We often hear of the brilliance of Steve Jobs as he developed the iPod and then the iPhone and iPads, but little mention is made of his turnaround of Apple back in the late 90s. This coincided with the rise of the dominance of Windows.
Many commentators even suggested that Apple should allow themselves to be bought over by IBM, Motorola, Sony or HP!
In 1997, Apple was tottering down the path towards bankruptcy. This was when Steve Jobs took over as CEO again but investors were still bearish about Apple’s chances of any real transformation and were pressing for them to present themselves as attractive targets to IBM or Sony (in the event the IBM move had anti-competitive issues and challenges from the US regulators).
So what did Jobs do?
Secure immediate financing
The genius of Steve was to talk Bill Gates into providing US$150 million to pump some much needed liquidity back into Apple’s operations. He did this by showing Apple’s non-threatening position (at the time) to Microsoft and also explain to them how Apple’s survival will help Microsoft’s battles with the Department of Justice on an monopoly-charge.
Cut the product range and scale back Apple’s inventory
He removed the printer and peripherals department and also cut the number of desktop models (from fifteen to just one). He also reduced the scale of software development and engineering. He also shifted the manufacturing (of a much leaner product range and line) to Taiwan and cut inventory by 80%.
Control product distribution
He also cut over 80% of his existing national retailers and also focused on selling directly to customers through an enhanced website. He later did the same with applications and software through the App Store. The idea was simple – sell a simpler product range through a simpler range of outlets / retailers.
Take things one major leap at a time
Initially, all Jobs wanted to do was to ensure the survival (or going concern) of Apple. Sell a simplified product range through a limited range of sales outlets (both Apple’s Website and the limited retailers). He felt this would help apply pressure on the cash bleed that Apple was suffering from.
Once that was secured, he fixed his OS and had the Mac G3s. He waited before he decided to push on with the revolutionizing how people listened to music through the iPod and iTunes.
He then waited again before embarking on the iPhone and taking on the existing big boys of Nokia, BlackBerry, Sony, Motorola etc and redefined the phone industry.
Next came the iPad and the buttressing of the App Store. This redefined how people bought apps, both for portable devices as well as their laptops and desktops.
What did this mean for Apple and Steve Jobs?
Jobs focused on the most pressing matters of the day when he took over: survival. Once Apple’s survival was guaranteed, he then reached out to a niche market of fashionable consumers who became his strongest brand advocates. From there, he launched one big thing after another. This transformed the world of computing and personal electronics.
This is meant to be a very brief overview of how Apple took the steps needed to first survive and then subsequently thrive and then flourish in the technology world! Hope it is helpful!