Pass the popcorn.
Like an old Saturday-matinee serial, the Apple saga took another plot twist Wednesday with the unceremonious departure of CEO Gil Amelio and technology overseer Ellen Hancock. Few were surprised by Amelio's abrupt exit - the company, after all, was bleeding money - although the timing of the move raised many questions. Perhaps the biggest is: Who would be brave (or stupid) enough to now take the job?
"It's a tall order, a very tall order," Daniel Kunstler, an analyst at J. P. Morgan Securities, said Thursday. "It will take some very, very bold person." Does such a person exist? "Well," Kunstler replied, "who wants to land F-18s on aircraft carriers in choppy weather? There are such people out there."
In a conference call with reporters, chief financial officer Fred Anderson, who will hold down Apple's fort until a proper replacement for Amelio is found, was peppered with questions as to the fate of co-founder Steve Jobs. Is he going to return as CEO? Does he even want the job? And what exactly does the company mean by giving him an "expanded role"?
One can only imagine that Jobs is smirking with satisfaction. After an ugly divorce from Apple in 1985, he has returned with more than US$400 million in his pocket from selling the company his NeXT operating system - stay tuned on this one, folks - and about as much butt-smooching PR buzz as one man should receive in a lifetime.
To diehard Macolytes (as if there was any other kind), Jobs' resurrection is nothing less than the return of the Messiah. He represents everything that's right about Apple - the innovation, the creativity, the go-your-own-way attitude toward industry trends. Steve Jobs is all that Microsoft's Bill Gates is not. He is the Anti-Bill.
"It's his if he wants it," Dataquest analyst Chris Le Tocq said of Jobs' born-again CEO prospects. "The question is: Does he want it? I haven't seen any signs that he does."
Whoever moves into Amelio's old office, it won't be pretty watching him or her dig out of the hole Apple has fallen into. The company has lost about $1.6 billion over the past six quarters, and has handed pink slips to no less than a third of its work force. Senior managers have been leaving (or shown the door) in droves.
In the quarter ended 31 March, Apple lost $708 million. The company is scheduled to report its results for the latest quarter on Wednesday, and analysts are already bracing for another pounding. Overall, Apple's revenue is expected to shrink to about $8.5 billion in the latest fiscal year, from about $11 billion a year earlier. ("We're out of the business of predicting when this company will return to profitability," Anderson told reporters.)
Meanwhile, Mac cloners like Power Computing are committing the ultimate blasphemy by flirting with the Windows market, and have made no secret of their disenchantment in trying to cut deals with Apple for the Mac OS 8 operating system, not to mention the long-ballyhooed Rhapsody OS, to be built upon the chassis of Jobs' NeXT.
And then there's talk that Apple's only hope of salvation is to be sold to a new master. Oracle chairman Larry Ellison, never one to shy away from publicity, has voiced his desire to acquire Apple - with his own money, no less. He backed away from this goal last month when his trial balloon met with a tepid response from Apple-lovers, although it's hard to believe Ellison's phone number isn't still tacked up on the wall of Apple's boardroom.
"I can't imagine that what Larry Ellison wants is to own a dying standard," said James Meyer, an analyst at Janney Montgomery Scott. "He probably feels that, for the right price, there's a world of software there for whatever he wants to do."
But Apple could still return to life. "When Apple decides to put its ego in its pocket and build a Wintel machine ... then it has a chance," Meyer observed. "If Apple stays with the closed architecture, it will die. The point isn't who makes the most elegant box. It's who makes the most usable computer."
If nothing else, running Apple can be a lucrative career move, even if not the most impressive résumé item. Under Amelio's five-year contract with the company, signed in February 1996, he is entitled to no less than $7 million over the next few years. This is on top of a $5 million loan, plus $10 million in the event that the company is sold within the next year.
That alone should make Apple an appealing prospect for any would-be CEOs out there. The cliffhanger continues.
