Sculley admits his big mistake at Apple

In an unusually candid speech, former Apple Computer CEO and current technology investor John Sculley has admitted that he had 'failed' in his position as head of the struggling computer maker during his Apple tenure in the 1980s and early 1990s. 'At the end of ten years [at Apple], I have to admit that I failed,' Sculley said during a talk at the Middle Eastern Technology Roundtable Exhibition (METRE). 'In hindsight, we should have done things differently ... and it is a tremendous disappointment.' Though Sculley ousted Steve Jobs as CEO back in 1983, he believes now that Steve Jobs is the only one who will now be able to turn Apple back around. 'Apple is a cult and the person who created that cult is Steve,'

In an unusually candid speech, former Apple Computer CEO and current technology investor John Sculley has admitted that he had "failed" in his position as head of the struggling computer maker during his Apple tenure in the 1980s and early 1990s.

"At the end of ten years [at Apple], I have to admit that I failed," Sculley said during a talk at the Middle Eastern Technology Roundtable Exhibition (METRE). "In hindsight, we should have done things differently ... and it is a tremendous disappointment."

Though Sculley ousted Steve Jobs as CEO back in 1983, he believes now that Steve Jobs is the only one who will now be able to turn Apple back around. "Apple is a cult and the person who created that cult is Steve," Sculley said. Even when Sculley was in charge, "it was always [Steve Jobs'] company," Sculley said. "The best chance Apple has is having Steve Jobs back running the company," he said.

Sculley, who was himself ousted from the CEO slot in 1993 after ten years at Apple's helm, has been accused by some industry observers as being largely responsible for Apple's demise. His mistakes, they say, include not licensing the MacOS platform at a much earlier date and positioning Macintoshes as expensive, high-end machines instead of entering the low-cost PC market.

However, Sculley disagreed that broadly licensing the MacOS early on would have been the move that saved the company from its current woes. Between 1985 and 1990, Apple was more like a hardware company than a software company, Sculley said. The company didn't think like a software company that licensed out its software to other hardware vendors, he said.

His biggest mistake wasn't holding onto the MacOS too closely, Sculley said, but rather was in not having partnered with Intel in 1990.

In May 1990, Intel released the 386 processor and Microsoft was smart enough to recognise the chip's importance -- although the chip was not the best on the market, its low cost would ultimately create a perfect mass-market platform for the Windows operating system. Microsoft quickly formed an alliance with Intel, while Apple chose instead to go with the more powerful, yet more expensive, PowerPC processor from IBM and Motorola -- a move that crippled Apple, Sculley said.

"[The Windows-Intel combination] was the beginning of the end for Apple," Sculley said. "That was the date it was over for Apple." What Apple should have done, was to move the MacOS software to the Intel platform as quickly as possible, he said. "If we had moved the MacOS to the Intel platform and formed an alliance with Intel, Apple could be a viable company today," Sculley said. Choosing PowerPC as the main platform for the MacOS was "the wrong choice," Sculley said.

But Sculley doesn't want to take all the blame for the tremendous beating Apple has taken in the PC market. Other decision-makers made wrong choices as well, he said. For example, deciding to go after the corporate market was a step that Sculley "could never understand," he said. Why did Apple want to move into the corporate market, "a market which never respected Apple," when it had already cornered the education and creative markets?" he questioned. If Apple is to succeed now, it must go back and leverage its hold on the creative market of "Mac fanatics," though it is most likely too late for Apple to gain back the education market, he conceded.

In addition to admitting that he may have caused Apple to miss out on the Intel wave, Sculley also said that he should have left Apple years before he did. He always had the intention to stay at Apple for only five years, he said. However, when the stock market crashed in 1987, Sculley felt compelled to stay on to bring Apple's stock back up, he said. During those last five years, he began to lose perspective, Sculley admitted. The management of the company suffered because, as he realises now, his talents have always been strongest in marketing products rather than in managing people, Sculley said.

So where does the former CEO see Apple heading from now on? By leveraging its brand name, Apple could do very well in the consumer Internet-appliance market, Sculley said. "It is still a phenomenal brand," and Apple could use this to create a wide-variety of user-friendly Internet devices, from handheld computers to set-top boxes to smart phones, Sculley said. In this space, Apple could compete head-to-head with companies such as Sony, he said.

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