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CHAPTER TWENTY-FOUR
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THE RESTORATION ) y# v+ \7 ~4 C d) _% Q
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The Loser Now Will Be Later to Win5 [/ k7 B* N) G9 X( ]0 w W
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7 C# d6 R4 P) AAmelio calling up Wozniak as Jobs hangs back, 19970 H# q; v, J8 K8 B2 H
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. ]% }) k6 M) p. tHovering Backstage
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“It’s rare that you see an artist in his thirties or forties able to really contribute something
+ _: Z+ [; P! a. k' O2 B3 @ _8 Gamazing,” Jobs declared as he was about to turn thirty.( D8 d/ z% a% J; \% L5 [; L
That held true for Jobs in his thirties, during the decade that began with his ouster from
' j' b. l' {' k5 b9 E' b( I( ^3 lApple in 1985. But after turning forty in 1995, he flourished. Toy Story was released that
. _ v% A- ]$ Qyear, and the following year Apple’s purchase of NeXT offered him reentry into the: @0 [% Z0 r: l$ B2 B. H; W
company he had founded. In returning to Apple, Jobs would show that even people over
/ H2 e: X, q9 J4 B$ Iforty could be great innovators. Having transformed personal computers in his twenties, he' l2 g+ j. @/ M. [8 `$ T
would now help to do the same for music players, the recording industry’s business model," [) N- b7 i, k
mobile phones, apps, tablet computers, books, and journalism., S+ p+ `, d! b) i8 ~+ [7 y
He had told Larry Ellison that his return strategy was to sell NeXT to Apple, get1 t+ W! t( h. W
appointed to the board, and be there ready when CEO Gil Amelio stumbled. Ellison may/ f, N$ W+ i- Z7 q" q( T! @: q
have been baffled when Jobs insisted that he was not motivated by money, but it was partly
! t: y( c7 M: e+ u9 E3 w* N3 l9 S1 ]true. He had neither Ellison’s conspicuous consumption needs nor Gates’s philanthropic
- G" P) `. L, i t! ^1 simpulses nor the competitive urge to see how high on the Forbes list he could get. Instead
9 D4 d7 M& ?# p6 M. g3 Dhis ego needs and personal drives led him to seek fulfillment by creating a legacy that5 o# e2 }' P3 p. `9 L
would awe people. A dual legacy, actually: building innovative products and building a5 t/ Z' _4 m# L7 S. E4 p9 t
lasting company. He wanted to be in the pantheon with, indeed a notch above, people like ( C* k. M6 G6 s
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3 Y4 j5 i- r# c- o: _- w6 m! PEdwin Land, Bill Hewlett, and David Packard. And the best way to achieve all this was to
) n1 g6 C) e" o/ h/ {return to Apple and reclaim his kingdom.. u3 a# K+ F% L! R# h
And yet when the cup of power neared his lips, he became strangely hesitant, reluctant,6 K5 K6 {3 u- j% B
perhaps coy.; ]( J2 P$ ~* q$ I e
He returned to Apple officially in January 1997 as a part-time advisor, as he had told! ?- [( i: y( I' y
Amelio he would. He began to assert himself in some personnel areas, especially in
8 M# a) e! ^& N0 Xprotecting his people who had made the transition from NeXT. But in most other ways he
9 r: U) D. C: ^" L! |was unusually passive. The decision not to ask him to join the board offended him, and he: R& M) ]# w7 u5 c
felt demeaned by the suggestion that he run the company’s operating system division.4 V9 ^* O6 b9 U. J
Amelio was thus able to create a situation in which Jobs was both inside the tent and
, D8 _$ U* l) U$ O, m1 n2 `; J$ foutside the tent, which was not a prescription for tranquillity. Jobs later recalled:
9 t9 H1 X9 B5 vGil didn’t want me around. And I thought he was a bozo. I knew that before I sold him
4 L/ d6 U7 Z) o& Kthe company. I thought I was just going to be trotted out now and then for events like7 Z) j. O$ J. p
Macworld, mainly for show. That was fine, because I was working at Pixar. I rented an
( W w+ `7 s6 M. O" Z) M; zoffice in downtown Palo Alto where I could work a few days a week, and I drove up to$ i$ k3 B5 k8 }* q- Q& l$ H
Pixar for one or two days. It was a nice life. I could slow down, spend time with my family.
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4 K6 @& T( s8 x, eJobs was, in fact, trotted out for Macworld right at the beginning of January, and this
3 q2 n, o) Q( G( ^+ u, Nreaffirmed his opinion that Amelio was a bozo. Close to four thousand of the faithful
* h+ y0 u+ L1 ?, N; L, r9 b/ Nfought for seats in the ballroom of the San Francisco Marriott to hear Amelio’s keynote" U8 G% m7 ~8 A% M8 s
address. He was introduced by the actor Jeff Goldblum. “I play an expert in chaos theory in. \3 B* c, P1 b2 b& _
The Lost World: Jurassic Park,” he said. “I figure that will qualify me to speak at an Apple
4 e6 O+ }- R/ o% P! ?" sevent.” He then turned it over to Amelio, who came onstage wearing a flashy sports jacket6 G& l" w1 ^ X5 @; U
and a banded-collar shirt buttoned tight at the neck, “looking like a Vegas comic,” the Wall! P/ k+ v" {! n! V
Street Journal reporter Jim Carlton noted, or in the words of the technology writer Michael* B' ?+ h/ ^: e' n+ R3 f% ~
Malone, “looking exactly like your newly divorced uncle on his first date.”; Y4 h ?0 D* _- o4 V
The bigger problem was that Amelio had gone on vacation, gotten into a nasty tussle4 J9 n/ Q' b/ v
with his speechwriters, and refused to rehearse. When Jobs arrived backstage, he was upset4 O& |2 J$ W# s
by the chaos, and he seethed as Amelio stood on the podium bumbling through a disjointed( h7 A4 _2 D( \2 T( u8 m
and endless presentation. Amelio was unfamiliar with the talking points that popped up on0 }5 }% B; e; p( j3 ~7 [
his teleprompter and soon was trying to wing his presentation. Repeatedly he lost his train% x, N& V- m) g
of thought. After more than an hour, the audience was aghast. There were a few welcome7 V" `1 x, E# o; P
breaks, such as when he brought out the singer Peter Gabriel to demonstrate a new music
7 @" ]8 ~5 D2 a6 }: c" \program. He also pointed out Muhammad Ali in the first row; the champ was supposed to
- P4 M% D9 R9 bcome onstage to promote a website about Parkinson’s disease, but Amelio never invited
' a O9 t+ F$ D( ^: [/ Thim up or explained why he was there.* {( }$ Y0 d7 a7 u' h
Amelio rambled for more than two hours before he finally called onstage the person3 T! k% U3 H$ l% w+ Y7 L. L6 Q; M6 P
everyone was waiting to cheer. “Jobs, exuding confidence, style, and sheer magnetism, was
' x6 h/ T/ i E1 m: ^6 w. m( u8 Athe antithesis of the fumbling Amelio as he strode onstage,” Carlton wrote. “The return of
6 p, \2 o$ F. c j# j s7 iElvis would not have provoked a bigger sensation.” The crowd jumped to its feet and gave+ I3 W" O& L8 ^6 X" Z [
him a raucous ovation for more than a minute. The wilderness decade was over. Finally+ h: a4 F+ m4 l& n+ i; V
Jobs waved for silence and cut to the heart of the challenge. “We’ve got to get the spark & h# F; _; v9 F0 Y& z1 L& K
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back,” he said. “The Mac didn’t progress much in ten years. So Windows caught up. So we
& t) K: m* x+ \% r# Vhave to come up with an OS that’s even better.”- G6 s7 w8 }% e5 u& i4 F
Jobs’s pep talk could have been a redeeming finale to Amelio’s frightening performance.$ ]. Q0 D+ p; E$ ~+ w# v
Unfortunately Amelio came back onstage and resumed his ramblings for another hour.
! g3 d9 l; H# d" c* t6 f; ]* h+ KFinally, more than three hours after the show began, Amelio brought it to a close by calling
/ n% I' Z, a* ^: M$ QJobs back onstage and then, in a surprise, bringing up Steve Wozniak as well. Again there
. y6 \/ o5 _% Z! Twas pandemonium. But Jobs was clearly annoyed. He avoided engaging in a triumphant
3 A) }- S. ?% I8 {) Q: Qtrio scene, arms in the air. Instead he slowly edged offstage. “He ruthlessly ruined the
! l; g4 K6 @- w$ X: o. x/ b+ ?7 Lclosing moment I had planned,” Amelio later complained. “His own feelings were more
0 e' i* a' w) N+ D5 Q; B& z( I* c) Ximportant than good press for Apple.” It was only seven days into the new year for Apple,
5 X0 U7 a7 d; Y0 Vand already it was clear that the center would not hold.$ a M% G9 a8 Q4 o6 p1 {) j+ U* p
* P( {: _5 x+ e$ ?! W$ u0 wJobs immediately put people he trusted into the top ranks at Apple. “I wanted to make sure$ E5 t* n* s& d
the really good people who came in from NeXT didn’t get knifed in the back by the less
3 V; h4 f7 ^5 m8 }competent people who were then in senior jobs at Apple,” he recalled. Ellen Hancock, who
' y: Z4 ~6 P& f# \) v) {had favored choosing Sun’s Solaris over NeXT, was on the top of his bozo list, especially
& \2 [ v0 P( _) V( \9 u$ Dwhen she continued to want to use the kernel of Solaris in the new Apple operating system.8 f4 a; a2 s4 Z( L/ B
In response to a reporter’s question about the role Jobs would play in making that decision,; y$ L8 C, s* ~, i
she answered curtly, “None.” She was wrong. Jobs’s first move was to make sure that two U6 L3 W; v" A+ ]/ [4 |" A
of his friends from NeXT took over her duties.- W/ S5 F- w2 p! x
To head software engineering, he tapped his buddy Avie Tevanian. To run the hardware% V" `1 _0 I+ ]. M2 I
side, he called on Jon Rubinstein, who had done the same at NeXT back when it had a. }3 t' U( j. Z* A
hardware division. Rubinstein was vacationing on the Isle of Skye when Jobs called him.9 T; E8 C- v: B4 {
“Apple needs some help,” he said. “Do you want to come aboard?” Rubinstein did. He got# }3 @5 f( Q5 A9 m3 p
back in time to attend Macworld and see Amelio bomb onstage. Things were worse than he
# z. B3 z$ ~$ m& ?expected. He and Tevanian would exchange glances at meetings as if they had stumbled
1 ^& | P" B, s' ?" ?* M4 b3 [& Linto an insane asylum, with people making deluded assertions while Amelio sat at the end: y6 H, y# _- F) g) F# n
of the table in a seeming stupor.
" @3 x7 c" H( @5 h0 CJobs did not come into the office regularly, but he was on the phone to Amelio often.9 c* @# b: [& }' y |% S* M
Once he had succeeded in making sure that Tevanian, Rubinstein, and others he trusted5 o3 L; a; ~6 }. K* l; v+ Q
were given top positions, he turned his focus onto the sprawling product line. One of his7 ^9 R6 F7 D9 S' `3 f
pet peeves was Newton, the handheld personal digital assistant that boasted handwriting
' \% L# ~( l: q" P) crecognition capability. It was not quite as bad as the jokes and Doonesbury comic strip
; k1 ^& R9 ^5 T% z$ J( Omade it seem, but Jobs hated it. He disdained the idea of having a stylus or pen for writing2 v" c6 ^0 v! H- ~, o8 o# b
on a screen. “God gave us ten styluses,” he would say, waving his fingers. “Let’s not invent9 t" R/ c2 X& x, G
another.” In addition, he viewed Newton as John Sculley’s one major innovation, his pet2 z8 o0 d0 p. i" `$ o
project. That alone doomed it in Jobs’s eyes.
/ B/ U2 l* ?% l* a" g3 f“You ought to kill Newton,” he told Amelio one day by phone.
; p1 m- a* L, _& j; ? @" oIt was a suggestion out of the blue, and Amelio pushed back. “What do you mean, kill
* W- q1 r* s1 e& E/ mit?” he said. “Steve, do you have any idea how expensive that would be?”0 w8 y! r% [2 O5 E; }9 r3 k$ f
“Shut it down, write it off, get rid of it,” said Jobs. “It doesn’t matter what it costs.
$ J. E5 U% J1 [9 V& t! @, c/ ], nPeople will cheer you if you got rid of it.” ) T9 @7 |6 ^5 a _
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, _3 i \. g: j7 \9 w0 Q9 D“I’ve looked into Newton and it’s going to be a moneymaker,” Amelio declared. “I don’t7 O% l7 ] B1 z0 N4 [6 U4 |) ]
support getting rid of it.” By May, however, he announced plans to spin off the Newton
4 s5 K3 B% i0 W0 [& f" N6 xdivision, the beginning of its yearlong stutter-step march to the grave.
, G9 ?/ M. ~$ S( WTevanian and Rubinstein would come by Jobs’s house to keep him informed, and soon
0 z5 |0 T% J/ c4 i. t1 t& ^much of Silicon Valley knew that Jobs was quietly wresting power from Amelio. It was not2 |- a" z" I, q- R$ G# \0 L
so much a Machiavellian power play as it was Jobs being Jobs. Wanting control was
3 |1 h+ U" o0 g# G4 Gingrained in his nature. Louise Kehoe, the Financial Times reporter who had foreseen this
]. i) {$ p$ |. V9 Swhen she questioned Jobs and Amelio at the December announcement, was the first with
8 G% M/ g! L: {+ {the story. “Mr. Jobs has become the power behind the throne,” she reported at the end of
2 l& E0 [+ K+ S. A# ]February. “He is said to be directing decisions on which parts of Apple’s operations should
+ ^0 P" i) v+ N# A+ S! s( L, E4 @be cut. Mr. Jobs has urged a number of former Apple colleagues to return to the company,
5 w9 ?' E" k2 p% r% M+ Y; \% shinting strongly that he plans to take charge, they said. According to one of Mr. Jobs’
7 @% _3 k v" H) ?confidantes, he has decided that Mr. Amelio and his appointees are unlikely to succeed in) ?6 @5 X) v" v9 `. I( G
reviving Apple, and he is intent upon replacing them to ensure the survival of ‘his5 \0 G4 b, @1 S& }
company.’” m4 I0 R9 o; ]+ Q0 Q2 Q& h
That month Amelio had to face the annual stockholders meeting and explain why the
/ C' v/ P! p0 eresults for the final quarter of 1996 showed a 30% plummet in sales from the year before., \- l2 T; W8 Y5 D: X
Shareholders lined up at the microphones to vent their anger. Amelio was clueless about
z; j" v4 |8 t4 Qhow poorly he handled the meeting. “The presentation was regarded as one of the best I
" ^" S2 f; @3 e' }9 x- k' Dhad ever given,” he later wrote. But Ed Woolard, the former CEO of DuPont who was now
! L; L/ w0 o2 ?* lthe chair of the Apple board (Markkula had been demoted to vice chair), was appalled.. w( Z @. V7 q8 A+ E, `; C2 i
“This is a disaster,” his wife whispered to him in the midst of the session. Woolard agreed.- q9 ?2 O& |6 N! S. E _% U- _" k3 Z
“Gil came dressed real cool, but he looked and sounded silly,” he recalled. “He couldn’t
, A; R1 Z6 E Yanswer the questions, didn’t know what he was talking about, and didn’t inspire any$ o, l1 g9 M4 u, m; c6 ?
confidence.”
: c1 J. t9 y6 fWoolard picked up the phone and called Jobs, whom he’d never met. The pretext was to
: j7 s6 z. o9 C2 i2 ainvite him to Delaware to speak to DuPont executives. Jobs declined, but as Woolard
N M9 V$ H& j; V: V8 N) \recalled, “the request was a ruse in order to talk to him about Gil.” He steered the phone
- H5 [$ u) q3 Tcall in that direction and asked Jobs point-blank what his impression of Amelio was." l4 Y" p: \( c9 R5 @
Woolard remembers Jobs being somewhat circumspect, saying that Amelio was not in the3 R: j4 g( ]' E) K
right job. Jobs recalled being more blunt: g; ?+ l& ^. E( {
I thought to myself, I either tell him the truth, that Gil is a bozo, or I lie by omission.) f4 ?# N- s" p+ Q7 I) }' X
He’s on the board of Apple, I have a duty to tell him what I think; on the other hand, if I tell
* O' O. \1 B) f" _1 Ohim, he will tell Gil, in which case Gil will never listen to me again, and he’ll fuck the
5 U, U; W3 M/ Q7 U8 y4 b7 Cpeople I brought into Apple. All of this took place in my head in less than thirty seconds. I* g; y4 e6 W& K$ S" N( [( u
finally decided that I owed this guy the truth. I cared deeply about Apple. So I just let him
3 g/ z; W3 o" l* j7 i! nhave it. I said this guy is the worst CEO I’ve ever seen, I think if you needed a license to be5 s5 X' y% G: E
a CEO he wouldn’t get one. When I hung up the phone, I thought, I probably just did a( F0 m; A0 {: p6 H
really stupid thing.
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/ E( }% \) Z0 A3 z: HThat spring Larry Ellison saw Amelio at a party and introduced him to the technology
I/ C0 Q! T/ O" ljournalist Gina Smith, who asked how Apple was doing. “You know, Gina, Apple is like a7 E8 C, F8 } p- b; o9 L1 I
ship,” Amelio answered. “That ship is loaded with treasure, but there’s a hole in the ship.! c9 P, a+ u$ O! y+ ]: A1 f" m
And my job is to get everyone to row in the same direction.” Smith looked perplexed and
' E4 N# G# h2 tasked, “Yeah, but what about the hole?” From then on, Ellison and Jobs joked about the$ Z, r! c. d8 s4 t9 [- _: |
parable of the ship. “When Larry relayed this story to me, we were in this sushi place, and I
9 @" u, g% ?" J$ I2 p* `- cliterally fell off my chair laughing,” Jobs recalled. “He was just such a buffoon, and he took
7 q; c% i+ x3 I: y2 {6 \! J6 R: O4 ghimself so seriously. He insisted that everyone call him Dr. Amelio. That’s always a* x6 B: ~' `. [; a1 D
warning sign.”. G2 j; P: |5 g& A% w4 T* D/ t
Brent Schlender, Fortune’s well-sourced technology reporter, knew Jobs and was9 J! Y) q) s2 A9 J
familiar with his thinking, and in March he came out with a story detailing the mess.) Z# |. P. h' t0 R
“Apple Computer, Silicon Valley’s paragon of dysfunctional management and fumbled
7 B8 C" h! d, r" [7 n1 }8 V5 Atechno-dreams, is back in crisis mode, scrambling lugubriously in slow motion to deal with
, s( n$ U0 m3 d' C ?5 kimploding sales, a floundering technology strategy, and a hemorrhaging brand name,” he) f9 g: Q5 }; P C% j) `4 X M
wrote. “To the Machiavellian eye, it looks as if Jobs, despite the lure of Hollywood—lately
: P- I3 W7 A( F4 q* I) i1 She has been overseeing Pixar, maker of Toy Story and other computer-animated films—
5 A/ q6 C% G" G$ L3 s( Hmight be scheming to take over Apple.”
, ]/ X) S- f( k7 ~Once again Ellison publicly floated the idea of doing a hostile takeover and installing his
- ^% T1 y. s6 d$ N3 B“best friend” Jobs as CEO. “Steve’s the only one who can save Apple,” he told reporters.
' R1 b, l t/ m/ o8 Y“I’m ready to help him the minute he says the word.” Like the third time the boy cried* ~: x) P2 I. s) {8 L& A* H4 z$ }
wolf, Ellison’s latest takeover musings didn’t get much notice, so later in the month he told
/ _6 y5 {. A7 k2 }' Y8 V2 v: b1 fDan Gillmore of the San Jose Mercury News that he was forming an investor group to raise
; g8 x. ?+ K/ k% c$1 billion to buy a majority stake in Apple. (The company’s market value was about $2.3( v& _+ U6 ]. b" _
billion.) The day the story came out, Apple stock shot up 11% in heavy trading. To add to6 g! f6 U( J9 c) h! y3 c _
the frivolity, Ellison set up an email address, savapple@us.oracle.com, asking the general
+ \" `2 b/ V. X8 R) R9 Gpublic to vote on whether he should go ahead with it.
7 r! L1 D' h' Y2 P; J% v) oJobs was somewhat amused by Ellison’s self-appointed role. “Larry brings this up now. y$ h, i; x0 |8 P0 e
and then,” he told a reporter. “I try to explain my role at Apple is to be an advisor.” Amelio,
+ i( q1 c+ I7 n. Zhowever, was livid. He called Ellison to dress him down, but Ellison wouldn’t take the call.( e- X3 i# s, u! ^$ }: P
So Amelio called Jobs, whose response was equivocal but also partly genuine. “I really4 k, _* p# s- |
don’t understand what is going on,” he told Amelio. “I think all this is crazy.” Then he
7 ]) Y- j) `, t* e8 I- z% padded a reassurance that was not at all genuine: “You and I have a good relationship.” Jobs4 _5 V4 R! F4 O( e
could have ended the speculation by releasing a statement rejecting Ellison’s idea, but* w; }0 L* e/ G3 q, P& q" r
much to Amelio’s annoyance, he didn’t. He remained aloof, which served both his interests
/ s1 _$ l8 d! p: E0 {and his nature.
8 N. u8 ], {- n6 IBy then the press had turned against Amelio. Business Week ran a cover asking “Is Apple+ z2 g9 _3 X' X& M& L
Mincemeat?”; Red Herring ran an editorial headlined “Gil Amelio, Please Resign”; and0 I% K9 l* F5 A+ Q6 S& r
Wired ran a cover that showed the Apple logo crucified as a sacred heart with a crown of7 M. }8 C! f6 x: ]
thorns and the headline “Pray.” Mike Barnicle of the Boston Globe, railing against years of" i: ], y t+ M% J9 f* W
Apple mismanagement, wrote, “How can these nitwits still draw a paycheck when they
! i" K' a9 ~. z9 y5 }took the only computer that didn’t frighten people and turned it into the technological
" [+ B4 Q- s9 H5 U3 A) B5 m# l' oequivalent of the 1997 Red Sox bullpen?” ( j0 D u# e6 r. q1 u
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When Jobs and Amelio had signed the contract in February, Jobs began hopping around1 {9 E/ F. }, E+ N7 n
exuberantly and declared, “You and I need to go out and have a great bottle of wine to
' g: }, q4 D& k$ Zcelebrate!” Amelio offered to bring wine from his cellar and suggested that they invite their1 ~5 G9 H2 W; l5 M6 @4 i3 c. I
wives. It took until June before they settled on a date, and despite the rising tensions they; i4 ?8 x* W' u" N, d8 H0 O/ \
were able to have a good time. The food and wine were as mismatched as the diners;+ w: o5 _ {2 N. N! o" a
Amelio brought a bottle of 1964 Cheval Blanc and a Montrachet that each cost about $300;
1 r& v& i1 W( Q' J4 k3 \Jobs chose a vegetarian restaurant in Redwood City where the food bill totaled $72.
/ g' z1 V+ S' o& }9 VAmelio’s wife remarked afterward, “He’s such a charmer, and his wife is too.”
7 w- K) a! n* v$ I; g. U5 tJobs could seduce and charm people at will, and he liked to do so. People such as Amelio
% ~8 Q5 }5 j1 I9 e( V+ w% _ mand Sculley allowed themselves to believe that because Jobs was charming them, it meant
( ?- B- J6 [4 g2 {( bthat he liked and respected them. It was an impression that he sometimes fostered by2 k0 D4 J% N) a" f8 b% P% P; ~3 e
dishing out insincere flattery to those hungry for it. But Jobs could be charming to people/ ?* T& e Z! n* q4 c2 ?' t; S1 b- S: s
he hated just as easily as he could be insulting to people he liked. Amelio didn’t see this# @. X7 p8 ` T# ]0 q( D
because, like Sculley, he was so eager for Jobs’s affection. Indeed the words he used to& f; P0 j% f# t( q+ x
describe his yearning for a good relationship with Jobs are almost the same as those used; _7 s# q. k: {& U& t
by Sculley. “When I was wrestling with a problem, I would walk through the issue with
- X* C% V% s2 V3 p4 zhim,” Amelio recalled. “Nine times out of ten we would agree.” Somehow he willed0 r3 o( z, C- w" {) L, v5 z* }- o
himself to believe that Jobs really respected him: “I was in awe over the way Steve’s mind* X3 g, Q2 v' G$ b9 {
approached problems, and had the feeling we were building a mutually trusting& T8 u ?1 U8 |
relationship.”, }5 K$ Q* K" I3 S* y9 E- a1 q. @
Amelio’s disillusionment came a few days after their dinner. During their negotiations,+ s! p1 \2 S3 g9 g
he had insisted that Jobs hold the Apple stock he got for at least six months, and preferably
9 z! J- M8 j% g, I% clonger. That six months ended in June. When a block of 1.5 million shares was sold,3 \+ N, \0 W+ {
Amelio called Jobs. “I’m telling people that the shares sold were not yours,” he said.* l7 a& o/ d% ?7 V- W# J
“Remember, you and I had an understanding that you wouldn’t sell any without advising us0 [: b& Q2 T4 g" Y0 n" @* F
first.”
, ~. O" Y: u% { N: |% K5 ?“That’s right,” Jobs replied. Amelio took that response to mean that Jobs had not sold his
( y7 f* D; T9 I I3 i9 i/ Mshares, and he issued a statement saying so. But when the next SEC filing came out, it
& @% e+ T+ H7 v6 e, ]# ?! j" h0 nrevealed that Jobs had indeed sold the shares. “Dammit, Steve, I asked you point-blank
n+ F* ^7 _7 M8 P: I# \about these shares and you denied it was you.” Jobs told Amelio that he had sold in a “fit of
; Y: f2 Q) b, Q g+ d4 o4 b& Ldepression” about where Apple was going and he didn’t want to admit it because he was “a
5 O3 S$ o" w- c8 m$ I2 P3 S3 Plittle embarrassed.” When I asked him about it years later, he simply said, “I didn’t feel I; h$ y' s" Z2 P$ k8 j* l
needed to tell Gil.”
7 d& k0 j" s) n/ W$ w, WWhy did Jobs mislead Amelio about selling the shares? One reason is simple: Jobs
2 ^$ _2 ]+ R+ m }6 D; E! S! tsometimes avoided the truth. Helmut Sonnenfeldt once said of Henry Kissinger, “He lies
- c5 [7 U3 S- A+ Xnot because it’s in his interest, he lies because it’s in his nature.” It was in Jobs’s nature to" _8 F1 r2 f/ X; P) k6 w
mislead or be secretive when he felt it was warranted. But he also indulged in being
- |$ a, e- j7 x7 B: ^' b3 u6 lbrutally honest at times, telling the truths that most of us sugarcoat or suppress. Both the, V) K! h X% A& L7 x7 v
dissembling and the truth-telling were simply different aspects of his Nietzschean attitude
! U" h, e$ {/ m3 w3 Fthat ordinary rules didn’t apply to him.' H1 t9 F. i0 E) F! R5 R8 G1 X
! Q# x" Z* j7 `: q0 f" |Exit, Pursued by a Bear
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1 v( J& z% [- K' O- MJobs had refused to quash Larry Ellison’s takeover talk, and he had secretly sold his shares+ Q: D) b( c: M) @# l8 ]) b& ?8 D
and been misleading about it. So Amelio finally became convinced that Jobs was gunning
6 _" K J2 x" {! G$ c4 ]for him. “I finally absorbed the fact that I had been too willing and too eager to believe he
+ Q# C* L7 A8 ~( Q3 Vwas on my team,” Amelio recalled. “Steve’s plans to manipulate my termination were$ `, Z" K3 d( a" O
charging forward.”
8 G4 O' [$ A7 G1 v9 G/ |Jobs was indeed bad-mouthing Amelio at every opportunity. He couldn’t help himself.
9 q' _& V& d6 h( \But there was a more important factor in turning the board against Amelio. Fred Anderson,
7 j: p/ w6 r0 e0 } j& k% h" v2 Xthe chief financial officer, saw it as his fiduciary duty to keep Ed Woolard and the board
1 Z% j$ q+ e! ?5 ^+ T6 pinformed of Apple’s dire situation. “Fred was the guy telling me that cash was draining,
% u5 J5 X$ w1 g; w; ?people were leaving, and more key players were thinking of it,” said Woolard. “He made it( [; S }; d- Z' Z: R
clear the ship was going to hit the sand soon, and even he was thinking of leaving.” That
" A7 k, E9 `' ~: R g2 ~added to the worries Woolard already had from watching Amelio bumble the shareholders
& t3 k6 l+ s. G4 Y0 X5 ^0 ]9 ~' wmeeting.
5 l c/ y3 C+ T J! E( aAt an executive session of the board in June, with Amelio out of the room, Woolard
* @) v1 `: K1 n8 y. W. @described to current directors how he calculated their odds. “If we stay with Gil as CEO, I
0 m9 r4 L3 L! ?/ [# Y8 lthink there’s only a 10% chance we will avoid bankruptcy,” he said. “If we fire him and2 g3 Y# D; x2 s* D! U" I/ @
convince Steve to come take over, we have a 60% chance of surviving. If we fire Gil, don’t
' W$ W! m- N! dget Steve back, and have to search for a new CEO, then we have a 40% chance of& H$ Y& e- t8 a' \/ I1 |/ k
surviving.” The board gave him authority to ask Jobs to return.+ ? B" V Y( T% t( D
Woolard and his wife flew to London, where they were planning to watch the0 I, o- Q$ |" m# [# F" a. B
Wimbledon tennis matches. He saw some of the tennis during the day, but spent his
/ H! p% M! l) y2 K5 Wevenings in his suite at the Inn on the Park calling people back in America, where it was* g+ [4 [! }" N* S! \
daytime. By the end of his stay, his telephone bill was $2,000.5 `& }0 W4 W6 _, ?/ @/ A0 ]
First, he called Jobs. The board was going to fire Amelio, he said, and it wanted Jobs to
{7 } Y M5 |come back as CEO. Jobs had been aggressive in deriding Amelio and pushing his own
8 k2 Z5 T, F1 @) kideas about where to take Apple. But suddenly, when offered the cup, he became coy. “I/ m8 W: p8 D' z5 A& H% i- g
will help,” he replied.# E6 d( o0 E7 l7 X
“As CEO?” Woolard asked.
. D- j" K% R+ B4 E; VJobs said no. Woolard pushed hard for him to become at least the acting CEO. Again
$ Z! o( D- u; Q- y: E3 P! ZJobs demurred. “I will be an advisor,” he said. “Unpaid.” He also agreed to become a board8 y% \) t9 v5 c M. @
member—that was something he had yearned for—but declined to be the board chairman.1 j& k; |9 h6 T6 w
“That’s all I can give now,” he said. After rumors began circulating, he emailed a memo to
. I& i* p$ K+ }) I( Z4 E% [, }Pixar employees assuring them that he was not abandoning them. “I got a call from Apple’s4 L/ T1 |, `2 ]0 H( y
board of directors three weeks ago asking me to return to Apple as their CEO,” he wrote. “I
8 ]2 k* I% T8 n1 b7 V6 [3 u( adeclined. They then asked me to become chairman, and I again declined. So don’t worry—
+ W1 P8 G0 }$ |2 q5 Uthe crazy rumors are just that. I have no plans to leave Pixar. You’re stuck with me.”
' }1 y% A# ~8 MWhy did Jobs not seize the reins? Why was he reluctant to grab the job that for two, P) j1 e' S; _
decades he had seemed to desire? When I asked him, he said:
- m$ j- I4 t* u3 Z; p% oWe’d just taken Pixar public, and I was happy being CEO there. I never knew of
6 w( ^8 K; `% u {anyone who served as CEO of two public companies, even temporarily, and I wasn’t even
# J3 L6 D/ c' |* y7 q% G0 E2 J. gsure it was legal. I didn’t know what I wanted to do. I was enjoying spending more time
6 h+ b3 ?2 z3 k2 y2 U5 Y' Zwith my family. I was torn. I knew Apple was a mess, so I wondered: Do I want to give up
% {$ j. V t$ K( c+ E/ lthis nice lifestyle that I have? What are all the Pixar shareholders going to think? I talked to 1 o! f( j0 L1 h" A
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: J; q0 _5 o. G7 [$ [; kpeople I respected. I finally called Andy Grove at about eight one Saturday morning—too$ Z7 G; \% m4 q9 R' w
early. I gave him the pros and the cons, and in the middle he stopped me and said, “Steve, I
' C% C: D. c2 ?5 _; q/ Y* ydon’t give a shit about Apple.” I was stunned. It was then I realized that I do give a shit
1 u) D# [+ J; Y5 q! C$ Iabout Apple—I started it and it is a good thing to have in the world. That was when I+ K& U W/ h9 r) t' R, u
decided to go back on a temporary basis to help them hire a CEO.
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* |6 }; R5 X# |, JThe claim that he was enjoying spending more time with his family was not convincing. He
% v+ Q2 [5 Y9 E# fwas never destined to win a Father of the Year trophy, even when he had spare time on his
- J0 t2 }7 y- j4 w: s2 Ehands. He was getting better at paying heed to his children, especially Reed, but his
9 B K8 O: c! Aprimary focus was on his work. He was frequently aloof from his two younger daughters,
( G' T9 u& I# y% J# Restranged again from Lisa, and often prickly as a husband.8 M4 y4 T" M" m5 x; {- F5 i
So what was the real reason for his hesitancy in taking over at Apple? For all of his6 I" I3 E3 e3 C7 y% Q+ ]
willfulness and insatiable desire to control things, Jobs was indecisive and reticent when he* c1 e2 N. S& u/ {- I2 K& m
felt unsure about something. He craved perfection, and he was not always good at figuring z, a# |( m- }% i. m
out how to settle for something less. He did not like to wrestle with complexity or make0 [$ T f! s' D+ `& f) j" o& [5 I
accommodations. This was true in products, design, and furnishings for the house. It was/ }9 I1 |* c6 X7 e( S' W9 P
also true when it came to personal commitments. If he knew for sure a course of action was
+ v% N: j! g' i3 e wright, he was unstoppable. But if he had doubts, he sometimes withdrew, preferring not to
/ |6 m$ P' y, Z/ Tthink about things that did not perfectly suit him. As happened when Amelio had asked him
* f0 K s: A- y* J. e6 ~* k- i5 \what role he wanted to play, Jobs would go silent and ignore situations that made him/ ?) W M% z$ N+ \, s6 ]
uncomfortable.0 ]' {% _* P. u4 C
This attitude arose partly out of his tendency to see the world in binary terms. A person
. o* j+ o) T1 h: C4 K& W7 x {was either a hero or a bozo, a product was either amazing or shit. But he could be stymied
1 l& L0 Z5 _0 ]% Jby things that were more complex, shaded, or nuanced: getting married, buying the right7 w( N# z- _! ~4 b9 P2 Y, M. q
sofa, committing to run a company. In addition, he didn’t want to be set up for failure. “I! j- r+ I- o% ~5 [) `
think Steve wanted to assess whether Apple could be saved,” Fred Anderson said.
1 P7 _ \6 }) h9 I- S0 g: P+ YWoolard and the board decided to go ahead and fire Amelio, even though Jobs was not+ v% ]0 i1 H* ?' S/ e- s
yet forthcoming about how active a role he would play as an advisor. Amelio was about to
( ^- x) A6 E5 Y% D* e4 m' lgo on a picnic with his wife, children, and grandchildren when the call came from Woolard7 D, b! C5 c# T! s5 F, C
in London. “We need you to step down,” Woolard said simply. Amelio replied that it was3 G/ R% O. [ d% E) {
not a good time to discuss this, but Woolard felt he had to persist. “We are going to/ U. i) ~$ k7 F( O
announce that we’re replacing you.”6 @2 z! m! r, S Y- Z) x
Amelio resisted. “Remember, Ed, I told the board it was going to take three years to get
+ c7 Z* _" Z; K% D8 }7 p0 ~this company back on its feet again,” he said. “I’m not even halfway through.”
- a e+ o" [/ ]; @1 r" ~“The board is at the place where we don’t want to discuss it further,” Woolard replied.
1 I4 T$ D* i( MAmelio asked who knew about the decision, and Woolard told him the truth: the rest of the
# [2 ~/ e# }+ iboard plus Jobs. “Steve was one of the people we talked to about this,” Woolard said. “His0 b6 ^! H7 `" Y' g) G7 l
view is that you’re a really nice guy, but you don’t know much about the computer6 o) |' C- m8 x8 f# v! _, N
industry.”
: c9 m: t% e) k- p8 D& R' q/ t“Why in the world would you involve Steve in a decision like this?” Amelio replied,+ @3 W1 _# X. _* M" h
getting angry. “Steve is not even a member of the board of directors, so what the hell is he
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* [' }' F Y$ V
- O6 g" c T& o0 C( y' A2 ~& _doing in any of this conversation?” But Woolard didn’t back down, and Amelio hung up to
1 e/ p0 X6 f U* t" H6 c4 E6 ]- zcarry on with the family picnic before telling his wife.7 l( ]3 v+ k8 r/ |4 U0 g
At times Jobs displayed a strange mixture of prickliness and neediness. He usually didn’t; e. {2 z$ \ h* v4 X: `" x6 N
care one iota what people thought of him; he could cut people off and never care to speak, A+ h. E0 M& ~7 ~' Z
to them again. Yet sometimes he also felt a compulsion to explain himself. So that evening
$ ?% h4 N( o# e U1 q) d# X3 m+ T7 lAmelio received, to his surprise, a phone call from Jobs. “Gee, Gil, I just wanted you to
+ B8 v+ s: k$ |* d% C" ~* a5 A+ mknow, I talked to Ed today about this thing and I really feel bad about it,” he said. “I want6 `8 ]5 t0 d7 [- W) t
you to know that I had absolutely nothing to do with this turn of events, it was a decision& A: j& r, q3 @" P
the board made, but they had asked me for advice and counsel.” He told Amelio he
6 J& ^1 U% }/ {9 vrespected him for having “the highest integrity of anyone I’ve ever met,” and went on to
( f; ~6 V- o' V! q0 lgive some unsolicited advice. “Take six months off,” Jobs told him. “When I got thrown+ M* i, l0 w6 \/ d
out of Apple, I immediately went back to work, and I regretted it.” He offered to be a3 y. @5 S! c. r0 Q- ~
sounding board if Amelio ever wanted more advice.
5 W# T N/ d, ~, a& n6 W& ^; t; ]Amelio was stunned but managed to mumble a few words of thanks. He turned to his
, N" x1 o5 o1 L. b3 t% c9 |& dwife and recounted what Jobs said. “In ways, I still like the man, but I don’t believe him,”* Y. W: e8 q4 o$ b( v4 z- x+ N* I
he told her.2 o9 l1 M# _: s) \* x( X: W
“I was totally taken in by Steve,” she said, “and I really feel like an idiot.”/ T9 o( [7 c+ W6 u2 | g8 e
“Join the crowd,” her husband replied.
/ H; r( X6 x, w0 OSteve Wozniak, who was himself now an informal advisor to the company, was thrilled( |+ d' r3 j+ F ]3 E1 [/ }
that Jobs was coming back. (He forgave easily.) “It was just what we needed,” he said,$ {9 c7 C* u( ] v/ F& q Z
“because whatever you think of Steve, he knows how to get the magic back.” Nor did
: j% q4 `4 q5 |8 m; TJobs’s triumph over Amelio surprise him. As he told Wired shortly after it happened, “Gil
1 j0 o) b* [. X' JAmelio meets Steve Jobs, game over.”
& h. z8 o+ `' H- x! V' QThat Monday Apple’s top employees were summoned to the auditorium. Amelio came in
) a) w# G% r: R: M& _looking calm and relaxed. “Well, I’m sad to report that it’s time for me to move on,” he
3 Q) X" [3 c! m# jsaid. Fred Anderson, who had agreed to be interim CEO, spoke next, and he made it clear2 L5 a& e; @; Y, L
that he would be taking his cues from Jobs. Then, exactly twelve years since he had lost
$ h- c) |( O R6 D4 x0 R/ Rpower in a July 4 weekend struggle, Jobs walked back onstage at Apple.& f9 L m+ B) t. |/ g: O0 }
It immediately became clear that, whether or not he wanted to admit it publicly (or even& @/ N! i& Q% g
to himself), Jobs was going to take control and not be a mere advisor. As soon as he came) {& {" g8 r3 A
onstage that day—wearing shorts, sneakers, and a black turtleneck—he got to work5 k" ` N& t4 ~4 u* t9 L
reinvigorating his beloved institution. “Okay, tell me what’s wrong with this place,” he8 X0 ~! Y& V" w% n, u
said. There were some murmurings, but Jobs cut them off. “It’s the products!” he answered.
! J- \3 l9 r$ x# d4 X“So what’s wrong with the products?” Again there were a few attempts at an answer, until
, }+ U+ ?( J4 n3 A* G* c+ |4 G0 A& bJobs broke in to hand down the correct answer. “The products suck!” he shouted. “There’s
" @4 e0 }6 t9 ]3 Jno sex in them anymore!”
; Q s, ]. |* nWoolard was able to coax Jobs to agree that his role as an advisor would be a very active
% H. K& c) J2 ^9 Q9 zone. Jobs approved a statement saying that he had “agreed to step up my involvement with5 B+ r6 C3 t( ~8 j; W
Apple for up to 90 days, helping them until they hire a new CEO.” The clever formulation; y5 c& d/ m( u$ Z) Z
that Woolard used in his statement was that Jobs was coming back “as an advisor leading' ~& L! R% @8 G, k1 i. n
the team.”4 P0 y' [% {4 V, z
Jobs took a small office next to the boardroom on the executive floor, conspicuously
. Z2 Z: O8 Z: a9 A& P; Oeschewing Amelio’s big corner office. He got involved in all aspects of the business:
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2 Q O& z) k7 H0 _product design, where to cut, supplier negotiations, and advertising agency review. He
* ]$ @- x: O" _5 Bbelieved that he had to stop the hemorrhaging of top Apple employees, and to do so he
8 O8 J- W/ Z5 o7 n, Iwanted to reprice their stock options. Apple stock had dropped so low that the options had& x- @- D z/ U: ^ C# x
become worthless. Jobs wanted to lower the exercise price, so they would be valuable
4 q& |9 y" W, {( o/ ?/ Cagain. At the time, that was legally permissible, but it was not considered good corporate
$ t6 T" r; ?1 e5 r+ T' opractice. On his first Thursday back at Apple, Jobs called for a telephonic board meeting
7 V8 ~1 K+ u# S0 `, `4 Cand outlined the problem. The directors balked. They asked for time to do a legal and* i: I3 o& b7 T/ }# U
financial study of what the change would mean. “It has to be done fast,” Jobs told them.0 f4 S+ j- h/ b1 g' S5 t. ^
“We’re losing good people.”) t" x6 s" ]/ i ^3 b2 W5 `
Even his supporter Ed Woolard, who headed the compensation committee, objected. “At1 s% f' x2 R! ^3 A5 U/ F0 U
DuPont we never did such a thing,” he said.
# q2 H/ C' k( i, B& b/ p“You brought me here to fix this thing, and people are the key,” Jobs argued. When the" q& ^( T8 t ^7 @
board proposed a study that could take two months, Jobs exploded: “Are you nuts?!?” He
1 \' G. e% o3 O( u! {% y" lpaused for a long moment of silence, then continued. “Guys, if you don’t want to do this,
/ ^2 J( P7 K6 i5 ]I’m not coming back on Monday. Because I’ve got thousands of key decisions to make that
. l; F) ], `, f# U+ `; _" |) hare far more difficult than this, and if you can’t throw your support behind this kind of
( {2 }7 d7 f1 Pdecision, I will fail. So if you can’t do this, I’m out of here, and you can blame it on me,% F) b: b; J9 V1 ~, g" |5 Q& a( Z( w
you can say, ‘Steve wasn’t up for the job.’”! A6 G# h1 U; J! |5 u
The next day, after consulting with the board, Woolard called Jobs back. “We’re going to' _9 L0 L" d- @* i
approve this,” he said. “But some of the board members don’t like it. We feel like you’ve
! ]* x f2 D; L& ?( l5 V" yput a gun to our head.” The options for the top team (Jobs had none) were reset at $13.25,
* x9 ^: a4 i! Ewhich was the price of the stock the day Amelio was ousted.
7 r! {- m$ I+ tInstead of declaring victory and thanking the board, Jobs continued to seethe at having to& D0 X3 F. V: q$ h
answer to a board he didn’t respect. “Stop the train, this isn’t going to work,” he told; \' t$ d0 w+ a8 I- j0 O
Woolard. “This company is in shambles, and I don’t have time to wet-nurse the board. So I
: B" q# o% s: K5 aneed all of you to resign. Or else I’m going to resign and not come back on Monday.” The
& ?9 m- A# Z% t3 ]% x* A, ~. B0 v2 Jone person who could stay, he said, was Woolard.
4 [6 B, J, U; M" A' [2 Y4 T# o$ MMost members of the board were aghast. Jobs was still refusing to commit himself to2 l8 S: b9 a5 W
coming back full-time or being anything more than an advisor, yet he felt he had the power
) E- P! D; ?6 E+ }/ L! jto force them to leave. The hard truth, however, was that he did have that power over them.
, T0 w: f; M1 N: V& |9 y6 \8 \They could not afford for him to storm off in a fury, nor was the prospect of remaining an
+ h' {% L- O' G# N! QApple board member very enticing by then. “After all they’d been through, most were glad; z: S, c, z3 r: \
to be let off,” Woolard recalled.3 E7 ^' s' X# f' n* s: d
Once again the board acquiesced. It made only one request: Would he permit one other# J3 @/ z3 D8 x0 `, m
director to stay, in addition to Woolard? It would help the optics. Jobs assented. “They were' o& ~' |' ?, K
an awful board, a terrible board,” he later said. “I agreed they could keep Ed Woolard and a
+ D( t8 A# ]/ F" F. aguy named Gareth Chang, who turned out to be a zero. He wasn’t terrible, just a zero.
, z5 r% ?$ n( U) ~- KWoolard, on the other hand, was one of the best board members I’ve ever seen. He was a( S3 |8 Q0 `5 S' f; l- F5 R6 u
prince, one of the most supportive and wise people I’ve ever met.”
' p8 e" R# t/ TAmong those being asked to resign was Mike Markkula, who in 1976, as a young
( u3 R6 S, \( g" Q. g" Q- lventure capitalist, had visited the Jobs garage, fallen in love with the nascent computer on* b& o d1 t. E3 p& N
the workbench, guaranteed a $250,000 line of credit, and become the third partner and one-$ \) w" p3 \: w- W# t' I
third owner of the new company. Over the subsequent two decades, he was the one
* q. |; g, f/ Y( x4 V/ q
* i1 w6 Z2 V: l, \, u# } x
, k8 c. G$ y3 Q' x6 \
8 |" h1 z* L1 u! n- a- T1 X4 R, L
2 t4 u9 @/ {$ G/ W) |: k+ L$ k" S% m! o. ] S8 i/ k6 `, J( ^" i
* r! h( `: N0 Z% D+ h# P7 X
. r+ [8 i, Q/ z+ p i+ h3 I/ t
9 b! T6 P! z* |
$ f6 \$ F( f& J$ [constant on the board, ushering in and out a variety of CEOs. He had supported Jobs at$ c; K" x7 b9 o
times but also clashed with him, most notably when he sided with Sculley in the5 M: p! K8 P0 W8 H
showdowns of 1985. With Jobs returning, he knew that it was time for him to leave.0 Y; }4 E+ \1 U1 G
Jobs could be cutting and cold, especially toward people who crossed him, but he could
* D2 h1 n @1 s- g& c4 Ualso be sentimental about those who had been with him from the early days. Wozniak fell
8 R9 D8 H2 X# O+ l, ~# [. ^into that favored category, of course, even though they had drifted apart; so did Andy( k3 i% U6 P3 X) G: y3 [* O% U9 [' ]
Hertzfeld and a few others from the Macintosh team. In the end, Mike Markkula did as* d/ c9 l9 q9 w
well. “I felt deeply betrayed by him, but he was like a father and I always cared about him,”1 e p( g; Z2 @8 J3 [+ [- B
Jobs later recalled. So when the time came to ask him to resign from the Apple board, Jobs* K3 T1 K* O L& x
drove to Markkula’s chateau-like mansion in the Woodside hills to do it personally. As
/ l# S& \: h, ~8 \usual, he asked to take a walk, and they strolled the grounds to a redwood grove with a
, A& n) m6 D$ b+ Z- H( ?picnic table. “He told me he wanted a new board because he wanted to start fresh,”
: G) d% X1 p6 @7 t- ?& c1 i mMarkkula said. “He was worried that I might take it poorly, and he was relieved when I
4 d$ P3 Z) P5 w k* mdidn’t.”8 \8 m, m, I! A1 M; d9 v
They spent the rest of the time talking about where Apple should focus in the future.
8 @( E! e- t+ X0 B, k8 y* YJobs’s ambition was to build a company that would endure, and he asked Markkula what
. X% m- t& W3 B! o6 Ethe formula for that would be. Markkula replied that lasting companies know how to
+ Q8 b# L, N" Z/ |reinvent themselves. Hewlett-Packard had done that repeatedly; it started as an instrument( @( Y' O( Q, w6 T8 \' E
company, then became a calculator company, then a computer company. “Apple has been
/ Z; Y9 Z8 J# w$ p2 |# esidelined by Microsoft in the PC business,” Markkula said. “You’ve got to reinvent the
! N6 G, t. a* L/ L3 r3 B* ycompany to do some other thing, like other consumer products or devices. You’ve got to be7 m2 ]- O; h2 A6 p8 T3 A
like a butterfly and have a metamorphosis.” Jobs didn’t say much, but he agreed.
, M7 t" R# L8 w6 iThe old board met in late July to ratify the transition. Woolard, who was as genteel as
1 P2 ]) p4 z% t1 l& uJobs was prickly, was mildly taken aback when Jobs appeared dressed in jeans and. U2 w& C3 K0 u8 N8 C$ g# j# ^3 S8 R
sneakers, and he worried that Jobs might start berating the veteran board members for
! G N2 U' u9 B% M; Kscrewing up. But Jobs merely offered a pleasant “Hi, everyone.” They got down to the
+ |0 E& }. u h _business of voting to accept the resignations, elect Jobs to the board, and empower Woolard
1 ?: b3 P2 K3 d9 t, U) w1 Land Jobs to find new board members.
. j0 h) [' x y7 P: K! _Jobs’s first recruit was, not surprisingly, Larry Ellison. He said he would be pleased to" K& ` Z+ \& U% b) f
join, but he hated attending meetings. Jobs said it would be fine if he came to only half of! C( _. t, N* b& J) ]
them. (After a while Ellison was coming to only a third of the meetings. Jobs took a picture& N8 ~. f1 F' E5 ]
of him that had appeared on the cover of Business Week and had it blown up to life size and% A: S0 r. b1 D$ s
pasted on a cardboard cutout to put in his chair.)
, E5 X [/ x$ LJobs also brought in Bill Campbell, who had run marketing at Apple in the early 1980s* F; g6 p, H6 O! C$ P F
and been caught in the middle of the Sculley-Jobs clash. Campbell had ended up sticking
* x+ Q* n: X+ }8 R- x2 ^" ]with Sculley, but he had grown to dislike him so much that Jobs forgave him. Now he was9 F5 n H, {3 d% q! _
the CEO of Intuit and a walking buddy of Jobs. “We were sitting out in the back of his/ a9 O ?$ z3 t7 }0 ]
house,” recalled Campbell, who lived only five blocks from Jobs in Palo Alto, “and he said
u% d5 ^/ w/ N# D3 ^3 }he was going back to Apple and wanted me on the board. I said, ‘Holy shit, of course I will+ \6 t H- I0 o9 l" O
do that.’” Campbell had been a football coach at Columbia, and his great talent, Jobs said,- b* @, R: u4 j% V+ P7 ?
was to “get A performances out of B players.” At Apple, Jobs told him, he would get to
: G9 [/ @# n# e0 U$ [: D5 h! r% ^work with A players.
5 x5 W" [7 Y: l9 a; Y* w3 {" V! _' z: a1 M# P
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. `7 \9 F: q& H1 F0 e2 W1 C' ~
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" ? @% \! z+ I& B! |. ]7 ~. A( H' f
2 E: U- c& R8 M4 i7 X$ }
6 k; E! X3 b' ]1 bWoolard helped bring in Jerry York, who had been the chief financial officer at Chrysler
0 R5 I) a V$ b2 R! cand then IBM. Others were considered and then rejected by Jobs, including Meg Whitman,
4 [6 g' o6 \9 p" S9 X+ Ewho was then the manager of Hasbro’s Playskool division and had been a strategic planner
/ e- y1 }5 I4 W( vat Disney. (In 1998 she became CEO of eBay, and she later ran unsuccessfully for governor
% _: w$ x' i$ h* ?! Uof California.) Over the years Jobs would bring in some strong leaders to serve on the
! u, K1 v* h3 o1 n# fApple board, including Al Gore, Eric Schmidt of Google, Art Levinson of Genentech,/ ^" r" c# p+ B c1 o2 d, i( o
Mickey Drexler of the Gap and J. Crew, and Andrea Jung of Avon. But he always made3 w b3 T" O4 x4 F
sure they were loyal, sometimes loyal to a fault. Despite their stature, they seemed at times5 g2 r/ W" @0 [. \! i
awed or intimidated by Jobs, and they were eager to keep him happy.
5 }" d' b/ v( i; D* PAt one point he invited Arthur Levitt, the former SEC chairman, to become a board
8 K* ?9 Z X2 e( N( s) ymember. Levitt, who bought his first Macintosh in 1984 and was proudly “addicted” to2 k$ G5 C2 I3 L8 b
Apple computers, was thrilled. He was excited to visit Cupertino, where he discussed the
) l" s, f" O: q& h% yrole with Jobs. But then Jobs read a speech Levitt had given about corporate governance,1 A" a* S' u0 v- q% F. `8 l) x
which argued that boards should play a strong and independent role, and he telephoned to, \- q- y! |1 y9 C# X1 B8 H
withdraw the invitation. “Arthur, I don’t think you’d be happy on our board, and I think it
5 i( T! M- C/ q7 Ybest if we not invite you,” Levitt said Jobs told him. “Frankly, I think some of the issues! S% D9 X b7 x
you raised, while appropriate for some companies, really don’t apply to Apple’s culture.”
, z- }: e7 s# X8 F/ HLevitt later wrote, “I was floored. . . . It’s plain to me that Apple’s board is not designed to
7 r) ^+ h! d- Z* U3 v" K* c5 U, Vact independently of the CEO.”
6 y% i: @! n! R$ W1 j% w7 p% \" W# b2 f0 a/ A8 p8 N- L" X
Macworld Boston, August 1997
- s! t# y- C& {$ H, p; m0 e# c: f
The staff memo announcing the repricing of Apple’s stock options was signed “Steve and
6 a3 l" j& W6 e& t0 ?% M) B) @6 sthe executive team,” and it soon became public that he was running all of the company’s
r# U/ R! p" v4 ]8 r' Zproduct review meetings. These and other indications that Jobs was now deeply engaged at
# C" o- s0 M- x" o- GApple helped push the stock up from about $13 to $20 during July. It also created a frisson
, _; @2 S w8 |9 rof excitement as the Apple faithful gathered for the August 1997 Macworld in Boston.4 z- d- h6 J6 ^% A0 L
More than five thousand showed up hours in advance to cram into the Castle convention
' s& D- h \ N% h; O1 ^3 M+ ]8 Ihall of the Park Plaza hotel for Jobs’s keynote speech. They came to see their returning
; L( a; E# e, ehero—and to find out whether he was really ready to lead them again.
& }& G k' p" W# Q' yHuge cheers erupted when a picture of Jobs from 1984 was flashed on the overhead
/ I _$ ^2 g5 G$ L5 ~ kscreen. “Steve! Steve! Steve!” the crowd started to chant, even as he was still being: e0 }6 Y. v8 P! W4 @) K
introduced. When he finally strode onstage—wearing a black vest, collarless white shirt,
6 U" h |" x( G$ x8 pjeans, and an impish smile—the screams and flashbulbs rivaled those for any rock star. At3 D) g2 r$ L( m1 g
first he punctured the excitement by reminding them of where he officially worked. “I’m
9 @& F' `7 O. u' WSteve Jobs, the chairman and CEO of Pixar,” he introduced himself, flashing a slide
3 a& f; W6 ?7 A+ H6 E5 v Aonscreen with that title. Then he explained his role at Apple. “I, like a lot of other people,( \' E# d6 {+ d& B% _# n! g1 ]
are pulling together to help Apple get healthy again.”
) S$ V# q- y: M0 aBut as Jobs paced back and forth across the stage, changing the overhead slides with a
( t1 ]( S7 O% a& N3 P1 d- cclicker in his hand, it was clear that he was now in charge at Apple—and was likely to
! [$ @" `+ j9 aremain so. He delivered a carefully crafted presentation, using no notes, on why Apple’s3 s, \& t# Q- k6 p, v+ {
sales had fallen by 30% over the previous two years. “There are a lot of great people at
3 f/ g- K# Y9 y/ Z0 L: x$ C5 r# A3 pApple, but they’re doing the wrong things because the plan has been wrong,” he said. “I’ve
@& Z2 Z( \5 g4 [$ P2 ]; t2 {' t7 M. C2 ?0 v) X
2 R7 W, P1 m8 {! `! `# z# |0 J8 z1 A1 G
: K0 `( u- ?* T8 {, r# o9 d! K+ Q9 L( F" `* h9 z9 u9 ?( ]) s5 @
/ k4 f$ U" O. f# T0 \2 Y
5 @; R/ I% m) g* c9 e: x2 D
" O6 r! {. j# I' P- a% C* @( M
4 U5 w1 K/ {0 G5 [* X4 i, yfound people who can’t wait to fall into line behind a good strategy, but there just hasn’t
! y" F6 u0 W, u( Wbeen one.” The crowd again erupted in yelps, whistles, and cheers.
+ [9 n2 a! m8 q3 dAs he spoke, his passion poured forth with increasing intensity, and he began saying
% u: g: J; R0 a3 A4 h* g4 m“we” and “I”—rather than “they”—when referring to what Apple would be doing. “I think/ o8 ~4 h, ?: @
you still have to think differently to buy an Apple computer,” he said. “The people who buy
+ P$ ^' ?+ }/ U5 X" ?- xthem do think different. They are the creative spirits in this world, and they’re out to
' S8 f) v' n; |) J1 Rchange the world. We make tools for those kinds of people.” When he stressed the word
7 L/ S% C3 m1 p" b“we” in that sentence, he cupped his hands and tapped his fingers on his chest. And then, in
- z0 [. o( Y4 z: e4 i" T khis final peroration, he continued to stress the word “we” as he talked about Apple’s future., S; Z1 V2 j( J# x5 @ [
“We too are going to think differently and serve the people who have been buying our
. a2 x7 x3 E6 x: Y" q" pproducts from the beginning. Because a lot of people think they’re crazy, but in that# {7 P$ G. g: U0 l# B' s. V6 t9 u
craziness we see genius.” During the prolonged standing ovation, people looked at each3 @5 r0 }: [0 @1 h( q& {
other in awe, and a few wiped tears from their eyes. Jobs had made it very clear that he and+ ~- T3 h& d& h! F' Z, O4 z
the “we” of Apple were one.
: R, U, U9 t( l& v
! f. `5 }, }' u: J, h7 j8 H) GThe Microsoft Pact
$ J9 f! S& `2 o# z Z* m7 {1 _' Y) m* C# W: L
The climax of Jobs’s August 1997 Macworld appearance was a bombshell announcement,
$ h7 c7 w7 W) t, u& h" W, U# F1 L6 Aone that made the cover of both Time and Newsweek. Near the end of his speech, he paused
& V- T1 C" N; G3 x4 i9 Rfor a sip of water and began to talk in more subdued tones. “Apple lives in an ecosystem,”( q: j0 ]9 B2 h. ^( P/ W
he said. “It needs help from other partners. Relationships that are destructive don’t help" ?* o* X3 }3 d+ Z9 ~
anybody in this industry.” For dramatic effect, he paused again, and then explained: “I’d, @$ d9 d: ]* |6 ^
like to announce one of our first new partnerships today, a very meaningful one, and that is( t! V) O' n3 O% Z& q1 N
one with Microsoft.” The Microsoft and Apple logos appeared together on the screen as9 N% H% q, N1 d+ r" M; z
people gasped.% E7 [6 G0 [3 B: h% F
Apple and Microsoft had been at war for a decade over a variety of copyright and patent
6 C0 D1 S( X8 ]issues, most notably whether Microsoft had stolen the look and feel of Apple’s graphical$ n. }; i+ R N6 X! G$ C
user interface. Just as Jobs was being eased out of Apple in 1985, John Sculley had struck a
9 x& a% q7 c( g& b+ hsurrender deal: Microsoft could license the Apple GUI for Windows 1.0, and in return it: c" u% I, [' b& w; M. ^( w, l( W
would make Excel exclusive to the Mac for up to two years. In 1988, after Microsoft came
0 {: J% P4 D; j; Dout with Windows 2.0, Apple sued. Sculley contended that the 1985 deal did not apply to
! X' J9 y% a) O3 T4 l# P3 Z: [Windows 2.0 and that further refinements to Windows (such as copying Bill Atkinson’s
* r" f5 E( |% ^) k; Ptrick of “clipping” overlapping windows) had made the infringement more blatant. By 19975 e0 z* Y5 h3 w& D" U* U: j
Apple had lost the case and various appeals, but remnants of the litigation and threats of2 V. S1 ?3 F; }
new suits lingered. In addition, President Clinton’s Justice Department was preparing a/ o4 t! Q' E$ T. c. ~
massive antitrust case against Microsoft. Jobs invited the lead prosecutor, Joel Klein, to
7 A# o! x3 S( P5 MPalo Alto. Don’t worry about extracting a huge remedy against Microsoft, Jobs told him4 R, A, x. }. n. R
over coffee. Instead simply keep them tied up in litigation. That would allow Apple the
! D, E: h) o2 U6 m: o5 W2 Mopportunity, Jobs explained, to “make an end run” around Microsoft and start offering
5 b i- H* Q8 mcompeting products.
' U( c; {" O4 OUnder Amelio, the showdown had become explosive. Microsoft refused to commit to
, {, S7 j3 k7 P( T5 qdeveloping Word and Excel for future Macintosh operating systems, which could have
/ X6 J# o" O/ A! u& ydestroyed Apple. In defense of Bill Gates, he was not simply being vindictive. It was 3 P5 q1 S- v0 X) }, r
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7 E4 |% R; @! W) u6 Q( h- O [
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% S" N" N, s( ^* T s3 K2 z+ ~/ \/ {4 W. N
& F" K& `. r+ `' ^+ \understandable that he was reluctant to commit to developing for a future Macintosh; z J' g& y, X
operating system when no one, including the ever-changing leadership at Apple, seemed to$ y3 Z3 A/ _) q8 f& c
know what that new operating system would be. Right after Apple bought NeXT, Amelio
- M* e3 V, H% E- ]and Jobs flew together to visit Microsoft, but Gates had trouble figuring out which of them
" x+ a/ \: w* `3 K$ ywas in charge. A few days later he called Jobs privately. “Hey, what the fuck, am I: O7 c8 K8 J3 k' x
supposed to put my applications on the NeXT OS?” Gates asked. Jobs responded by8 C5 C, P% V& I, l# z; H) T
“making smart-ass remarks about Gil,” Gates recalled, and suggesting that the situation
6 k% u4 k) Y' l8 |" `would soon be clarified.
' j6 f0 R5 b3 u7 ~/ ^# oWhen the leadership issue was partly resolved by Amelio’s ouster, one of Jobs’s first
7 d2 [ I$ ?$ R9 @2 o9 v1 w! Sphone calls was to Gates. Jobs recalled:9 y! U$ P5 r7 `5 U/ Q" a9 ~: s! b
I called up Bill and said, “I’m going to turn this thing around.” Bill always had a soft: N, o3 E8 j. D
spot for Apple. We got him into the application software business. The first Microsoft apps) Z' j& G; a9 m! R9 n
were Excel and Word for the Mac. So I called him and said, “I need help.” Microsoft was
7 D3 Q- q$ G# C$ hwalking over Apple’s patents. I said, “If we kept up our lawsuits, a few years from now we
% [# |- j/ h G! |% ?could win a billion-dollar patent suit. You know it, and I know it. But Apple’s not going to, i& X0 T5 h5 @$ w% ^
survive that long if we’re at war. I know that. So let’s figure out how to settle this right8 _% L- d1 Y, J1 H8 b* {4 R
away. All I need is a commitment that Microsoft will keep developing for the Mac and an- \; `* R; {, l
investment by Microsoft in Apple so it has a stake in our success.”# ~2 Q9 S7 o- q: U) i
4 {2 A6 w d5 w- P# w8 r6 E- g% ?3 a& [8 Q. ^) z+ ~1 K/ N
) s( W) v8 w) }. f% g/ |/ r( i+ L& g6 B
. q$ ^9 e9 a) ]: d5 T" e) mWhen I recounted to him what Jobs said, Gates agreed it was accurate. “We had a group of& g% g) d( k( u
people who liked working on the Mac stuff, and we liked the Mac,” Gates recalled. He had
5 Z/ e7 a. f: q' E1 nbeen negotiating with Amelio for six months, and the proposals kept getting longer and4 ^2 }2 {7 m6 C6 @0 s( m7 a- k- H' p
more complicated. “So Steve comes in and says, ‘Hey, that deal is too complicated. What I) _3 U, ~! v- x( c4 z6 V0 V
want is a simple deal. I want the commitment and I want an investment.’ And so we put
1 e1 |% H) l% |- Mthat together in just four weeks.”
$ s# k2 q$ |( E. m9 w4 Y8 [1 U+ H' vGates and his chief financial officer, Greg Maffei, made the trip to Palo Alto to work out
9 {; z9 Y3 W& M! \4 Q" J, ithe framework for a deal, and then Maffei returned alone the following Sunday to work on5 g5 c3 z$ [2 b# v" ?' k, |
the details. When he arrived at Jobs’s home, Jobs grabbed two bottles of water out of the
9 s" T* T* r3 n% J" ^refrigerator and took Maffei for a walk around the Palo Alto neighborhood. Both men wore
3 e# w7 j5 W' b0 l( h4 jshorts, and Jobs walked barefoot. As they sat in front of a Baptist church, Jobs cut to the$ h3 v/ ~5 S( W4 e4 h5 w
core issues. “These are the things we care about,” he said. “A commitment to make5 t9 Q; l7 K) n( j& K, [* c/ A
software for the Mac and an investment.”- Z( x6 `1 }( V5 e# w9 G
Although the negotiations went quickly, the final details were not finished until hours
9 h) @$ s5 {& B- x7 zbefore Jobs’s Macworld speech in Boston. He was rehearsing at the Park Plaza Castle when
" J% S& v: \ f. @7 r! `6 this cell phone rang. “Hi, Bill,” he said as his words echoed through the old hall. Then he4 H7 {! a0 d. T0 T* {0 Y
walked to a corner and spoke in a soft tone so others couldn’t hear. The call lasted an hour.
3 v4 Q$ j$ W# l2 f# O( {* X/ V- d6 aFinally, the remaining deal points were resolved. “Bill, thank you for your support of this
* E" {$ S$ S& ?7 d5 T1 ~1 c: v$ dcompany,” Jobs said as he crouched in his shorts. “I think the world’s a better place for it.”. ~5 O- J9 s( o- q
During his Macworld keynote address, Jobs walked through the details of the Microsoft
* ^3 S& W7 V1 L7 j4 l Xdeal. At first there were groans and hisses from the faithful. Particularly galling was Jobs’s4 U8 O M5 {9 q5 t1 V* O
announcement that, as part of the peace pact, “Apple has decided to make Internet Explorer 7 w5 c# b. {6 \, y) ], E
F4 \: W8 T5 }9 h9 A4 W7 D
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5 i& I% b O0 H- [. o. q# A1 H
$ p" c; ~" Y2 iits default browser on the Macintosh.” The audience erupted in boos, and Jobs quickly
0 Y) O" k1 |; A. Z$ xadded, “Since we believe in choice, we’re going to be shipping other Internet browsers, as
# \5 ?/ G* ?, B& ]! o) `" awell, and the user can, of course, change their default should they choose to.” There were7 |$ X$ ^3 s( @ n* D2 C9 N; w6 N
some laughs and scattered applause. The audience was beginning to come around,
- F" K! c. o9 {especially when he announced that Microsoft would be investing $150 million in Apple and
. v0 e3 }$ D% ^" _getting nonvoting shares.6 R: v3 z) {% N& K4 `3 N8 i+ l
But the mellower mood was shattered for a moment when Jobs made one of the few8 i5 L: w4 C+ ?& {6 |: {
visual and public relations gaffes of his onstage career. “I happen to have a special guest
2 M2 [" @9 Y) q1 w# L8 a# Nwith me today via satellite downlink,” he said, and suddenly Bill Gates’s face appeared on0 _! N- U! N0 g# v
the huge screen looming over Jobs and the auditorium. There was a thin smile on Gates’s( ?! c `. b# l% q
face that flirted with being a smirk. The audience gasped in horror, followed by some boos' ^3 Z5 Y9 T( k7 h/ F5 g
and catcalls. The scene was such a brutal echo of the 1984 Big Brother ad that you half
- n5 y0 v% M* k1 G0 f$ yexpected (and hoped?) that an athletic woman would suddenly come running down the
' I0 r, x' a# N+ `% a5 S5 qaisle and vaporize the screenshot with a well-thrown hammer. t# P7 K# W; U3 t4 |" Z9 a. E' P1 ~
But it was all for real, and Gates, unaware of the jeering, began speaking on the satellite
/ e; u3 d: z7 s: h* rlink from Microsoft headquarters. “Some of the most exciting work that I’ve done in my
# r) C5 R" }! _career has been the work that I’ve done with Steve on the Macintosh,” he intoned in his% X% G, d) q3 j! L4 ?8 ^$ G
high-pitched singsong. As he went on to tout the new version of Microsoft Office that was
# Y4 M5 d. z4 z; D! gbeing made for the Macintosh, the audience quieted down and then slowly seemed to
% w4 h9 X% {3 v7 K" caccept the new world order. Gates even was able to rouse some applause when he said that
+ \% l5 U0 Q6 j" D# athe new Mac versions of Word and Excel would be “in many ways more advanced than7 B2 S" G" [% q6 v; u8 D
what we’ve done on the Windows platform.”- n$ Z6 ]4 p3 k, s" t$ ^
Jobs realized that the image of Gates looming over him and the audience was a mistake.+ y9 M6 R# N! a7 V/ ]+ g7 f3 |2 n# J
“I wanted him to come to Boston,” Jobs later said. “That was my worst and stupidest
8 H; k9 l. V' b9 c/ g( Estaging event ever. It was bad because it made me look small, and Apple look small, and as j, X0 {- r$ @2 g
if everything was in Bill’s hands.” Gates likewise was embarrassed when he saw the( \- M; \9 \9 }. F# i# c
videotape of the event. “I didn’t know that my face was going to be blown up to looming! X' L3 L3 X- G9 f
proportions,” he said.
) ]! a2 R% \& J* D6 n" dJobs tried to reassure the audience with an impromptu sermon. “If we want to move* l8 Y) I x% o$ ^
forward and see Apple healthy again, we have to let go of a few things here,” he told the
; @" J" q6 a; u1 [audience. “We have to let go of this notion that for Apple to win Microsoft has to lose. . . . I
: }" `; V, S- V* C2 Bthink if we want Microsoft Office on the Mac, we better treat the company that puts it out* m4 k) }8 q, P& n1 [
with a little bit of gratitude.”
% t6 e6 |5 r( j# @# k: uThe Microsoft announcement, along with Jobs’s passionate reengagement with the: f" @" i! @2 c2 L+ A. Z/ w: z- C
company, provided a much-needed jolt for Apple. By the end of the day, its stock had2 ^7 `2 ^7 F, a6 E
skyrocketed $6.56, or 33%, to close at $26.31, twice the price of the day Amelio resigned." `9 s. z9 Q6 }8 B3 ~0 v
The one-day jump added $830 million to Apple’s stock market capitalization. The company. R- I D4 z9 W, p3 z @* v t8 _
was back from the edge of the grave.
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CHAPTER TWENTY-FIVE ) A: r( n4 T6 z3 x6 q
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