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ATPM 3.07
July 1997

A few days before Dr. Amelio was relieved of his duties as Apple’s Chairman and CEO, I was flipping through a magazine and stopped at a two-page Apple advertisement. The ad was sophisticated and said a lot of good things. But, it didn’t “grab me” or get me excited about the company’s latest hardware. It was too bad, I thought. The release of Mac OS 8 was only a few weeks away and the company had exciting hardware products to talk about. Ironic, I thought, that the company which helped launch the desktop publishing revolution was having trouble communicating its message in print.

Dr. Amelio, in my view, did many things that will contribute to Apple’s survival. Gil Amelio, Ellen Hancock and the other recent members of Apple’s executive team made a lot of important decisions and difficult choices relative to the development of Apple’s operating systems, the size of the company’s overhead and the direction of Apple Computer as an independent entity. Many of these decisions and choices will, in retrospect, be considered turning points in Apple’s ultimate return to sustained profitability. It’s a shame the new products and new direction that were developed while Dr. Amelio was at the helm, were not effectively communicated to the buying public. At least not sufficiently for Gil Amelio to remain at Apple for a little while longer.

The decision to replace Dr. Amelio sooner rather than later may have been an inevitable one. He did a lot to cut expenses and place the company on a track where reduced costs would ultimately meet the company’s reduced revenues. But without revenue growth, the game is like constantly chasing one’s proverbial tail. Some way, somehow, Apple has to increase revenue to return to long-term, sustainable profitability. Marketing and public relations are not Gil Amelio’s strong points. He’s the first to admit that. I wish him well. In some ways, I’m almost sure he’s happy to be out from underneath a very heavy burden. Dr. Amelio assumed the positions of Chairman and CEO at a time of crisis. His departure, sooner than many expected, may save the company from another crisis. His resignation and the forthcoming choice of a new CEO are a natural progression of rapidly changing events.

What does this mean to you and me? To my children and yours? We will see. If there’s one change I’d like to see at Apple, it’s the separation of its hardware and software business into separate units. Dr. Amelio is correct: The Mac OS is one of Apple’s most undervalued assets. I think people would pay a little more for the OS if it meant Apple was opening all its hardware markets to competition from the clone makers. This, in my view, would bring about more innovation and a continuing reduction in the relative cost of Mac OS hardware, not to mention a greater market share for Apple and the clone makers.

In my view, the education market is one key to Apple’s success. It’s important for Apple to maintain leadership, not by locking clone makers out, but by emphasizing the value of the Mac OS and the soon-to-be-released Rhapsody operating system. I watch my kids on their computer. The more intuitive something is, the easier it is for them to explore, learn and play. On this score, Windows cannot reasonably compare. The Mac OS is the real value in the education market. There’s room for Apple to share its markets with the clone makers. Power Computing and the other Mac OS clone makers can win back market share for the Mac OS and new market share for the forthcoming Rhapsody system. Apple, in my view, needs to focus its attention on the OS. The hardware sales will follow.

There have been several times during the last two years when I’ve been at a point where I honestly don’t understand a lot of what Apple Computer is doing. That’s OK. It’s the same thing some people say about my life. Just recently I’ve placed my home up for sale. I’ve also decided to return to a 9-6 work world, and discontinue operating a small business.

I started my business when my kids were very small and I wanted to maximize the time I spent with them. Times are changing, and they are getting older. I’m looking forward to reestablishing a conventional career. I no longer need a large house. I use only a couple of rooms. I’ll be happy to let go of maintenance responsibilities, especially since I’ll no longer be working out of my home. My decisions seem counter to most trends. I no longer wish to be a homeowner and I no longer wish to be my own boss. I no longer want a “perfect” life, I simply want a life that’s perfect for me.

With all these changes, I’m taking time on the eve of my birthday to write this column. I’m looking forward to a day full of fun, shared with my kids and a few friends that are as close to me as family. As an adult, people are less apt to ask me what I want on my birthday, however, I’ll share my desires with our thousands of ATPM readers. First on my list is a quality digital camera. I want it to shoot quality images, have a built-in flash and zoom lens and easily transfer its data to my desktop Mac. Secondly, I’d like to trade my 4-door car for a mini-van, because it would fit better with my kids and my new lifestyle. Thirdly, I’d like a new tower-style Mac with a DVD drive and a G3 processor. It will be a computer I can grow with and develop greater skills with graphics-related software during the next few years. Fourth, I’d like a few more new friends to share my life experiences. The common thread between these wishes is better communication with more people, on screen or in person. The mini-van is just something that will help me move from place to place, a utilitarian necessity.

I realize now that my life may continue to bring changes and new opportunities. A few years ago I wouldn’t have imagined the way my life is today, nor that my birthday desires would be for things to help me communicate more effectively with others . Two years ago I also didn’t expect Apple Computer to be facing many of the changes and new opportunities that it has today. Like me, Apple is seeking better ways to communicate what it has to say.

Again, Dr. Amelio’s strong points are not public relations and marketing. In order to grow revenues by increasing sales the company needs to change buyer’s perceptions. Dr. Amelio brought a new discipline and some much needed direction to Apple’s software development and hardware design. This new structure made it possible to change top-level management so easily. A workable structure is in place that will support Apple’s continuing operations. Now the company needs to sell more products and revamp its moribund image.

The world awaits the official release of Mac OS 8. I’ve been systematically upgrading my software and performing general computer maintenance and software updates to prepare for the receipt of my copy. Technologically speaking, times have never been better for Apple. Their hardware is among the best in the world and their operating systems (Mac OS 8 and Rhapsody) are poised to set new standards for ease-of-use and customer satisfaction. Strangely, at a time of great change and seeming uncertainty for Apple Computer, I’m more excited than ever about their products.

I do not wish to spend time speculating about who will be Apple’s new Chief Executive Officer. That decision will be made by the Board of Directors. I wish them well. I just hope the new CEO will be successful at changing Apple’s public image and excite both press and buying public about Apple products.

Properly managed, Apple Computer’s domestic image should be that of an American icon. Its story should represent something bigger than itself. A company started in a garage and now makes hardware and software products that are the tools of choice for many of the world’s most creative people. Millions of people want Apple Computer to succeed. I’m sure that Gil Amelio is among them. He may even have a chance to write about his important role in the turnaround at Apple. I hope so.

As for me, I simply wish to enjoy my birthday tomorrow, spending time with my kids and a few close friends. With all the changes in my life, it will be nice to pause, have some fun and a little cake, too. Now, it’s simple things that matter. For Apple Computer, a simple story must be told. They make the world’s best personal computer and OS. Never mind the financials or market share, it’s the computer of choice for people who dream, people who create and people who make art out of the experience called Life.

“Apples, Kids and Attitude” is © 1997 by Robert Paul Leitao, rleitao@atpm.com

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