After showing the grid of Apple’s new product strategy and going through some slides about the new computer’s performance, he was ready to unveil his new baby. “This is what computers look like today,” he said as a picture of a beige set of boxy components and monitor was projected on the big screen behind him. “And I’d like to take the privilege of showing you what they are going to look like from today on.” He pulled the cloth from the table at center stage to reveal the new iMac, which gleamed and sparkled as the lights came up on cue. He pressed the mouse, and as at the launch of the original Macintosh, the screen flashed with fast-paced images of all the wondrous things the computer could do. At the end, the word “hello” appeared in the same playful script that had adorned the 1984 Macintosh, this time with the word “again” below it in parentheses: Hello (again). There was thunderous applause. Jobs stood back and proudly gazed at his new Macintosh. “It looks like it’s from another planet,” he said, as the audience laughed. “A good planet. A planet with better designers.”
Once again Jobs had produced an iconic new product, this one a harbinger of a new millennium. It fulfilled the promise of “Think Different.” Instead of beige boxes and monitors with a welter of cables and a bulky setup manual, here was a friendly and spunky appliance, smooth to the touch and as pleasing to the eye as a robin’s egg. You could grab its cute little handle and lift it out of the elegant white box and plug it right into a wall socket. People who had been afraid of computers now wanted one, and they wanted to put it in a room where others could admire and perhaps covet it. “A piece of hardware that blends sci-fi shimmer with the kitsch whimsy of a cocktail umbrella,” Steven Levy wrote in Newsweek, “it is not only the coolest-looking computer introduced in years, but a chest-thumping statement that Silicon Valley’s original dream company is no longer somnambulant.” Forbes called it “an industry-altering success,” and John Sculley later came out of exile to gush, “He has implemented the same simple strategy that made Apple so successful 15 years ago: make hit products and promote them with terrific marketing.”
Carping was heard from only one familiar corner. As the iMac garnered kudos, Bill Gates assured a gathering of financial analysts visiting Microsoft that this would be a passing fad. “The one thing Apple’s providing now is leadership in colors,” Gates said as he pointed to a Windows-based PC that he jokingly had painted red. “It won’t take long for us to catch up with that, I don’t think.” Jobs was furious, and he told a reporter that Gates, the man he had publicly decried for being completely devoid of taste, was clueless about what made the iMac so much more appealing than other computers. “The thing that our competitors are missing is that they think it’s about fashion, and they think it’s about surface appearance,” he said. “They say, We’ll slap a little color on this piece of junk computer, and we’ll have one, too.”
The iMac went on sale in August 1998 for $1,299. It sold 278,000 units in its first six weeks, and would sell 800,000 by the end of the year, making it the fastest-selling computer in Apple history. Most notably, 32% of the sales went to people who were buying a computer for the first time, and another 12% to people who had been using Windows machines.
Ive soon came up with four new juicy-looking colors, in addition to bondi blue, for the iMacs. Offering the same computer in five colors would of course create huge challenges for manufacturing, inventory, and distribution. At most companies, including even the old Apple, there would have been studies and meetings to look at the costs and benefits. But when Jobs looked at the new colors, he got totally psyched and summoned other executives over to the design studio. “We’re going to do all sorts of colors!” he told them excitedly. When they left, Ive looked at his team in amazement. “In most places that decision would have taken months,” Ive recalled. “Steve did it in a half hour.”
There was one other important refinement that Jobs wanted for the iMac: getting rid of that detested CD tray. “I’d seen a slot-load drive on a very high-end Sony stereo,” he said, “so I went to the drive manufacturers and got them to do a slot-load drive for us for the version of the iMac we did nine months later.” Rubinstein tried to argue him out of the change. He predicted that new drives would come along that could burn music onto CDs rather than merely play them, and they would be available in tray form before they were made to work in slots. “If you go to slots, you will always be behind on the technology,” Rubinstein argued.
“I don’t care, that’s what I want,” Jobs snapped back. They were having lunch at a sushi bar in San Francisco, and Jobs insisted that they continue the conversation over a walk. “I want you to do the slot-load drive for me as a personal favor,” Jobs asked. Rubinstein agreed, of course, but he turned out to be right. Panasonic came out with a CD drive that could rip and burn music, and it was available first for computers that had old-fashioned tray loaders. The effects of this would ripple over the next few years: It would cause Apple to be slow in catering to users who wanted to rip and burn their own music, but that would then force Apple to be imaginative and bold in finding a way to leapfrog over its competitors when Jobs finally realized that he had to get into the music market.
CHAPTER TWENTY-EIGHT
CEO
Still Crazy after All These Years
Tim Cook and Jobs, 2007
Tim Cook
When Steve Jobs returned to Apple and produced the “Think Different” ads and the iMac in his first year, it confirmed what most people already knew: that he could be creative and a visionary. He had shown that during his first round at Apple. What was less clear was whether he could run a company. He had definitely not shown that during his first round.
Jobs threw himself into the task with a detail-oriented realism that astonished those who were used to his fantasy that the rules of this universe need not apply to him. “He became a manager, which is different from being an executive or visionary, and that pleasantly surprised me,” recalled Ed Woolard, the board chair who lured him back.
His management mantra was “Focus.” He eliminated excess product lines and cut extraneous features in the new operating system software that Apple was developing. He let go of his control-freak desire to manufacture products in his own factories and instead outsourced the making of everything from the circuit boards to the finished computers. And he enforced on Apple’s suppliers a rigorous discipline. When he took over, Apple had more than two months’ worth of inventory sitting in warehouses, more than any other tech company. Like eggs and milk, computers have a short shelf life, so this amounted to at least a $500 million hit to profits. By early 1998 he had halved that to a month.