Whither Apple?

DeWitt Robbeloth

II Computing Volume 1 Number 1
October / November 1985

The computer world was stunned in June when Apple Computer, Inc. announced, in effect, that cofounder and Chairman of the Board Steven Jobs had been unhorsed in a corporate joust with Apple’s President and Chief Executive Officer, John Sculley.

Sculley convinced the Board of Directors to reorganize the company in a way that removed Jobs from his executive role as general manager of the Macintosh Division. The new “functional” organization did not include a managerial job for Jobs. Of course, he remains as Chairman and major stockholder, and is now characterized as “chief visionary” for the company.

Most industry savants agree the move was good for Apple, or even crucial. Why? There were serious, functional differences between the two about what Apple products should be like, how they should be marketed, and how the company should be run. (What else is there?)

Jobs and co-founder Steve Wozniak epitomized the boy-genius entrepreneurial style. In Apple’s 1984 Annual Report, Jobs appears conspicuously coatless amid his sartorially staid executive staff. Having achieved the American dream, Jobs was seen as “cocking a snoot” at corporate traditions, according to Apple-watcher Paul Evans of the securities firm S.G. Warburg, Rowe & Pitman, Akroyd.

Seemingly at odds with the concept that had made the Apple II such a success, Jobs advocated the closedbox approach to products, with most resources backing the Mac as a business machine to challenge the IBM PC. Sculley favored open, expandable product lines like the Apple II, aimed at soaking up sales where IBM’s corporate clout wasn’t devastating- in education, small businesses and the home.

WithJobs in the Macintosh saddle, Sculley apparently had little control over half the company. Finally, the failure of the Mac to significantly dent IBM’s armor resulted in losses that gave Sculley a good business reason to challenge Jobs’ control by reorganizing.

Apple’s former organization divided the company along product lines – Apple II on one side, Macintosh on the other. It was really two companies running side by side, with some glaring duplication of services. The new organization is functional, with sales and marketing on one side, and product operations, including new product development, on the other.

Now what? At his first public appearance since the coup (at Future Computing’s MacForum in San Francisco), Sculley assessed the situation. Apple is still healthy, he said, and will be trimmer after the reorganization. A more disciplined approach to business enacted by Apple’s many good managers and some new outsiders will concentrate on selling all Apple’s existing products primarily through dealers (as opposed to direct sales by the Apple sales force).

The vision for Apple remains the same, Sculley said. “Apple builds personal computers for individuals, not institutions.” There will be new Apple products, but their development will be “market driven.” He urged his listeners to stop focusing on “what comes next, and look at what we have to offer people today?’ Nevertheless, there will be new products. Sculley firmly supported continuing production and development for the Apple II line and encouraged other companies to jump on Apple’s bandwagon. He specifically instructed Apple’s legal and marketing groups “to Build bridges with outside software and hardware developers, to make it easier for them to work with Apple.”

One widely rumored direction is towards the 65C816 chip. This microprocessor from Western Design Center operates in either of two modes. In emulation mode it works identical to the 6502 or 65C02 chip, so it could maintain compatibility with existing Apple II software. In native mode it operates as a 16-bit (or 8-bit) processor and will need new software, but can directly address 16 megabytes of memory (about the same as most mainframes). An operating system for this chip’s native mode is being designed that will do for it what CPIM did for the Z-80.

The Apple II market continues strong. Future Computing, a research firm, pegs Ile sales in 1984 at about 500,000 units and holding steady, with Ile sales expected to surpass that number in 1985. Even if demand is only half that much, it would still indicate substantial interest in this venerable line of computers. There are good reasons for this. The open architecture of the II line continues to stimulate thirdparty development of hardware and firmware, while a vast library of software and established user networks help retain the loyalty of Apple II owners.

It seems the furor has settled down, but there are still doomsayers. Robert Lydon, publisher of Personal Computing magazine, predicts that Apple Computer, Inc. will not last as a separate company for another two years. As for the home market, “It never really existed” he says. “It was a fad. Just about everyone who was going to buy a computer for their home has done it. And my guess is that most of the computers actually used at home tie in with some business use.”

Paul Evans, on the other hand, thinks Apple will make it. “It’s a big company, and now it’s going to be run like one. It has viable products and a great reputation. There’s room in the market for Apple. It’s going to take a bad quarter or two and write off a lot of problems, then come back strong this Christmas. No question in my mind, Apple will be around a long time.” II

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