Steve Jobs

shouldn’t be wasting your time on such crappy products.” Many of the engineers were infuriated at his slash-and-burn tactics, which resulted in massive layoffs. But Jobs later claimed that the good engineers, including some whose projects were killed, were appreciative. He told one staff meeting in September 1997, “I came out of the meeting with people who had just gotten their products canceled and they were three feet off the ground with excitement because they finally understood where in the heck we were going.”
    After a few weeks Jobs finally had enough. “Stop!” he shouted at one big product strategy session. “This is crazy.” He grabbed a magic marker, padded to a whiteboard, and drew a horizontal and vertical line to make a four-squared chart. “Here’s what we need,” he continued. Atop the two columns he wrote “Consumer” and “Pro”; he labeled the two rows “Desktop” and “Portable.” Their job, he said, was to make four great products, one for each quadrant. “The room was in dumb silence,” Schiller recalled.
    There was also a stunned silence when Jobs presented the plan to the September meeting of the Apple board. “Gil had been urging us to approve more and more products every meeting,” Woolard recalled. “He kept saying we need more products. Steve came in and said we needed fewer. He drew a matrix with four quadrants and said that this was where we should focus.” At first the board pushed back. It was a risk, Jobs was told. “I can make it work,” he replied. The board never voted on the new strategy. Jobs was in charge, and he forged ahead.
    The result was that the Apple engineers and managers suddenly became sharply focused on just four areas. For the professional desktop quadrant, they would work on making the Power Macintosh G3. For the professional portable, there would be the PowerBook G3. For the consumer desktop, work would begin on what became the iMac. And for the consumer portable, they would focus on what would become the iBook. The “i,” Jobs later explained, was to emphasize that the devices would be seamlessly integrated with the Internet.
    Apple’s sharper focus meant getting the company out of other businesses, such as printers and servers. In 1997 Apple was selling StyleWriter color printers that were basically a version of the Hewlett-Packard DeskJet. HP made most of its money by selling the ink cartridges. “I don’t understand,” Jobs said at the product review meeting. “You’re going to ship a million and not make money on these? This is nuts.” He left the room and called the head of HP. Let’s tear up our arrangement, Jobs proposed, and we will get out of the printer business and just let you do it. Then he came back to the boardroom and announced the decision. “Steve looked at the situation and instantly knew we needed to get outside of the box,” Schiller recalled.
    The most visible decision he made was to kill, once and for all, the Newton, the personal digital assistant with the almost-good handwriting-recognition system. Jobs hated it because it was Sculley’s pet project, because it didn’t work perfectly, and because he had an aversion to stylus devices. He had tried to get Amelio to kill it early in 1997 and succeeded only in convincing him to try to spin off the division. By late 1997, when Jobs did his product reviews, it was still around. He later described his thinking:
    If Apple had been in a less precarious situation, I would have drilled down myself to figure out how to make it work. I didn’t trust the people running it. My gut was that there was some really good technology, but it was fucked up by mismanagement. By shutting it down, I freed up some good engineers who could work on new mobile devices. And eventually we got it right when we moved on to iPhones and the iPad.
     
     
    This ability to focus saved Apple. In his first year back, Jobs laid off more than three thousand people, which salvaged the company’s balance sheet. For the fiscal year that ended when Jobs became interim CEO in September 1997, Apple lost $1.04 billion. “We were less than ninety days from being insolvent,” he recalled. At the January 1998 San Francisco Macworld, Jobs took the stage where Amelio had bombed a year earlier. He sported a full beard and a leather jacket as he touted the new product strategy. And for the first time he ended the presentation with a phrase that he would make his signature coda: “Oh, and one more