Apple Rehires Co-Founder Jobs to Lead Recovery
Steven P. Jobs, the charismatic entrepreneur who all but invented the personal computer industry, made a triumphal return home Friday as Apple Computer Inc. announced that it will rehire its co-founder and one-time chairman as part of a bold turnaround plan.
Bringing one of the most colorful dramas in American business history full-circle, Apple will also pay $400 million to acquire Next Inc., the company Jobs started after he was abruptly ousted from Apple 11 years ago in one of the most talked-about corporate firings ever.
Next’s technology and several of its senior executives will join Jobs in a high-stakes effort to create a new type of personal computer to replace the aging Apple Macintosh and challenge “IBM-compatible” PCs based on software from Microsoft Corp.
At a news conference Friday evening at the Apple campus here, Apple chairman Gilbert F. Amelio called Jobs “not just a visionary by reputation but a visionary in fact” and said his return would “launch a renaissance at Apple.”
Jobs will formally become a consultant to the company, reporting directly to Amelio and advising on a range of strategic and technical issues. Jobs was uncharacteristically modest about his new role, saying he did not expect to be the public face of Apple and was uncertain how many hours he would be working.
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“I have a very rich life and I like it,” he said. Indeed, Jobs serves as chairman of Pixar Inc., the computer animation company that created the film “Toy Story,” and is now the father of three children. But Amelio indicated he expected Jobs to play an important if vaguely defined role.
Under Jobs’ leadership, Apple rose to prominence in the late 1970s, producing the first widely popular PC--the Apple II--and then, in 1984, the revolutionary Apple Macintosh. The Mac replaced arcane text commands with a graphical interface and a pointing device called a mouse, making computers accessible even to technophobes.
But Jobs, a mercurial figure ill-suited to running a large corporation, was ousted in a bitter 1985 power struggle by John Sculley, a former Pepsico marketer who Jobs himself had hired to manage Apple. Microsoft Corp., in the meantime, mimicked the key features of the Mac with its Windows software, and by the early 1990s the relatively expensive Macintosh had become a minor sideshow in an industry dominated by cheap PCs running Windows.
Sculley was deposed in 1993 in favor of ambitious insider Michael Spindler, and he in turn was fired earlier this year in favor of board member Amelio.
Amelio was given responsibility for turning around a company that was hemorrhaging money and talent and lacked any clear strategy for restoring its technological leadership. Amelio stopped the money losses with layoffs and other cost-cutting measures, but until Friday had not laid out a strategy to address the broader problems.
The conversations with Next and Jobs began with a phone call from a Next engineer to Apple’s chief technologist, Ellen Hancock. Next, which Jobs launched to challenge Apple, jettisoned its hardware operations several years ago and was itself struggling, but it did have a highly regarded software operating system.
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Discussions began in earnest three weeks ago after Apple’s negotiations to buy Be Inc.--a computer start-up company with leading edge software that was founded by another charismatic ex-executive, Jean-Louis Gassee--stalled over price.
Jobs made a presentation to Apple executives on Monday morning in which he outlined how Next’s software could be adapted to Apple’s hardware. Sources said it was a virtuoso performance, with Jobs convincing the board that an unfinished Apple operating system called Copland could be grafted onto Next’s operating system, thus salvaging nearly half a decade of engineering work.
By midweek, Apple had signed an agreement in principal to acquire Next. The board approved the deal during a Friday morning meeting. The Friday night news conference followed a long day of speculation during which the company declined to comment on a Times report that Jobs would be returning to the company.
Investors and analysts on Friday were intrigued by the news, but cautious as to whether it would be enough to bring Apple back. It will take some time to produce new software that integrates the Next technology, and even a brilliant new computer line based on the new software would face an uphill battle in taking market share from the ubiquitous Windows-based PCs.
And Jobs himself remains something of a wild card.
“If Steve Jobs is interested in and motivated in helping Apple be successful, then this is a good deal,” said longtime PC industry watcher Stewart Alsop. “The Next operating system was brilliant for its time. Steve correctly perceived where the personal computer is going.
“But when I talked to Steve about Apple a year ago he said it was doomed, and I can’t think of anything that’s happened in the last year to cause him to change his mind,” Alsop continued. “I think the real scenario is that Steve Jobs is trying to get out of a bad situation, which is what Next has become, and he’s using his old company to do it.”
Apple stock, down in early trading, closed up $1.25 at $23.50 a share on the Nasdaq stock market before the formal announcement was made.
But others were more upbeat. “This is very sweet,” said longtime Apple watcher Tim Bajaran, president of Creative Strategies, a San Jose consulting firm.
Inside Apple, longtime loyalists were jubilant, with one even digging out the pirate flag that Jobs had raised over the Macintosh development building in the early 1980s--an episode that marked the beginning of his downfall.
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And Apple’s return to its past will continue in early January when Steve Wozniak, the other co-founder of the company who has long been estranged from Jobs, joins Amelio and his former cohort on the stage at the Macworld conference in San Francisco.
The audience there will be the all-important software developers who must be persuaded to create the applications programs--games and word processors and the like--that will run on the new software operating system. Most major developers devote much of their energy to Windows applications, speeding the decline of the Macintosh.
With its bold stroke Apple has at the very least gotten their attention, and they’ll be waiting to see whether Jobs can once again deliver the goods.
