Evolution of brands: Apple (Part 2) - The Mac & the Steve Jobs fallout

Posted by David Murton on Mon, May 25, 2015 @ 11:05 AM

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By the end of the 1970s, Apple was in a good position. Profits continued to rise and, by the time 1980 rolled around, the company officially release the Apple III. Unlike the previous two iterations, however, the III was designed to be more business-oriented than its preceding instalments. This was done to try and compete against IBM and Microsoft. Unfortunately, for Apple, the III would prove to be the company's first real financial failure. 

Despite this setback, Apple were in no way slowing down. While the III did cause a certain amount of financial problems for the company, it also inspired the creation of two new Apple products: the Apple Lisa and the very first Apple Macintosh.

 

The Apple Macintosh

While Steve Jobs was originally assigned to the Apple Lisa team, which would be the first computer to utilise a Graphical User Interface (GUI), infighting led to him being pushed from the project. During that time, however, Jobs had already been active in his involvement with the Macintosh. Or, as Macintosh's original visionary Jef Raskin would say, Jobs liked "pushing himself in everything".

In 1982, three years after Raskin originally put forward the idea for the Macintosh, he resigned. This resignation led to Jobs quietly becoming the project lead for the computer. Given his reputation as a notorious perfectionist, those working on the Macintosh project knew that they had to be absolutely sure of any idea they had before putting it in front of Jobs.

While the objective of the Macintosh was for it to be the first truly affordable personal computer, the project cost Apple $78 million. It was this type of excessive spending that would attribute to Jobs eventually being ousted from Apple. But on 24 January, 1984, Steve Jobs unveiled the first ever Macintosh computer with what is now one of the most famous advertisements in marketing history (the ad also ran two days prior during the Super Bowl).

Despite the huge amount of money that went into the development and marketing of the Macintosh, it was a relative commercial success. Its retail price was a whopping $2,495, far exceeding Jef Raskin's original hope of creating a computer that would retail for around $500. Still, the Macintosh sold well initially, then floundered. Sales eventually picked back up later down the line.

 

Firing Steve Jobs

Despite his ability to market products and think outside the box, Steve Jobs proved difficult to work with. His removal from the Apple Lisa team and his notoriety for overspending for forays into untested products only further drove concerns that he would run Apple into the ground. The Macintosh may have been a substantial evolution in computing, but it didn't immediately fix Apple's financial state.

It was in 1985 when Jobs stepped over the line, prompting a power struggle between him and then-CEO John Sculley. Sculley become CEO in 1983 and, initially, maintained a very healthy friendship and working relationship with Jobs. But Jobs' tendency to do what he wanted and not consider the financial side of things caused Apple's board of directors to request that Sculley "contain" Jobs.

Sculley did as requested and limited Jobs' role. Jobs would still claim 15% of the company, maintain his status as chairman, but would no longer be tied to any assignments at Apple. Jobs was not happy with this, and instead sought to organise a coup against Sculley with other Apple executives. Sculley found out about Jobs' plans and confronted him over the matter. On 10 April, 1985, a board meeting was held to see whom the board would choose to run Apple - Jobs or Sculley. In a unanimous decision, the board chose Sculley, and Jobs was forced out of Apple.

A few weeks later, Jobs officially released his resignation letter to the press. Some suspect he may have done this to try and garner sympathy from the public. But his plan backfired. Instead, Apple shares jumped in value. Regardless of whether he was a visionary, Jobs' excessive spending and notorious attitude had hurt Apple's value. With him gone, the company experienced some initial financial benefits.

In the same year of being ousted, Jobs would go on to form NeXT, a company that created computers for higher education.

 

Read Part 1 here

 

In the next instalment, we'll look at how Apple performed without Steve Jobs and what led to him returning to the company he co-founded.

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Topics: Technology, Evolution of Brands

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