Visionary Apple Chairman Moves On
By John Markoff
The New York Times
San Francisco -- October 15, 1993 -- John Sculley brought an era to an end in Silicon Valley today by resigning from Apple Computer Inc., the innovative company he joined 10 years ago and built into a giant in the personal computer industry.
Mr. Sculley, a former Pepisco Inc. executive, made his mark by bringing marketing skills and corporate discipline to Apple, a company founded in Steven P. Jobs's parents' garage. During Mr. Sculley's reign the company's sales grew tenfold, from $800 million a year to $8 billion, and he was credited with helping the industry push the personal computer beyond office desktops and into the homes and onto the laps of America.
"His contribution to the field was significant," said Nicholas Negroponte, the director of the media laboratory at the Massachusetts Institute of Technology. "He can almost single-handedly be credited with America's re-entry into consumer electronics."
But in recent months, as Apple has stumbled financially, Mr. Sculley was criticized as having failed to attend to the details of its business while playing the roles of industry luminary, informal Presidential technology adviser and apostle of the creed of "convergence" -- the confluence of computers, communications, publishing and entertainment.
In June, a few weeks before Apple announced a $188.3 million third-quarter loss, Mr. Sculley relinquished the title of chief executive to the president, Michael Spindler. Today, a day after the company surprised Wall Street by posting a fourth-quarter profit, Mr. Sculley stepped down as chairman. He did not publicly indicate his plans other than to say in a statement that after "an extraordinary journey" he was "ready to head off to new challenges."
Mr. Sculley, 54, is being replaced as chairman by A. C. Markkula Jr., 51, a co-founder of Apple with Mr. Jobs and Stephen Wozniak in 1976. Mr. Markkula was previously chairman of Apple from 1977 until 1988.
Apple's shares jumped $4.50 each today, closing at $28.25 in Nasdaq trading. The surge follows the release of Apple's earnings report on Thursday evening after the stock market closed.
Mr. Sculley was not available for further comment today. Although his name has been floated as a candidate for several top corporate jobs, including the chief executive's position at Eastman Kodak, people close to him say he is more interested in finding a position that would allow him to pursue his vision of "convergence."
In the absence of Mr. Sculley's own explanations, it was left for industry executives to consider his legacy.
"His departure indicates that the phase of rapid growth in personal computing has come to an end," said Michael Borrus, a computer industry expert and co-director of the Berkeley Roundtable on International Economics. "It's probably appropriate that someone else steward the company through the next phase."
Two years ago, in an attempt to cope in a changing industry, Mr. Sculley steered the company into an unprecedented alliance with the world's largest computer maker, I.B.M. He also led Apple directly into the consumer market with the introduction of the Newton Messagepad, a hand-held computer designed to recognize handwriting. Neither venture has yet proved a success.
Moreover, despite Apple's rapid growth, Mr. Sculley has been faulted for being too slow to respond to an assault on the company by rival computer makers whose machines are powered by Intel Corporation chips and run Microsoft Corporation software. Apple computers are based on the company's own software and use chips from Motorola Inc.
Many industry executives say they think Mr. Sculley missed an opportunity in the late 1980's to move Apple's Macintosh software to Intel-based computers before Microsoft was able to popularize its Windows program, which imitates the graphical Macintosh approach to computing. Many analysts also say he was too slow in reducing Apple's prices during the continuing personal computer industry price war, thereby losing valuable market share that the company has yet to reclaim.
Mr. Sculley's resignation as chairman came less than four months after he gave up the chief executive post following a board room drama full of intrigue, during which Mr. Spindler was made chief executive. Soon afterward the Cupertino, Calif., company laid off about 2,500 employees and reported the $188.3 million quarterly loss, its largest ever.
Today, an executive close to Apple's board said the directors had decided at a meeting in June that Mr. Sculley would leave the company before the end of October.
Neither Mr. Markkula nor Mr. Spindler was available for comment yesterday. "For the past 10 years, John Sculley has had one of the most compelling and articulate visions of how computing technology can improve the lives of people everywhere," Mr. Markkula said in a statement released by the company.
Mr. Sculley was president of Pepsico in 1983 when he was hired at Apple by Mr. Jobs. The two were initially close friends, but in 1985, after the Macintosh personal computer was introduced and was slow to gain momentum, they quarreled. Mr. Jobs was stripped of his position as head of the Macintosh division and left the company soon afterward.
Mr. Sculley was made chairman and proceeded to oversee the success of the Macintosh, which grew in popularity in part because of its success in desktop-publishing applications.
Although Mr. Sculley had originally been brought to Apple as a professional manager, after Mr. Jobs departed he increasingly styled himself as a visionary.
"What surprised me about John was that he changed from being the day-to-day manager to a visionary," said William H. Hambrecht, the president of Hambrecht & Quist, a San Francisco investment banking firm, which underwrote Apple's initial public offering in 1981. "I think he did a good job that way."
Mr. Sculley, who was paid $1.65 million in salary and bonus in 1992, owns less than 1 percent of Apple's stock.
GRAPHIC: Photos: John Sculley stepped down yesterday as Apple Computer chairman after 10 years with the company. (Associated Press)(pg. 39); A. C. Markkula Jr. is to replace John Sculley as Apple's chairman. (Associated Press)(pg. 41)
Chart: "Apple Computer in the Sculley Years" shows a chronology of the Apple Computer company during the years of Sculley's employment. (Source: Apple Computer)(pg. 39)Copyright 1993 The New York Times Company