posted by Thomas Hormby on Mon 2nd Oct 2006 19:11 UTC

"Business Decision, Page 3/3"
Hiring Michael Spindler

Michael Spindler was a good marketer. He had gotten his start at DEC's European division in Paris, where he helped the company develop a presence almost totally controlled by IBM. In 1980, Spindler was handpicked to run Apple's marketing department in the nascent Apple Europe division, based in tiny offices in Brussels. From there, Spindler pioneered a strategy of releasing specialized products in every region while still taking advantage of the Apple brand. He made sure that there were products available in every language Apple Europe sold to, unique amongst the other PC manufacturers. As a result of his 'multi-localism' strategy, Apple was able to compete with cheaper local products like the Acorn BBC Micro.

Spindler did an excellent job in marketing, but he was not a good manager. He didn't take dissent well, staffers were terrified of even asking questions during his meetings. Worse than his inability to handle dissent was his problems with managing stress. Several times during his career at Apple, staffers found him huddled up under his desk or passed out on his couch apparently from a panic attack.

Sculley was impressed with Apple Europe's performance, and promoted Spindler to head of all the international divisions. Luckily for Spindler, there were always able staffers who could translate his impassioned speeches on 'multi-localism' and other strategies into concrete steps for his managers to follow. They did such a good job, that Sculley promoted him again, to replace the universally popular Del Yocam as COO. Around the same time, Gass'e left with a few Newton staffers to found Be Inc., so Spindler's main competition in the corporate hierarchy was gone.

Spindler was dishonest with Sculley. He would spread rumors and bash Sculley's management style, and lie to Sculley's face about it. Spindler was determined to become CEO, and he did.

On June 17, 1993, Apple's board met to discuss Apple's declining stock price. Weeks before the meeting, Spindler personally met with most of the board members to gather votes for a coup d''tat against Sculley, and succeeded. The board broke the news to a distraught Sculley. Spindler attempted to cheer up his old boss by telling him that he had only heard of the decisions fifteen minutes before the board broke the news to Sculley. He lied.

Spindler's career at Apple was to be characterized by staggering losses and missteps that cost the company the gains it had made in the early nineties. By 1996, Apple had to write off a billion dollars in unsold inventory because of channel stuffing. That year, the company would lose hundreds of millions of dollars. Eventually, Spindler was ousted for his mismanagement, but not before he nearly killed Apple.

Not Buying or Licensing an Outside OS Sooner

In the mid-nineties, Apple was in trouble. Microsoft had released Windows NT in 1993, and it had taken the business world by storm. Finally, there was an inexpensive workstation-class operating system for relatively inexpensive PC's. Apple had already ceded the business market to Microsoft, so NT posed little threat to the Macintosh.

Windows 95 was a direct attack on the Macintosh. It was easy to use, relatively stable and had the full resources of Microsoft and every clone manufacturer in the world behind it. The Macintosh did not stand a chance. Worse still, Microsoft claimed that its next consumer version of Windows would be a modified version of NT, known as Cairo. Cairo never developed, but the announcement scared a lot of users into jumping ship. AT&T, major universities and even Motorola were cancelling orders for new Macs.

Apple could have addressed all of these problems, and even gotten some new customers, if it had recognized that it would be unable to develop an operating system to rival Windows NT on its own. If it had licensed Solaris, AIX or bought NeXT a year earlier, it would have been able to negate Microsoft's PR boost and get new customers. Unfortunately, Copland, the project to 'extend' the Mac OS, was doomed and it would take a new CEO, Gil Amelio, to recognize that.

Firing frogdesign

Style and aesthetics are personal opinions, but Apple hurt itself when it stopped using frogdesign's Snow White language. Before 1994, Apple had distinctive, even cool looking products, like the Apple IIc and the Macintosh. As part of the cost-cutting measures introduced by Spindler, Apple spent less on cases, and it showed. Suddenly, the Macintosh was no more attractive than any other PC in the world. Notable products include the Power Macintosh 4400 and the PowerBook 520. The 4400 is almost indistinguishable from a PC, and the 520 looked dated, with its space age curves, even before it was released. It's hard to place a value on good aesthetics, but Apple's products lost one of their most distinguishing features when it dropped frog, looks.

Contracting iPod Manufacturing to Chinese Firms

The Apple mythos is incredible. When people think about Apple's early history, they think of Steve Jobs walking around Silicon Valley barefoot extolling the virtues of the Apple I. They think of Wozniak and Jobs assembling the computers in the Jobs' garage. They don't think of Chinese workers doing 15 hour days and being paid less than minimum wage to produce cheap iPods. Apple really ought to bite the bullet and fire Foxconn, the owner of the offending facilities, or even move manufacturing state side. Bad PR is hard to fight off.

Making Jobs Indispensable

Steve Jobs is widely credited with Apple's turnaround in recent years. He personally took control of Apple's product line and created the famous 'matrix' of Macs. He personally oversaw development of the iMac, iMovie, iTunes, iPod, Mac OS X (he picked the Aqua color scheme) and just about every other successful (and not so successful) Apple product released in the past decade. Unlike every other Apple CEO since the days of Mike Scott, Jobs has no clear successor. Avie Tevanian and Jon Rubinstein were once the most famous former NeXT executives to follow Jobs to Apple, but both left this year. The lack of a successor might make for less infighting, but could cause problems should something happen to him.

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Table of contents
  1. "Business Decision, Page 1/3"
  2. "Business Decision, Page 2/3"
  3. "Business Decision, Page 3/3"
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