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Piper Jaffray Cos
The deteriorating health of Steve Jobs loomed over Apple’s (AAPL) Oct. 4 press event at the company’s headquarters in Cupertino, Calif. Apple wanted the day to be all about its new iPhone 4S, but the absence of the company’s charismatic co-founder was palpable. On the far right of the jam-packed theater’s front row was an empty chair, its back covered by a black cloth with “reserved” written in bright, white letters—possibly a subtle tribute to the ailing icon. Tim Cook, the company’s new chief executive officer, took the stage first to kick off the 90-minute show, but he spoke slowly and deliberately, and perhaps, in hindsight, with a touch of melancholy. He didn’t mention Jobs once. Neither did Phil Schiller, Apple’s longtime marketing chief, who pulled the curtain off the new iPhone, or Eddy Cue, head of Internet software and services, who rolled out a new Web storage system, iCloud. The executives knew the situation was grim. Jobs passed away at 3 p.m. the following day, kicking off a wave of reflection and adulation that continues even now.
The executive who summoned the most energy at the press conference was a boyish-looking senior vice-president named Scott Forstall, who reviewed the features of the new iPhone operating system. Toward the end of the event he returned to the stage to introduce the device’s surreal digital assistant, Siri. “Who are you?” he asked his iPhone. “I am a humble personal assistant,” the device replied, bringing the biggest laugh of the otherwise low-key morning. Forstall then showed off his Jobsian knack for ungrammatical hyperbole. “That is absolutely blow-away,” he said.
With the death of Jobs at age 56, Forstall has now become an even more important and visible member of Apple’s leadership team. As the person in charge of Apple’s mobile software division, he oversees the iOS operating system, which runs the iPhone and iPad, devices that account for 70 percent of Apple’s revenues. At 42 he’s the youngest senior executive at Apple. He may also be the best remaining proxy for the voice of Steve Jobs, the person most likely to channel the departed co-founder’s exacting vision for how technology should work. “He was as close to Steve as anybody at the company,” says Andy Miller, who headed Apple’s fledgling iAd group before leaving the company this summer. “When he says stuff, people listen.”
Forstall, who went to work for Jobs right out of college, is one of the key architects of Apple’s current success. In less than five years, iOS—the latest version, iOS 5, ships this week—has become one of the most valuable corporate assets on earth. His name is on about 50 Apple patents that cover everything from how application icons are laid out on the iPhone screen to the method of turning off a device with a finger swipe. On a crucial 2009 patent for a touchscreen device controlled by finger commands, “Forstall, Scott” is listed second, right after “Jobs, Steven P.”
In many ways, Forstall is a mini-Steve. He’s a hard-driving manager who obsesses over every detail. He has Jobs’s knack for translating technical, feature-set jargon into plain English. He’s known to have a taste for the Mercedes-Benz SL55 AMG, in silver, the same car Jobs drove, and even has a signature on-stage costume: black shoes, jeans, and a black zippered sweater. (He favors Reyn Spooner Hawaiian shirts for normal days at the office.)
Forstall is like Steve in one other important way: He can be, in what some of his co-workers might call an understatement, a polarizing figure. He’s won the intense loyalty and allegiance of many of his underlings, and his engineers are among the hardest workers at the company. At the same time, according to several former Apple employees, a number of high-ranking executives have left the company because they found working with Forstall so difficult. That sentiment, it seems, has not been limited to fellow executives. One former member of the iOS team, a senior engineer, describes leaving Apple after growing tired of working with Forstall and hearing his common refrain: “Steve wouldn’t like that.” Similarly frustrated engineers from Forstall’s group have been hired by other Silicon Valley companies, according to one CEO. (Forstall and Apple declined several requests to comment; Steve Dowling, a company spokesman, says Apple does not cooperate on media profiles of its top executives.)
Some former associates of Forstall, none of whom would comment on the record for fear of alienating Apple, say he routinely takes credit for collaborative successes, deflects blame for mistakes, and is maddeningly political. They say he has such a fraught relationship with other members of the executive team—including lead designer Jony Ive and Mac hardware chief Bob Mansfield—that they avoid meetings with him unless Tim Cook is present.
Office politics are nothing unusual in Corporate America, nor are ambitious and divisive managers. Even if Forstall is controversial, he may just be what Apple needs now that Jobs is gone—a detail-oriented obsessive who gets things done, egos be damned. “I once referred to Scott as Apple’s chief a–hole,” says former Apple software engineer Mike Lee, who left the company in 2010. “And I didn’t mean it as a criticism. I meant it as a compliment. You could say the same thing about Steve Jobs.”
Yet part of what’s made Apple such a spectacular success has been the ability of its management team to drive toward a common goal. Whatever the internal debates, the company has been a disciplined, almost monolithic agent of innovation whose executives fell in line with their leader.
Apple now confronts a whole set of new challenges if it is to continue its epic success into the post-Jobs era. Without its Decider-in-Chief, the company must fundamentally change the way it works. At weekly Monday meetings, Apple executives disagreed about matters all the time, but could count on Jobs to make the final call. Its board of directors must find a new chairman and take a more assertive role guiding the company. And Cook must ensure there isn’t an exodus of those in the company’s top ranks, all of whom are extravagantly wealthy and were loyal to Jobs.
The controversial and ambitious Forstall may present the greatest management puzzle. In families that lose a beloved parent, the children either band together with a shared sense of history and mission—or tear each other apart over the spoils of the estate. Apple’s executives “have to learn new roles, but if somebody among them rises up and lords over the others, they can be resented for being presumptuous, [of trying to] assume Steve Jobs’s legacy,” says Jeffrey Sonnenfeld, senior associate dean of the Yale University School of Management. “But if they treat it as a shared legacy, there is a way to keep that spirit alive.”
Forstall’s most recent triumphs are likely bittersweet. Over the last few years he watched as his biggest champion and mentor slowly lost an agonizing personal battle, all while products running his software have helped make Apple the most valuable company in the world. Apple has sold more than a quarter billion devices running Forstall’s iOS. The iPhone alone, since its 2007 debut, has generated more than $70 billion in sales, inspiring a wave of copycat touchscreen phones from Samsung Electronics, HTC, Hewlett-Packard (HPQ), and Research In Motion (RIMM), among others. The iPhone 4S, which goes on sale on Oct. 14, sports a speedy Apple-designed A5 processor and a beefed-up digital camera. And it operates on both major types of cell networks. On Oct. 10, Apple announced that more than one million orders for the new iPhone 4S were placed in a single day, a new iPhone record.
The most significant changes in the device are in Forstall’s upgraded operating system, iOS 5. The new digital assistant, Siri, listens to voice requests for things like driving directions and calendar appointments. This virtual helper completes these tasks, and reports back in a robotic female voice. The iPhone 4S also makes it easier for users to post on Twitter. “They’re shifting the focus from hardware to software and services,” says Gene Munster, senior research analyst at Piper Jaffray (PJC), who predicts Apple will sell 183 million iOS devices in 2012.
In addition to building the iOS group from a tiny skunkworks into an operation with hundreds of employees, Forstall has pushed deal-shy Apple toward acquisitions that further enhance his team and influence. Last year he lobbied to buy Quattro Wireless, a mobile advertising company, and Siri, the startup that provided the technological underpinnings of the iPhone’s new feature. “He knows what he wants, and he’s driven to get it,” says AT&T (T) Chief Technology Officer John Donovan. “He can be relentless about getting it.”
Relentlessness is a virtue, most of the time. Forstall is clearly adept at motivating his employees. Colleagues say members of the iOS team often skip Apple’s Friday night beer bashes for coding sessions, and work such long hours, says Lee, that they have piles of the vouchers that entitle them to free dinners at the company cafeteria, Caffe Macs. The group seems to have embraced some of the us-versus-the-rest-of-Apple mentality of Jobs’s legendary early-1980s Mac development team, which was housed in a separate building that flew a Jolly Roger flag. “Every iPhone engineer and iOS engineer I know at Apple has some of that,” says Wil Shipley, an independent developer who has written software for the Macintosh for decades. “They will tease me that iOS is crushing Mac in sales.”
Then there’s the other Forstall, the one former colleagues say wielded his relationship with Jobs as a bludgeon to expand his authority, and sent other talented execs packing. These include iPod chief Tony Fadell, who they say left Apple after clashing repeatedly with Forstall, and Jean-Marie Hullot. The CTO of Apple’s application division until 2005, Hullot, according to two people familiar with the situation but who weren’t authorized to speak on the record, left the company in part because he was unwilling to work with Forstall. Hullot, now CEO of Paris-based photo-sharing site Fotopedia, declined to comment on why he left Apple other than to say he was ready to try new things.
Forstall seems to engender one of two completely opposite emotions in people that have worked closely with him. Many rave that he works tirelessly, endures constant pressure, and has a comprehensive view of what’s happening in the industry. Others have a more visceral reaction to the mere mention of his name. Jon Rubinstein, a former iPod chief who left for Palm in 2006, chatted amiably at a Silicon Valley party last month, until Forstall’s name came up. Then he turned away abruptly. “Goodbye!” he said.
Scott Forstall grew up in middle-class Kitsap County, Wash., second of three boys born to a registered nurse and an engineer. (Forstall’s older brother, Bruce, has been a senior software design engineer at Microsoft (MSFT) for 20 years; imagine the Thanksgiving dinner conversations.) Friends and classmates recall the Forstall family as one of the first in the neighborhood to have a PC. In junior high school Scott qualified for a gifted science and math class that gave him regular time in a classroom outfitted with Apple IIe’s. “We learned how to program,” says Heather Brockington, a family friend who has known Forstall and his high school sweetheart, now wife, Molly, since they were teenagers. “That was very easy for him. The rest of us found it very hard.”
Forstall entered high school a year early and immersed himself in competitions of all kind: chess club, National History Day quizzes, and a contest called “The Knowledge Bowl.” One year his team, the “Babbling Anglos,” made it to the state finals. “He did not slack on group projects,” says former classmate Kati Carthum, who has known Forstall since seventh grade. “He would step up and do the hard work to get it done.”
He graduated as co-valedictorian with a perfect 4.0 grade point average. (His future wife was the other co-valedictorian.) “His goal is to be a designer of high-tech electronics equipment,” said an article at the time in a local newspaper. “Part of what appeals to Scott about that career is the creative element.”
His classmates marvel at how far he’s come but don’t sound surprised. Brockington recalls Forstall as a relentless debater—“he’s a bit like a dog with a bone sometimes”—who loved being on stage. In his senior year, she says, Forstall played the lead in a high school production of the Stephen Sondheim musical Sweeney Todd. “There are two kinds of men, and only two,” the demon barber of Fleet Street famously sings. “There’s the one staying put in his proper place and one with his foot in the other one’s face.” During a rehearsal, Brockington says, Forstall was ill with a fever but refused to rest or break character. Eventually, he got lightheaded, tumbled off the stage, and was knocked out cold.
Forstall went on to Stanford University, where he received an undergraduate degree in symbolic systems, an interdisciplinary department that combined classes in philosophy, linguistics, and computer science, and then a master’s degree in computer science. After finishing at Stanford in 1992, he joined Jobs’s NeXT Computer, where he worked on the company’s pioneering operating system. When Apple acquired NeXT in 1996 and Jobs returned to become interim CEO, Forstall was put to work designing user interfaces for a reinvigorated Macintosh line.
In 2000, Forstall was a leading designer of the Mac’s new user interface, dubbed Aqua, which included water-themed visual cues such as translucent icons and reflections. “One of the design goals was when you saw it, you wanted to lick it,” Jobs said when the concept was introduced. A few years later, Forstall managed the group that created the highly regarded Leopard version of the Mac operating system. “He was viewed as a real talent,” says Fred Anderson, the company’s former chief financial officer. “He was a rising star.”
During that ascent, Forstall accumulated enemies, particularly during the long, arduous process of creating the iPhone. Around 2005, Jobs faced a crucial decision. Should he give the task of developing the device’s software to the team that built the iPod, which wanted to build a Linux-based system? Or should he entrust the project to the engineers who had revitalized the software foundation of the Macintosh? In other words, should he shrink the Mac, which would be an epic feat of engineering, or enlarge the iPod? Jobs preferred the former option, since he would then have a mobile operating system he could customize for the many gizmos then on Apple’s drawing board. Rather than pick an approach right away, however, Jobs pitted the teams against each other in a bake-off.
Forstall led the Mac-centric approach. He commanded a team of fewer than 15 engineers who went to work stripping down Apple’s OS X operating system to see if it would work on a device with considerably less power and battery life than a regular computer. Leading the other group was Fadell, who helped create the iPod. Another boy wonder, Fadell in 2005 had become one of Apple’s youngest-ever senior vice-presidents at 36. The competition, according to former Apple employees, turned explosive, with Fadell and Forstall arguing over talent, resources, attention, and credit. (Fadell declined to comment for this story.) (After publication, Fadell submitted a response. His comment can be found at the end of this story.)
Forstall’s team managed to get their shrunken Mac system to work, and Jobs went with that software approach. From the get-go, Forstall frustrated Fadell and other executives by raiding top talent and refusing to show early versions of what would become iOS. (Forstall religiously abided by Jobs’s demand for secrecy, which was required even among the company’s own units.) After iOS shipped in the first iPhone in 2007, Forstall’s position strengthened. Since all Apple devices had to work seamlessly with the software, hardware executives such as Fadell couldn’t add new features—a better camera, say, or a larger, Bluetooth-based add-on display—without support from Forstall’s engineers. If Forstall didn’t like an idea, the work wouldn’t get done. He also insisted that iPhone versions of programs like iTunes be developed within his own group. By 2008, Fadell had resigned. According to three people familiar with the internal politics, tension with Forstall was one important factor.
Steve Jobs had the same effect on some people over the first 10 years of his career. Then he spent a decade in exile from Apple, creating the also-ran computer company NeXT and honing skills as a strategist, marketer, and manager. Forstall may more closely resemble the early Jobs, scorching the earth behind him while retaining a remarkable ability to come out ahead.
By the time he was promoted to senior vice-president in 2008, Forstall was getting a reputation inside Apple as a striver who was better at managing up than down—that is, making sure his accomplishments were noticed first, and blaming others for mistakes.
Yet even critics don’t deny his accomplishments or ability to troubleshoot. Before the introduction of the iPhone, Forstall supported Jobs’s view that Apple didn’t need to create an ecosystem of third-party developers. Back then they figured the device would stand out for combining a phone with an iPod plus a superfast browser. For the most popular activities—watching YouTube videos, for example—Forstall’s team would simply partner with market leaders such as Google (GOOG) to create apps built specifically for the iPhone.
That worldview changed fast, as consumers began tweaking their iPhones to run unauthorized apps from hundreds of developers inspired by the new device. Forstall oversaw the creation of a software developer’s kit for programmers to build iPhone apps as well as an App Store within iTunes. Forstall’s flexibility impressed even his rivals. “Scott’s a pretty amazing guy,” says Vic Gundotra, a senior vice-president at Google. “In terms of running an operating system team, he’s one of the best I’ve ever seen.”
As the iPhone became a key ingredient of Apple’s phenomenal success, Forstall started getting a lot more visibility. In June 2009, during one of Jobs’s medical absences, he handled a large portion of the keynote at Apple’s annual Worldwide Developers Conference. At one point, hamming it up, he donned a white lab coat, goggles, and noise-canceling headphones to help inflate a balloon with an iPhone and illustrate an app designed to make science more fun for kids. The gag flopped; the balloon failed to inflate and Forstall awkwardly tried to make light of the situation by attempting to blow it up himself. When Jobs returned to work he wouldn’t let Forstall live it down. One former executive says that in Apple meetings after the event, Jobs routinely needled Forstall about “that science experiment.”
By early 2010, Forstall made it through another screw-up. Before the first iPhone came out, Jobs had limited the number of prototypes employees could carry around to a handful, for fear of secrecy breaches. Before the iPhone 4 went to market, Forstall persuaded Jobs to allow dozens of his engineers to carry prototypes of the device to better test its network performance and minimize dropped calls, says a former Apple employee who was a manager at the time. Sure enough, in March an iOS engineer left his preproduction iPhone 4 (camouflaged in a special shell designed to make it look like an iPhone 3GS) on a bar stool at the Gourmet Haus Staudt, a German beer hall in Redwood City, Calif. The device ended up in the hands of the technology blog Gizmodo.
After the iPhone 4 went on sale, the issue of unreliable connectivity blossomed into “Antennagate.” Customers complained that the phone dropped calls when held a certain way. At a press conference Apple held in July to minimize the fallout, a reporter asked about media reports that the problem had originated in the device’s communication software. Forstall took the microphone and declared there was no software glitch, and such claims were “patently false.” (The same former Apple manager familiar with the Gizmodo affair, as well as an executive at another company with close ties to Apple, says that iPhone software did in fact contribute to the problem.)
In any case, Forstall seems to have sailed through that controversy unscathed. And Apple has since given him additional authority over quality assurance and testing—reflecting the company’s belief that his team’s software will almost surely be the foundation for future Apple products, such as an oft-rumored flat-screen television. But Forstall hardly needs to stick around. He has sold about 237,000 shares worth $42.5 million over the past decade, according to regulatory filings. Brian Marshall, an analyst at ISI Group, says that he would consider downgrading Apple stock if Forstall were to leave.
Here’s another reason it’s so critical to keep him: He’s the high priest of the iOS developer community, a guru to the thousands of restless, advantage-seeking startups and programmers who build apps, and who are also being wooed by Google, steward of the Android operating system. Over the past two years these developers have received more than $3 billion from Apple for sales of their applications at Apple’s App Store.
Since Forstall controls the tools for building those programs, these folks hang on his every word. At a meeting this summer arranged by venture capital firm Kleiner Perkins Caufield & Byers, Forstall fielded questions from several major developers who talked about their experience building apps for Apple devices. They asked for a “fast lane” so their programs would be approved more quickly for the App Store; Forstall said that would be unfair to other developers and would invite them to cut corners once they qualified. He was also asked about a technology called near field communication that would allow the iPhone to be used as a credit card. Forstall turned the question around: How would developers use NFC, and what would consumers get out of it?
Responses like that made an impression on the gathering. “When you make a statement, he asks questions back to drill down to see if it’s a problem that happens for other developers,” says Cyriac Roeding, CEO and co-founder of Shopkick, a shopping application. Another thing that struck his audience: Forstall takes detailed notes without pen, paper, or laptop. “He listens to you and he starts typing on his iPhone,” says Matt Murphy, a partner at Kleiner Perkins and the manager of a fund at the firm that invests in iOS developers. “You’re thinking he’s not listening and sending a text message, then you realize he’s taking notes.”
Developers do have some complaints. One is that decisions requiring any kind of collaboration between Apple’s hardware and software units often must be elevated to the CEO’s office and take too long to resolve. Those delays speak to the tensions within the different divisions of Apple, which were largely hidden from sight during the tenure of the secrecy-obsessed Jobs.
By all accounts, Jobs and Forstall had a close collaboration. Colleagues say Forstall would meet with Jobs frequently to show him the latest features for the iPhone and iPad, and return to his office with lists of things to change. Brockington, his longtime pal from childhood, recalls visiting the Forstall family last year only to find Forstall lying on his hammock on a Sunday, talking to Jobs on the phone. It’s well-known that Jobs loved to hang out in Jony Ive’s hardware design lab, looking over hardware. Another favorite spot was the user interface lab run by Forstall, located a floor above.
Jobs clearly took some pride in the young executive. “If the hardware is the brain and the sinew of our products, the software is their soul,” he said to a large audience at Apple’s Worldwide Developers Conference in June. He was referring in large part to Forstall’s work. Later that morning, as Jobs walked back on stage after Forstall had spoken about the latest version of iOS, he said to his protégé, “Good job.” Then Jobs faced the community of Apple loyalists for what would be the last time. “You like everything so far?” he asked. “Well, I’ll try not to blow it.”
“I inherited the competitive iPhone OS project from Jon Rubenstein and Steve Sakoman when they left Apple. I quickly shuttered the project after assessing that a modified Mac OS was the right platform to build the iPhone upon. It was clear that to create the best smartphone product possible, we needed to leverage the decades of technology, tools and resources invested in Mac OS while avoiding the unnecessary competition of dueling projects.”