggests that Apple should buy another big computer company, such as the former NCR, and thus force its way into the corporate computing markets that have eluded it. Others talk wistfully of what might happen if a proven managerial superstar--Pfeiffer of Compaq, say, or Andy Grove of Intel--took over the company. But such people are in extremely short supply. Removing Spindler would, in itself, solve little.

“If Mike weren’t there, who would run the company?” asks Richard Shaffer, principal of Technologic Partners in New York, noting that there isn’t a core of strong managers around the chief executive. The most fanciful speculation involves the return of Steve Jobs, whose post-Apple career has finally started to blossom with the success of his computer animation company, Pixar, and the improved fortunes of his computer-maker-turned-software company, Next Inc. But few take this suggestion seriously, and fewer still think Jobs would be any more capable of building a healthy and sustainable culture than he was the first time.

Wozniak, who now spends much of his time working in public schools, is among those who believe Apple is on an OK course--though he does wish the company would do better in making consumer PCs even easier to use. He isn’t alone in believing that major changes are unnecessary. Spindler supporters note the recent improvements in market share and consistently strong customer satisfaction ratings, and assert the chief executive has done about as well as anyone could in coping with an extraordinarily complex set of circumstances.

It’s clear, though, that the patience of the Apple faithful is wearing thin. They desperately want Apple to succeed--indeed, just about everyone involved with computers wants to see one of the industry’s few consistent innovators succeed. As Shaffer says, “Microsoft may be a leader, but they’re not first in anything--they’re a very good follower. If the real innovators in the industry can’t make money, who should Microsoft follow?”

But people like Charles Rudnick, owner of Film and Video Service, a digital video and CD-ROM production company in San Francisco’s “multimedia gulch,” can’t afford to wait. Rudnick isn’t much of a techie himself--he’s a filmmaker by vocation--and he’s always used a Macintosh. Now, though, with his small company facing an expensive investment in 10 new computers, he has to do the cost-effective thing.

“I never liked that ‘backslash’ stuff,” he says, referring to the infamously arcane diction of DOS. “But now we have new projects coming where we’ll need new computers, and the guy who is looking into what we’d be getting says ‘you’d be foolish to stay with Apple.’ It’s a question of bang for the buck.”