Apple crumble. (several key mistakes by Apple Computer CEO Gil Amelio led to his early dismissal)(Brief Article)

    

   The Economist(US)

   July 12, 1997

   NEW YORK

   WHEN Gil Amelio was appointed chairman and chief executive of Apple Computer in February 1996, many in the computer world were puzzled. Mr Amelio had no experience of the cut-throat PC business-and Apple was getting its throat cut. Undaunted, Mr Amelio boasted that he would restore Apple's profitability within a year.

It was not to be. In the five quarters since the beginning of 1996, Apple has lost a net $1.6 billion; in its latest quarter the firm reported that revenues were falling at the rate of 27% a year. This week Apple's shares were trading below $14, compared with more than $70 in 1991. Small wonder, then, that on July 9th Apple's board decided to kick Mr Amelio out-along with his strange choice as chief technology officer, ex-IBMer Ellen Hancock-and seek a new saviour.

   Mr Amelio's missteps were legion. When what Apple really needed was a rich parent, Mr Amelio played hard to get with Oracle, a software giant that came close to buying the firm but balked at Mr Amelio's asking price. Irked, Mr Amelio paid $400m last December for NeXT Software, a company started by Steve Jobs, one of Apple's co-founders-and brought back Mr Jobs as an adviser. NeXT's technology was supposed to boost Apple's efforts to develop a replacement for its Mac operating system. Instead, it threw those efforts into disarray. Worse, having dithered over the launch of a new range of computers, Mr Amelio failed to anticipate demand when he finally released it.

   Did Mr Amelio do anything right? In some respects he did best what he did best at his previous employer, National Semiconductor-cut costs. By the end of this year, Apple will have one-third fewer employees than it had when he arrived. It is also on its way to slicing $500m from its annual operating expenses. And the firm now has $1.4 billion cash in the bank.

Mr Amelio's lasting legacy, however, may be the reunion of Apple and its visionary, if mercurial, co-founder-a move that, in the end, probably cost him his job. Although a slew of recent setbacks-among them the news that Power Computing, a maker of Mac clones, will now sell PCs based on the rival Intel/Windows technology-helped lose Mr Amelio the support of Apple's board, it was Mr Jobs who in effect gave him the push. Last month Mr Jobs registered to sell (and may indeed have sold; nobody seems sure) all but one of his 1.5m Apple shares-a huge vote of no-confidence. With Mr Amelio gone, says Apple, Mr Jobs will for the time being "assume an expanded role". Like running his beloved firm again?