> AUGUST 22, 1997

> ## Amelio: The Exit Interview

> Web Exclusive by Cheryl England

> Apple's former chief executive officer, Dr. Gilbert Amelio, has recently decided that he wants to give the press his view of what happened at Apple during his tenure there. According to Amelio, everything is fine at the company now thanks to the processes and people he's put into place. Obviously, though, not everything is fine at Apple right now. But we're not going to analyze what Amelio had to say right here and now. Instead, we're running the interview verbatim. Here's exactly what Amelio had to say to us.

> > Cheryl England, Editor in Chief
> > cengland@macaddict.com

> MacAddict: So you called us to see if we'd like to do an interview. Obviously, you have something that you would like to tell people.

> Amelio: Absolutely. The general message is that Apple's gone through kind of a traumatic period. And I really think that if we can get the public to start, and frankly the media, to start communicating a slightly more positive message about the company, that it now has the products, the momentum, and the strategic plan in place to really be very, very successful if people give it a chance. And unfortunately, the press has been so bad in the last couple of years that it's just frightened the bejeezus out of everyone. And - except for the die-hard folks, the addicts - they have been reluctant to buy the products, so we've lost a lot of that base for... if we haven't lost it, we have some people who are hanging on to their old Macs, trying to work up their courage to buy the next one, but haven't quite crossed that bridge yet, and we're hoping that Mac OS 8 was going to give them a reason to do that. We have seen some pickup in Mac OS 8 sales, I mean in hardware sales as a result of Mac OS 8 sales, so hopefully that will help.

> But in any event, if you go back, the problem really started way back when Apple made the decision to switch from the 68000 to the PowerPC. The PowerPC's a great architecture, and that has nothing to do with that, but what it has to do with is the fact that when they made the transition, one of the things they had to do was figure "Okay, what are we going to do with the operating system?" Well, as you know, they emulated the old 68000 operating system onto the PowerPC, and everyone thought "Well, that works pretty good." The fact of the matter was, it didn't work good at all, and we had a lot of instability in the product that resulted in too many crashes, too many freezes, too much unsatisfactory user experience. And that really started a problem that I inherited when I got there.

> People didn't really see the full impact of this until late 1995, after they'd been buying some of these for a while. So Apple had shipped over a million PowerPCs at that time, and now statistically, people are beginning to see these problems, and so the reputation got a little tarnished, and I walked in right in the middle of the downslide, in that thing... What we should have done... the unfortunate part, it takes you a while to figure out all the problems. If you know them instantly when you walk in the door, it's real easy. But unfortunately, you don't. You've got to kind of dig through. With hindsight, it's so much better, because it's easier to see.

> But in any event, what we should have done, what the team should have done, was as soon as they realized there were some system instabilities in there, they should have quickly put a massive effort on stabilizing the operating system, and cleaning up all the bugs, and so forth, and so on. And in fact, I ultimately ordered that they would do that. And that's the reason why 7.6 came out and was so much better than anything before it, and ultimately OS 8, which is even better yet, and that department was because I made it a very, very high priority for our software folks to do that. But the situation when I came in was "Well, we're not going to worry about System 7 anymore. We're working on Copland." Heck, you know, everybody in the software department was working on Copland, and no one was paying any attention to what we were shipping at that time. It took me probably 3 to 6 months to sort that all out, and so around July of '96, really came home to me that we had a massive problem here. And I directed that we get on a new path, and that resulted in the Harmony release.

> And you recognized that software instability was a problem because you started seeing statistical reports, you heard somebody saying...

> Exactly. Anecdotal evidence, in terms of letters from customers, statistics from the quality department, my own experience just using... I have a Mac in just about every room of the house, I have enough machines here to get my own statistics, and so I was seeing some of the problems. And it was clearly less satisfactory than it was back in the 68000 days, and it was very, very frustrating. Today I think those are well in hand and I think that Apple can probably make the claim that it's more stable than Windows 95, and I think that would hold up.

> I have again the anecdotal evidence, I had a fellow over here working yesterday on my [home] system, and he was carrying around this PC clone laptop, sort of to hook it in and do whatever he does with it, and of course, I made a few jokes about his machine, and he says, "You know, I use this machine because that's what the material I'm using is written for, I don't have a choice, I don't have a choice in anything. I have used Apple, and it's really a great, great product. This thing is a much, much bigger pain in the butt than this other... than Apple is, and so I wish they wrote the software for Apple, so I could use that instead." And so I care about a lot of little anecdotal things like that, and I think all of us, you know, people who really eat, sleep, breathe the Mac, like Mac addicts, and of course the people who work there, really know what the story is. The challenge is, how do you get the message out there to a large enough audience so that you have an impact on the company's fortunes.

> Anyhow, those were the problems we had when I came in, and slowly we started to address those. We cleaned up the operating system, came up with a new road map, which led to Harmony, which wasn't in anybody's plans, which led to the existing Mac OS 8, which isn't Copland, but it's a damn sight better than anything else that's out there, and of course the whole Rhapsody strategy came out of all that work that I did during mid and late 1996, and I'm pretty pleased about that.

> The other thing we did was, of course, we launched a lot of ships in terms of new products which are now beginning to come out. You know, we came out with a lot of good ideas in that first 6 months I was in the company, but of course, as you know, it takes a year, a year and a half, to get a new product developed, so you know, those things are starting to come out now, and I'm very pleased at the positive reaction to the new 300 and 350 megahertz machines that we announced at MacWworld in Boston.

> Great products clearly set a new high-water mark for everyone to shoot for, and combine that with stuff like Mac OS 8 and then some great new software like Virtual PC, and you can now start thinking about, "Hey, this could be a universal computer." You know, this could do it all, because with Virtual PC, the nice thing about that piece of software, of course, is that it emulates the Intel hardware, so anything an Intel can run, you can run on Virtual PC. So, in fact, we actually took that and ran the NeXT operating system on top of Virtual PC. It was a little slow, because the machine we were using was only a 200MHz machine, but when you get up to this new processor with 350, and we have some in the labs running at 450, and then you go ahead and you emulate it, it looks pretty good. It looks pretty darn good. And so you can say, "It isn't perfect, but it's the closest thing that the world has got to a universal computer." And that's starting to get exciting, and if we can get that message out, I think we're going to see an upturn. So the bottom line of it, and the bottom line of my story, is that we've been through the valley of death, and I think that we're on the positive side of the curve now, and although it isn't obvious yet, especially from the reports you read, I think the truth of the matter is that the company is far healthier today in every respect than it was a year and a half ago. It's got great products, its operating system is cleaned up, we've got a more focused organization... we've got a smaller organization, so it's more economically efficient. And I really believe that once we get traction, you're going to see a nice upturn in the business, and it's going to be a real good story. But it was a tough year and a half. It was about as hard as anything I've ever had to do.

> And so, you know, when I came with the company, you may remember this, I announced to the press that I saw this as about a three-year job, you know, to clean this thing up. And I said that because I said the same thing to the board, when they asked me to take it over. And I didn't get those 3 years, I got about half that, but I got more done in that half than I thought I would, and so that sort of makes up for it a little bit. If... The only fear I have is that Apple is a company, and just like most companies, does well when it focuses and follows a consistent plan. Part of the malaise I found when I went there is that there was a new plan every Monday morning, you know, so your people couldn't really get their teeth into things and focus and therefore get results. So one of the things I tried to do was to stabilize that whole process; I came out with my famous White Paper on the strategy of the company, and the whole purpose of that was to try to get people focused on a consistent set of priorities. My DSUVs that I came up with, the ways of saying, "These are the things you should focus on. Don't worry about everything else; focus on these things and do them well." I think at this point we've come a long ways in making that focus happen, and so I think you're going to see much better execution.

> In 1997, we, Apple, will introduce more new products than ever in its history, and virtually all of them are going to be on time, within the normal error bars that you have in this industry. And that includes, of course, two operating system releases, 7.6 and 8.0, both of which were announced on time, and even mighty Microsoft hasn't done that. So I think it's clear that we've got a machine there going now that's going to be able to execute much better, and if we can... if the succeeding CEO, the next management... and of course, in the meantime, Steve, who I guess is calling most of the shots at this point, if they can stay consistent and focused, we'll be okay. And it's only if we start getting... dreaming too much about all the other things we could do and then suddenly get the organization scattered again, that would be my big fear. If we stay focused the way we are now, Apple will execute like crazy.

> While you were the CEO of Apple, you put a lot of emphasis on the clones and licensing...

> I'm a big supporter of that.

> ...and now it looks like that maybe is for naught.

> I think, no bones about it, I think it would be a big mistake if we abandon the clones. Let me tell you why. Other than sort of the obvious stuff, that you give... you make the platform more viable by having multiple suppliers of the platform, and you give people a choice, a greater spectrum of choice, you're more likely to succeed. Also, the thing that makes the Mac the Mac is the software, not the hardware. So Apple has absolutely, positively, main control, and it's the custodian of this great software legacy, but freezing out, or closing out, other folks who can make hardware to run that software is a major, major mistake. And I think that if that's what Apple does, it will very quickly turn out to be a very big, big problem.

> The other thing about it, though, is that if you really look at Apple, I mean, the question I asked myself when I came into the company, I sort of scratched my head, and I said, "How is it that we've got a company here that has invented virtually everything that goes on in the field of personal computing, you know, everything emanated from this company, and they are at risk, in terms of whether they're going to survive or not?" I mean, most companies who are technical leaders are industry leaders. Intel comes to mind in the semiconductor business. You know, they've been a technology leader, they're also the market leader. That is not uncommon. If you look at other industries, other businesses, people who are the innovators and the leaders are the folks who tend to do really well. So what went on?

> And what I finally decided is the following: Apple is indeed a great innovator, a very innovative company. Microsoft, on the other hand, isn't nearly so innovative, but it's a great competitive company. It's a great competitor. It knows how to compete in the marketplace. Apple is not a competitor. Apple does not know how to compete. It knows how to innovate, but it doesn't know how to compete, and they're different. So you have a situation where you got the innovator here, you got the competitor here, and guess what? The competitor won that because, their things are great, but in the final analysis, if you can't compete, you can't make it attractive in the marketplace, you can't have people lusting after buying it, it doesn't matter.

> Microsoft took what we all know to be an inferior product, and made it seem attractive to people, because they're a great competitor. Apple needs to learn how to compete. It is a corporate skill set that does not exist at Apple today. And what I saw in the clones was an opportunity to have sort of friendly competition, because after all, they were partners, but which would hone the skills of Apple as a competitor in a much safer way than trying to take on the Windows world alone, and if we could be successful competing with the clones, it would, for one, benefit all the users, because it would mean more value for less money, for all of the customer base. It would also give Apple a set of skills that it could then use to take on at the right moment the larger task of competing with the Windows world. And so I saw this as a very critical and necessary step, painful step to go through in order to get to this ultimate outcome, and I think if Apple goes back to trying to not compete, trying to avoid competing, which is what the entire history of the company has been, it's going to once again get back into the same trouble that got it in trouble in the first place.

> If Apple had made that decision a decade ago, it said, "Hey, we've got to learn how to compete, we're going to license the operating system..." we all know what would have been different. Had we done that licensing in the mid-80s, you know, Windows would never have been born, and we all know that. When I ask these people, all I've heard anyone really talk about is, is not just that that was important as a market-making move, but it was also important to establish Apple as a competitor. And the decision Apple made time and time again has been to avoid competing. And those of us who love Apple are beginning to realize that that is a major problem in terms of management courage, and I finally said, "I've got to have the courage as CEO to teach this company how to compete." And it was sort of a tough love kind of a lesson, but I viewed it as absolutely critical.

> For all of these reasons, I was a big supporter of the clones. Where I had a heartburn was, I thought the original licensing deals that our people did, which were going on when I came in - and frankly I didn't pay any attention to it for a while, because of these other problems I was dealing with - but when I finally did focus on it, I realized we had been overly generous, in my view, that is... because normally what you do is you price things based on their value that they represent to the buyer, as opposed to based on your cost, you base it on value, and I felt like we needed to put in place value-based pricing. It's still a good economic model, don't get me wrong, but frankly, that rewarded us just a little bit more for the deal. And it incentivized them to do things that we wanted to do. The last word I had on the clones was that we had reached agreement in principle with all of them, in that we were sitting down to write the contracts, that would definitize that understanding. The contracts were not done when I stepped down. That was my expectation, that there would be files on the agreements that had been made, and that in fact, the clone business would continue to be very, very viable. What happens now I don't know.

> Some people could argue that the clones were almost too successful at competing with Apple...

> That's Apple's problem. That was Apple's problem. Look at the volume. You know, Apple's making three, four million machines a year when Power Computing was making 200,000. The economics, just the economies of scale, should have favored Apple in that. So why was Power Computing able to underprice Apple and compete? It was because Apple wasn't the competitor it needed to be. It made a great product, don't get me wrong, but it wasn't as competitive as it needed to be. It needed a home base of skills, and it needed to watch its costs better, and do all of those things that competitors do, which is make all of those tough decisions, about "Yes, I'll include this," and "No, I won't, because it adds a little cost and doesn't carry enough value"... all those tough decisions that competitors are forced to make, Apple needed to step up to. And so, a strong Apple, a competitive Apple, would not fear a clone who was ten times smaller than they were. And my view was, hey, the problem is not the clones, the problem is us. And there was a lot of rhetoric in the company about, "Gee, we should have never done the clone thing" ...and every time that came up in one of the staff meetings or something, I would pipe up and give them the same damn speech: It is the easy way out; it's also the wrong way. I feel very strongly about that. I think that when the history is written of Apple, that the lesson that's going to emerge from this is you've got to learn how to compete. The sooner you do that as a new company, the better off you're going to be in the long run. And Bill Gates had to do it, because he was always coming from behind, and he learned how to compete, and compete well.

> In hindsight, what would you have done differently?

> You know, that's a good question, because the truth of the matter is, I wouldn't have done things terribly differently... I would have done maybe one or two things differently, but most importantly, I would have done things sooner. Because the thing is, you don't know what you know today when you start. If you did, then you could move quickly. It took me a while to unravel the enigma that was Apple, and to understand what all the issues were - let me say six months - and then I had the task of reorienting the organization to focus on my diagnosis. And that took more time, and so time was working against us. So if there's anything I could have done differently, I would have tried to find a way to move faster.

> People say, "Oh, you should have done more in advertising..." and my view is real simple on that: we didn't have any great products. You don't advertise when you don't have great products. You have to get your priorities straight. Your first priority is to make great products. When you've got them, then you can brag about them. So in my last few months, I was working on doing things to strengthen our marketing program. That doesn't happen overnight - it takes a while.

> But we started in February when we came out with those first wave of ads, which sort of signaled a new change. We were gradually making changes, and made the decision to drop our advertising agency, and open the whole thing up to competitive bid. I saw that the company made the decision to go with a particular firm, and I don't know whether that was the result of the competition, or whether that was just a shortcut decision made by somebody, but it was my intention to open up the competition, and have everyone, all of the advertising folks, come in with all of their best ideas, get some incredibly good ideas out of this thing, and then pick a winner. I'm sure that the folks we picked will do extremely well, but that was the process I was in the middle of and wanted to go through.

> So, you know, the criticism is sometimes, "Gee, you should have done more advertising and marketing and so forth," but I still think I would have done it the same way, because I just don't believe in spending lots of money on advertising when you don't have the great products to back it up. I think all you do is just drive up frustration. Just look at what we did with the PowerBooks... I mean, the PowerBooks were a total disaster, and now we've got a heck of a great lineup of PowerBooks. What about the Newton? The Newton was a disaster, but the MessagePad 2000 is a damn good product, and it's selling; people are buying it, and people are using it. The desktops, with the introduction of this new Kansas series of machines, is spectacular. It's really a great, great story. So I'm hard pressed to think of what I would have done a whole lot different. What I tell my people is, it's the products. And if you don't have the products, all the rest is hype. And so my priority was to make sure we get great products, without question, then we'll brag about them.

> There's one other thing I had - I'm getting off the subject a little bit, but I want to mention this - and that is, before I left, I was beginning to see something I had wanted to see all along, which was a certain amount of pride the employees had in what they were doing. Because this was a very down-in-the mouth group when I came aboard, and there was no reason for them to be upbeat. But in the last few months, let me say from February to July when I stepped down, I could see positive momentum forming in the employees, and they were beginning to get increasingly proud of what they did, and as it became clear that Harmony was a success, and the new series of desktops was a success, and the PowerBooks were starting to be a success, and Mac OS 8 was around the corner, and Rhapsody was sounding really great, there were people starting to say, "Hey, I'm proud to be here now. We're doing good stuff. I want to be here." And I was just beginning to see that take place, and I hope we don't lose that momentum, because it was really a great, great thing.

> Anyhow, back on what I would have done differently, I honestly don't think I would have done anything much differently, except move faster. I think I did exactly the right things. It was just probably never in the cards to fix Apple in 17 months. I don't care who the company, the Board could have hired in that period of time, I doubt if anyone, and I mean anyone, could have gotten results a whole lot faster than I did.

> Can you give us a little bit of your perspective on what the situation was when you came on board and what it was when you left as far as getting developers to continue making Mac products? And what about the loss of market share in education?

> Let's take the developers first. The developers are real simple. You've got to make something that really gets them excited about wanting to develop on your platform, and we hadn't done that. We had a system, as I've already told you, which was unstable and crashed all the time, and we hadn't really been paying close attention to the developers in setting up the platform in such a way that it was a good deal for them. Every time one of our developers - it seemed like it, it wasn't really true - seemed to come out with a good idea, Apple would co-opt it. And it only happened a few times, but that's all it needed to happen for people to begin to believe that it was going to happen all the time. And we just did a lot of dumb, stupid things. And I was starting to change all that, and I think in the end we'll maintain the developer base if we stay on the track we've been on recently relative to making the platform something truly exciting to develop on, and we'll get those folks back.

> Loss in education has to do with a totally different reason. Losing ground in education; we haven't lost a lot of ground, we've lost a little. And the reason is very simple: PC users come into their schools, and supervisors of school districts basically say, "Gee, we want Johnny learning on the machine that everyone else is using, and everyone else is using the PC, and so therefore that's what we should be teaching in school." And I've had a lot of teachers tell me that they simply couldn't put up the babble that they needed to against those forces, that if it was the teachers' decision, they would continue to buy virtually 100% Macs, because it was the right tool to teach children on.

> But they also had that fear and frustration that the ability to make that decision was being taken away from them. And I think that that's the story there. And how you counteract that, the thing you can do is try to convince the world that Apple is a company with staying power and that Johnny learning on that machine does not disadvantage him long-term in being computer literate. Which of course is absurd, but nonetheless, simplistically speaking, people say that, and they act on it. That's really the problem, and that's what we have to work on.

> One of the things that we've heard from the Board of Directors is that for the next CEO, they want somebody who's really customer-driven. Yet, the importance of customers is something you've stressed from the very first. What is the board talking about that you weren't already doing...

> We're still not doing enough in that category. You know, the thrust behind that effort, the mission goal and the DSUVs - my idea there was Apple has to stand for something. We need to decide what it is we're going to stand for, and then we'll do that. We'll do whatever that is, better than anyone in the world. My conclusion out of all that - and we had task forces and groups of managers working on this - so this wasn't just my idea alone, but the outcome of that was the product DSUVs. I believe that Apple better stay damn focused on those things if they're going to be customer-focused. Because it was all assessment, and I think an accurate assessment, based on surveys and everything else we've taken, that those are the things that people really wanted. They wanted ease of use. They wanted performance. They wanted compatibility. They wanted great connectivity. They wanted an attractive industrial design. Those were the things that matter, and those are the things we should stay focused on.

> Take networking, for example. I mean, in the really early days, Apple was ahead of everyone. And then we just got bored with it, and went off and did other things, and woke up one day and realized that, you know, we were trailing instead of leading. We should have been the first company out there with 100-megabit Ethernet on every product, and working on gigabit Ethernet as fast as we could. We should have been driving that kind of technology to the marketplace. When I was at National, we did the first 100-megabit Ethernet chipset like in, I want to say, '93, within a reasonable period at that time. Of course, the first people we sold it to were Apple, because we were a supplier to Apple on the Ethernet chipsets that went on the desktop cards. They didn't do anything with it. We made a presentation to Apple, you know, this is this great technology, and nothing happened. So like six months later, I went back to Apple again, I did the same presentation all over again, and nothing happened. And so it was very frustrating, even when I became CEO, I tried to get people refocused on this connectivity question, this whole network thing, said, "Hey, man, wake up, we'd better get with it." I think it's starting to get some attention on it now, but it took way, way too long. Customer-driven, the 5 DSUVs, focus on them, live them, do them great, do them consistently, and we'll be okay in that department.

> What's it like to come in to Apple when everyone looking in from the outside knows what the solutions are?

> Well, let me just tell you one anecdote to go with that. I invited in - I don't know, I can't remember exactly, I think earlier this year, maybe late last year, but I think it was early this year - all of the key analysts that follow us, you know, Tim Bajarin and the Gartner Group, and so forth, and so on... the top guys, the lead analysts in each of those companies, and I said, "Hey, you're going to get to be Gil today. What should I do?" Here I am, we're trying to fix the company, and I've heard a thousand good ideas, but what is it specifically that I should do. So I started this discussion. And what was interesting was one guy would come up with something, and then someone else at the table said, "No, you can't do that, because here's the problem if you do that," and I'd say, "Oh, yeah, you're right." And so then another one would come up with something, and they'd say, "No, no, that won't work for this reason." And at the end of the session, they were saying, "We're glad we're not you."

> You know, on the surface it sounds easy, but when you really start to dig below a millimeter deep, you find that these are incredibly difficult decisions that have to be made, and that's why they take time. I think that the things I did will stand the test of time. I think the operating system strategies, I think the new product development strategies, I think those things are going to stand the test of time, but they were not easy. They were not things that you do as a Monday morning quarterback. They were things that you agonize over for months before you make those tough decisions. And so, maybe it's not humorous, but it is naive, to be polite, for reporters, any reporters, to do this instant diagnosis on how to fix all of the problems. I read all of the Mac magazines, and I'm eager to see the points of view, and I integrated all of that into my thinking while I was CEO, but most of them are woefully naive, and the real complexity of dealing with it... they don't want to do it.

> Think about being the leader of... the captain of a ship, or the leader of an army, whatever you want to call it, of 15,000 people, all of whom dress the way they want, think the way they want, do what they want, are incredibly wonderful people, but it's just not a disciplined group, okay? So you come in as a leader, and what you need to lead, of course, is you need people to be good followers, otherwise you can't be a good leader. And Apple doesn't have a lot of good followers. They're getting better, though, but I had to... the one thing I learned about people early in my management career, the most valuable lesson, was that just because someone is smart doesn't mean you can tell them something just once. In fact, it's almost exactly the opposite: The smarter they are, the more often you have to reinforce that message. So someone thought they were being critical of me, when in fact they were complimenting me, but they didn't know that. What they said was, "Gee, he always says the same things." Isn't that great! That was a young fellow in the company, and it sounded to me like "Wake up, that's what it's all about!" And so my story is that what you need to do in that situation is you have to pass the basic message over and over and over, and it was finally starting to take hold. It really was. People were really starting to pay attention and follow the mantra that I was repeating, and I really hope we don't lose that momentum now. If we get defocused now, it's going to take a while to get that back together.

> What do you think of Steve Jobs? Are you sorry you brought him back into Apple? Do you think he's going to be a good force for Apple?

> Well, I think he can be a good force for Apple. I mean, time will tell. But I'm not sorry I got him reaffiliated with the company. I think I did what really needed to be done. What I was trying to do was pull together the Apple community in a more cohesive way because we shouldn't be fighting with one another, and that included the clones, and that included Steve Jobs, it included Steve Wozniak, and anyone else I could think of, because I really feel like we need to pull everyone together to do that, so no, I do not regret that at all. Steve has his own set of views. My concern would be that when you're as smart as someone like Steve is, it's real easy to fall in love with your own ideas. And I don't mean that critically, I just mean that when you're smarter than everyone else, you pretty soon get into the habit of believing every decision you make is the right one.

> What you have to guard against, and I had to do this, and I think everyone has to do this, is work hard to maintain an openness, so you really do listen to what other people are saying, before you make those hard decisions. And so if I were to give advice, I would just say, process is important here. And the process has to be making sure you go through an open inquiry onto important questions and give people a chance, make sure everyone has turned it over in their minds and then make a decision. It's real easy to shoot from the hip, but the rule I always followed was a simple one, which was: Don't make a decision before you have to make a decision, but when you have to make a decision, go ahead and make it. So the first thing you decide is, when do I have to decide?

> It's real macho to walk in on Monday morning and start shouting out decisions, but if they're not decisions that have to be made that Monday morning, all you are is being macho, and you're cutting yourself off from additional information that could increase your batting average. So, as the old saying goes, our greatest strengths are sometimes our greatest weaknesses. And that applies to me as much as anyone else, and I always guarded against that, and so this doesn't apply just to Steve, it applies to Steve and all the other smart people at Apple just like him, which is that you've got to make sure that you keep that open mind and go through that carefully-thought-through process, and not decide before you have do, because facts do come in all the time.

> What qualities do you think that the new CEO of Apple needs to have?

> I think that the person should have a certain charisma about them, because I think that's important, just because we're still trying to keep the face so unified, and I think that someone who's got the kind of magnetic charisma I think would be positive, and they have to be someone who really is just great at marketing and sales, because now we've got something to market and sell, and more in the pipeline. I mean, we've got a lot more products in the pipeline you'll see over the next year that I launched, which I won't get to introduce, but which will in fact come out, and they're just going to continue to be a series of great products coming out of that company. Now that we've got something to sell, I'd like to see someone who's charismatic and who's brilliant in marketing sales.

> And someone who knows enough not to screw around with stuff they don't understand. Let the Jim McCluneys run the factory, because they really know what the hell they're doing, and so on and so forth, you go right through the staff and you realize that some of these people are really good, so let them do their job.

> Apple's executive team is very different now from the one that was there when you started. Why were those changes were necessary?

> It was necessary because the model of who Apple was, which was in the mind of the management team that I inherited when I went there, was wrong. It was the Apple of yesterday, but it wasn't the Apple that was threatened in the 90s. And we were still trying to do things the old-fashioned way. There was an enormous, enormous amount of turf battles and turf warfare going on within the company, that was just totally pointless, and we were still acting as if we were the only guys in the business, and the only guys we had competed with were each other.

> How many Macs do you have in your house?

> Well, let's see... five here, one on my airplane, plus an eMate 300, a MessagePad 2000, so five and a half, right at this minute. And I have... this house is sort of laid out kind of funny, but this room isn't large enough to do what I really want to do. So at the other end of the house, we built this little addition on, which is actually a theater room, you know, we have this little home theater room, so what I did, I found a little alcove there where I could put my desk where my main computer center is, and of course we could curtain it all off when we were using it for entertaining. But then I had to have a large room with a lot of space that I could work on. So I have a computer all the way at the other end of the house, and I have the library here, and I put in this Ethernet network, so all of the machines in the house are on a network, so we can get to any machine from any place, so if I really have to get something off the computer back there, I can either walk back there, or I can just log on and do it from here. And a lot of times, that's all I really need, because I'm looking up a phone number or something like that. Actually, it sounds like a lot, but they all get used.

> And if I'm not using them, [my wife] is using them, and the only one she tends not to use is my monster back there, everything runs to that machine, and it's sort of a cross between a server and a power user installation. It's a 9600 with all the bells and whistles, and it's great. It's really a wonderful... I just love the product, absolutely love it, will always love it. I loved it from the day I first saw it.

> I bought an Apple II when they first came out, because I've always been a little bit of a leader in the sense of adopting new things early, and I remember bringing it home and showing it to my oldest son Todd at the time, who promptly found out that there were games written for it so he could play games on it. But then I'd heard about the Mac, and I was really keen on it, and literally the day the Mac came out, that day I was at the store, and I think it took me a month or so to finally get my hands on a box, but I got it immediately and I've been buying them ever since. I have no idea how many I've bought over the last thirteen and a half years, but it's been a lot. Seems like every couple of months I'm buying something else. Then my old ones I give away, so within the family now, I've populated a large infrastructure of Macs of various vintages, right down to and including our grandson, who has a 6100/66, which is, as you know, an old box, but, poor thing, just got handed down through the cascade of the family, until finally... now he's three years old, so we figure in another Christmas or two, he's going to be bugging me for something better.

> One final question: what is your best memory of your time at Apple?

> Oh, there's just so many wonderful experiences there. I guess I would honestly have to say when I invited the Apple Masters in for their first meeting. We had a dinner the night before, and then we had meetings all the next morning, and then we had this lunch, and what I arranged for lunch was to get [the Masters to] go into the town hall, and have whatever master wanted to get up to the podium and talk, and have Apple employees fill up the town hall, and then have it broadcast to all the other sites. It was totally unplanned, there was nothing rehearsed, it was totally spontaneous, and then one after another, each of these wonderful people got up and made comments about how the Mac affected their life.

> Gregory Hines, for example, got up, and of course there's a stage there, so Gregory says, "I don't know how to express to you how much I love the Mac, so I'm just going to do a dance for Apple." And no one can dance like Gregory Hines, and he went up and did this thing, and Kathleen Kennedy got up and talked about the making of The Lost World, and how the Mac was such a key part of it, and Michael Crichton got up and said about how he wrote all of his stories, including Jurassic Park and Lost World, on a Mac, and Harry Marks got up and actually walked through a computer demonstration of how he creates on a Mac, and it went on for about two hours, and no one could move a muscle. It totally hypnotized everyone. And you suddenly realized how powerful Apple is and what an enormous impact it had on people's lives, in a way that really touches you. You know, you go to work every day, and you have a job to do, but then suddenly something like this brings home just how significant what you do is. And I'll never forget that. That probably had to be among my happiest moments at the company.

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