Based on the fact that Apple is currently
the most valuable American company, it's hard to imagine that at one point in its history
the company almost went bankrupt. At its worst moment, Apple was less than 90
away days from bankruptcy. Today we will tell you the stories of how
Steve Jobs returned to Apple and managed to save the company from bankruptcy, but let's
start with a quick reminder of how it happened that Steve Jobs left Apple in the first place In 1985, due to a conflict with the current
Apple CEO John Sculley, Jobs lost so much control over Apple that he decided to leave
the company that he started himself. After Jobs's departure, Apple was doing quite
well for several years. The company was able to increase profits based
on its domination in the desktop publishing market. However, Steve Jobs wasn’t satisfied with
the situation in the company. Jobs claimed that there is an excessive willingness
to multiply profits and a lack of innovation. He believed that Apple CEO John Sculley introduces
the company in a period of declining revenues and declining market share. In fact, the situation at Apple was actually
getting worse over time. Apple's market share dramatically fell from
the 16% it had in the '80s. to 4% in 1996. John Sculley was replaced as CEO by Michael
Spindler, who was trying to sell the company to Sun, IBM, and hp. After unsuccessful attempts to sell Apple,
in 1996 Spindler was replaced by Gil Amelio. During Gil Amelio's first year at Apple, the
company lost a billion of dollars, and the share price, which was $70 in 1991, dropped
to $14. Meanwhile, Steve Jobs wasn't in the best position
either. After Jobs left Apple, he started another
computer company called NeXT. When the company presented its first computer
NeXTCube, at first people responded with an outburst of enthusiasm, but the excitement
dropped after the product was launched onto the market. Finally, the company was forced to stop producing
computers and content itself with selling operating systems for other computers. … and here interesting situations arose At the time, Apple had a problem with the
operating system. The hope for the company was the new operating
system called Copland, but after getting acquainted with the project, Amelio stated that it wouldn’t
solve Apple's problems and in addition, they wouldn’t be able to release it within the
prescribed period. Apple needed a company that would provide
them with a decent operating system - initially, Apple became interested in the company called
Be, but during the negotiations regarding the sale of Be to Apple, it turned out that
Be's demands were too high. At the time, Apple was also considering several
other options - Solaris, Windows NT, and Steve Jobs’s company NeXT. Finally, both Be and NeXT, presented to Apple's
directors what they can provide to the company. NeXT’s presentation turned out to be much
better and Apple decided to choose NeXT. NeXT had better technology, a complete solution,
and Steve Jobs. Amelio and Jobs started negotiations and it
was finally agreed that Apple would buy NeXT for $429 million. Despite that Amelio tried to convince Jobs
to return to Apple permanently, Jobs was initially not sure if he wanted to return to an active
role in the company. Due to Jobs' indecision about his future at
Apple, it was initially announced that he would be working as an advisor. Immediately after Jobs joined Apple in January
1997, he began to strengthen his position in the company, firstly focusing mainly on
protecting the people who joined Apple from NeXT. On the other hand, Amelio's situation was
getting worse, he had to explain to the shareholders why the results for the last quarter of 1996
showed a 30% decrease compared to the previous year, and the chairman of the board Ed Woolard
didn’t like what Amelio was doing. When Woolard asked Jobs what he think about
Amelio, Jobs replied that Amelio is unfit for his position. The media also turned against Amelio, the
press in its publications turned attention to Apple's problems and expressed criticism
about Amelio. In addition, then Chief Financial Officer
of Apple, Fred Anderson informed Wollard of the difficult situation of the company. He said that money is leaking out, people
are leaving and other key people are considering leaving. During the meeting of the board, Woolard described
how he assesses the company's chances: -if we leave Amelio as CEO, we will have a
10% chance to survive -if we remove Amelio and make Jobs CEO, we
will have a 60% chance to survive -if we fire Amelio and we fail to convince
Steve to become CEO and we will have to find a new CEO, we will have a 40% chance to survive. The company's board decided to authorise Wolard
to make Jobs an offer to return. Initially, Jobs did not want to become CEO. He agreed to join the board and become an
advisor. Why didn't Jobs want to become CEO? One of the reasons was his second company
Pixar, at this time Steve Jobs was Pixar's CEO and the company had just become publicly
listed on the NASDAQ stock exchange. Another thing is that he just felt happy as
CEO of Pixar and enjoyed spending more time with his family. Jobs knew that Apple was in a mess and he
wondered if he wanted to give up the pleasant lifestyle he led at the time. Finally, while considering what to do, Jobs
realized that he cared about Apple and decided to come back there for a while to help the
company find a new CEO. Although Jobs has yet to declare how active
role he wants to play in the company, the board of directors has decided to fire Amelio. Ultimately, the situation was as follows:
Amelio has been fired and he is leaving the company. Then-Apple Chief Financial Officer Fred Anderson
has been appointed interim CEO and he announced that he will follow Jobs' directions. Under the influence of Wollard, Jobs agreed
to become an active advisor and approved the statement, in which it was said that he would
increase his involvement in Apple for a period of 90 days to help the company until the new
CEO will be hired. Jobs delved into all aspects of the business
- product design, savings, negotiating with suppliers, and evaluating an advertising agency. To stop the outflow of key employees, Jobs
decided to discount their stock options. This decision was the first conflict between
Jobs and the board of the company. Finally, Jobs threatened to leave the company,
and the board agreed to his idea regarding stock options. However, this wasn’t enough for Jobs. He said that the company is in a terrible
condition and he has no time to indulge the board. Jobs stated that he want the entire board
of directors to resign, and if they didn’t do this, he would leave the company. The only person who could stay was Woolard. The members of the board knew that they couldn’t
let Jobs leave the company, and therefore they agreed to resign. After Jobs managed to force the board of directors
to resign, he completed a new board of directors from his loyal people. Signs that Jobs is seriously involved in the
operation of the company caused the stock price to rise from $13 to $20 a share. Another important information was presented
at Macworld in August 1997. During his speech, Jobs communicated that
he and other people are working to improve the situation in Apple and outlined the reasons
for the decline in product sales over the past few years. Next, he announced something surprising - a
partnership agreement with Microsoft. How did it happen that two competing companies
suddenly decided to cooperate? After Amelio was fired, the phone call with
Gates was one of the first that Jobs had. He phoned Bill and said that he needs help. Microsoft was accused of infringing Apple
patents, Jobs told Gates that if we continue to litigate, Apple could win a billion dollars
in a patent case in a few years, he also pointed out that he realizes that Apple will not last
that long in a state of conflict. Jobs suggested to solve this problem right
away. He wants Microsoft to commit to developing
software for Mac and investing in Apple, thanks to which Microsoft will have a share in the
future success of Apple. An additional incentive for Microsoft to invest
in Apple was the fact that support for its own competitor may help Bill Gates' company
with its problems with its antitrust case. Finally, the contract between the two companies
was prepared in just 4 weeks. During the presentation at Macworld, Jobs
described the terms of the contract with Microsoft. Apple was supposed to set Internet Explorer
as the default browser in Macintosh, but it was possible to change the default browser. Microsoft will invest $ 150 million in Apple
and will get non-voting shares. In addition, Microsoft committed to releasing
Microsoft Office on Macintosh for the next five years. At the end, a connection was made to Bill
Gates, his face appeared on the screen above the stage and Gates gave a speech from Microsoft's
headquarters. The news of Microsoft's investment and Jobs'
involvement in the company's operations caused a positive effect on the company’s shares. At the end of the day, the share price went
up by 33% to a halt at $26.31, which was double the share price the day Amelio left the company. This one-day jump, increased the company's
stock market value by $830 million. The next step was to remind people what makes
Apple stand out. Jobs stated that they have to prove that Apple
is still alive and Apple still means something special. For this purpose, Jobs contacted Lee Clow,
who was involved in the creation of the famous Apple’s "1984" ad. As a result, advertising agency TBWA \ Chiat
\ Day, where Lee Clow was the chief creative officer in cooperation with Apple, created
the Think different campaign. Instead of a series of advertisements presenting
individual products, it was decided to conduct an image campaign. Its aim was not to show what computers can
do, but what creative people can do with the help of computers. The famous advertisement showed creative people
who took risks, paid no attention to failures, and put their careers at risk, acting in a
way different from what is generally accepted. Meanwhile, Jobs finally decided that he would
officially take over the management of the company for a while. Basically, he was the leader since the removal
of Amelio 10 weeks earlier, but officially he was still only the advisor, the formal
interim CEO was Fred Anderson. On September 16, 1997, Steve Jobs was named
interim CEO of Apple. The next thing Jobs got around to was the
company's product portfolio. He decided to withdraw Apple from the licensing
business. In 1994, Apple began licensing its operating
system to other computer manufacturers, which turned out to be a quite dubious strategy. In addition, Jobs wanted to have control over
the entire device, which meant tight integration of hardware and software. Another thing was that Apple was producing
numerous versions of the same products. Jobs began removing various models and products,
which reduced the number of them by 70%. During the reduction of product portfolio
complexity, Jobs also decided to withdraw from the sale of printers and close the Newton
project. Finally, Jobs stated that the company needs
4 great products, which will fit into the categories - consumers, professionals and
desktop computer, portable computer. A desktop computer for a professional user
was to be the Power Macintosh G3. A portable computer for a professional user
was to be the PowerBook G3. As for the desktop computer for consumers,
work began on a project that would eventually be named iMac. Whereas a portable computer for consumers
was to become the iBook. The ability to properly concentrate efforts
saved Apple. It is worth mentioning that in the first year
after Jobs' return, he fired more than 3000 people, which allowed to save the company's
financial balance. The losses for the fiscal year that ended
when Jobs became "interim CEO" were 1.4 billion. At the end of fiscal 1998, profit was $ 309
million. This was the story of how Steve Jobs saved
Apple from bankruptcy. If you want to see more stories of companies
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