BUSINESSWEEK ONLINE : JULY 31, 2000 ISSUE
COVER STORY

"If the PC Doesn't Change, It'll Go the Way of the Dodo"


Steven P. Jobs has done what many said was impossible: He has put the pizzazz back into Apple Computer Inc. With his flair for design and his marketing panache, Jobs has propelled Apple's revenue growth to 17% in the latest quarter--second only to Dell Computer Corp. And the Apple co-founder sees nothing but better times ahead. Is he right? Jobs lays out his thinking in an interview with Silicon Valley correspondent Peter Burrows.

Q: You've been back at Apple for three years now, and the company is once again healthy. Now, you're expanding the product line and distribution. And you've said the company is looking into new product areas. Is Apple going for big-time growth again?
A:
This is about Apple hitting its stride. High-performance organizations take time to mature, but once you get there it's really great. I think Apple's entering a wonderful decade where it's going to make some major contributions again.

Q: How much bigger can the company become?
A:
We have about 6% market share now [excluding the business market, where Apple doesn't compete]. If it's only 6% now, that means we only have to convince another 6% of PC buyers to buy from us and we can double the size of our company. That's exciting.

Q: Apple's recovery has been about a return to its original strengths: product design and marketing. Is there anything the world doesn't get?
A:
I've seen Microsoft praised for the way they continuously improve their products--how even if they don't get it right the first time, they just keep coming. Well, I think we deserve some of that praise. There's just no relief around here, we just keep coming. To execute like we have been and bring out a major new product or initiative every nine months is just amazing to me.

Q: You cut long-term research when you arrived. But some observers say that Apple is getting by on the strength of slick design and marketing, and that it's not sustainable.
A:
That's not a very insightful point of view. Making the iMac work without a noisy fan is not just fit-and-finish. It is hard-core engineering. If people think Apple's success is based on candy-colored iMacs that sell because of their colors, they're not seeing the whole story. Take the Cube. There is not another PC company in the world that could have designed the Cube. They don't have the engineering, nor do they have the design talent.

Q: How can Apple stay ahead of the Wintel industry that includes Microsoft, Intel, and all those PC makers?
A:
What I observed early on in my career is what can be done if you have the right people. With most things in life, the difference between the best and the worst is maybe 30% to 50%. But when we created Apple, I realized that [co-founder] Steve Wozniak was at least 25 to 50 times better than the average. It's hard to put a number on it, because sometimes such people can do things that no amount of average people could do. And I think that's what we've built here.

Q: Isn't a PC just a PC?
A:
Our industry has been in a coma for years--including us, until recently. But there's tremendous opportunity for innovation. We think the horizontal model for the PC industry [in which PC makers get software from Microsoft and chips from Intel rather than use their own] may have seen its better days. That works great when it's all about basically cranking out boxes. But we're the only company left that owns the whole widget. We can take responsibility for the whole user experience--and we're in a time when people want more from their PCs.

Q: What about the talk that we're entering a post-PC era where people will use information appliances that do one thing well, rather than a PC?
A:
If the PC doesn't change, it'll go the way of the dodo bird and the dinosaur. But we have a very clear sense of what needs to be done. And while we agree that there will be planets around the sun, the PC will still be at that center.

Q: There's a sense that if any company is a reflection of its CEO, it's Apple--from the marketing to the products. How much of what Apple does comes from your hunches?
A:
We are always having big drawn-out meetings about what is important and what is enduring. You can't believe the number of times we've talked about information appliances, for example, and whether that's a market we should get into. But so far, we've decided it's better to do a $799 iMac vs. a $499 iOpener that nobody's going to be happy with.

Q: Dell and Compaq have recently announced that they will discontinue iMac-like PCs. Some analysts have taken that to mean that there's just not a big market for PCs with slick designs--Apple's specialty.
A:
Yeah, we've heard. I guess fashion is going out of fashion. But Apple really does believe design is important. It's hard to name another area of human purchase where it's not--in cars, in houses, even in spouses! It's not the only consideration, but it's a very important one.... And everyone else is retreating because they've failed. We're the only one with the necessary engineering and the necessary design skills--and the courage--to pioneer new classes of computers. It looks easy, but it's not.

Q: How would a breakup of Microsoft affect Apple?
A:
The amount of time we've spent talking about that is about a half-hour. I'm totally serious. We're not going to win or lose based on how they or any other competitor does. It'll be based on how we do.

Q: Matt Drudge recently reported that Disney was thinking about buying Apple and Pixar, and that you would be groomed to replace CEO Michael D. Eisner. Any plans to leave?
A:
That again! All I can say is that if they're planning something, they haven't told me about it.



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``If the PC Doesn't Change, It'll Go the Way of the Dodo''

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