Book on history of Apple contains lessons
for businesses dealing with rotten cores - Jan 06 1998

No technology company was in the news last year as much as Apple Computers. Tumbling market share, cancelled products, chaos at the top, along with the return of founder Steve Jobs and peace with rival Microsoft, have been just some of the events that have kept the company's story on the business pages.

Jim Carlton is West Coast technology reporter for the Wall Street Journal. As such, Apple has been part of his beat. His recently published book has a simple title, Apple, but a telling subtitle: The Inside Story of Intrigue, Egomania, and Business Blunders (Random House/
Times Business, $38.50).

In it, he chronicles the past decade and a half, from the efforts to create the Macintosh, self-proclaimed as "a computer for the rest of us," to this past summer, with Jobs' pact with Bill Gates' Microsoft. We see a company that saw itself with an idealistic mission, but one in which management was never able to control engineering, and where as early as 1985, the issue of licensing Mac clones was raised in a surprising memo from Gates. (Had Apple's management chosen to move in that direction then, they would almost certainly have forestalled Microsoft's Windows efforts and emerged as the dominant computer platform.)

We get pictures of Apple chief executives: John Sculley, recruited from the ranks of Pepsi by Jobs, who then engineered Jobs' removal. Sculley, who comes across as basically a nice guy, went on to pull the company out of sales slumps not once but twice, but never earned the respect of Apple's technologists or many of its customers. His successor, Michael Spindler, nicknamed The Diesel, was less of an engine of growth than a man who was known to hide under his desk when faced with unwelcome visitors and was unable to give the company a focus when faced with a growing Windows hegemony. He was replaced, for a brief period, by Gil Amelio, who promised employees that he would "take the blame when things go wrong -- and give you the credit when things go right" but lost their respect by doing just the opposite, paving the way for Jobs' return. Each changeover at the top was characterized by plotting and backstabbing worthy
of Imperial Rome. Lurk-
ing in the background throughout most of the 1980s was chief technologist Jean-Louis Gassee, who let his engineering staff run rampant, funding their excess spending by promoting a policy that deliberately priced "the computer for the rest of us" too high for many to afford.

Carlton's account focuses on the importance of business leadership. While Microsoft has clear direction from Gates, and chip-maker Intel is led by Andy "Only the Paranoid Survive" Groves, Apple's leaders were too busy fighting among themselves to give the company the control it needed. The book offers some morals, which may be applicable across the board:

* Be paranoid, not arrogant. Knowing they had the best technology, Apple expected the market to pay whatever they asked. Instead, the market was prepared to settle for more affordable if not-as-sophisticated technology from the Wintel cloners.

* Welcome help from others; do not sneer at it. The 1985 memo about cloning comes to mind.

* Seek the long-term reward, not just the short-term gain. Again, compare Apple to Microsoft, a company prepared to take years to build market share -- and this is not just a result of the company's deep pockets. For most of the period covered, Microsoft's sales were a tiny fraction of Apple's.

* Embrace industry standards; do not live outside them. As the only company defining the Macintosh standard, Apple is forced to shoulder a research and development burden that is double what is spent by rival Compaq, for example. Companies like Compaq which produce Wintel computers end up benefiting from research and development spread across an entire industry.

By focusing on Apple's leadership, or lack of it, Carlton's book loses sight of the products and the customers. There is little sense of the magic that much of the Macintosh product line evoked or why the company has garnered a following prepared to pay a premium price and to stick with the company through the troubled 1990s. The debate over whether to open the Macintosh standard to other companies threads through the book. Unfortunately, the book missed the company's recent decision to shut down most of its cloning initiative.

Apple's try-anything, out-of-control engineers have provided many of the best ideas for its competitors. I can only hope the company returns to being a vital force in the industry. In the meantime, Carlton's book provides insight into the long process that brought the company to its current position.*

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Alan Zisman is a Vancouver educator, writer, and computer specialist. He can be reached at E-mail Alan