earth to apple - you have a problem 10 of july, 1997 by johnmichael patrick monty monteith

It seems like every few months I report on the ridiculous things happening down in Cupertino, California. Guess what folks? It's been a few months.

About a year and a half ago Apple started losing money like nobody's business, and the tradition will continue for the foreseeable future. Apple is expected to post another 70 million dollar loss for the previous quarter to add to the disastrous 708 million dollar loss the previous quarter. And if recent events are any sign, the loss may be significantly more.

Apple's previous answer to turning around the losses was to bring in the best in the business. Gilbert Amelio, who had previously saved companies who were heading for chapter 11, was brought in to balance the books and give Apple some direction. The Apple community rejoiced at the news, and proclaimed Apple had finally found the road to success (of course most of these guys proclaim that every other week).

Over the past year and a half Gilbert Amelio has done exactly what he promised to do: He has reduced Apple to a lean mean corporate machine, he has given the Macintosh product line a sense of focus, he has restored hope for the future with new products, and most of all, he has given the company a vision for the future. He did these things by cutting excess product, cleaning up Apple's hardware mess (flaming PowerBook anyone?), throwing out a hopeless product called Copland, and cutting a deal for a new operating system called Rhapsody. Yet, with all of these changes, two things remain constant: Apple continues to lose money and market share.

When Amelio was first hired the phrase was "if he can't fix Apple, no one can." Yesterday the board of directors subtly ousted Amelio. Suddenly the new phrase is, "I'm not sure Gil Amelio ever had a clue" (APS Vice President). The Apple community is bad mouthing Amelio right and left when last week they could not say enough good things about the guy?

"Their lack of direction has frustrated everyone in the industry.", CEO of TrueVision Inc.

Talk about fair weather friends. Lack of direction? Are we talking about the same company? What happened to the praises of last week? What happened to the talk of Amelio finally giving Apple a hope with Rhapsody? What happened to the talk only a week and a half ago about an Apple Computer returned to profitability thanks to the genius of Amelio?

As if all of this was not ludicrous enough, then you have those folks which would like to see Steve Jobs be given the CEO position at the company. This is the same group of Apple Evangelistas that crowded the Time web site to vote Jobs as the "Builder and Titan" of the 20th Century. Obviously, these folks need a RAM upgrade. They have completely forgotten that the man they want in charge was the same fellow that pronounced Apple Computer a dead company with a dead product only a few short years ago. This is the same man that nearly put Apple out of business the last time he was in charge. And this might be the same supposed "visionary" that sold all but one of his 1500 Apple shares just last week. What sort of visions for Apple's future do you suppose he was seeing when he put in the call to the stock broker that morning? Even if Jobs was not the one selling 1500 Apple shares (amusing how no one will fess up), someone did.

And for those of us that might have been stupid enough to purchase some Apple stock back when the Evangelistas published what a fabulous deal it was at $28 a share, I have a little message: Welcome to the poor house. I suppose they were under the impression that if you say something enough times it might come true. It did. Apple's stock has been breaking records all right. All time record lows. Some investors might remember the over $40 a share days. If you were able to get $14 today, you were doing very well.

As a Macintosh owner myself, I hate to bring up the worst news of all: It is going to get worse. Why do you suppose that both Amelio and Hancock agreed to the board shove off the plank? It was not because things were all roses inside the ship. There is a foul odor seeping, and plugging the leaks is not going to cure the problem. It would seem that Steve Jobs is not the only one with a less than perfect vision for Apple's future.

Then there is the fact that Amelio was probably Apple's last, best chance. Back when he was hired, most Apple observers were saying exactly those words. Now the he has been yet another person through the Apple revolving door, one has to question the future of the company. He was a CEO with a track record for success that knew how to turn a company to profitability. Amelio spent months touring the company and cutting every program that was not going to help in the goal of profitability. He drew up a strong and much praised roadmap for Apple's future. If he could not do the job for Apple, who can? Many realize, short of a miracle, the fortune's for Cupertino are not going to turn around any day soon. Apple might be able to get a single quarter of profitability once a year, but with the record losses the company has sustained, it needs to show a full year of profitability. It looks fairly bleak.

Perhaps the outlook would have looked better if the board of directors was fired instead of the CEO. Wasn't it the board who decided to hire all of these CEO's they keep throwing out the Cupertino doors? Wasn't it the board who signed off on all of the plans of all of these CEO's?

No matter how many times the Apple board of directors pushes out CEO's. No matter how many times Apple lays off employees. No matter how many times Apple changes it's course for the future, things only seem to get worse for the little company. How many more hundred million dollar losses do you suppose the company can withstand? How many more upper management revolving doors? How many more changes in direction? How many more mistakes by the board of directors? Mac owners are beginning to change their answers to these dire questions: Do you truly believe Apple will ever return to the profitable company it once was? Do you believe it's market share will ever reach above 5% again? Do you suppose it's stock price will ever re-claim it's $40 offering?

These are trying times for Macintosh owners and Apple Computer fans. Short of those without common sense, we all must question Apple's future.