Written By Keshav Mohta (Grade 8)
In 1996, Apple bought NeXT Software Inc as part of an effort to revive the company. Steve Jobs who was the CEO of NeXT Software at the time of the acquisition, came back to Apple as part of the deal. Little did anyone know that this deal was to be the turning point for Apple but for reasons they never expected.
During Jobs’ time away from Apple, the company had become a mess. They had not been able to make any significant breakthroughs after the original Macintosh. Out of desperation, they had ventured out into newer products like printers and calculators. They even tried licensing the Macintosh operating system to hardware companies like Radius, but that didn’t help them either.
The first few months after Jobs joined were disastrous for the company. The presentations at Macworld 1997 (an annual Mac expo) in San Francisco had malfunctioning equipment while Gil Amelio, then CEO of Apple, forgot to introduce Muhammad Ali, the guest of honour. Soon after, Apple announced a loss of over $700 mn for the March 1997 quarter and fired 3,000 employees. All this while, Jobs quietly promoted all his employees from NeXT into leadership roles.
Through this period, the Board started losing faith in Amelio. Finally, in July 1997, the Board fired Amelio and appointed Jobs as interim CEO. In his memoir, On the Firing Line: My 500 Days at Apple, Amelio looks at his journey in Apple and blames Jobs for his ouster.
Back in charge, Jobs quickly discontinued many of Apple’s existing products. These products were not selling well and comprised a small portion of the market. They included the Newton (a personal digital assistant) and Cyberdog (an internet suite of applications) and were all developed when Jobs was outside Apple. This was the first step towards the revival of the world’s soon-to-be most valuable company.
The Steve Jobs 2.0 was god’s gift to the company. It didn’t take him long to turn things around and make Apple profitable again. His learnings from NeXT helped him revive the company from its all-time low. One of the major problems Apple faced was the complexity of their Mac lineup. They included the Power Macintosh, the PowerBook, the PowerMac G3, the Performa and many other Macs, and each of them were for a different kind of customer. Jobs wanted to make it easy for the consumer to choose an appropriate Mac. So, he decided to put all of Apple’s energies behind just 4 products: a consumer desktop, a pro desktop, a consumer notebook/laptop and a pro notebook/laptop. He decided to start with the consumer desktop.
In May 1998, 14 years after the original Macintosh, Jobs announced, the iMac. This was a one-of-a-kind consumer product. The iMac was the first Mac to allow you to connect to the internet. At that time, the internet was relatively new and the idea of network computers was picking up. As Jobs said, what consumers wanted was to get internet, simply and fast. He compared the iMac to other computers which were “slow”, had “crummy displays” and were “ug-ly”.
This first iMac was competitively priced at $1,299. It had a 15-inch display and most importantly a colourful, translucent design with a matching mouse. Jobs wanted it to make a brand statement and show to the world the company Apple was becoming. It was not aimed at the education sector, but its attractive design made it a favourite among students. By the end of 1998, the iMac was America’s highest-selling personal computer with annual sales of nearly 800,000 units. Twenty years later, the iMac is still one of the best desktop computers one can get, with close to 18.2 million units being sold in 2018.
A year later, in 1999, Apple launched the iBook. It targeted computer novices and primarily the education segment. With a clamshell design and 6 vibrant colours it was just like the iMac, but portable. It was even advertised as an “iMac to go” and had a handle so that people knew that it was portable. The iBook became one of the most popular computers in schools with some even distributing it to every student. Eventually the iBook morphed into today’s famous MacBook.
After two great product launches, the iMac and the iBook, in January 2000, the Board at Apple decided to make Steve Jobs the official CEO of Apple. A year later, Apple finally launched Mac OS X. This was NeXTSTEP, and much better.
While there were major moves on the product line, Jobs also needed money to fund his projects. Going back to August 1997, Jobs announced a shocking deal at Macworld. While speaking about ‘Meaningful Partners’, he announced a deal with his long-time foe, Bill Gates. Microsoft and Apple were going to share their patents. Further, Microsoft would build a version of MS Office for the Mac. Jobs also announced that Microsoft Internet Explorer was going to become the default web browser on the Macintosh.
Towards the end, a massive live video of Gates came on the screen (which in hindsight, Jobs acknowledged, showed Jobs in poor light). This was met with loud booing from the crowd who were Apple purists and were against all those “PC people”. Jobs explained this later by famously saying, “Apple didn’t have to beat Microsoft. Apple had to remember who Apple was because they’d forgotten who Apple was.”
As CEO, one of Jobs’ priorities was to reinvigorate the brand image of Apple. He wanted to raise the brand to an ideological level and hence decided not to talk about technical specifications, a philosophy that continues till date.
Around this time, IBM, Apple’s biggest competitor, was promoting their ThinkPad using the campaign slogan, “Think”. In Autumn 1997, Jobs launched the new Apple campaign, “Think Different”. He said the soul of Apple was to do things differently. Apple products were meant to be used by people who considered themselves different and not ordinary. Only people who believe they can change the world actually do so.
The “Think Different” campaign was immensely powerful and had a very deep meaning. The lynchpin of the video ad was the memorable Crazy Ones which included world-famous visionaries like Albert Einstein, Thomas Edison, Mahatma Gandhi and Pablo Picasso. These Crazy Ones were the people who believe they could change the world and they did. This campaign won the 1998 Emmy Award for Best Commercial and the 2000 Grand Effie Award for most effective campaign in America.
I must say that this is one of the best ad campaigns I have seen and stands next to Pepsi’s iconic, “Nothing Official About It” ad.
Jobs believed that Apple was a premium company with premium products. Therefore, he charged a higher price for their products. Since, Apple computers were sold next to Windows computers, often the salespeople recommended the cheaper Windows computers. Jobs realised he had to sell Apple products differently and create a brand experience. To create this experience, he decided to open Apple’s own retail stores in the US. In May 2001, stores in Tyson’s Corner, Virginia and Glendale, California were opened.
The Apple retail experience was an instant hit. iMac sales skyrocketed with close to 650 thousand units being sold that year alone. People were able to experience Apple products for themselves and try them out. This was unlike anything done by other tech companies. Today, the Apple retail experience is core to Apple. Their attractive design and helpful staff create a unique experience for the customer. Millions of people visit Apple stores just to try their products and end up buying them. All this has resulted in Apple acquiring the status of a cult where people blindly follow the company. This success helped transition Apple to the 21stCentury.
Even as Jobs had invested deeply in terms of sales and marketing it was also time to up the product line once again. The digital music industry had been picking up for quite some time. People wanted to listen to their own personalised libraries of music easily and quickly. Jobs realised this problem and got onto making one of the most revolutionary products of its time.
In January 2001, Apple launched iTunes. iTunes was an app that came packaged with every Mac and was not only a music player but could also convert music of CDs to MP3. This was in exceptional demand and helped boost Mac sales. However, iTunes was just the predecessor to something much bigger.
Ten months later, in October 2001, Apple announced the iPod, undisputedly one of the most successful products in the world which would go on to sell 400 million units. The iPod was a portable MP3 music player. At that time, other portable MP3 players could only store 100-150 songs. They also did not have intuitive user interfaces and it was difficult to scroll through 100s of songs. The iPod was advertised as being able to house 1,000 songs in your pocket making it especially attractive to youngsters.
With the iPod, Apple invented a whole new category of digital music players which could allow you to listen to music wherever you went. It had a mechanical scroll wheel and came in capacities of 5 GB and 10 GB starting at under $300. It was impossible to see a teenager roaming around without an iPod in their pocket.
Across all the products launched by Apple in this time, there was one consistent theme – ‘i’. There are many theories behind the ‘i’. Some people believe that it stands for the internet in iMac and others believe that Steve Jobs shortening interim CEO to iCEO started the trend of the ‘i’. However, over a period of time the ‘i’ stood for oneself signifying the personalisation of Apple products. From the iMac to the iPod all the products were made for individuals and worked seamlessly together. The iMac and the iBook were to help an individual get work done and the iPod and iTunes helped one play music curated as per their wishes. An individual could easily move across all the Apple products in the ecosystem. This might be another reason as to why almost every Apple product launched after this started with an ‘i’.
Apple was slowly coming back from the dead. In 6 years, Steve Jobs had turned the company on its head. For the fiscal year 2003, Apple announced profits of close to $69 million. However, the best was yet to come. Unfortunately, the story was not without its twists. In autumn of 2003, Steve Jobs got diagnosed with pancreatic cancer. The journey was difficult for Jobs but he continued to fight and make his company the most valuable tech company in the world.
Go to Part 3: Steve Jobs – A Journey in Exile
Go to Part 5: Steve Jobs – The Grand Finalé
Featured Image Courtesy – LinkedIn
Well done Keshav
very well written very informative