Steve Jobs: `There's Sanity Returning'

Nobody can doubt the charisma of Steven P. Jobs. The interim CEO of Apple Computer Inc., who returned to the company last July after his ignominious 1985 ouster, has brought back his legendary vision, impatience, and infectious passion for the Macintosh. Jobs spoke to Business Week Correspondent Andy Reinhardt in Apple's stark, fourth-floor boardroom, just after the company rolled out its new software strategy on May 11.

Note: This is an extended, online-only version of the Q&A that appears in the May 25, 1998, issue of Business Week.

Q: Now that you've introduced the new, bold-looking iMac, are you going to do some radically different products?

A: There's a lot of talk about such things -- about handhelds, set-top boxes. A lot of computer companies have been searching for a consumer product. My view is that the personal computer has been the most successful consumer product of the last 10 years. What we have to do, what the industry stopped doing, is targeting [the consumer PC] sector of the market. IBM wants to be IBM. Dell is just selling to the corporate market, primarily. Compaq just bought DEC -- my God! There's nothing wrong with wanting to be IBM.

But Apple really beats to a different drummer. I used to say that Apple should be the Sony of this business, but in reality, I think Apple should be the Apple of this business. Apple is certainly moving closer to doing that with these new products. Also, I've had some experience in the entertainment industry because of Pixar. And I've got to tell you, the Internet is a place you go when you want to turn your brain on, and a television is a place you go when you want to turn your brain off. I'm not at all convinced that the twain will meet.

Q: The $1,299 price of the iMac, even competitive with sub-$1,000 PCs, is still not in the range of consumer electronics products.

A: No PCs are in the price range. But people are seeing the value at these prices, and our goal is to continue to lower prices on products like iMac. Part of it relates to how much of a necessity you think these devices are. And a lot of people are starting to feel that having a personal computer, especially one that is able to deliver as robust an Internet experience as the iMac can in the home, is an essential utility. An iMac costs about as much as heating a New England home in the winter, a lot less than an automobile. We're not in the sweet spot totally, but we're getting there. For Apple, this is a pretty big step. Apple hasn't had a compelling product under $2,000 for the last several years.

Q: Did you do consumer research on the iMac when you were developing it?

A: No. We have a lot of customers, and we have a lot of research into our installed base. We also watch industry trends pretty carefully. But in the end, for something this complicated, it's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them. That's why a lot of people at Apple get paid a lot of money, because they're supposed to be on top of these things.

Q: Why did you decide against including an internal floppy drive and opt for a slower modem?

A: You know, you've got to do the right thing. Just take the floppy: People aren't thinking clearly. Nobody's going to back up a 4-gigabyte drive onto 1-megabyte floppies. They'll use a Zip drive -- but they're too expensive to build into a consumer product. Besides, hardly anybody backs up anyway, so why build cost into every system? The second reason for a floppy is software distribution, but a lot of software now comes on CD-ROMs because it's better and cheaper [the iMac includes a CD-ROM drive].

Q: How much of a role did you have in the design of the product?

A: A fair bit. [Smiles] There were several teams. On a day-to-day basis, my job wasn't to head any of them. We have really talented people to do that. But when I got here last July, it took me about two weeks to figure out that Apple didn't have a consumer product in the pipe. I began a crash program in August to create one. We put together various teams.

Q: But you smiled when I asked the question. Do you feel this is your baby?

A: We all feel like it's our baby. Everybody at Apple has a pride in it, because it represents what Apple ought to be doing. You expect this kind of innovation from Apple. Apple is getting back to that, and it's something we can all be proud of.

Q: What are you doing about increasing the number of Mac software programs?

A: Let's focus first on the real problem. Forget the perception. The real problem is that a lot of developers have had a really tough time dealing with Apple over the last few years. I talked to these folks. It wasn't even about the volume of Mac sales declining -- it was problems in dealing with Apple. We fixed almost all of that. The developers are coming back, and it feels really good. We haven't brought everybody back yet, but a lot of them.

Q: Are you going to take the CEO job permanently?

A: There's nothing new to report. I just decided one day that for me, it just wasn't such a big deal. I didn't have to lose sleep over this, worry about this. I'm Apple's interim CEO, and it won't be forever, and I'm doing the best that I can. But I'm the full-time CEO of Pixar Animation Studios, and I love it, and I also have a family. I'm doing the best I can here. If folks think there's a better solution, I'll be glad to step aside. And eventually we'll find somebody else to take the reins.

Q: What about stock ownership? Do you intend to take a stake in the company?

A: This isn't about money for me.

Q: I'm talking about the symbolic value.

A: That's not my problem. I've worked my tail off here. I don't think I could work any harder. I'm trying to help Apple. I do have more time now to be with my family. We've filled out our senior management team. We've got a good team now, and we're firing on all cylinders. And as the strategy becomes clearer to more of the people in the company, it really makes things much easier. The organization is clean and simple to understand, and very accountable. Everything just got simpler. That's been one of my mantras -- focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it's worth it in the end because once you get there, you can move mountains.

Q: There's a lot of symbolism to your return. Is that going to be enough to reinvigorate the company with a sense of magic?

A: You're missing it. This is not a one-man show. What's reinvigorating this company is two things: One, there's a lot of really talented people in this company who listened to the world tell them they were losers for a couple of years, and some of them were on the verge of starting to believe it themselves. But they're not losers. What they didn't have was a good set of coaches, a good plan. A good senior management team. But they have that now.

So, the first thing to invigorating people is winning again. They're seeing us win, by the customer reactions to the products, by the sales, the profitability, all of those signs that people want what we've got again. And, that we can run our business well. That our own house is in order, that we've stopped the waste that people have seen with their own eyes without knowing what to do about it. There's sanity returning.

The second thing that's reinvigorating them is that Apple is starting to innovate again. There's been a vacuum in this industry for a long time, in many ways, and that vacuum is in a lot of areas where Apple's legacy is. So Apple is back to its roots, starting to innovate again, and people are sensing that, seeing it concretely, and really feeling good about it. That's why they came here. That's what they want to do. When they see the iMac, for example, they think we really can produce industry-leading products like this. It's not about charisma and personality, it's about results and products and those very bedrock things that are why people at Apple and outside of Apple are getting more excited about the company and what Apple stands for and what its potential is to contribute to the industry.

Q: What's the coolest stuff you have coming down the product pipe?

A: We have some pretty cool stuff coming, but we don't talk about it.

Q: Will they be computers?

A: Yes. We're not going off into la-la land.

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