Apple: Doubts grow about leadership
TUESDAY FEBRUARY 25 1997
By Louise Kehoe
Apple, the struggling personal computer manufacturer that is
preparing to announce swingeing cutbacks and thousands of lay-offs,
is facing a leadership crisis that could decide its fate.
Mr Gil Amelio, who this month completed his first year as Apple
chairman and chief executive, is increasingly under fire. Confidence
in his ability to revive the company has been shaken by declining
sales and heavy losses.
Insiders say his influence is being undermined by Mr Steve Jobs,
Apple co-founder, who himself was ousted as leader in 1985. Yet his
recent return to Apple as part-time adviser to the chairman -
following the $430m acquisition of his company NeXt Software - was
widely regarded as a brilliant public relations move by Mr Amelio.
Mr Jobs has rapidly built a power base. Three former colleagues from
NeXt have been installed in senior posts - as heads of hardware and
software development and North American sales. All three sit on the
seven-member executive committee that runs the company; in
addition Mr Jobs and Mr Stephen Wozniak, Apple's other founder
who returned this month as an adviser to Mr Amelio, attend some of
these meetings.
These appointments have persuaded many within Apple of Mr Jobs'
growing influence. The departure of five senior executives over the
past two weeks - including Mr Marco Landi, former chief operating
officer, who was appointed by Mr Amelio less than a year ago - has
added to this impression.
One of the most telling aspects of the situation, however, may be the
effective demotion of Mrs Ellen Hancock, a close colleague of Mr
Amelio, who worked with him at National Semiconductor before
joining Apple last year. Mrs Hancock is executive vice-president in
charge of technology, but her responsibilities have been significantly narrowed.
An Apple official said that Mr Jobs remained an adviser to Mr Amelio
and declined further comment.
However, Mr Jobs has become the power behind the throne,
according to several current and former Apple employees. He is said
to be directing decisions on which parts of Apple's operations should
be cut. Mr Jobs has urged a number of former Apple colleagues to
return to the company, hinting strongly that he plans to take charge,
they said.
According to one of Mr Jobs' confidantes, he has decided that Mr
Amelio and his appointees are unlikely to succeed in reviving Apple,
and he is intent upon replacing them to ensure the survival of "his
company".
Mr Jobs has not made his intentions clear. His official spokesman at
NeXt said that he could not be reached, but that he had consistently
declined to comment over the past few days.
Another possibility, given that Apple's stock is languishing near a
10-year low and its market value is standing at about $2bn, is that
Mr Jobs might attempt a buy-out. Mr Larry Ellison, the billionaire
chairman and chief executive of Oracle, said recently he would back
his "best friend" if Mr Jobs wanted to mount a bid for Apple. But Mr
Ellison put the probability of such a buy-out at about 30 per cent.
Such a move would be popular with many Apple alumni and
Macintosh enthusiasts. "Steve is Apple's only hope," said a former
senior Apple executive who worked with Mr Jobs in the 1980s.
Analysts are not so sure. His reputation as a business manager is
mixed: at Apple he was divisive and mercurial, and at NeXt, he failed
to create a new computer industry powerhouse. However, Pixar, his
film animation company, has achieved acclaim for Toy Story, the
computer animation film.
According to Apple, which does not speak officially for Mr Jobs, he
has described speculation about his moving to acquire the company
and take it private as a "fantasy".
The battle between Mr Amelio and Mr Jobs could turn out to be a
storm in a teacup. The two are contrasting personalities - Mr Amelio
a seasoned manager uncomfortable in the spotlight, versus Mr Jobs,
the American entrepreneur, who thrives on publicity.
Should they find a way to marry their talents, the company might be
better for their efforts. All the signs, however, point to yet another
executive suit drama at Apple Computer.
Apple
This article appearing today at the Financial Times site.
c Copyright the Financial Times Limited 1997
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