What if Steve Jobs Hadn’t Returned to Apple in 1997? 12 comments
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Thursday is Thanksgiving in the U.S. Traditionally we take stock of the things that we’re thankful for on this day each year. And I realized that one of those things is Steve Jobs. I’m thankful that he returned to Apple in 1997 and did the things he has done since. It wasn’t at all a certainty that he would ever return to the company that he co-founded two decades earlier. In fact, it was only luck and coincidence that pushed him back there.
It was late December 1996. I was an associate at Wilson Sonsini Goodrich & Rosati, the largest and most well known law firm in Silicon Valley. I’d fought for my job there, and I was lucky to be in a small group of lawyers that worked on some of the hottest deals at the firm – Netscape public financings and acquisitions, Pixar’s corporate deals with Disney (DIS), and NeXT Software, among others. Steve Jobs ran Pixar and NeXT, and whenever he did something that needed a law firm, he called my boss. Well, my boss’s boss – Larry Sonsini.
That month Larry got a call. Steve was going to try to sell NeXT Software to Apple (AAPL). He’d presented to the Apple board of directors, and his characteristic anti-charm won them over. They’d shortly pay about $400 million to get NeXT, with Steve Jobs returning to Apple as an advisor. It wasn’t long before he took the CEO job and started a more than decade-long run of hit products that have disrupted the computer, music, television, movie and telecommunication industries.
We worked night and day on that deal for six straight days, barely leaving the office and usually sleeping on the floor under our desks. When we were done, one of the partners drove me over to Steve’s house to get his final signature on the documents I remember stuttering in his presence about my first computer, an Apple II+. A few days later Steve left me a voicemail about an administrative issue. I saved that voicemail for years, until I left the firm. It was, all in all, a formative moment for me.
And even today, not that many people fully realize how unlikely it was that the deal would ever happen. Apple was also negotiating with Jean-Louis Gassée to acquire his company, Be Inc. Be’s operating system BeOS was probably a better product fit with Apple than NeXT. Apple offered a rumored $200 million for Be, but Gassée held out for far more. And so Apple went with Jobs at the last minute.
Here’s what the NeXT Software website showed immediately after the announcement:
What if Apple had bought Be, and Steve never returned to Apple? What would the company, and our world, look like today?
Apple Then, Apple Now
When Steve Jobs returned to Apple the company had just completed a fiscal year where they lost about $1 billion on $7 billion in revenue. The company was worth about $4 billion. Rivals like HP and Dell were worth about $62 billion and $8 billion, respectively.
Today Apple is worth a staggering $184 billion on revenues of $36.5 billion and net income of $8 billion. The company is now worth far more than HP (HPQ) and Dell (DELL) combined. Hewlett Packard is worth just $119 billion, and Dell is worth $28 billion. You could throw another Dell in there and Apple would still be worth more.
In 1997 Apple had a snoozy product line that included the ill-fated Newton, the Performa, the Power Macintosh, the PowerBook a bunch of printers and a few servers.
User dependence on desktop software meant that only the very loyal or the very strange used Apple’s products. Everyone else wanted a common desktop platform.
Fast Forward to today. Apple has the sexiest products in the business: iMacs, Macbooks, iPhones, iPods and more. Even the Mac Mini has a place in my home, powering my television.
In the last three months of this last year alone, Apple sold 3 million Macs, 10 million iPods and 7.4 million iPhones.
But the hardware isn’t even the start of what Apple has done in the last 12 years. They’ve accelerated the pace of change in the music, film and television industries as well with the iPod and iTunes. And they’ve redefined the mobile phone with the iPhone.
If Gassée, or anyone else, had become the CEO of Apple back in 1997, how many of these products would exist today? Would Apple have ever made the first iPod, entering into an already saturated MP3 player market in the beginning of this decade? How likely would the iPhone have been? And next year we’ll see an Apple Tablet computer. Does anyone think anyone but Steve Jobs would have pushed that product to market?
I don’t think any of those products would have launched. Or if they did they would have been as notable as the MP3 players and phones launched by competitors like Dell and HP. Quick, who can name any of those products? Who’s owned one?
Our World Without Steve Jobs At Apple
Fortune recently named Steve Jobs the CEO of the Decade, and with good reason. Not only has Apple performed financially – it’s worth about as much as Google, and has a larger market cap than AT&T (T), HP, Intel, Dell and countless other huge tech companies.
But forget all that. What would our world look like without him? We’d likely still be in mobile phone hell. Chances are we still wouldn’t have a decent browsing experience on the phone, and we certainly wouldn’t be enjoying third party apps like Pandora or Skype on whatever clunker the carriers handed us. Even if you use an Android, Palm Pre or newer Blackberry today, you must thank Apple for pushing open the doors to mobile freedom. Think back to the phone you had in 2006, and then tell me you don’t love Apple for the iPhone alone (yes, I’ve moved on, but the iPhone was the genesis).
Steve Jobs was also the man who talked the major music labels into dropping DRM. He nearly single-handedly disrupted the entire industry. And it’s amazing how many laptops and desktops today mimic the look and feel of Macbooks and iMacs.
Apple certainly hasn’t done everything right (MobileMe comes to mind, and I have had nothing but trouble with the Macbook Air). And their stance on the iPhone is irritating and, well, sorta evil.
But all of that’s ok. Because without Steve Jobs’ Apple the world would be a less colorful place. The man is a living legend and deserves his place in history. This Thanksgiving, Steve Jobs is one of the things that I’m thankful for. And I bet you are too.
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"And their stance on [Google Voice for] the iPhone is irritating and, well, sorta evil."
I suggest CEO Steve Jobs to review his strategy for 2010 and beyond:
Dropping prices on all Apple products.
Offer incentives for software developers.
Bundle incentives for beloved customers.
Offer Apple iPOD to all worldwide customers.
Working closer with academic and universities.
Growing a channel partners and let them drive market.
Strategic partners to drop prices to gain more market share.
Have a wonderful Thanks Giving.
Your comments about getting the NeXT deal are very interesting.
When the history of the computer industry is written, Steve Jobs will occupy a position of importance well above Gates. Not that Gates has not been important. Gates has been important, in a very negative way.
The pivotal decision in the PC industry was IBM's product strategy of putting an open hardware architecture on the market. The killer app was Lotus 1-2-3.
Gates has been an outstanding monopolist. He managed to get away with inflicting a piece of junk on the market, getting hundreds of millions of users hooked on this junk. His junk has been bug-ridden and glacially slow to evolve. Gates' junk is based on an incoherent theory of OS design that has been wide open to hackers. Very importantly, the defects in the junk Gates has pushed on the world have caused untold costs for end users and OEMs.
I believe that Gates and Microsh*t should rightfully have been the targets of the largest class action products liability and antitrust case in the history of the world -- past and future.
But the key feature of the iPhone was and still is USABILITY.
Other devices had the same features, more of them, and better features than the original iPhone (and still do today). But just try to actually use those features. What good is a feature if only an Engineer can use it? How much value does a built-in GPS have if a new user can't find it without the help of an instruction manual? What good is a camera with a flash if you can't figure out how to actually use the shutter button for it? How good is a web browser on your phone when it can't access the real web? These were the monumental changes that the iPhone ushered in - all usability features. And here's the kicker - it's still by far the easiest to use, most intuitive interface on a phone, bar none. It's been almost 3 years since the iPhone was announced, and no one has caught up to their interface yet.
In a world which is dominated by non-tech types, that simple reality explains why Apple has been so successful. It isn't marketing. It's usability.
Oh, BTW - you may not be able to run your engineering apps on the Mac, but I can run my engineering apps - I just recompile the UNIX code for the OS-X kernel and I'm good to go. There's an advantage to OS-X being a UNIX shell.
On Nov 27 12:45 PM Davis Gentry wrote:
> come on - what single capability on the iPhone was unique when the
> started selling them? I had a touchscreen phone (with full keyboard)
> from HTC running Windows Mobile at least two years before the iPhone
> came out. It had voice recognition (how long did it take Apple to
> realize the ideal interface to a phone was, well, voice?), web browsing,
> was tied to my email, and I could and did buy lots of apps for it.
> The iPhone browsing experience was better to start with, but I prefer
> my Blackberry Bold for browsing over the iPhone today. Their touch
> interface was innovative, and did forward the state of the art. But
> if you did (or do, for that matter) use a PC as a primary interface
> to the rest of the world, Apple in general has severe limitations.
> You cannot buy MAC versions of a great deal of engineering software,
> so engineers HAVE to have something with a Windows operating system
> (not a complaint, mind you - I LIKE Windows - and as an operating
> system OSX has some advantages, too). My latest computer is a MacBook
> Pro with Fusion and Windows. I originally planned to not use MS Office,
> and just run engineering stuff and Visual Studio on the Windows side.
> The iWork package is so bad (try comparing a Word doc with embedded
> spreadsheet to the same thing with iWork) that I bought a copy of
> Office and installed it on the Windows side. And Apple has nothing
> that compares to Outlook. And my old HTC was fully integrated with
> all of it. My desktop Inbox stayed integrated with my phone one (iPhone
> still cannot do that, last I heard). I ran pdfs, spreadsheets, and
> documents on the phone. What Apple is great at is the same thing
> that Microsoft was great at twenty years ago - marketing.
A former LAWYER is pontificating about EVIL!!!!
Just wonerful
Others:
- Light sensor that shuts off the backlight when you hold the iPhone to your head.
- Accelerometer that can be used not only for automatically shifting to landscape mode, but as a game controller, as well.
- Gestures, like "inertia" for scrolling through lists
- Did the HTC have a hard glass capacitance display or the more usual Palm-like pressure-sensing display? (IOW, did you use a stylus with the HTC?)
- Did the HTC have multiple-language keyboards?
and, of course, the full iPod capability, including widescreen video.
Did you try the Mac version of MS Office? It may actually be better, according to several people who've switched to it from running the Windows version with Parallels.
On Nov 27 12:45 PM Davis Gentry wrote:
> come on - what single capability on the iPhone was unique when the
> started selling them?
On Nov 27 10:55 AM Old Hand wrote:
> Spot on, dude.
>
> Your comments about getting the NeXT deal are very interesting.<br/>
>
> When the history of the computer industry is written, Steve Jobs
> will occupy a position of importance well above Gates. Not that
> Gates has not been important. Gates has been important, in a very
> negative way.
>
> The pivotal decision in the PC industry was IBM's product strategy
> of putting an open hardware architecture on the market. The killer
> app was Lotus 1-2-3.
>
> Gates has been an outstanding monopolist. He managed to get away
> with inflicting a piece of junk on the market, getting hundreds of
> millions of users hooked on this junk. His junk has been bug-ridden
> and glacially slow to evolve. Gates' junk is based on an incoherent
> theory of OS design that has been wide open to hackers. Very importantly,
> the defects in the junk Gates has pushed on the world have caused
> untold costs for end users and OEMs.
>
> I believe that Gates and Microsh*t should rightfully have been the
> targets of the largest class action products liability and antitrust
> case in the history of the world -- past and future.
Occasionally they are the extreme cutting edge with a major new technology (CD Rom, Newton, WiFi), but more often they take stuff that's been around a little while but that hasn't been done right, and mix in or invent some important technology to make it work better (Multi Touch, Bonjour, Mag Safe, the Mouse, LCD, machined aluminum enclosures, etc.).
--- --- ---
Others:
- Light sensor that shuts off the backlight when you hold the iPhone to your head.
- Accelerometer that can be used not only for automatically shifting to landscape mode, but as a game controller, as well.
- Gestures, like "inertia" for scrolling through lists
- Did the HTC have a hard glass capacitance display or the more usual Palm-like pressure-sensing display? (IOW, did you use a stylus with the HTC?)
- Did the HTC have multiple-language keyboards?
That is revisionist history. The mac at that time was having some problems, but it still offered the best usability by far. In fact, though it was not as stable, the Mac OS at the time had many features that OS X still lacks.
It is true that 'everyone else' was afraid to buy a Mac at the time. Contrast this to now, where it seems everyone WANTS a Mac, but some are still not sure why they should buy one. It's kind of a catch 22, (unlike iPod and iPhone which has been the real genius--put out a product that is understood even by windows users) until you buy one you have no idea why they are so great.
That bit about Google Voice is really getting old. If GV is so great, as you seem to think, then just switch to Android and quit whining. Apple isn't going to let Google come in and totally FUBAR the entire iPhone just because Goog might have a good idea. Apple is in the driver's seat here, not Google.