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Sculley on Apple and Intel

Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by AhmedFaisal
Yet another person that just goes by the numbers. I can name you a whole bunch of companies that became extremely profitable for a while when the CEO came in (cuz he leveraged it to death) and then died a slow death because the CEO didn't realize that profit is not everything.
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From $1 billion in sales, to $10 billion in sales. By contrast, Apple is now hitting about $6 billion in sales per year.

Or let's look at Job's performance over the past few years. In Q3 2000, Apple shipped just over a million Macs. In Q3 2003, that had slipped to just 771,000 units - and that's not just a blip, the figures inbetween have shown a steady slide.

Or perhaps you'd like market share figures. In 1994 (the year after Sculley left), Dataquest put the Mac market share at 8.9%. In January 1997, while Amelio was CEO, the total for all Macs (including clones) had risen to 11%, with Apple accounting for about 9% (yes, folks, contrary to the Jobs-inspired myth, cloners didn't cost Apple market share - in fact, they increased it overall for the Mac). By 2002, this was down to 3.8%. So, in other words, despite the "success" of the iMac, Jobs has overseen a significant slide in the Mac's market share, and, since the first wave of iMac euphoria died down, a slide in unit sales as well.

So if sales are slipping, how is Apple actually making money? Ironically, part of it is accounting tricks (none of them illegal - Fred Anderson is a very good CFO in this regard), partly by eating the dealers up with Apple Store (thus increasing its own margin), and partly be small but significant diversification - iPod, yearly updates, .Mac. Plus, of course, sales of ARM shares, which in more than a couple of quarters have been the difference between Apple making a loss and Apple making a profit.
 
I think Apple's biggest mistake was just keeping with Motorola so long, when they were clearly not interested in the desktop CPU but the embedded market. I think the RISC vs CISC argument is a wash now with Apple's partnership with IBM. IBM processors are proven, fast and reliable, with years of experience in the mainframe and midrange markets. As long as IBM keeps up the momentum and the GHz rising, Apple will only get better. I don't think Apple will ever be the $399 special at Walmart. It's just not there market, they are the BMW of computers. But it would be nice if there processors weren't second class, and now with IBM I don't think this is the case.

They will never be the dominate workstation in the market with there pricing, but there is room to definitly take more market share. Hopefully more in the corporate market. It would be nice instead of the niche Mac or two at a company, it would be used by a whole department. Everywhere I worked (in IT) we had a couple Macs but no great number. IT just liked them because they never had to do anything with them, they just worked. Apple needs to get its foot in the door...
 
The biggest mistake Apple made didn't involve who to buy their chips from (yes they did stay with Moto too long, but there are plenty of other chip sources) but involved their decision to stop clones. Mac clones increased their marketshare markedly. Look in the DOS world, IBM didn't account for the DOS/Windows growth, the clones did. Apple needs more vehicles out there to run its operating system and they can't make enough to meet the need. T
 
Originally posted by MacFan26
What is John Sculley's purpose in saying this? "'Apple took another path and ended up a different kind of company', Sculley said." What's his point? I don't understand why he would make this comment after not even working there for so many years.
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Sculley is such a long term failure with regards to everything he has touched. He is probably hoping Intel will hire him.
Intel recently mouthed off the same thing that Apple should have come their way. Sculley is just reiterating in hopes they call him up to work for them.
 
Analog Kid,

I'm sorry Intel did this to you, or at least a few individuals at Intel. Maybe it's just their blue-collar force that gets the good treatment.

In five years I worked in four different manufacturing sites in AZ for 10 different managers. Three of which were very BAD people including my last one. He wasn't the reason I quite though. But if he had been my first, I would have quit for that reason.

The engineers I knew mainly complained about working 60 hours per week. What else is new for engineers, anywhere?
 
Re: What's wrong with Intel? Intel GOOD, Microsoft BAD

Originally posted by roy_dan
Who says an Intel enabled Mac would be on IA32? I'm sure if Steve Jobs gave Intel the go-ahead they would have a PPC compliant product to manufacture in parallel to the P4's on their awesome manufacturing process.

Whether by buying a license or inventing an ingenious workaround, making PPC's would give them one more edge on AMD and Sun and that's what Intel really cares about.
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I don't believe Intel making PPC's is plausible. Apple is moving toward less reliance on Microsoft. Do you think Apple would willing rely on Intel to provide them with a relatively small market chip when Intel is so closely tied to Microsoft? If Apple went to Pentium family CPU's it would be different, I don't think Intel would simply refuse to sell them to Apple. But if Bill woke up on the wrong side of the bed one morning and decided he'd had enough of Steve, one phone call would be all it would take for Intel's PPC efforts to languish and die.
 
Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by EvilMole
From $1 billion in sales, to $10 billion in sales. By contrast, Apple is now hitting about $6 billion in sales per year.

Or let's look at Job's performance over the past few years. In Q3 2000, Apple shipped just over a million Macs. In Q3 2003, that had slipped to just 771,000 units - and that's not just a blip, the figures inbetween have shown a steady slide.

Or perhaps you'd like market share figures. In 1994 (the year after Sculley left), Dataquest put the Mac market share at 8.9%. In January 1997, while Amelio was CEO, the total for all Macs (including clones) had risen to 11%, with Apple accounting for about 9% (yes, folks, contrary to the Jobs-inspired myth, cloners didn't cost Apple market share - in fact, they increased it overall for the Mac). By 2002, this was down to 3.8%. So, in other words, despite the "success" of the iMac, Jobs has overseen a significant slide in the Mac's market share, and, since the first wave of iMac euphoria died down, a slide in unit sales as well.

So if sales are slipping, how is Apple actually making money? Ironically, part of it is accounting tricks (none of them illegal - Fred Anderson is a very good CFO in this regard), partly by eating the dealers up with Apple Store (thus increasing its own margin), and partly be small but significant diversification - iPod, yearly updates, .Mac. Plus, of course, sales of ARM shares, which in more than a couple of quarters have been the difference between Apple making a loss and Apple making a profit.
Click to expand...

Sculley did do good by concentrating on the business market at that time. But the 1 billion to 10 billion was inevitable because of the expansion of computer use at that time period. Any CEO with similar focus on the business market could have done that and more.

The market share thing is deceptive since about that same time the whole internet thing really started rushing forward. People were buying computers left and right. Apple did not capitalize on the momentum at that time. As the overall home computer market expanded in general Apple kept selling the same amount and as a result their percentage shrank in an expanding market.

And if sales are slipping explain their laptop sales numbers as of recent. G5 sales will tell another tale when the quarter rounds out.
You compared the year 2000 sales to today sales without accounting for recessionary conditions in the economy today.
A lot of companies will show drop offs in revenue and sales over that same time period.
 
Apple on Intel debate rages again, and within the first page of comments I have yet to read one *intelligent* comment about Sculley's remarks - I see only knee jerk reactions.

Sculley dropped the ball while at Apple because he didn't understand Apple. Keep in mind, however, that he was also around so long because he made shareholders happy with excellent ROI and consistent improvement in performance throughout the late 1980s and early 1990s.

Of course, shareholders during that time really didn't "get" how the consumer IT business works - grab marketshare and then gouge later. Apple took a different approach: keep margins high and marketshare low.

But this is beyond the point. Those of your criticizing Sculley's comments just don't get it. Had Apple moved to Intel, the 'disaster' that everyone says would have happened simply would not have. Just because Apple could have used Intel chips does not mean that software would work on Apple computers. It does not mean that there would have been Apple clones. It does not mean that people would like at the price of a Mactel machine and a Compaq machine and said, "Well, the Compaq is cheaper!"

Think about it - that situation still exists today and Apple survives and thrives. Why? Market segmentation. Market differentiation. Elasticities of demand. Marketing. Different user experience. User Interface. Etc. etc. etc.

Sculley is dabbing into a bit of revisionist history - but before we nail his coffin shut, remember that it was Steve Jobs' meddling that delayed the Macintosh introduction, that it was Steve's obsession of silence that led to no fan and consequently a much higher cost to manufacture the Mac. It was Steve Jobs who overspent budgets by millions of dollars, who went on wild tangents building billion-dollar factories that went virtually unused. And most of all, remember that it was Steve Jobs who brought John Sculley onboard, oblivious to the fact that Apple didn't need a marketer. It needed a stern manager.
 
Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Good points, EvilMole. Keep in mind that throughout the mid-1980s Apple also had a significant revenue stream from imaging products such as scanners and printers, as well as a far more robust line of monitors.

Also keep in mind that it has only been in the last five years or so that the PC market has become 'commoditized' - prior to that, margins were significantly higher for everyone involved.

EvilMole also makes a very good argument from a management/financial perspective. If you look at Apple's quarterly profits derived from operations, that figure has eroded significantly since Q4 2000. That means that it is becoming increasingly difficult for Apple to turn a profit based on Macintosh and Macintosh related sales alone. As Evil points out, the difference is made up by good accounting moves and from ancillary services.

Apple the company may be on a decent playing field at the moment, but Macintosh is by no means out of the woods.

Originally posted by EvilMole
From $1 billion in sales, to $10 billion in sales. By contrast, Apple is now hitting about $6 billion in sales per year.

Or let's look at Job's performance over the past few years. In Q3 2000, Apple shipped just over a million Macs. In Q3 2003, that had slipped to just 771,000 units - and that's not just a blip, the figures inbetween have shown a steady slide.

Or perhaps you'd like market share figures. In 1994 (the year after Sculley left), Dataquest put the Mac market share at 8.9%. In January 1997, while Amelio was CEO, the total for all Macs (including clones) had risen to 11%, with Apple accounting for about 9% (yes, folks, contrary to the Jobs-inspired myth, cloners didn't cost Apple market share - in fact, they increased it overall for the Mac). By 2002, this was down to 3.8%. So, in other words, despite the "success" of the iMac, Jobs has overseen a significant slide in the Mac's market share, and, since the first wave of iMac euphoria died down, a slide in unit sales as well.

So if sales are slipping, how is Apple actually making money? Ironically, part of it is accounting tricks (none of them illegal - Fred Anderson is a very good CFO in this regard), partly by eating the dealers up with Apple Store (thus increasing its own margin), and partly be small but significant diversification - iPod, yearly updates, .Mac. Plus, of course, sales of ARM shares, which in more than a couple of quarters have been the difference between Apple making a loss and Apple making a profit.
Click to expand...
 
Re: Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by synergy
Sculley did do good by concentrating on the business market at that time. But the 1 billion to 10 billion was inevitable because of the expansion of computer use at that time period. Any CEO with similar focus on the business market could have done that and more.

And if sales are slipping explain their laptop sales numbers as of recent. G5 sales will tell another tale when the quarter rounds out.
You compared the year 2000 sales to today sales without accounting for recessionary conditions in the economy today.
A lot of companies will show drop offs in revenue and sales over that same time period.
Click to expand...

It was by no means inevitable that Apple would grow from $1 billion to $10 billion - there were plenty of computer companies around in 1983 that fell by the wayside. Sculley also managed Apple during the only time I can remember a computer company making the leap from one architecture to another succesfully - from Apple II as the main breadwinner, to the Mac. No other compute company managed that kind of jump.

Apple's laptop sales are, indeed, on the rise - but because they are selling a higher proportion of their product mix as laptops, not desktops. In other words, the company is cannabalizing its own desktop sales to feed higher-margin laptop sales. That's what Jobs means when he says that he wants to surpass 50% of Apple's sales as portables. That will mean that, overall, its share of the portable market will rise - but at the cost of a lower share of the desktop market. It's not a bad strategy, as it allows them to make more money per machine and boosts Apple's profile in an important market.

As for overall sales, there's no good news for Apple there. Between the 4th quarter of 2000 and the same quarter in 2002, overall PC sales fell by about 6% - significantly less than the 20+% slide that Jobs has presided over.

There's no doubt that when you look at the figures, Jobs has failed to convert Apple's immense brand strength into unit sales of Macs. of course, to be fair, he must know this as well: and products like the iPod and iTunes Music Store are an indication that for Apple, the future isn't just about Mac. And that, to me, makes it a far more interesting company.
 
Re: Sculley still has no clue!

The lack of management from CEO was the problem. Acceptance of the in-house kingdoms was the problem. Hiring and promoting wrong people was the biggest problem.

MY thesis was on Apple

At least where i live , Apple's problem is the price and lack of knowledge of use (incompatible comes to mind?) because people doesn't know Apple is quite compatible these days.

Not everyone is a mac geek like us.

Apple should have a better campaign, more airplay of their tv adds.

Also, this is the strange part of my conclusions:

The share of mind(remember i am trying to translate to english) of Apple and what people thought about quality and the whole Apple system was one of the highest.

Everyone wanted a Mac, they just couldn't afford it>

So the problem with Apple to those people that don't know the difference between a computer and the next one is only the:

PRICE.
 
Originally posted by hvfsl
The reason a few people have been talking about Intel making PPC chips for Apple, is that moto will soon stop making PPC chips for Apple and Apple needs to get its lowend chips from someone else. IBM only makes G3 low end chips, which are not good enough to be put in the PowerBook/iMac (at least at the moment).

So the options are:
- Apple moves all its product line over to G5, which would mean a low power G5 would be needed.
- Apple goes to Intel to make a G4 to be used in its low end or low power computers like powerbook etc.
- IBM takes over the G4 production from moto and combines it with its G3 tec.
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I can see it now, iMacs with an "Intel Inside" sticker on the front. Blashphemy, I tell you, Blasphemy!
 
Originally posted by Dippo
I still think RISC is much better than CISC. CISC is reaching it's limitations while RISC still has some ground to go.

That's just my opinion, no real scientific data to back it up with.
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I agree that RISC is superior. CISC does well holding its own, but with Intel CISC processors, it takes considerably more clock speed. AMD can do more with less clock speed. If the consumer wasn't so fixated on the MHz myth, chips that would perform the same amount of work in the same time but have considerably less clock speed thus reducing power required and heat generated would be in use. Here are some benchmarks for the various processors available. By no means are the CISC processors a slouch, but when they are equivalent in work accomplished but in some cases have nearly twice the clock speed or more, it shows how inefficient they are becoming.

Power4 1.7GHz
CINT2000: 1113
CFP2000: 1699

Fujitsu SPARC 1.35GHz
CINT2000: 905
CFP2000: 1340

Pentium 4 3.2GHz
CINT2000: 1330
CFP2000: 1494

Itanium 2 1.5GHz
CINT2000: 1322
CFP2000: 2106

Sun USIII 1.2GHz
CINT2000: 722
CFP2000: 1344

AMD Athlon 3200+
CINT2000: 1335
CFP2000: 1250

AMD Opteron 2GHz
CINT2000: 1335
CFP2000: 1339
 
Re: Re: Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by EvilMole


Apple's laptop sales are, indeed, on the rise - but because they are selling a higher proportion of their product mix as laptops, not desktops. In other words, the company is cannabalizing its own desktop sales to feed higher-margin laptop sales. That's what Jobs means when he says that he wants to surpass 50% of Apple's sales as portables. That will mean that, overall, its share of the portable market will rise - but at the cost of a lower share of the desktop market. It's not a bad strategy, as it allows them to make more money per machine and boosts Apple's profile in an important market.
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If they had let the desktop line wither more than it has I would agree with your line of reasoning. But they haven't willingly let the desktop line wither. Part of the circumstances is with the lack of a good PPC chip to push the desktops. The G4 just aged very very poorly. Yes Apple could have shoveled money into it to help aleviate that, but that would not have helped the bottom line.

So I don't see Apple allowing laptop sales to cannabalize the desktop line. Apple is growing the laptop sales. It just so happens that curcumstances allowed for the desktops to flounder. What could Apple have done differently to puch desktop sales? Not much until IBM got the G5 out of the door. You can argue up and down that other chips were available or Apple could use their cash horde to push the G4. But the chip was not entirely theirs to begin with.

I don't think it was their strategy to let the desktops flounder. They just got stuck at a time where it did flounder. The G5s will push their desktop sales even further. Once they start to migrate the other desktops to the G5s I think they can show some serious reason for people holding onto old G4 machines to upgrade.
 
Re: Sculley still has no clue!

Originally posted by ipiloot
You had no vision and no clue what's happening inside and outside. You would have been very good operations manager. But not CEO. At least in Apple. Admit it.
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You know what this means? Steve Jobs is Apple. Everyone knows it. He makes the company. You know what else that means? When Steve Jobs dies (and he will eventually), Apple will have no choice but to be run by somebody else. Let's hope ol' Stevie can get someone good groomed for the job, or else Apple will quickly become just another company like Pepsi or Nike or whatever.

The day Jobs passes on is likely the day Apple stops being Apple.
 
Re: Re: Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by EvilMole
<snip>
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Hear, hear!

I can't believe the purely negative, apparently uneducated, instant reactions to Sculley. It takes a very, very bright guy to make two household names. And it takes some pretty solid business knowledge to increase a company's revenue tenfold. And while we're at it, it takes a lot of guts to risk the kind of innovation that Apple was doing in the 80s and early 90s, which has in many ways led them to where they are today.
 
Re: Re: Re: Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by synergy
What could Apple have done differently to puch desktop sales?
Click to expand...

Simple: continued with the clone program. This would have given customers greater confidence, particularly businesses that always require more than a single supplier, as well as giving Motorola (as a clone maker) a bigger incentive to push PowerPC production. Clones *were* growing the market, as the market share figures at the time showed. The reason that Jobs cancelled the clone program had nothing to do with the simple business of selling market share for everyone, and everything to do with Jobs' desire to see Apple own *all* of the Mac market.

The decision to cancel cloning directly cost Motorola over $100 million, simply in built Mac clones that it had to junk. Is it any wonder that Motorola wasn't exactly rooting for Apple after that?
 
Re: Re: Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by EvilMole
As for overall sales, there's no good news for Apple there. Between the 4th quarter of 2000 and the same quarter in 2002, overall PC sales fell by about 6% - significantly less than the 20+% slide that Jobs has presided over.
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Haven't you noticed, it's not just "Computer" companies, but 90% of ALL company profits/trading incomes are down since 2000. Have you forgotten about 9-11??? That caused a major drop in the markets, world-wide....

Companies are now starting to show market growth. And so is Apple. It's only a matter of time before the markets start growing again like they were....



CS....
 
Re: Re: Re: Re: Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by EvilMole
Simple: continued with the clone program. This would have given customers greater confidence, particularly businesses that always require more than a single supplier, as well as giving Motorola (as a clone maker) a bigger incentive to push PowerPC production. Clones *were* growing the market, as the market share figures at the time showed. The reason that Jobs cancelled the clone program had nothing to do with the simple business of selling market share for everyone, and everything to do with Jobs' desire to see Apple own *all* of the Mac market.

The decision to cancel cloning directly cost Motorola over $100 million, simply in built Mac clones that it had to junk. Is it any wonder that Motorola wasn't exactly rooting for Apple after that?
Click to expand...

Industry analysts have already been over this.
Mac clones did not expand market share and only cannibalized Apples sales. When they decided to do clones it was too late. Apple had hoped to expand the market share. But when it only ate their own market share and did not expand the market share Apple had to pull the plug.

http://www.cnn.com/SPECIALS/1997/web.whatnext/hit.miss/miss08.html
 
Re: Re: Re: Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by CaptainScarlet

Companies are now starting to show market growth. And so is Apple. It's only a matter of time before the markets start growing again like they were....
.
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Unfortunately, that's not true. Between Q3 2001 and Q3 2002, computer sales overall rose by 3.6%, according to IDC (Dell, the market leader, upped its year-on-year growth in sales by a staggering 23% in the same period). In other words, other computer makers have seen their unit sales grow since at least the end of 2001, while Apple's have fallen.
 
Re: Naah Sculley-boy, you being Apple's CEO was the w

Originally posted by synergy
Industry analysts have already been over this.
Mac clones did not expand market share and only cannibalized Apples sales. When they decided to do clones it was too late. Apple had hoped to expand the market share. But when it only ate their own market share and did not expand the market share Apple had to pull the plug.

http://www.cnn.com/SPECIALS/1997/web.whatnext/hit.miss/miss08.html
Click to expand...

Despite what CNN says (and what Apple said at the time), this simply isn't true. As the figures I quoted earlier showed, Mac OS sales reached a high of 11% market share penetration in January 1997, when cloning was at its peak. It began its long decline after that. Apple's own share had stabilized at around 9%, and is now down to a mere 3%-ish.

The truth is more complex. In the short term, Apple needed to buy time to reposition itself as what an analyst friend of mine calls "a boutique computer company": that is, a company that makes high-price, high-design value machines, leaving the cloners to make the "grey box that you hide under your desk" machines. To buy this time, Jobs decided to cull the cloners, without thinking of the long-term effects on Apple's business relationships (a classic Jobs error, and one that he's made several times in the past).
 
Re: Re: Re: Re: Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by EvilMole
Unfortunately, that's not true. Between Q3 2001 and Q3 2002, computer sales overall rose by 3.6%, according to IDC (Dell, the market leader, upped its year-on-year growth in sales by a staggering 23% in the same period). In other words, other computer makers have seen their unit sales grow since at least the end of 2001, while Apple's have fallen.
Click to expand...

However, most of Apple's losses were in the desktop sector. They had gains in the laptop sector, but not enough to offset the loss in desktops, mostly the PowerMac. So it can be argued that Apple's numbers fell strictly because they didn't have an appealing desktop line. This has changed since then. I would expect the next numbers we see out of Apple to be VERY impressive. Just from what I've heard from friends and associates it seems that everyone is getting a G5.
 
Re: Re: Re: Re: Re: Re: Re: Re: Re: Naah Sculley-boy, you being Apple's CEO was the worst mistake...

Originally posted by Rincewind42
However, most of Apple's losses were in the desktop sector. They had gains in the laptop sector, but not enough to offset the loss in desktops, mostly the PowerMac. So it can be argued that Apple's numbers fell strictly because they didn't have an appealing desktop line. This has changed since then. I would expect the next numbers we see out of Apple to be VERY impressive. Just from what I've heard from friends and associates it seems that everyone is getting a G5.
Click to expand...

And that's exactly what I was saying.
 
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