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Apple Computer's Sculley to Give Up CEO Position

June 19, 1993|JONATHAN WEBER | TIMES STAFF WRITER

SAN FRANCISCO — John Sculley, the soft-drink marketeer turned high-tech executive who led Apple Computer through 10 years of explosive growth, said Friday he has stepped down as chief executive.

His replacement is Apple President and Chief Operating Officer Michael H. Spindler, who has been running the company on a day-to-day basis for some time. Sculley will remain chairman.

The change comes at a critical juncture for Apple, which is struggling to maintain its position in the cutthroat personal computer business even as it launches a series of risky but critically important initiatives in consumer electronics, multimedia information services and corporate computing.

Since its archetypal founding in 1977--in a Silicon Valley garage by two long-haired youths, Steve Wozniak and Steve Jobs--Apple has been a symbol of freewheeling, idealistic, high-tech creativity. The company virtually invented the personal computer industry with its Apple II and achieved a second major breakthrough with the Macintosh, so user-friendly it has developed almost a cult following.

Although Apple has lost much of its uniquely youthful culture, it is still the world's No. 2 personal computer vendor and a leader in many critical new technologies, and it still wages irreverent war against the IBM-compatible standard that dominates the market.

Resented by many as an outsider, Sculley never did win the heart of Apple's techies. Nevertheless, during his tenure Apple became a household name. The company launched a broad range of Macintosh computers and accessories, including its phenomenally successful Powerbook laptops, and grew in sales from less than $1 billion a year to more than $7 billion.

Analysts and Apple insiders Friday praised the promotion of Spindler, whom many say is the unsung hero largely responsible for Apple's solid performance in recent years. Apple shares, which have fallen sharply in the past two weeks because of worries about poor earnings, closed at $41, off 25 cents.

Just as Sculley was brought on board in 1983 to implement a technology strategy defined by Apple co-founder and then-Chairman Jobs, Spindler's job will be to execute a plan largely defined by Sculley. And Sculley said he will remain actively engaged as chairman, focusing on alliance-building and long-term technology strategy.

"This is not my swan song," he said in a telephone interview. "I hope to be around for a while."

Sculley said he had been considering stepping back from operations for some time, and that the timing of the move was driven in part by his desire to begin in July the six-week sabbatical to which all Apple employees are entitled every five years.

Yet several sources at the company painted a different picture of events, noting that the board meeting on Thursday--where the change was made--was scheduled at the last minute.

Sources who asked not to be named suggested that the change was a victory for those inside Apple who believe that the company must focus more tightly on its core business--namely, the Macintosh computer--and be less distracted by initiatives such as the much-hyped Newton hand-held computer.

Signs of turmoil at Apple have been mounting for several months. Two key executives responsible for Macintosh products left for competitor Dell Computer. Apple announced last week that earnings would be below forecast as a result of ongoing computer price wars. And some in the industry even question Apple's long-term viability as PCs using Microsoft's graphically oriented Windows operating system grow ever cheaper and more powerful.

Spindler is expected to deal forthrightly with these problems in a major restructuring that will include layoffs. Friday he would not directly confirm layoff plans but said the company would do "everything we have to do to maintain growth and profitability."

In the long run, though, Apple's success will still depend on the new directions launched by Sculley over the past two years. In the core computing business, Apple will be undertaking a risky transition to a new type of high-speed computer chip and a new type of advanced software system as part of its much-publicized alliance with International Business Machines.

The new chip, dubbed the Power PC, was originally designed by IBM and is being developed jointly by IBM, Apple and Motorola. A new generation of Power PC-based Macintosh computers will begin appearing next year, and although they will run existing Macintosh software, completely new software will be required to exploit the machines' potential.

"They're painting a picture of the transition from (the current Macintosh) to the Power PC that is very rosy," said Stewart Alsop, editor of InfoWorld. "But it's a transition that no company has pulled off without trouble. . . . It's been done only three or four times in history."

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