Macworld 1997 The return of Steve Jobs

[Music] a [Music] go God ladies and gentlemen well good morning I'm uh Colin Crawford I'm the president and CEO of Mac

Publications this is an exciting newly form joint venture between Z Davis and idg which is now responsible for publishing Mac week and Mac world and

I'd like to welcome you all on behalf of the sponsors to Boston and mawell Expo you know more than any other computer company Apple continues to attract a

great deal of media attention and today is no exception for uh for me and I expect for for many of you the last the last year in the Mac markets felt like being a bit

on an emotional roller coaster your highs of optimism followed by troughs of near despair as Apple wrestled with this turnaround strategy Jubilation as Apple

improved and rationalized its product line and made progress with his OS strategies and then concern as negotiations with the lenses appeared to

stall but for all the the followers of the Apple Market nearly every possible solution every other every possible

solution for for Apple has been analyzed and and dissected there's certainly no shortage of pundants you know to give advice [Music]

Gill Gill media Apple's former CEO once remarked to me his frustration with the media coverage my response was that Apple would be facing an even bigger problem the media stop

[Applause] caring despite all the the issues and and problems of the past couple of years the passion and loyalty remain people

want the Apple Macintosh Market to be successful and return to a state of sustained profitability and growth today I'm going to spare you my solutions for

Apple though having been in this market for over a decade I've certainly some some strong views it's much more important that we all hear a vision for

the Macintosh platform from Apple and other senior Executives in the industry what are future plans for hardware and software what will persuade

independent software and Hardware vendors that the Apple Market represents a solid business [Music] [Applause]

opportunity I want to leave ma World Expo at the end of the week with evidence that the Macintosh platform is still one of the most exciting segments of the computer industry

[Applause] I want my belief reinforced that the Macintosh platform is not just relevant in today's Marketplace but the leading

age of technology and to start us off in the right direction is an individual who really needs little introduction

[Music] [Applause] after all after all Steve Jon has been around since the very first Macintosh so

please join with me now and welcome from Apple computer Steve Jobs [Applause]

[Music] [Applause] [Applause] [Applause]

thank you very much for that warm welcome now I guess I'm going to have to give a speech the uh I came today to give you a status report on what's going on and to try to fill you in on some of

the steps we're taking to get apple healthy again um as you know uh I'm the chairman and CEO of a company called

Pixar and thank you and uh I like a lot of other people have are pulling together to help Apple uh get healthy again and I am uh extraordinarily

confident that that is going to happen now when I uh started to get involved a lot of people gave me advice and some of the advice that was the most

popular was uh uh Apple has become irrelevant um there was a great one that was Apple can't execute anything

uh and another one was um the Apple culture is is anarchy you can't no one could manage it you've read all these things in the press and after four weeks

um here's what I found quite the opposite of these things actually uh Apple's not relevant as relevant as it used to be everywhere but in some

incredibly important market segments it's extraordinarily relevant and I want to share some of that with you today uh Apple is executing

wonderfully on many of the wrong things the ability of the organization to execute is really high though I mean I've met some extraordinary people at Apple there's a lot of great people at

Apple they're doing some of the wrong things because the plan has been wrong and lastly um what I found is

rather than Anarchy I found people that can't wait to fall into line behind a good strategy there just hasn't been one

[Applause] so what I see is is the makings of a of a very healthy company uh with some extraordinarily talented people who are

still just as passionate and committed uh to the dream of computing as they ever were uh that need to come together and get a great plan and then start to execute it and that's exactly what's

been happening over the last 4 weeks now what's the fundamental problem uh I think the fundamental problem is a little more subtle but I think this is a

symptom but in a nutshell um whoops excuse me in a nutshell that's

it right Apple sales in in 1995 were 11.1 billion in '96 they were 9.5 billion and then this year they there'll be you know 7 billion plus or minus a

little bit that's the problem or the symptom depending on how you look at it and that needs to be stabilized and turned around

and people are working very hard to do that so what are some beginning steps that we're going to take one of the first ones has to be to

start at the top Apple's done a lot of of change at the bottom and I think this change needs to start at the top um with the board of directors focus

on focus on relevance Apple needs to find where it is still incredibly relevant and focus on those areas it needs to figure out what its

core assets are and invest more in them Apple has neglected its core assets for a while it has to forge some meaningful

Partnerships not just Partnerships and press releases and it needs to find some new product paradigms and we've got some great ideas I'm not going to be talking about products today though I just want

to let you know that that we have some wonderful ideas that you'll be hearing about between now and the end of the year so let's uh let's talk about some of these board of

directors uh Apple had a uh a very decent group of people as their board of directors uh they worked very very hard for Apple but I think uh with apple in

the in the situation it finds itself it was time for a change and the directors agreed with that we have put together a new board of directors that I would like

to announce to you today there are two members of the prior board uh that uh we are extremely pleased are going to stay on the new board uh the first of those

is Ed Ward uh Ed is the chairman and former CEO Dupont I've gotten to know Ed over the last several weeks and I uh I think he's terrific and has provided a tremendous

amount of leadership uh during this very critical time for Apple next is Gareth Chang Gareth is the president of Hughes International again he's been on the [Music]

uh he's been on the apple board for a short while and Gareth brings a tremendous International experience to Apple in particular in Asia which is a very important market and a high growth market for

Apple and then we're going to add four new board members the rest of the uh prior board has resigned and we're going to add uh [Applause] we're going to add four new board

members to uh to carry the company forward the first is Larry Ellison CEO of or I hope that wasn't a boo I'm hearing Larry uh started Oracle in his

garage about a year after we started Apple it's grown to be the second largest software company in the world uh we would like to do a lot more in terms of software and we thought having some uh software industry expertise would be

a good idea on the board uh second board member Jerry orc former CFO of IBM and

[Music] Priceless uh Jerry uh did a lot of the turnaround work at Chrysler and IBM and

uh is uh extremely welln and respected uh in the financial Community for his work the third new board member is Bill Campbell CEO and Tu

[Applause] it Bill uh in addition to being a CEO of Inuit was formerly the vice president of sales and marketing for Apple during

some of its Heyday and also ran Claris and is very familiar with uh some of the successes and some of the failures that Apple has had and I think it'll be an

extremely good board member and lastly I am joining the board as [Applause] well I'd like to just take a moment and uh and thank the outgoing board members

I think it has not uh not been an easy job to be a board member of Apple over the last few years and these are very decent people and they've been trying very hard to do the right thing for the company and uh to welcome our new board

members I think we have a really exciting task ahead of us uh to help help the management team and guide apple back to health and to prosperity and so I hope you'll agree

that uh this is a pretty sweeping change uh we're adding a tremendous amount of of Industry expertise we are not naming a chairman at this time uh we're going to wait till we have a new CEO and and

uh sort things out when that happens uh at that time now I put I put together a little video uh if you'd like I'll show it to you that just uh I asked the we asked the board members a few questions and you can just maybe get a little get a little

familiar with him would you like to see [Applause] it let's go ahead and roll that you know the old board has been um associated with the past and the past

has been failure a new board brings hope the new group of people on on the apple board are all computer insiders we've all been in the computer industry everyone knows that the computer

industry changes at the speed of light now we have people who clearly can help us articulate and understand where the niches are where Apple can compete and successfully

win so a lot of times we trying to focus on ourselves reengineer ourselves in internal a and we forgot sometimes who pays the bills it's the customer out there pays the bills you know one of the

things that that bothered me years ago was when when they raised prices I thought that that was the the um uh it made me think that Apple didn't

understand the outside world I think Apple needs to worry less about competing with Microsoft and worry more about doing things that are

different it's back to Innovation it's back to creativity it's back to Vision no one's really going to believe Apple can be successful until we get the revenues the cost back in line and that

means we got to start growing the revenues again companies have to look at everything they're doing and determine you know what are core competencies what

are the core parts of the business in a sense apple is D trying to do too many different things we need to focus on a handful of things and do them really really well well I was on the city court board

in 1991 the price of the stock was $9 a share and there was many negative articles being written about City Court was going bankrupt uh the price today is

$130 mainly because we did the fundamental things that were necessary to focus on the customer and focus on having a highly successful business at

at Chrysler uh we had to take uh nearly $4 billion out of the cost structure to get Chrysler fully competitive uh particularly with the Japanese I've seen

this at Dupont I've seen it at IVM I've seen it at City Corp the the success starts to generate additional success well the confidence has to start with a

Clear Vision what are we trying to accomplish what are we trying to do you take that Vision down to a strategy it has to people have to look at it and say yes they can do that when a company lack

the energy you can't do anything to the company so I think with Steve and the new board members first thing we we need to do is inject tremendous amount new Energy new thoughts Apple has very

strong positions in two Market segments uh first education and secondly uh creative content what other computer

system has 20 to 25 million loyal enthusiastic uh committed users just building on that base recapturing uh their dedication and strength because

we're bringing out great products whenever you have a strong position in a market segment you can capitalize on that you know Apple's the only Lifestyle brand in the computer industry it's the

only company that people feel passionate about you know my company Oracle it's a huge company IBM is a huge company Microsoft's a huge company but no one

has incredible emotions associated with our companies only apple is really a Lifestyle brand and companies can spend billions of dollars to build a brand apple does not have to do that it's

already been done the important thing is to uh to build products that are wonderful and uh or Steve would say insanely great and it's time to build insanely great products the biggest thing you can do is go out and buy a Mac

do I use a Mac absolutely I use a Mac I have three of them in my home I've been using a Mac since 1984 and I'm not about to stop I probably own every single machine that apple had ever produced and

I can tell you no one can change me in terms of personally what machine I would use it's got to be a Mac [Music] so as you can see this is a pretty

diverse group of people lot of deep industry expertise who come together to say hey this world's a lot better place with a healthy Apple computer in

it okay next Market Focus yeah I can't get anyone to tell me the definitive market share number for Apple but it's around 7% from all I can

gather and the question is where is Apple relevant where is Apple still uh the dominant player which market

segments and there are two the first one I call Creative content it's publishing design prepress Etc it's creative

professionals using computers and what's interesting is Apple is still the dominant market leader for Creative professionals by far

it's like 80% of the computers used in advertising and graphic arts design prepress all mtages and

64% is the best number I could find 64% of all internet websites are created using a Mac it's amazing but but we haven't been doing a good

enough job here as an example there's something like 10 to 15% of Mac sales which can be traced directly back to people using Adobe Photoshop as their power app right when was the last time

you saw Adobe and apple co-marketing Photoshop you know when was the last time we went to Adobe and said how do we make a computer that'll run Photoshop faster these things haven't been as cohesive as they should have been and I

think we're going to start proactively focusing much more on how we do these things the second Market is is one that's very close to my heart is education uh

[Applause] apple apple put the first computers in education uh Apple did it again with the

Macintosh and apple is still uh the dominant leader in education now I'm going to ask you a question who is the largest education company in the

world who's the largest education company in the worldle yeah the answer is apple apple is the single largest education supplier

in the world okay supplier to education in the world single largest education company in the world now I've asked 100 people at Apple this and only two have thought of

it's incredible the position Apple still has in education 60% of all computers in education are

apples 64% of computers teachers use are apples it's A2 to2 and5 billion dollar business for Apple every year what an incredible Foundation to build off of

what an incredible Legacy to build off of and so you're going to see apple proactively focusing

much more on these two markets where it is very relevant and both of these markets are growing over at 20% a year now Apple share is shrinking in these

markets slowly but I think you're going to see that stabilize and turn around and you're going to see apple grow with these markets because it's going to do a much better job of focusing where its

relevance is and where its legacies lie next core assets as you know Apple's greatest core asset is you all it's the

group of 20 to 25 million active users that believe that Apple products and Macintosh is still the best in the [Applause]

world I don't think we've been doing a good enough job uh taking care of you have you called the I mean I've called the support lines myself I've gotten very acquainted with the hold

signal and uh so I think we're going to see some changes there soon and I apologize for for anything in the [Applause] past but what I want to do right now is

get a little more analytical and I want to say sort of from a an more analytical standpoint what are apples core assets and there's two of

them that I've been able to uncover the first one is the brand itself and the second is the Mac OS now the

brand if you asked you know what are the five greatest brands in the world if you asked you went out and you asked professionals this question you know I

think Nike would be on everybody's list coca colola would be on everybody's list Disney would be on everybody's list and apple would be on everybody's

list we have we have one of the world's greatest Brands and we haven't paid much attention to it in the last several years and I think you're going to see

that start to change and now I want to focus on the Mac OS the Mac OS is an incredibly core asset to Apple and we've been walking all over

it I mean most people think that we're about to abandon the Mac OS most people think that you know Macintosh os8 which we just released was code named 10 tempo

as you know right so we just released Tempo most people think our next release next year which is code name Allegro will come out but then our next release will be requium and it's

crazy it's absolutely crazy the Mac OS is still the best thing in the world it is still the best thing in the world there are over 20 million

active users the number is a little closer to 25 million there are thousands of deel developers and there's a billion a half dollar software industry built around on this thing this is one of the

core assets of the company and we are going to invest a lot more in it because we think it is an incredible asset and

it has yet to really be fully exploited apple is about the Mac OS we're going to be doing other things

because we're creative people but at the core apple is about the Mac OS and all of the the fears that I've heard of people that we're we're abandoning it are absolutely not

true our latest release Mac os8 I've got some really good news for you we released this thing two weeks ago and we have already sold 1.2 million

[Applause] [Music] CS that's four times greater than what our forecast was so we're scram Ling to ship everything and if you uh if it

takes a little bit to get yours please I apologize for that but we are scrambling and this number is going up I mean there's it shows no sign of abating so things are going very well with

os8 now I'd like to talk about meaningful Partners Apple lives in an ecosystem

and it needs help from other partners it needs to help other partners and relationships that uh that are

destructive don't help anybody in this industry as it is today so during the last several weeks we have looked at some of the

relationships and uh one has stood out uh as a relationship that uh hasn't been going so well but had the potential I think to be great for both

companies and I'd like to uh announce one of our first Partnerships today a very very meaningful one and that is one with [Applause]

Microsoft I'd like to take you through this um the discussions actually began uh because there were some uh

patent disputes and uh rather than uh I [Applause] know rather than uh repeating history I'm extremely proud of both companies

that they have resolved these differences in a very very professional way and this is Led I think to an overall relationship that we're announcing today that's got several

parts to it and we're extremely excited about first part of it is a patent settlement and cross license uh the two companies have reached a full cross

license for all patents that exist and for patents that are filed within the next 5 years and uh it has been a uh a very serious patent

settlement the second part of this is Microsoft is committing to release Microsoft Office on Macintosh for the next 5

[Applause] [Music] years they are um they are going to release the same number of uh of major releases as they release on Windows

during that time their first release uh uh is going they're going to Target to have it out near the end of the the year it might slip a few months into next year but they're working real hard on it and it looks very very

good next we have taken a look uh at browsers out there and Apple has decided Apple has decided to make Internet Explorer its default browser on the

[Music] Macintosh since we believe in Choice uh since we believe in choice we're going to be shipping other internet browsers as well on the Macintosh and the user

can of course change their default should they choose to but [Applause] uh we believe that Internet Explorer is

a really good browser and uh we think it's going to make a fine default browser Java we are going to be collaborating with Microsoft on Java uh

to ensure that uh we can get the best from each other and ensure that there's compatibility between our virtual machines and uh we think that uh that will serve everybody's interests and

lastly Microsoft is making an investment in apple Microsoft is buying $150 Million worth of Apple stock at market

price it is non voting shares and they've agreed [Applause] and they've agreed not to sell them for

at least three years so what this means is is that Microsoft is going to be part of the game with us as we restore this company back to health have a vested interest in that stock price

going [Applause] up we're going to be working together on Microsoft Office on Internet Explorer on

Java and I think that uh it's going to lead to a very healthy relationship so it's a package announcement today we're very very happy about it we're very very

excited about it and I happen to have a special guest with me today uh via satellite down link and uh if we could uh get him up on the stage right now

some of the most exciting work that I've done in my career has been the work that I've done uh with Steve on the Macintosh uh whether it's the first

introduction uh or doing products like mac exal uh these have been major milestones and it's very exciting to renew our commitment uh to the Macintosh

we have over 8 million customers uh using Microsoft software on the McIntosh um we make it very easy for people to use Macintosh uh to take their

uh their documents and work with all kinds of machines uh we're very excited about the new release we're building this is is called Mac office

98 uh we do expect to get it out by the end of this year and we've got some uh some real exciting features uh it's a product that's going to require no setup

it's going to be an easy transition from people in the past uh and I think it's going to really uh set a new Benchmark for doing a good job of performance and

exploiting unique Mac features uh in many ways it's more advanced than what we've done on the Windows platform now we're ALS Al excited about uh Internet

Explorer and we've got a a very dedicated team that's down in California that works on that product uh and the code is really specially developed for the Macintosh it's not just a port of

what we've done in the windows environment and so we're pleased to be uh supporting Apple uh we think Apple makes a a huge contribution to the

computer industry um we think it's going to be a lot of fun helping out and uh we look forward to the feedback from all of you as we move forward doing uh more

Macintosh software [Applause] thanks thank you Bill you know where we are right

now is we're shepherding some of the greatest Assets in the computer industry and and if we want to move forward and see apple healthy and

prospering again we have to let go of a few things here we have to let go of this notion that for Apple to win Microsoft has to lose

okay we have to embrace a notion that for Apple to win Apple has to do a really good job and if others and if if others are going to help us

that's great cuz we need all the help we can get and if we screw up and we don't do a good job it's not somebody else's fault it's our fault so I think that's a

very important perspective I think if we want Microsoft Office on the Mac we better treat the company that puts it out with a little bit of gratitude we'd like their

software so the era the era of of setting this up as a as a competition between Apple and Microsoft is over as far as I'm concerned this is about getting Apple

healthy and this is about Apple being able to make incredibly great contributions to the industry to get healthy and prosper [Applause]

again the last thing the last perspective I'd like to leave with you on this is you know sometimes points of view can really make you look at things differently when you hear a new point of

view like for me when I was looking at the statistics and it it it uh hit me that apple is the largest education company in the world that was like a

bolt of lightning that's huge what an incredible base to build off of another bolt of lightning is that apple plus

Microsoft equals 100% of the desktop computer Market and so whatever apple and Microsoft agree to

do it's a standard and I think that you'll be seeing us work with Microsoft more because they're the only other player in the desktop industry and I think you'll

be seeing Microsoft want to work with apple more because apple is the only other player in the desktop industry so I hope we have even more cooperation in the future because the

industry wants it lastly I want to just talk a little about about Apple and the brand and uh and what it means I think to a lot of

us you know I think you always had to be a little different to buy an Apple computer uh when we shipped uh the Apple 2 you had to think different about computers when computers were these

things you saw in movies they occupied giant rooms uh they weren't these things you had on your desktop you had to think differently because there wasn't any

software at the beginning you had to think differently when a first computer arrived at a school where there had never been one before and it was an Apple 2 I think you had to think really

differently when you bought a Mac it was a totally different computer worked in a totally different way used a totally different part of your brain and it opened up a computer world for a lot of people who thought

differently you were buying a computer with an installed basis one you had to think differently to do that and I think you still have to think differently to buy an Apple

computer uh and I think the people that do buy them do think differently and they are the creative Spirits in this world they are the people that are not just out to get a job done they're out

to change the world and they're out to change the world using whatever great tools they can get and we make tools for those kinds of people so hopefully what you've seen here today are some some

beginning steps that give you some confidence that we too are going to think differently and serve the people that have been buying our products since the

beginning because a lot of times people think they're crazy but in that craziness we see genius and those are the people we're making tools for thank you very much

we [Music]

[Applause] h