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CHAPTER TWENTY-FOUR
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The Loser Now Will Be Later to Win, V, w& _& Q6 v' H+ U) o y: a
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6 a2 ?6 V: O/ q7 v; x& i: G1 [Amelio calling up Wozniak as Jobs hangs back, 1997& z- p8 v9 y. |
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+ A* ?* I! o9 U6 f; l, G* I6 q/ y% J9 nHovering Backstage8 ^/ Y4 z5 \ `1 C+ U+ S- v
. ]! E" G" W. Z# h! m' o- T/ @“It’s rare that you see an artist in his thirties or forties able to really contribute something
. p( L: v% Q4 tamazing,” Jobs declared as he was about to turn thirty.( l* o8 z% i0 E) i. i& {: A
That held true for Jobs in his thirties, during the decade that began with his ouster from, _) h0 k. R0 p0 U7 b# r
Apple in 1985. But after turning forty in 1995, he flourished. Toy Story was released that
* l& c/ V9 Y5 `; vyear, and the following year Apple’s purchase of NeXT offered him reentry into the
# t0 G! [8 y+ @! L) }company he had founded. In returning to Apple, Jobs would show that even people over
. p4 R- }/ k) e* Zforty could be great innovators. Having transformed personal computers in his twenties, he
3 n, a5 V4 n2 z9 Xwould now help to do the same for music players, the recording industry’s business model,
2 {( T ? Y- M- V2 smobile phones, apps, tablet computers, books, and journalism.2 Z6 f5 R5 s* f' j7 w/ [
He had told Larry Ellison that his return strategy was to sell NeXT to Apple, get
z9 W, S1 d, G, q) o$ N. R( T% ^appointed to the board, and be there ready when CEO Gil Amelio stumbled. Ellison may& ~. ]* h2 k9 \ g3 b8 X7 Q$ n. w; Z
have been baffled when Jobs insisted that he was not motivated by money, but it was partly
6 ~6 F% `+ j! v; |true. He had neither Ellison’s conspicuous consumption needs nor Gates’s philanthropic/ [+ Z9 h: q) b: w- h, B5 q
impulses nor the competitive urge to see how high on the Forbes list he could get. Instead: B# |6 y6 {4 A% @1 O' J4 P, H
his ego needs and personal drives led him to seek fulfillment by creating a legacy that& [2 B2 `; |" a0 }2 l. Q/ B
would awe people. A dual legacy, actually: building innovative products and building a! d2 n4 W$ r+ A( s' `, S
lasting company. He wanted to be in the pantheon with, indeed a notch above, people like 0 {1 N) O6 G% G2 R, O6 ~
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9 C9 \! W e. o7 QEdwin Land, Bill Hewlett, and David Packard. And the best way to achieve all this was to
9 E8 e5 m0 [7 B# U) zreturn to Apple and reclaim his kingdom.5 m8 y" Y0 C; }6 R1 W8 w
And yet when the cup of power neared his lips, he became strangely hesitant, reluctant,
$ D4 m0 ~- v+ }# v# @4 n7 Bperhaps coy.
0 G; u0 {. ^6 oHe returned to Apple officially in January 1997 as a part-time advisor, as he had told
/ c" ~7 e; C: b: E% ^6 vAmelio he would. He began to assert himself in some personnel areas, especially in
( G I! o6 _% h/ m% \$ @5 H l6 ~/ N8 O, hprotecting his people who had made the transition from NeXT. But in most other ways he: X+ C, K4 u: K
was unusually passive. The decision not to ask him to join the board offended him, and he7 b- X7 H& `4 E
felt demeaned by the suggestion that he run the company’s operating system division./ N. y6 ^% h3 L1 \, E# ^
Amelio was thus able to create a situation in which Jobs was both inside the tent and: b! i# \, ?3 [1 O/ j# T: `% G& `
outside the tent, which was not a prescription for tranquillity. Jobs later recalled:
1 z2 d q* X3 z/ A# P* H; DGil didn’t want me around. And I thought he was a bozo. I knew that before I sold him
. R& I% h8 S8 Dthe company. I thought I was just going to be trotted out now and then for events like6 v t* D' X! ^
Macworld, mainly for show. That was fine, because I was working at Pixar. I rented an" S1 Y' n. v* A Z7 R
office in downtown Palo Alto where I could work a few days a week, and I drove up to
. T; @* i3 a7 h- I0 `Pixar for one or two days. It was a nice life. I could slow down, spend time with my family." e9 C1 k) d: j
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6 f9 v1 W9 r! m! eJobs was, in fact, trotted out for Macworld right at the beginning of January, and this- S8 B- m0 N; `* ^- S" u
reaffirmed his opinion that Amelio was a bozo. Close to four thousand of the faithful
( C5 `$ u. c9 N; ?% h, \- ^) @! ]fought for seats in the ballroom of the San Francisco Marriott to hear Amelio’s keynote
. j& A8 E, e, O0 b0 G1 r/ M; u$ F; paddress. He was introduced by the actor Jeff Goldblum. “I play an expert in chaos theory in' A. X" s& M1 _. Y* `# e
The Lost World: Jurassic Park,” he said. “I figure that will qualify me to speak at an Apple( M( K4 m& T4 I& ^
event.” He then turned it over to Amelio, who came onstage wearing a flashy sports jacket2 J- b. G- R; |+ [' J
and a banded-collar shirt buttoned tight at the neck, “looking like a Vegas comic,” the Wall
5 M( O$ s* }: n h: EStreet Journal reporter Jim Carlton noted, or in the words of the technology writer Michael( O C' Q" ?; L
Malone, “looking exactly like your newly divorced uncle on his first date.”
3 {) X$ V3 c6 u3 j; k; N2 s' D& v4 lThe bigger problem was that Amelio had gone on vacation, gotten into a nasty tussle/ ]& A/ c6 V$ R. F
with his speechwriters, and refused to rehearse. When Jobs arrived backstage, he was upset
& M# k) l @8 Pby the chaos, and he seethed as Amelio stood on the podium bumbling through a disjointed
* `% ~+ G( x. w! _& zand endless presentation. Amelio was unfamiliar with the talking points that popped up on7 D4 I. Y+ x7 @6 |/ b
his teleprompter and soon was trying to wing his presentation. Repeatedly he lost his train
2 m6 N- v9 F+ X* h h% G8 Iof thought. After more than an hour, the audience was aghast. There were a few welcome
- U o, J: u3 O, sbreaks, such as when he brought out the singer Peter Gabriel to demonstrate a new music: t2 A- M3 n. `- ]# v
program. He also pointed out Muhammad Ali in the first row; the champ was supposed to& Z9 n" D- |# v6 r; C- v2 A
come onstage to promote a website about Parkinson’s disease, but Amelio never invited4 x" ^; H7 R' v1 |3 [' ]! L
him up or explained why he was there.% ^- b) N5 f# W0 m
Amelio rambled for more than two hours before he finally called onstage the person
* e R" b0 L b* E7 U& A5 R; q* B$ Teveryone was waiting to cheer. “Jobs, exuding confidence, style, and sheer magnetism, was0 V9 P) p* F* r% s& q# Z3 u! g
the antithesis of the fumbling Amelio as he strode onstage,” Carlton wrote. “The return of
$ j; Z1 @- t# Z' T ~Elvis would not have provoked a bigger sensation.” The crowd jumped to its feet and gave
; Z. p+ R+ z$ Q& f' b& nhim a raucous ovation for more than a minute. The wilderness decade was over. Finally
/ U* \/ P3 V( t/ H( A# gJobs waved for silence and cut to the heart of the challenge. “We’ve got to get the spark + n( ~4 k+ F, }3 q( C8 K
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back,” he said. “The Mac didn’t progress much in ten years. So Windows caught up. So we
7 z& Y5 n% ~0 B2 k! Z3 p) `2 uhave to come up with an OS that’s even better.”# K! y. C% R# Y& O6 h& I: \( U
Jobs’s pep talk could have been a redeeming finale to Amelio’s frightening performance.% t" G7 K6 K- C6 s
Unfortunately Amelio came back onstage and resumed his ramblings for another hour.; g- Y8 W1 ?& P4 F! ^" t" f
Finally, more than three hours after the show began, Amelio brought it to a close by calling& }) Y6 e# w# _) u/ R5 V
Jobs back onstage and then, in a surprise, bringing up Steve Wozniak as well. Again there
: I& c2 ^* ^ Z6 s- G5 F D+ \was pandemonium. But Jobs was clearly annoyed. He avoided engaging in a triumphant. V" `+ r, ^' r+ Q1 B8 _
trio scene, arms in the air. Instead he slowly edged offstage. “He ruthlessly ruined the9 T, U" n9 r5 \: A d O
closing moment I had planned,” Amelio later complained. “His own feelings were more
- G5 T6 D+ n# Fimportant than good press for Apple.” It was only seven days into the new year for Apple," I Q$ {# H" T( y% E
and already it was clear that the center would not hold.$ [3 N) J. P3 y; u% p% g9 f
2 ]6 E$ g4 D3 p) e! S* hJobs immediately put people he trusted into the top ranks at Apple. “I wanted to make sure
7 h# w; P; U8 P1 G" X4 J* l# d: uthe really good people who came in from NeXT didn’t get knifed in the back by the less: }1 N+ F# [5 h# |# z
competent people who were then in senior jobs at Apple,” he recalled. Ellen Hancock, who
4 ]" Z% \4 L3 I. e" hhad favored choosing Sun’s Solaris over NeXT, was on the top of his bozo list, especially4 \/ ?8 N. Y- o8 d6 C8 n
when she continued to want to use the kernel of Solaris in the new Apple operating system.' _% D. B5 o1 ~7 D
In response to a reporter’s question about the role Jobs would play in making that decision,
7 [% t9 @" G! }0 y! A) _she answered curtly, “None.” She was wrong. Jobs’s first move was to make sure that two
; ^( h! \1 y+ I1 \. C- [5 ~of his friends from NeXT took over her duties.0 p) F# K# K7 g- l7 T9 V9 @0 F
To head software engineering, he tapped his buddy Avie Tevanian. To run the hardware
0 f6 e6 Z6 f6 x2 }! [% ~( l+ |side, he called on Jon Rubinstein, who had done the same at NeXT back when it had a9 f6 ]5 i! a1 u! d+ e& h3 ^
hardware division. Rubinstein was vacationing on the Isle of Skye when Jobs called him.9 _2 t, x& a$ N1 G
“Apple needs some help,” he said. “Do you want to come aboard?” Rubinstein did. He got9 f/ {: D! c5 S: i
back in time to attend Macworld and see Amelio bomb onstage. Things were worse than he& O0 C- ]# S; c9 d6 D3 I
expected. He and Tevanian would exchange glances at meetings as if they had stumbled
0 |( d! ^+ q& G# X8 q, `: ]& ninto an insane asylum, with people making deluded assertions while Amelio sat at the end- g) k/ V3 [/ P5 P4 W& x
of the table in a seeming stupor.
5 ]! ^" L% O$ TJobs did not come into the office regularly, but he was on the phone to Amelio often.* p; }! c7 \8 P2 z3 e
Once he had succeeded in making sure that Tevanian, Rubinstein, and others he trusted
3 F% x. z6 S. W/ u9 _/ Gwere given top positions, he turned his focus onto the sprawling product line. One of his: W% d) |' s$ A7 i3 V" n7 V& X
pet peeves was Newton, the handheld personal digital assistant that boasted handwriting% `) @. D- v" L8 J8 I
recognition capability. It was not quite as bad as the jokes and Doonesbury comic strip
" d7 C" K4 q9 f ?. wmade it seem, but Jobs hated it. He disdained the idea of having a stylus or pen for writing
9 y$ ]: {/ d8 E3 R8 Don a screen. “God gave us ten styluses,” he would say, waving his fingers. “Let’s not invent
* M4 V8 @* U& g) q" b% P; ]another.” In addition, he viewed Newton as John Sculley’s one major innovation, his pet! D! a* F! A* |* J: O- L$ R
project. That alone doomed it in Jobs’s eyes. s/ L, o% A% a8 H G0 K* f
“You ought to kill Newton,” he told Amelio one day by phone.
; J8 M3 o6 C/ L. c* [; f* CIt was a suggestion out of the blue, and Amelio pushed back. “What do you mean, kill
; q2 L; w: k T" `) Kit?” he said. “Steve, do you have any idea how expensive that would be?”
. Z- a b0 { x! Q2 H; m“Shut it down, write it off, get rid of it,” said Jobs. “It doesn’t matter what it costs.
# i: {; {: E0 p+ _0 d5 K6 fPeople will cheer you if you got rid of it.”
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, E: a( `4 m/ H2 ?0 X+ A“I’ve looked into Newton and it’s going to be a moneymaker,” Amelio declared. “I don’t
) l+ A0 g V+ _( k4 _support getting rid of it.” By May, however, he announced plans to spin off the Newton
6 E7 @# N. P8 L% v$ d; z; Bdivision, the beginning of its yearlong stutter-step march to the grave.4 Z" @+ ]/ k" F, t" S6 C
Tevanian and Rubinstein would come by Jobs’s house to keep him informed, and soon. v2 G8 z1 x. {/ m1 o, }
much of Silicon Valley knew that Jobs was quietly wresting power from Amelio. It was not
5 P0 z0 ?( U# B, t4 Bso much a Machiavellian power play as it was Jobs being Jobs. Wanting control was6 H/ C' [7 t( `% a" ~+ V
ingrained in his nature. Louise Kehoe, the Financial Times reporter who had foreseen this! d- {* E# M$ u, O- Y/ ~+ ~
when she questioned Jobs and Amelio at the December announcement, was the first with
, R# D$ ~5 U- x0 g* L2 Ethe story. “Mr. Jobs has become the power behind the throne,” she reported at the end of9 J3 x, ^- ]2 [- P" v7 @( u
February. “He is said to be directing decisions on which parts of Apple’s operations should( A/ s1 g% l: z
be cut. Mr. Jobs has urged a number of former Apple colleagues to return to the company,! F s8 a; D, w2 B2 M, V, k
hinting strongly that he plans to take charge, they said. According to one of Mr. Jobs’# ~/ a" h# d( e2 y$ S d' |$ E
confidantes, he has decided that Mr. Amelio and his appointees are unlikely to succeed in
' k/ T+ o0 Q& [: e4 N8 O, K- ~$ w4 Sreviving Apple, and he is intent upon replacing them to ensure the survival of ‘his
3 q4 s0 N& C+ A% @+ @company.’”
" T! x) ~9 S/ F" P! ^4 o: X! i$ cThat month Amelio had to face the annual stockholders meeting and explain why the! c5 p/ s% R. T* \( g; f: t
results for the final quarter of 1996 showed a 30% plummet in sales from the year before.* t! H! D% V5 Y* l* M. U
Shareholders lined up at the microphones to vent their anger. Amelio was clueless about4 E* c% }! H; N: g! U! S2 V8 r
how poorly he handled the meeting. “The presentation was regarded as one of the best I& T: G! v' c7 h
had ever given,” he later wrote. But Ed Woolard, the former CEO of DuPont who was now
! N8 R( ~1 o( A( o: L8 mthe chair of the Apple board (Markkula had been demoted to vice chair), was appalled.$ @8 t& j) K/ }0 H
“This is a disaster,” his wife whispered to him in the midst of the session. Woolard agreed.
; ^0 l. V8 r8 B$ P4 T; ]“Gil came dressed real cool, but he looked and sounded silly,” he recalled. “He couldn’t+ A# ?; y; k+ [ K
answer the questions, didn’t know what he was talking about, and didn’t inspire any. ]; ?# j9 g5 Y0 y- s3 F# i
confidence.”& m6 ]3 x1 s) r O; {
Woolard picked up the phone and called Jobs, whom he’d never met. The pretext was to
4 E, K& x8 o8 B7 u4 Y( ^* xinvite him to Delaware to speak to DuPont executives. Jobs declined, but as Woolard( J/ e# w, K. p& z+ h
recalled, “the request was a ruse in order to talk to him about Gil.” He steered the phone4 p( @& j' M3 `. b( }& [' Y
call in that direction and asked Jobs point-blank what his impression of Amelio was.* K9 Z4 O# G) w: ?. J
Woolard remembers Jobs being somewhat circumspect, saying that Amelio was not in the0 t- \! t V% L
right job. Jobs recalled being more blunt:
) P4 r: S# l0 K: M! B8 c9 T3 BI thought to myself, I either tell him the truth, that Gil is a bozo, or I lie by omission.
$ ]+ S$ Q S. DHe’s on the board of Apple, I have a duty to tell him what I think; on the other hand, if I tell
. j2 P5 o2 N6 n+ m# Yhim, he will tell Gil, in which case Gil will never listen to me again, and he’ll fuck the
. @2 w% Q' j8 f# ~7 D5 a/ Ypeople I brought into Apple. All of this took place in my head in less than thirty seconds. I
( `* j$ m3 w; m) q6 I& N! o3 N1 ~finally decided that I owed this guy the truth. I cared deeply about Apple. So I just let him( P0 K9 C9 ]2 g
have it. I said this guy is the worst CEO I’ve ever seen, I think if you needed a license to be+ N+ T9 i: d5 y W( a$ Q2 G
a CEO he wouldn’t get one. When I hung up the phone, I thought, I probably just did a
0 M; W% W4 e: C/ U' F9 preally stupid thing.
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That spring Larry Ellison saw Amelio at a party and introduced him to the technology
& {4 v U# B. o9 N& _- {journalist Gina Smith, who asked how Apple was doing. “You know, Gina, Apple is like a0 B/ m. S9 y3 K- F6 J, `& x" G
ship,” Amelio answered. “That ship is loaded with treasure, but there’s a hole in the ship.
0 N$ s2 ^# q! s8 S4 `- @And my job is to get everyone to row in the same direction.” Smith looked perplexed and/ k' P& a9 ~0 a$ U
asked, “Yeah, but what about the hole?” From then on, Ellison and Jobs joked about the; M2 p9 k- @3 T) F. @9 x
parable of the ship. “When Larry relayed this story to me, we were in this sushi place, and I
h# S4 c) d; n5 ^- y% rliterally fell off my chair laughing,” Jobs recalled. “He was just such a buffoon, and he took
) d# c: g B# x9 f$ x# yhimself so seriously. He insisted that everyone call him Dr. Amelio. That’s always a
& g) r6 M& q0 r: Lwarning sign.”
: {3 K/ P% \) TBrent Schlender, Fortune’s well-sourced technology reporter, knew Jobs and was: O) V( O/ I% u
familiar with his thinking, and in March he came out with a story detailing the mess.$ P5 [2 P# q2 ~# q# Q2 D& _! U) Y3 L
“Apple Computer, Silicon Valley’s paragon of dysfunctional management and fumbled
5 l1 p; {: I# J! n9 e1 K8 B stechno-dreams, is back in crisis mode, scrambling lugubriously in slow motion to deal with1 \ K m4 r8 U" J& N; k3 K
imploding sales, a floundering technology strategy, and a hemorrhaging brand name,” he$ _& x/ a0 K1 t$ j
wrote. “To the Machiavellian eye, it looks as if Jobs, despite the lure of Hollywood—lately# C$ p2 S$ n. P" ?
he has been overseeing Pixar, maker of Toy Story and other computer-animated films—, H/ Q1 D1 H) N' ~: _; V6 s$ K
might be scheming to take over Apple.”
4 L8 t1 h- T$ s" h+ H3 u5 u) nOnce again Ellison publicly floated the idea of doing a hostile takeover and installing his
% j L5 m/ r8 b: T: ]0 r/ |“best friend” Jobs as CEO. “Steve’s the only one who can save Apple,” he told reporters.! Q2 k: Q& y& t! a& R
“I’m ready to help him the minute he says the word.” Like the third time the boy cried
' t3 \& y! P9 m. ?+ f1 Twolf, Ellison’s latest takeover musings didn’t get much notice, so later in the month he told
# z3 e- ?( d/ p2 pDan Gillmore of the San Jose Mercury News that he was forming an investor group to raise) I) n! T3 g' [( g Z1 e
$1 billion to buy a majority stake in Apple. (The company’s market value was about $2.36 m: T2 H G% Z# V
billion.) The day the story came out, Apple stock shot up 11% in heavy trading. To add to
3 r6 l1 a m, t& @5 qthe frivolity, Ellison set up an email address, savapple@us.oracle.com, asking the general
: k- @! z* G, e* ]- G4 rpublic to vote on whether he should go ahead with it.
6 z! T! \- Q/ K2 b) bJobs was somewhat amused by Ellison’s self-appointed role. “Larry brings this up now: T Z; ^( _: X6 D, ^2 J0 V
and then,” he told a reporter. “I try to explain my role at Apple is to be an advisor.” Amelio,
1 Q5 d3 g4 L& e0 |3 M! `however, was livid. He called Ellison to dress him down, but Ellison wouldn’t take the call.0 L- J; v: |7 r# L
So Amelio called Jobs, whose response was equivocal but also partly genuine. “I really! ?5 v4 f( q' o
don’t understand what is going on,” he told Amelio. “I think all this is crazy.” Then he1 Q4 V) H7 f; P# P- V" S
added a reassurance that was not at all genuine: “You and I have a good relationship.” Jobs# E, F" g! K1 ~. ?( i+ l
could have ended the speculation by releasing a statement rejecting Ellison’s idea, but
, J0 L9 P& b: o4 Y, a N% f- F- V) Z- umuch to Amelio’s annoyance, he didn’t. He remained aloof, which served both his interests
. c9 F* r- b+ s6 m! uand his nature.
6 U1 c5 ~( e) mBy then the press had turned against Amelio. Business Week ran a cover asking “Is Apple
% w: t. b6 H5 B! {4 GMincemeat?”; Red Herring ran an editorial headlined “Gil Amelio, Please Resign”; and! G/ I; k4 c9 _: e# V0 A7 q1 ~- s
Wired ran a cover that showed the Apple logo crucified as a sacred heart with a crown of
+ W6 G H' M0 q9 ^7 Qthorns and the headline “Pray.” Mike Barnicle of the Boston Globe, railing against years of. ^. m! i2 T4 p
Apple mismanagement, wrote, “How can these nitwits still draw a paycheck when they
8 p2 @6 F# s, n' q6 H9 }took the only computer that didn’t frighten people and turned it into the technological; D5 h' I. x7 Q5 F6 @3 G6 z
equivalent of the 1997 Red Sox bullpen?” . A+ G% T+ [! o7 f
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1 G8 w* T e" P1 \3 S( q; D, A- a* Y* b2 T+ M# {. s. U- c" o% p
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When Jobs and Amelio had signed the contract in February, Jobs began hopping around0 }0 X- s! I- _' o6 @
exuberantly and declared, “You and I need to go out and have a great bottle of wine to
& b- Y* `: |* j' k, }celebrate!” Amelio offered to bring wine from his cellar and suggested that they invite their4 @0 C" v; E; X- J0 o
wives. It took until June before they settled on a date, and despite the rising tensions they6 `( s/ G! Q( l6 m
were able to have a good time. The food and wine were as mismatched as the diners;( S; e% O5 E& [$ R2 P
Amelio brought a bottle of 1964 Cheval Blanc and a Montrachet that each cost about $300;5 \8 n3 z, @* ?9 M {
Jobs chose a vegetarian restaurant in Redwood City where the food bill totaled $72.3 q2 k, Z9 p" m4 H) s2 R
Amelio’s wife remarked afterward, “He’s such a charmer, and his wife is too.”& C: m0 g2 C* t. v
Jobs could seduce and charm people at will, and he liked to do so. People such as Amelio% w- t" G9 q6 F% }( ^
and Sculley allowed themselves to believe that because Jobs was charming them, it meant; a b$ O; R- F( n, O
that he liked and respected them. It was an impression that he sometimes fostered by9 h4 P8 \: Y) `* R- L
dishing out insincere flattery to those hungry for it. But Jobs could be charming to people! S. p1 N. k9 _9 @. S* `
he hated just as easily as he could be insulting to people he liked. Amelio didn’t see this
7 A2 d; I$ f9 s3 Y$ |4 W" ]because, like Sculley, he was so eager for Jobs’s affection. Indeed the words he used to
4 G3 k! t* ]5 b. ndescribe his yearning for a good relationship with Jobs are almost the same as those used1 v U/ A1 v6 J8 R8 g
by Sculley. “When I was wrestling with a problem, I would walk through the issue with
! {6 {8 q1 B: _. [& {" _( C; P5 p7 yhim,” Amelio recalled. “Nine times out of ten we would agree.” Somehow he willed1 f7 a- U6 N, @# _* |4 A
himself to believe that Jobs really respected him: “I was in awe over the way Steve’s mind: V* W* a ^" a$ c) b
approached problems, and had the feeling we were building a mutually trusting
9 p. ~7 u `. L4 N f9 vrelationship.”
( c$ k7 o# ]" l8 B+ f# }! v" U! m8 B) W0 FAmelio’s disillusionment came a few days after their dinner. During their negotiations,# ^$ i$ W2 G+ F6 z
he had insisted that Jobs hold the Apple stock he got for at least six months, and preferably
4 @/ f9 @! d: Q8 L' N1 klonger. That six months ended in June. When a block of 1.5 million shares was sold,
# X% y+ h0 q4 I8 G0 y) @Amelio called Jobs. “I’m telling people that the shares sold were not yours,” he said.8 o6 C% B X2 v, q
“Remember, you and I had an understanding that you wouldn’t sell any without advising us S9 W# L) g( I
first.”
: v4 \8 G8 {& t5 V“That’s right,” Jobs replied. Amelio took that response to mean that Jobs had not sold his" Y7 E# g' u% t
shares, and he issued a statement saying so. But when the next SEC filing came out, it( `& p6 `1 s; {( m3 W
revealed that Jobs had indeed sold the shares. “Dammit, Steve, I asked you point-blank
$ u1 p" L8 \2 E, e, D4 @1 Mabout these shares and you denied it was you.” Jobs told Amelio that he had sold in a “fit of
6 C( c" M3 Z+ q1 j2 gdepression” about where Apple was going and he didn’t want to admit it because he was “a
2 X# n% I9 z; Q& {+ Vlittle embarrassed.” When I asked him about it years later, he simply said, “I didn’t feel I
4 x& g6 k4 `. g- O' ^0 Tneeded to tell Gil.”
3 f1 C/ ?& }" L# uWhy did Jobs mislead Amelio about selling the shares? One reason is simple: Jobs
. r; e" }, c; @2 Zsometimes avoided the truth. Helmut Sonnenfeldt once said of Henry Kissinger, “He lies( Y% i8 r) Q0 A/ j# \
not because it’s in his interest, he lies because it’s in his nature.” It was in Jobs’s nature to
/ H. }" U9 A! ?" T: O+ Fmislead or be secretive when he felt it was warranted. But he also indulged in being
8 @+ f8 ~9 S- k# Q4 ubrutally honest at times, telling the truths that most of us sugarcoat or suppress. Both the d+ x" \9 V1 b/ g# o
dissembling and the truth-telling were simply different aspects of his Nietzschean attitude) Z" c9 d" v1 }6 t. h! O4 v+ a
that ordinary rules didn’t apply to him.# B6 y+ G1 v* C' y: T
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Exit, Pursued by a Bear $ ~' q4 T/ l! t. i+ h
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Jobs had refused to quash Larry Ellison’s takeover talk, and he had secretly sold his shares
# w) y' ^; X) }/ iand been misleading about it. So Amelio finally became convinced that Jobs was gunning
: ^( J# L) z, A0 H7 I2 W" d3 Nfor him. “I finally absorbed the fact that I had been too willing and too eager to believe he1 d. R7 J3 z! l. j2 ~* I+ A
was on my team,” Amelio recalled. “Steve’s plans to manipulate my termination were. N7 o! z: @. U3 G5 u5 i2 X
charging forward.” ^. F, d1 {6 g" s
Jobs was indeed bad-mouthing Amelio at every opportunity. He couldn’t help himself.* d' }, j+ H& f) e
But there was a more important factor in turning the board against Amelio. Fred Anderson,& u7 N8 b4 Z* u- M
the chief financial officer, saw it as his fiduciary duty to keep Ed Woolard and the board
2 ]( f7 w# w' i; a' f, xinformed of Apple’s dire situation. “Fred was the guy telling me that cash was draining,/ O6 ~8 k) k3 ?! ~( T8 d
people were leaving, and more key players were thinking of it,” said Woolard. “He made it2 n) F3 ?8 y5 w# G0 I
clear the ship was going to hit the sand soon, and even he was thinking of leaving.” That
: r* f6 E- z% u" f% L; Sadded to the worries Woolard already had from watching Amelio bumble the shareholders3 Q5 s( r2 u% t! i/ ]
meeting." r, C: W; }- P- r0 d4 k, @
At an executive session of the board in June, with Amelio out of the room, Woolard* r% m0 c. f; {3 l* j! S
described to current directors how he calculated their odds. “If we stay with Gil as CEO, I
# r) {) j' l: N- B6 @, J1 T+ `think there’s only a 10% chance we will avoid bankruptcy,” he said. “If we fire him and+ F7 }0 n( c& \* V5 C
convince Steve to come take over, we have a 60% chance of surviving. If we fire Gil, don’t
- j/ }6 d) X9 d& X' aget Steve back, and have to search for a new CEO, then we have a 40% chance of
- b8 `9 @! I- R1 s1 u* w; H' J6 q% ?surviving.” The board gave him authority to ask Jobs to return.
$ \) K) p) c8 G6 uWoolard and his wife flew to London, where they were planning to watch the6 y, {8 A* R* a2 w
Wimbledon tennis matches. He saw some of the tennis during the day, but spent his( t4 T( j6 r& d4 ^# S i/ X! o
evenings in his suite at the Inn on the Park calling people back in America, where it was1 D9 a7 g; E/ h1 W. J
daytime. By the end of his stay, his telephone bill was $2,000.
7 X. Z2 b; ]6 IFirst, he called Jobs. The board was going to fire Amelio, he said, and it wanted Jobs to9 p2 {9 H$ q0 c1 f$ D N: v
come back as CEO. Jobs had been aggressive in deriding Amelio and pushing his own
% p1 k# W' ^7 S+ F$ b5 wideas about where to take Apple. But suddenly, when offered the cup, he became coy. “I
) O$ \& M7 Z5 ?$ ?; B, twill help,” he replied.) l" e8 u! O p5 d L
“As CEO?” Woolard asked.' i- ~2 W( L. }% F1 }
Jobs said no. Woolard pushed hard for him to become at least the acting CEO. Again
! p& ?( K$ S$ _8 E8 I# wJobs demurred. “I will be an advisor,” he said. “Unpaid.” He also agreed to become a board
' X# w, I% d' T2 Pmember—that was something he had yearned for—but declined to be the board chairman." {. F, e1 N6 N7 R* U8 E
“That’s all I can give now,” he said. After rumors began circulating, he emailed a memo to
3 p* I. O% r M6 Q7 ^ d9 }4 _( IPixar employees assuring them that he was not abandoning them. “I got a call from Apple’s
0 _% S- D4 ~5 v- ~6 \8 Eboard of directors three weeks ago asking me to return to Apple as their CEO,” he wrote. “I: a; l8 n) [' p2 h+ g. P9 o- o
declined. They then asked me to become chairman, and I again declined. So don’t worry—
/ X2 ~, l. U2 y5 ithe crazy rumors are just that. I have no plans to leave Pixar. You’re stuck with me.”) B8 B) {6 z4 h; d% U0 ?4 `* ?5 { v$ h
Why did Jobs not seize the reins? Why was he reluctant to grab the job that for two
+ ~$ Y( P. U* f! \decades he had seemed to desire? When I asked him, he said:' i1 Y$ O- b7 q& d' Y( m& {
We’d just taken Pixar public, and I was happy being CEO there. I never knew of
F" ]% f$ U- P; j: xanyone who served as CEO of two public companies, even temporarily, and I wasn’t even& j! S9 p# X s2 `+ `
sure it was legal. I didn’t know what I wanted to do. I was enjoying spending more time7 T5 d& q r3 `7 O4 i9 v# G
with my family. I was torn. I knew Apple was a mess, so I wondered: Do I want to give up, {! B* O( r% h4 x" x3 ?) e
this nice lifestyle that I have? What are all the Pixar shareholders going to think? I talked to
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) A+ R3 l0 j) Y' D2 ?2 Y2 apeople I respected. I finally called Andy Grove at about eight one Saturday morning—too; t& ~+ k( e7 |5 V$ F8 k0 \) B: o
early. I gave him the pros and the cons, and in the middle he stopped me and said, “Steve, I) i& y" q: M0 r* [! ~! P2 i
don’t give a shit about Apple.” I was stunned. It was then I realized that I do give a shit. s. F W9 o3 o3 k3 w9 }
about Apple—I started it and it is a good thing to have in the world. That was when I
9 U+ h+ P9 f5 C6 e4 N' Vdecided to go back on a temporary basis to help them hire a CEO.# R. ?) b$ Q; N9 S( O
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The claim that he was enjoying spending more time with his family was not convincing. He! }3 D: u% ?5 I& A$ O& Q* b/ P
was never destined to win a Father of the Year trophy, even when he had spare time on his
1 j# g) Z. U" lhands. He was getting better at paying heed to his children, especially Reed, but his
# G4 u+ g R; cprimary focus was on his work. He was frequently aloof from his two younger daughters,
; H+ ^- K. @9 J8 \3 f8 vestranged again from Lisa, and often prickly as a husband. k6 R; v! K# m! S. ?" l
So what was the real reason for his hesitancy in taking over at Apple? For all of his2 {! M7 J* R+ @& r; T
willfulness and insatiable desire to control things, Jobs was indecisive and reticent when he
; A- [" X& m1 u: m; j( J, Rfelt unsure about something. He craved perfection, and he was not always good at figuring
( G8 h. R' x& I+ ~7 vout how to settle for something less. He did not like to wrestle with complexity or make
, r4 r* S2 }7 M+ `* j+ N' Aaccommodations. This was true in products, design, and furnishings for the house. It was
* V% c0 I+ X8 G/ J) I$ I" W3 salso true when it came to personal commitments. If he knew for sure a course of action was
+ j: Y a1 `7 v2 q: Y B7 B, tright, he was unstoppable. But if he had doubts, he sometimes withdrew, preferring not to4 b* F/ g# r3 {' o- c' z
think about things that did not perfectly suit him. As happened when Amelio had asked him7 w( `* v( z# I; |
what role he wanted to play, Jobs would go silent and ignore situations that made him5 o l! f& I( X: `! M5 X9 s
uncomfortable.( E6 |) m; k6 t1 m
This attitude arose partly out of his tendency to see the world in binary terms. A person
4 r/ X& t5 U0 b W8 Nwas either a hero or a bozo, a product was either amazing or shit. But he could be stymied# X. ?: U$ b, i
by things that were more complex, shaded, or nuanced: getting married, buying the right) h9 r9 u( r% a" P9 S& B
sofa, committing to run a company. In addition, he didn’t want to be set up for failure. “I
# H: N9 a$ n$ N+ _) ^5 R1 fthink Steve wanted to assess whether Apple could be saved,” Fred Anderson said.
3 U- n/ h& J' ` p2 wWoolard and the board decided to go ahead and fire Amelio, even though Jobs was not
& `* F# G3 U: E# }! g2 hyet forthcoming about how active a role he would play as an advisor. Amelio was about to
0 w, u. @' @1 f6 l _go on a picnic with his wife, children, and grandchildren when the call came from Woolard. E" P4 ?5 m2 V0 Q. \, w5 u7 w
in London. “We need you to step down,” Woolard said simply. Amelio replied that it was+ k. a* j7 Q: d2 ~, X$ R4 h$ M, `
not a good time to discuss this, but Woolard felt he had to persist. “We are going to
+ i1 L0 T# M5 G8 u7 M& E+ [& k* aannounce that we’re replacing you.”3 k6 W/ y3 K8 r+ |9 V+ E
Amelio resisted. “Remember, Ed, I told the board it was going to take three years to get3 r9 N8 h \8 X; Z
this company back on its feet again,” he said. “I’m not even halfway through.”
2 e& A0 K% O2 d) ?9 V9 b“The board is at the place where we don’t want to discuss it further,” Woolard replied.* n' `, `4 r! A6 ~1 \
Amelio asked who knew about the decision, and Woolard told him the truth: the rest of the
" X) B4 h2 @: pboard plus Jobs. “Steve was one of the people we talked to about this,” Woolard said. “His, g, ~4 O: P0 T7 T% B# x
view is that you’re a really nice guy, but you don’t know much about the computer0 k1 V1 `2 r y$ Y6 C, ^& [4 h
industry.”( G0 ~9 V. M- }6 ~& R* m7 }0 X3 n
“Why in the world would you involve Steve in a decision like this?” Amelio replied,1 g8 n# b3 ], F8 c" O! P
getting angry. “Steve is not even a member of the board of directors, so what the hell is he
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( L. _" g+ W, Z, i& s, ?; v
: y$ w; M: v, n, u0 ^4 U% {doing in any of this conversation?” But Woolard didn’t back down, and Amelio hung up to
# T! x/ i O0 V( T/ Ccarry on with the family picnic before telling his wife.! H' P$ E2 A4 V
At times Jobs displayed a strange mixture of prickliness and neediness. He usually didn’t1 v8 x# k# p2 F
care one iota what people thought of him; he could cut people off and never care to speak, J9 `5 `8 ]4 y7 p( k
to them again. Yet sometimes he also felt a compulsion to explain himself. So that evening6 d' ?1 C5 i( s. y( I
Amelio received, to his surprise, a phone call from Jobs. “Gee, Gil, I just wanted you to
, L$ P8 p: W! ]know, I talked to Ed today about this thing and I really feel bad about it,” he said. “I want
2 _& U% M3 V4 }you to know that I had absolutely nothing to do with this turn of events, it was a decision
+ g; R) z& A/ xthe board made, but they had asked me for advice and counsel.” He told Amelio he7 x7 ~" T4 `1 z" V* d
respected him for having “the highest integrity of anyone I’ve ever met,” and went on to S6 o. O6 d5 O8 U# Q/ Q
give some unsolicited advice. “Take six months off,” Jobs told him. “When I got thrown
- ~- S H' x$ q5 q# r/ T k4 x( L. Hout of Apple, I immediately went back to work, and I regretted it.” He offered to be a3 M+ {, r# I0 ^' |% I
sounding board if Amelio ever wanted more advice.
6 [1 Y0 E2 B" h0 G' s5 v$ \Amelio was stunned but managed to mumble a few words of thanks. He turned to his
4 L7 E/ j" b% O% d$ V# K9 Qwife and recounted what Jobs said. “In ways, I still like the man, but I don’t believe him,”! n+ H/ Z6 _# K3 z; _) m) h
he told her.
# u d9 G5 ~$ g n" }“I was totally taken in by Steve,” she said, “and I really feel like an idiot.”, z" ?% t3 K* K, p1 r. b' l1 a9 {8 i* y
“Join the crowd,” her husband replied.% ~/ N4 @9 {) }" @
Steve Wozniak, who was himself now an informal advisor to the company, was thrilled3 z: W5 A' ^! W, }7 ~/ o2 }
that Jobs was coming back. (He forgave easily.) “It was just what we needed,” he said,
/ k7 ?/ n L# |! q“because whatever you think of Steve, he knows how to get the magic back.” Nor did( c/ V& Y+ T4 t3 H/ ~' l$ q
Jobs’s triumph over Amelio surprise him. As he told Wired shortly after it happened, “Gil# X9 G0 `' ` }; e$ j; P
Amelio meets Steve Jobs, game over.”, `* [8 g5 W* f" l! s# `
That Monday Apple’s top employees were summoned to the auditorium. Amelio came in' l. C7 w& `# n
looking calm and relaxed. “Well, I’m sad to report that it’s time for me to move on,” he& R2 _) e+ `% A! w# I
said. Fred Anderson, who had agreed to be interim CEO, spoke next, and he made it clear
`7 r. T; m0 X" \; A5 B3 T. Rthat he would be taking his cues from Jobs. Then, exactly twelve years since he had lost' H* w: g: x: f n3 F
power in a July 4 weekend struggle, Jobs walked back onstage at Apple.( {4 _1 Y' [! e8 S5 Z
It immediately became clear that, whether or not he wanted to admit it publicly (or even5 w3 s8 w8 V! |) w7 L& w# d
to himself), Jobs was going to take control and not be a mere advisor. As soon as he came; I1 T7 }& A# X% ?8 e
onstage that day—wearing shorts, sneakers, and a black turtleneck—he got to work
% W* ]+ b3 N- y" t# @ g. Wreinvigorating his beloved institution. “Okay, tell me what’s wrong with this place,” he8 ?. ^" N# u; b1 w9 H8 H9 v
said. There were some murmurings, but Jobs cut them off. “It’s the products!” he answered.4 e$ K, S5 `( O6 `% K
“So what’s wrong with the products?” Again there were a few attempts at an answer, until
5 T: z @( Z2 H7 A: s. YJobs broke in to hand down the correct answer. “The products suck!” he shouted. “There’s# F5 p5 x% Y0 [
no sex in them anymore!”1 v) [# E3 x r, x
Woolard was able to coax Jobs to agree that his role as an advisor would be a very active6 E5 y" V' I( \ p/ D$ T6 l( y& w
one. Jobs approved a statement saying that he had “agreed to step up my involvement with
& V; p$ r' H3 l3 v" yApple for up to 90 days, helping them until they hire a new CEO.” The clever formulation& M% J- F6 _- b* ?
that Woolard used in his statement was that Jobs was coming back “as an advisor leading
, i6 C9 X, R6 {0 Cthe team.”2 j `; }5 W6 y$ I5 E
Jobs took a small office next to the boardroom on the executive floor, conspicuously7 R/ k) M3 c, N$ U [
eschewing Amelio’s big corner office. He got involved in all aspects of the business: # u6 J9 _( u4 I: J
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product design, where to cut, supplier negotiations, and advertising agency review. He% e$ o" \7 N, Q* b7 p
believed that he had to stop the hemorrhaging of top Apple employees, and to do so he
& C1 C0 M# M* u. n/ ?$ ]+ Ewanted to reprice their stock options. Apple stock had dropped so low that the options had
% _( c+ j+ Z) |( z* U0 Fbecome worthless. Jobs wanted to lower the exercise price, so they would be valuable
# ]+ x% S" _& F/ [5 u( S' \again. At the time, that was legally permissible, but it was not considered good corporate1 y B) B' _3 o
practice. On his first Thursday back at Apple, Jobs called for a telephonic board meeting7 `, v, x1 i7 k/ H1 b, j/ Y
and outlined the problem. The directors balked. They asked for time to do a legal and. \. u1 T8 z, w9 D8 q2 Q
financial study of what the change would mean. “It has to be done fast,” Jobs told them.: t1 w R* H8 }9 w1 @. R
“We’re losing good people.”& @! J7 j' U. W2 O( G4 |
Even his supporter Ed Woolard, who headed the compensation committee, objected. “At
& ^( U* c5 Q1 X/ G' ~1 CDuPont we never did such a thing,” he said.
2 w8 C. H3 E; O# Z/ X" v. L2 F“You brought me here to fix this thing, and people are the key,” Jobs argued. When the4 U6 K, J) X0 r
board proposed a study that could take two months, Jobs exploded: “Are you nuts?!?” He8 u8 a/ l4 N! i4 M+ c1 R* j
paused for a long moment of silence, then continued. “Guys, if you don’t want to do this,
* m( _2 t% g' L: m- p. FI’m not coming back on Monday. Because I’ve got thousands of key decisions to make that
# o# H" i/ M! x1 [; Jare far more difficult than this, and if you can’t throw your support behind this kind of. y9 O4 P+ b5 R; v7 o
decision, I will fail. So if you can’t do this, I’m out of here, and you can blame it on me,+ `3 b$ F6 E, a# D1 j' C
you can say, ‘Steve wasn’t up for the job.’”
5 V7 \# r* Y3 T" GThe next day, after consulting with the board, Woolard called Jobs back. “We’re going to
3 Y6 y0 ?, i/ ^' sapprove this,” he said. “But some of the board members don’t like it. We feel like you’ve
2 \0 \5 o/ W* Z% P1 C. Z5 E t Lput a gun to our head.” The options for the top team (Jobs had none) were reset at $13.25,
8 l" q+ v# i' Q6 S) mwhich was the price of the stock the day Amelio was ousted.. i% A* d2 N8 o$ l- s- I
Instead of declaring victory and thanking the board, Jobs continued to seethe at having to
# I3 g, h9 G- @" ^4 _7 W$ nanswer to a board he didn’t respect. “Stop the train, this isn’t going to work,” he told U" c+ Q5 Q0 R) x6 S4 p
Woolard. “This company is in shambles, and I don’t have time to wet-nurse the board. So I
3 F# L+ F4 z0 }; b3 mneed all of you to resign. Or else I’m going to resign and not come back on Monday.” The. D' B4 Y. ` [! J/ M- ]
one person who could stay, he said, was Woolard.
& l& |8 r( i- B& q3 b8 |& FMost members of the board were aghast. Jobs was still refusing to commit himself to
# P, C1 \& }. x+ c% tcoming back full-time or being anything more than an advisor, yet he felt he had the power
1 x6 N, D4 Q2 u% G, y( F5 ?+ Sto force them to leave. The hard truth, however, was that he did have that power over them.
0 z2 D' \/ [% ~( N* H" p2 EThey could not afford for him to storm off in a fury, nor was the prospect of remaining an
, e" r" O; i9 ]2 f T8 HApple board member very enticing by then. “After all they’d been through, most were glad) y% A! h$ P6 v+ f/ J4 c
to be let off,” Woolard recalled.# f( E+ K+ y1 b+ o
Once again the board acquiesced. It made only one request: Would he permit one other9 }. E5 v2 c( R4 j3 O& j: s
director to stay, in addition to Woolard? It would help the optics. Jobs assented. “They were
3 Y, V; w. G' X, f5 k* tan awful board, a terrible board,” he later said. “I agreed they could keep Ed Woolard and a
$ @- p( u5 B3 H% U. ^guy named Gareth Chang, who turned out to be a zero. He wasn’t terrible, just a zero.: ]0 ?8 C, [0 h9 R9 ^: |6 I X x
Woolard, on the other hand, was one of the best board members I’ve ever seen. He was a. A3 d5 z8 v6 Z& k( ], |
prince, one of the most supportive and wise people I’ve ever met.”- ?- \% T7 q( \* W2 |
Among those being asked to resign was Mike Markkula, who in 1976, as a young
5 b J2 o) C2 X# s) hventure capitalist, had visited the Jobs garage, fallen in love with the nascent computer on
- L8 E$ q# f0 Z) A7 i" F6 w" qthe workbench, guaranteed a $250,000 line of credit, and become the third partner and one-5 z$ s, a5 x/ A& k- _5 @
third owner of the new company. Over the subsequent two decades, he was the one 4 [/ \9 a% U$ M' [# {6 r
9 C: B* o. @. H5 }! p3 y" K
3 ?- ^( ^- ]# J3 g# {; D
3 _* K' I; W; e9 w1 F+ [1 K0 {* |, F! G9 Z- q) q" k! Y: M
4 L5 ? r! R! p' G/ ]' E
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( x1 m+ \: ?& ]6 `constant on the board, ushering in and out a variety of CEOs. He had supported Jobs at
. M$ c. U: D: g* F. Qtimes but also clashed with him, most notably when he sided with Sculley in the3 w8 p' I8 u! N' J$ ]; T
showdowns of 1985. With Jobs returning, he knew that it was time for him to leave.
7 K5 W; F2 G7 U j; x: ^. gJobs could be cutting and cold, especially toward people who crossed him, but he could) }3 B, H* P [
also be sentimental about those who had been with him from the early days. Wozniak fell" Q1 `; r* `8 M6 k+ e U9 y) m
into that favored category, of course, even though they had drifted apart; so did Andy6 W* v& v. o# U
Hertzfeld and a few others from the Macintosh team. In the end, Mike Markkula did as
7 J |" U% n1 T+ }; }well. “I felt deeply betrayed by him, but he was like a father and I always cared about him,”6 I& v) S$ {% Z0 w0 m6 Q7 S
Jobs later recalled. So when the time came to ask him to resign from the Apple board, Jobs
) L' p$ {4 t5 v$ ^1 ^6 Vdrove to Markkula’s chateau-like mansion in the Woodside hills to do it personally. As4 N1 E9 }6 P5 f4 [) v
usual, he asked to take a walk, and they strolled the grounds to a redwood grove with a
* a/ o j# J4 }picnic table. “He told me he wanted a new board because he wanted to start fresh,”3 r3 Q2 q4 ?% e! _- \# l$ A) B
Markkula said. “He was worried that I might take it poorly, and he was relieved when I: F f6 l# v9 W- n" m
didn’t.”7 t9 k5 ]8 T% k1 w. C h/ C% O2 U
They spent the rest of the time talking about where Apple should focus in the future. Z4 Q& ]4 ]% ]8 L y
Jobs’s ambition was to build a company that would endure, and he asked Markkula what6 z% W9 Q4 i) v2 Q4 |- k; Q7 G
the formula for that would be. Markkula replied that lasting companies know how to! i( S3 i: C2 Q1 I
reinvent themselves. Hewlett-Packard had done that repeatedly; it started as an instrument
$ v, g- o! F8 J5 y& b5 Rcompany, then became a calculator company, then a computer company. “Apple has been
l! T' O( G+ x8 ksidelined by Microsoft in the PC business,” Markkula said. “You’ve got to reinvent the7 k5 z! j, L0 b# N8 u. i
company to do some other thing, like other consumer products or devices. You’ve got to be
/ _! _4 l, j; s* Blike a butterfly and have a metamorphosis.” Jobs didn’t say much, but he agreed.
g& K5 Z2 {8 ^ UThe old board met in late July to ratify the transition. Woolard, who was as genteel as8 q0 e$ Y1 o& D* U: O; b6 ~. h
Jobs was prickly, was mildly taken aback when Jobs appeared dressed in jeans and
9 Z% r! @$ ]+ qsneakers, and he worried that Jobs might start berating the veteran board members for6 ~/ [* J0 R( }" Y4 k6 k& w
screwing up. But Jobs merely offered a pleasant “Hi, everyone.” They got down to the
" _; L# u) z' v% v5 f4 s3 Z% O# Sbusiness of voting to accept the resignations, elect Jobs to the board, and empower Woolard
' P% F" U5 `9 l2 h; T- Aand Jobs to find new board members.0 e' |4 U5 a0 M% L6 v2 q! I
Jobs’s first recruit was, not surprisingly, Larry Ellison. He said he would be pleased to
! ]' |: {! |! R- O! Ljoin, but he hated attending meetings. Jobs said it would be fine if he came to only half of- p' J0 L( t* ? f# B! D5 c
them. (After a while Ellison was coming to only a third of the meetings. Jobs took a picture: W, e* P" b) i) K- W
of him that had appeared on the cover of Business Week and had it blown up to life size and
& s# ?( \+ F3 U- Dpasted on a cardboard cutout to put in his chair.)6 r; C) D" E* u. ~
Jobs also brought in Bill Campbell, who had run marketing at Apple in the early 1980s
! r4 l" r/ O; p0 [! b, uand been caught in the middle of the Sculley-Jobs clash. Campbell had ended up sticking
* |; h. J; A) T Pwith Sculley, but he had grown to dislike him so much that Jobs forgave him. Now he was& ^( ?( u i; P
the CEO of Intuit and a walking buddy of Jobs. “We were sitting out in the back of his. ^$ `0 Y7 K) Y/ T
house,” recalled Campbell, who lived only five blocks from Jobs in Palo Alto, “and he said
, M. e' L" T9 @/ p+ [$ H* Y/ `he was going back to Apple and wanted me on the board. I said, ‘Holy shit, of course I will
# J3 C3 ] f$ B+ j. G, Odo that.’” Campbell had been a football coach at Columbia, and his great talent, Jobs said,* d- I) W1 ~$ S; |$ t
was to “get A performances out of B players.” At Apple, Jobs told him, he would get to
) v r7 ` E4 hwork with A players. 3 m: ^2 [' L' q" _
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+ g2 ^5 l) p: k( z S0 G# sWoolard helped bring in Jerry York, who had been the chief financial officer at Chrysler
8 a' h' d1 f# [+ X! m$ ]) C$ L4 ]6 M: {and then IBM. Others were considered and then rejected by Jobs, including Meg Whitman,
- H/ g% i8 }" V2 fwho was then the manager of Hasbro’s Playskool division and had been a strategic planner
! H a2 E w& R! A& @at Disney. (In 1998 she became CEO of eBay, and she later ran unsuccessfully for governor, l- ?3 z: I+ s$ ~: [& s
of California.) Over the years Jobs would bring in some strong leaders to serve on the
o/ O# g" ^4 z+ p! i8 y! Q ^Apple board, including Al Gore, Eric Schmidt of Google, Art Levinson of Genentech,2 e' O* G% i* @2 n! p& t- c
Mickey Drexler of the Gap and J. Crew, and Andrea Jung of Avon. But he always made
! |" M7 H* N( K# L4 z0 @sure they were loyal, sometimes loyal to a fault. Despite their stature, they seemed at times8 D$ T+ i9 {$ v
awed or intimidated by Jobs, and they were eager to keep him happy.( u; [, D$ ]- j/ V, h& Q9 I, ^
At one point he invited Arthur Levitt, the former SEC chairman, to become a board( u* t$ V4 L. i! j( q4 o
member. Levitt, who bought his first Macintosh in 1984 and was proudly “addicted” to
0 B( O) e9 i* {+ iApple computers, was thrilled. He was excited to visit Cupertino, where he discussed the
, P1 T% j% ]. v4 y7 @role with Jobs. But then Jobs read a speech Levitt had given about corporate governance,
4 \# w. _: d r% V% }& n" wwhich argued that boards should play a strong and independent role, and he telephoned to4 {) I4 f) t8 ^# }+ t- @
withdraw the invitation. “Arthur, I don’t think you’d be happy on our board, and I think it1 M6 z+ T0 l+ e6 i8 L2 s% |
best if we not invite you,” Levitt said Jobs told him. “Frankly, I think some of the issues# i+ K, z2 |' d: n- i& Q6 }* m/ O
you raised, while appropriate for some companies, really don’t apply to Apple’s culture.”2 R# v" A5 x5 D: y3 a, u6 n+ e8 w
Levitt later wrote, “I was floored. . . . It’s plain to me that Apple’s board is not designed to- N4 i, l$ {' X9 j( h
act independently of the CEO.”" X: H% o4 q1 P, \9 G8 Y/ D1 ?
]5 y0 P% u T/ o5 J1 \Macworld Boston, August 19977 B- U, d) W9 t: U
0 X6 ^3 n+ p' a; I
The staff memo announcing the repricing of Apple’s stock options was signed “Steve and
7 _, r7 X! b& G& ]* |; e& rthe executive team,” and it soon became public that he was running all of the company’s: N; T2 S) A: r4 V( }- F% V
product review meetings. These and other indications that Jobs was now deeply engaged at0 S- o) f$ _) _9 r& P+ d
Apple helped push the stock up from about $13 to $20 during July. It also created a frisson3 Z: @" x7 ~: _! f. A- Q$ d
of excitement as the Apple faithful gathered for the August 1997 Macworld in Boston.( c- q6 u* T7 O7 w
More than five thousand showed up hours in advance to cram into the Castle convention" i( X4 d8 y& m. H$ S0 n
hall of the Park Plaza hotel for Jobs’s keynote speech. They came to see their returning
4 ? ~9 p8 k* C6 ?hero—and to find out whether he was really ready to lead them again.
, H8 z- w3 Q! z. A- P6 sHuge cheers erupted when a picture of Jobs from 1984 was flashed on the overhead
, P% a. S8 P% g" J- `: w" u5 o J8 Zscreen. “Steve! Steve! Steve!” the crowd started to chant, even as he was still being' [" w2 E1 i4 l/ ^
introduced. When he finally strode onstage—wearing a black vest, collarless white shirt,+ K( U+ y1 N; z5 X5 o$ a$ o
jeans, and an impish smile—the screams and flashbulbs rivaled those for any rock star. At
: b* i. ?. J* Dfirst he punctured the excitement by reminding them of where he officially worked. “I’m& r6 [6 x( n& q- g( X; U+ `
Steve Jobs, the chairman and CEO of Pixar,” he introduced himself, flashing a slide
* b5 s& T% ]' W8 Aonscreen with that title. Then he explained his role at Apple. “I, like a lot of other people,, D+ z5 c4 f1 e! p; W* L6 Z
are pulling together to help Apple get healthy again.”
; K& h* \5 M* L5 u+ k8 |But as Jobs paced back and forth across the stage, changing the overhead slides with a
# N% |3 |: \! gclicker in his hand, it was clear that he was now in charge at Apple—and was likely to
& U/ v: o. z9 h, ?& R, ]remain so. He delivered a carefully crafted presentation, using no notes, on why Apple’s
8 @4 A) o: I* n; Tsales had fallen by 30% over the previous two years. “There are a lot of great people at
. c1 M5 T3 h& v" f! H0 q2 ~Apple, but they’re doing the wrong things because the plan has been wrong,” he said. “I’ve ) B4 }2 R' f" B# b |: A
( |/ G; q$ F- a! Y, n3 m
9 Q) T; }4 S* o) _7 Q* f7 h& y4 @
4 Y: i; e6 I2 K# a& {
! d \6 f( e( `$ B" @
) \; ?, ]2 w; c$ }. [6 X+ m6 \- r# o' a9 `# u' `6 t
4 Y: s/ G% E0 H6 w/ c, g3 k
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" b( R6 V! `0 U* P2 K
found people who can’t wait to fall into line behind a good strategy, but there just hasn’t
; r% j3 |# C' O0 z6 K0 n6 N0 \been one.” The crowd again erupted in yelps, whistles, and cheers.* e i( Y3 S: V$ W
As he spoke, his passion poured forth with increasing intensity, and he began saying
# {! U. k6 r6 Y/ b" e0 ], j“we” and “I”—rather than “they”—when referring to what Apple would be doing. “I think
' `6 ]: Y! t, [you still have to think differently to buy an Apple computer,” he said. “The people who buy' z3 g: u2 w" L6 A
them do think different. They are the creative spirits in this world, and they’re out to
( r3 C8 s2 K0 t' gchange the world. We make tools for those kinds of people.” When he stressed the word
5 p9 |: f; N9 y“we” in that sentence, he cupped his hands and tapped his fingers on his chest. And then, in
6 I; [7 |* ~5 q! R3 ?his final peroration, he continued to stress the word “we” as he talked about Apple’s future.; h1 M. K( G# z9 d7 F) G! g
“We too are going to think differently and serve the people who have been buying our
! l) g7 d7 h3 ~products from the beginning. Because a lot of people think they’re crazy, but in that; G, h: t7 }" s' g1 x
craziness we see genius.” During the prolonged standing ovation, people looked at each
: u+ K: i8 @; U6 I; P5 Lother in awe, and a few wiped tears from their eyes. Jobs had made it very clear that he and
/ i5 y. Y t4 cthe “we” of Apple were one.6 c6 m2 m2 B2 u& E0 n
2 T9 r) J7 P; \0 |
The Microsoft Pact! ^: J6 ~& q1 \. p& s# k% `
# _* Q4 g0 L$ u aThe climax of Jobs’s August 1997 Macworld appearance was a bombshell announcement,
+ b- e9 a. L" d7 F; U, Uone that made the cover of both Time and Newsweek. Near the end of his speech, he paused1 I& d/ _4 b3 @
for a sip of water and began to talk in more subdued tones. “Apple lives in an ecosystem,”8 s ]. {' [5 w1 T
he said. “It needs help from other partners. Relationships that are destructive don’t help6 `. `6 D$ f& X ^
anybody in this industry.” For dramatic effect, he paused again, and then explained: “I’d8 b3 j7 [6 ^5 S( V1 P
like to announce one of our first new partnerships today, a very meaningful one, and that is
+ T& k- `9 P4 I# Gone with Microsoft.” The Microsoft and Apple logos appeared together on the screen as7 {7 o; q( D" r3 W% U! h" m+ `
people gasped.
3 ?, ~3 G9 \) [, mApple and Microsoft had been at war for a decade over a variety of copyright and patent2 P& ^: _/ X1 z/ u6 r' Z, _2 x
issues, most notably whether Microsoft had stolen the look and feel of Apple’s graphical
! c9 r7 J9 n D* f, r9 {; iuser interface. Just as Jobs was being eased out of Apple in 1985, John Sculley had struck a( y" y' l- W% f# s$ y
surrender deal: Microsoft could license the Apple GUI for Windows 1.0, and in return it; [* D1 k% K. U! I) E5 c
would make Excel exclusive to the Mac for up to two years. In 1988, after Microsoft came, S: D& W* C, A( v a0 w) C7 p
out with Windows 2.0, Apple sued. Sculley contended that the 1985 deal did not apply to
" U. F3 d7 N0 i% d/ F& D3 m( qWindows 2.0 and that further refinements to Windows (such as copying Bill Atkinson’s
- N$ x# O# s3 y; m* m ktrick of “clipping” overlapping windows) had made the infringement more blatant. By 19971 e a, \8 x' ]+ s
Apple had lost the case and various appeals, but remnants of the litigation and threats of, w0 a9 `- w2 @/ L( K- g
new suits lingered. In addition, President Clinton’s Justice Department was preparing a# H. f+ Y* ~/ w5 V
massive antitrust case against Microsoft. Jobs invited the lead prosecutor, Joel Klein, to; Z$ y6 W- T( z+ ^* t0 I, B
Palo Alto. Don’t worry about extracting a huge remedy against Microsoft, Jobs told him1 A* C: o8 v. z3 [
over coffee. Instead simply keep them tied up in litigation. That would allow Apple the
: r4 g# c) h3 v# k3 K8 z1 e; y4 a8 eopportunity, Jobs explained, to “make an end run” around Microsoft and start offering6 X/ Q. w# @4 B
competing products.
- F8 h9 E! H- K/ Y7 q3 fUnder Amelio, the showdown had become explosive. Microsoft refused to commit to
- ^4 Y2 ], u, R$ E" R3 w- D# T3 Ideveloping Word and Excel for future Macintosh operating systems, which could have9 k, }. w. f% H) o* b l5 Z1 Y/ t
destroyed Apple. In defense of Bill Gates, he was not simply being vindictive. It was , z, c9 f {; a& e* I, O( T' s
8 O, T- j' H" [# R- Y: w9 ]
j, H3 | Y) f8 s6 ~; g" G1 A
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( R- x+ r0 K4 s# `) Z- \& C( B6 Y1 i, P8 g m/ y
6 R) A& w8 i* x) @9 l' C: j
/ F& A8 H9 W; c1 O1 ]
: U3 z* n9 i* y# p! uunderstandable that he was reluctant to commit to developing for a future Macintosh
* Z" p# b8 }! q& ~$ [: eoperating system when no one, including the ever-changing leadership at Apple, seemed to
: {# U3 {. M: Hknow what that new operating system would be. Right after Apple bought NeXT, Amelio
1 e4 i3 s9 F8 o$ }% m8 n. l, Pand Jobs flew together to visit Microsoft, but Gates had trouble figuring out which of them
8 P1 l( g* V$ K* m6 fwas in charge. A few days later he called Jobs privately. “Hey, what the fuck, am I
& e- o0 K, O; f) y( Ksupposed to put my applications on the NeXT OS?” Gates asked. Jobs responded by' p1 G! o6 z0 y% h& W. `
“making smart-ass remarks about Gil,” Gates recalled, and suggesting that the situation1 Z6 k+ t( O$ Y1 W3 T5 H
would soon be clarified.0 x3 r0 s! x% U0 A
When the leadership issue was partly resolved by Amelio’s ouster, one of Jobs’s first
, {+ E) O2 w9 N7 P3 sphone calls was to Gates. Jobs recalled:
2 M; d x H8 O: h6 RI called up Bill and said, “I’m going to turn this thing around.” Bill always had a soft z2 W6 v- B% x- C& H9 t+ f: h
spot for Apple. We got him into the application software business. The first Microsoft apps3 N S/ q! N( |1 x, |1 s. e7 j
were Excel and Word for the Mac. So I called him and said, “I need help.” Microsoft was
- P7 d: t! O5 p9 ^+ jwalking over Apple’s patents. I said, “If we kept up our lawsuits, a few years from now we: W$ |$ ]! x( Q! M
could win a billion-dollar patent suit. You know it, and I know it. But Apple’s not going to
' W2 p2 P! V1 h9 k( t8 ^, nsurvive that long if we’re at war. I know that. So let’s figure out how to settle this right/ K; T8 s+ B b6 Z- [
away. All I need is a commitment that Microsoft will keep developing for the Mac and an6 t1 r+ w; V. Q2 ], F. G, q2 Z, D
investment by Microsoft in Apple so it has a stake in our success.”
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( G3 y9 o& ~% Y4 R2 f
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When I recounted to him what Jobs said, Gates agreed it was accurate. “We had a group of( e% T8 w1 ]! U3 O& Y1 H
people who liked working on the Mac stuff, and we liked the Mac,” Gates recalled. He had
G( c" v! w: n+ `5 l3 f& F( sbeen negotiating with Amelio for six months, and the proposals kept getting longer and
" v" ]* p. @- f6 Q$ n* wmore complicated. “So Steve comes in and says, ‘Hey, that deal is too complicated. What I
5 h! @; O5 E& C+ Y; X/ \! B8 w7 iwant is a simple deal. I want the commitment and I want an investment.’ And so we put
2 I8 K3 `; f7 ]$ a$ lthat together in just four weeks.”
" \& D4 A Y+ E% G$ J. {Gates and his chief financial officer, Greg Maffei, made the trip to Palo Alto to work out& y# V( O1 t8 H5 Q) s7 h. v2 e
the framework for a deal, and then Maffei returned alone the following Sunday to work on" }/ ^5 M3 Q( N, D N" b
the details. When he arrived at Jobs’s home, Jobs grabbed two bottles of water out of the$ \) N" w+ l) D# X- W- L, f g: A+ `
refrigerator and took Maffei for a walk around the Palo Alto neighborhood. Both men wore
% S! D, i$ N, K' K1 A6 N6 T9 Mshorts, and Jobs walked barefoot. As they sat in front of a Baptist church, Jobs cut to the
. S7 R7 N! \% d$ F$ n0 Ecore issues. “These are the things we care about,” he said. “A commitment to make8 ?4 V% D( N& a6 `
software for the Mac and an investment.”/ B; ] P; d) m/ J8 p3 u
Although the negotiations went quickly, the final details were not finished until hours
* ~6 F. n, D6 T' c4 m9 xbefore Jobs’s Macworld speech in Boston. He was rehearsing at the Park Plaza Castle when
- D, a+ d2 \" F( [8 nhis cell phone rang. “Hi, Bill,” he said as his words echoed through the old hall. Then he+ @* q, X" v9 V+ p
walked to a corner and spoke in a soft tone so others couldn’t hear. The call lasted an hour. Q$ r9 v% R9 q7 Z: R2 l
Finally, the remaining deal points were resolved. “Bill, thank you for your support of this
5 T0 l4 \7 Y6 bcompany,” Jobs said as he crouched in his shorts. “I think the world’s a better place for it.”
o; L2 b" Z& w* X3 z9 {During his Macworld keynote address, Jobs walked through the details of the Microsoft; I) }. y$ @' `" p; E: |9 [
deal. At first there were groans and hisses from the faithful. Particularly galling was Jobs’s( ?& u0 o; Q7 n4 ^# j( D
announcement that, as part of the peace pact, “Apple has decided to make Internet Explorer
; ` E" Z; K& T1 _, W- F8 s
, U" Y; Q8 V1 n% j/ |3 l% f9 I
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J+ e2 B+ p3 l/ S3 B! }3 G
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* ]: d" B5 ~" @0 s# a: H- _& }9 p8 ]
9 {" r/ _5 ^5 L. H7 L4 p. _$ n1 H: C8 Y% V7 {& _( g: h
its default browser on the Macintosh.” The audience erupted in boos, and Jobs quickly) P- O: O" r2 y$ t( e' J5 k$ M1 }
added, “Since we believe in choice, we’re going to be shipping other Internet browsers, as! M- d( f/ i) v% x6 I# |( G
well, and the user can, of course, change their default should they choose to.” There were7 ^ L- Q. ^4 l+ t6 q b' p
some laughs and scattered applause. The audience was beginning to come around,8 I7 v$ j8 S4 R1 x6 I
especially when he announced that Microsoft would be investing $150 million in Apple and
, l8 H3 F" H# [% r" T3 S$ rgetting nonvoting shares./ O$ x1 w1 H/ g+ D% B
But the mellower mood was shattered for a moment when Jobs made one of the few
9 I9 g! j( r2 ?6 b5 s X @/ p* v9 mvisual and public relations gaffes of his onstage career. “I happen to have a special guest) S k5 j7 {- N
with me today via satellite downlink,” he said, and suddenly Bill Gates’s face appeared on/ n+ Z1 n. m. N
the huge screen looming over Jobs and the auditorium. There was a thin smile on Gates’s
" B) C$ B9 m" X# ^0 ^, aface that flirted with being a smirk. The audience gasped in horror, followed by some boos6 ?0 @7 h: T# I3 {
and catcalls. The scene was such a brutal echo of the 1984 Big Brother ad that you half' v$ R- Q; [ C& s/ x
expected (and hoped?) that an athletic woman would suddenly come running down the ?$ K' w' R8 A. {
aisle and vaporize the screenshot with a well-thrown hammer.- W5 C1 ]& w' n
But it was all for real, and Gates, unaware of the jeering, began speaking on the satellite* X% a0 e6 T ?* m/ d
link from Microsoft headquarters. “Some of the most exciting work that I’ve done in my
1 P# C7 R! W* U* x- H: Ucareer has been the work that I’ve done with Steve on the Macintosh,” he intoned in his |, T6 r, B/ ^; I8 Y
high-pitched singsong. As he went on to tout the new version of Microsoft Office that was
8 H x6 {( X; {3 W5 _0 N) zbeing made for the Macintosh, the audience quieted down and then slowly seemed to
1 }9 ~1 P; e5 ^+ O+ u5 `accept the new world order. Gates even was able to rouse some applause when he said that7 `. i5 u" M |1 [
the new Mac versions of Word and Excel would be “in many ways more advanced than
- B7 H- g- J3 G5 \what we’ve done on the Windows platform.”
+ v- z9 ^' U- \4 ~. @Jobs realized that the image of Gates looming over him and the audience was a mistake.
) P: W) M0 m) _& p1 f. t! G9 j“I wanted him to come to Boston,” Jobs later said. “That was my worst and stupidest% Y- m# k, }! j- y! h; M4 B2 K
staging event ever. It was bad because it made me look small, and Apple look small, and as
; M4 s7 v. ~# C' D H% j0 Z- pif everything was in Bill’s hands.” Gates likewise was embarrassed when he saw the
3 N+ `# i: I9 N7 X4 f( W6 gvideotape of the event. “I didn’t know that my face was going to be blown up to looming. H( U3 W+ A( Z3 X" O2 L$ V
proportions,” he said.& Z' F. Y# |0 h
Jobs tried to reassure the audience with an impromptu sermon. “If we want to move
2 L. F# }7 O; a3 `; hforward and see Apple healthy again, we have to let go of a few things here,” he told the& Y: q. y2 I/ C [% f J
audience. “We have to let go of this notion that for Apple to win Microsoft has to lose. . . . I
5 N) p" d3 t% [0 B/ Z% fthink if we want Microsoft Office on the Mac, we better treat the company that puts it out
8 J8 \1 s* C; h: ~1 ?1 j. gwith a little bit of gratitude.”$ f/ c6 z5 W! c2 i+ n" C+ M' Q( E* @/ ~. @
The Microsoft announcement, along with Jobs’s passionate reengagement with the
: e9 V0 F/ j% v3 @company, provided a much-needed jolt for Apple. By the end of the day, its stock had2 V" w; V$ y' r7 C9 B
skyrocketed $6.56, or 33%, to close at $26.31, twice the price of the day Amelio resigned.
$ v* \. b( q1 j4 ^% CThe one-day jump added $830 million to Apple’s stock market capitalization. The company0 Y D+ e4 ?. T: N
was back from the edge of the grave.
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: }- K L( q _ ]CHAPTER TWENTY-FIVE
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