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Sculley Steps Down

After 10 years of running Apple, John Sculley has announced that Michael Spindler, currently the company’s president and COO (Chief Operating Officer), will replace him as CEO (Chief Executive Officer). Sculley will remain chairman of Apple, a role which will allow him to satisfy his need to bomb around the world hobnobbing with other truly rich people in charge of companies, instead of doing the daily grind as CEO. Rough life, eh? Do you think he’ll get a pay raise?

Sculley denied that Apple’s recent misfortunes are related to his resignation, but you have to wonder, especially coming from the man who proposed that IBM purchase Apple when talking to an IBM search committee looking for a new CEO for the big blue behemoth. Apple recently lost the suit against Microsoft and Hewlett-Packard, and although an appeal is almost certainly in the works (hey, lawyers have to eat too, even if only caviar and quail eggs), it looks bad for the home team, so to speak. In addition, Apple just announced that its second-half earnings will fall short of expectations (whose expectations isn’t quite clear), and as a result Apple stock took a major nosedive (if I had any money, I’d buy now, but then again, if I were a whiz at stocks, I could afford lawyer food on a more regular basis). And like a fairy tale, trouble comes in threes, with the rumors of Apple laying off about 1,000 employees.

Of course, this dire news stems from the very issues that Apple’s loyal users have clamored about for years. We want more Macs (well, maybe not any more – it’s too confusing) and we want cheap Macs, but that results in Apple’s margins, once thoroughly plump, slimming down to normal industry levels. The basic problem is that you can’t have your cheap Mac and lust after an innovative Mac at the same time. Other industry companies aren’t pushing the envelope nearly as hard, and that allows them to subsist on lower margins.

I almost wonder if it wouldn’t make sense for Apple to create another spin-off company that would be lean and mean (and do no R&D on its own) to compete with the PC-clone vendors. Perhaps such a split would give Apple the two faces necessary to fight it out on the low end while pumping out the expensive technological innovations on the high end. The Performas seemed aimed at filling that niche originally, but until recently few real Macintosh users have paid much attention to the relabeled machines (the Performa 450, in particular, has competed strongly against the LC III recently, in part because of stocking problems for the LC III). Besides, it’s so sad to go into Sears and when the Performa salesthing comes over and says, "Can I help you?" be forced to look at them pityingly and say, "No, I really don’t think so."

Of course, Apple is undoubtedly aware of these problems. Rumors abound of meetings with Dell (the third largest PC clone vendor), and Apple is talking more about Companion, the set of cross platform technologies jocularly referred to as "Macintosh on Everything." You’ll be able to run the Finder on top of Novell’s DR DOS, and you’ll be able to run Macintosh applications on top of various common flavors of Unix, just as you can run Macintosh applications on top of A/UX. Don’t worry, it will be thoroughly confusing when it all arrives.

In the meantime, Apple employees will feel the axe along with Apple prices, so watch those price lists carefully. With the slow sales of the PowerBooks, the Duos in particular, you may be able to pick up a four pound bundle of Macintosh joy for a song. If you’re an Apple employee, you already know this, but just to make the rest of the world jealous, Apple employees can buy up to four Duo 210s for $999 (notice the three nines? Remember the fairy tale?). If you happen to know an Apple employee, you might want to be nice that person since apparently resales are not being discouraged, and $999 for a 4/80 Duo 210 is the sweetest deal since the PowerBook 100s hit Price Club.

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