and he was ousted in February 1996 and replaced by Gil Amelio, a research engineer who was
CEO of National Semiconductor. During his first year the company lost $1 billion, and the stock
price, which had been $70 in 1991, fell to $14, even as the tech bubble was pushing other
stocks into the stratosphere.
Amelio was not a fan of Jobs. Their first meeting had been in 1994, just after Amelio was
elected to the Apple board. Jobs had called him and announced, “I want to come over and see
you.” Amelio invited him over to his office at National Semiconductor, and he later recalled
watching through the glass wall of his office as Jobs arrived. He looked “rather
like a boxer,
aggressive and elusively graceful, or like an elegant jungle cat ready to spring at its prey.” After a
few minutes of pleasantries—far more than Jobs usually engaged in—he abruptly announced the
reason for his visit. He wanted Amelio to help him return to Apple as the CEO. “There’s only one
person who can rally the Apple troops,” Jobs said, “only one person who can straighten out the
company.” The Macintosh era had passed, Jobs argued, and it was now
time for Apple to create
something new that was just as innovative.
“If the Mac is dead, what’s going to replace it?” Amelio asked. Jobs’s reply didn’t impress him.
“Steve didn’t seem to have a clear answer,” Amelio later said. “He seemed to have a set of one-
liners.” Amelio felt he was witnessing Jobs’s reality distortion field and was proud to be immune
to it. He shooed Jobs unceremoniously out of his office.
By the summer of 1996 Amelio realized that he had a serious problem. Apple was pinning its
hopes on creating a new operating system, called Copland, but Amelio had discovered soon after
becoming CEO that it was a bloated piece of vaporware that would not solve Apple’s needs for
better networking
and memory protection, nor would it be ready to ship as scheduled in 1997. He
publicly promised that he would quickly find an alternative. His problem was that he didn’t have
one.
So Apple needed a partner, one that could make a stable operating system, preferably one that
was UNIX-like and had an object-oriented application layer. There was one company that could
obviously supply such software—NeXT—but it would take a while for Apple to focus on it.
Apple first homed in on a company that had been started by Jean-Louis Gassée, called Be.
Gassée began negotiating the sale of Be to Apple, but in August 1996 he overplayed his hand at a
meeting
with Amelio in Hawaii. He said he wanted to bring his fifty-person team to Apple, and he asked
for 15% of the company, worth about $500 million. Amelio was stunned.
Apple calculated that Be
was worth about $50 million. After a few offers and counteroffers, Gassée refused to budge from
demanding at least $275 million. He thought that Apple had no alternatives. It got back to Amelio
that Gassée said, “I’ve got them by the balls, and I’m going to squeeze until it hurts.” This did not
please Amelio.
Apple’s chief technology officer, Ellen Hancock, argued for going with Sun’s UNIX-based
Solaris operating system, even though it did not yet have a friendly user interface.
Amelio began
to favor using, of all things, Microsoft’s Windows NT, which he felt could be rejiggered on the
surface to look and feel just like a Mac while being compatible with the wide range of software
available to Windows users. Bill Gates, eager to make a deal, began personally calling Amelio.
There was, of course, one other option. Two years earlier
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