An Apple A Day...

As the old saying goes "an apple a day keeps the doctor away". This saying seems to be true not only in general but also in the case of Apple Computer. Till about two years back, bad news used to keep popping up about this once upon a time computer giant. In fact, even after the home-coming of the charismatic Steve Jobs--company's founder--things seemed to be the same for Apple.

Earlier, the company after much dillydallying had finally decided to license Mac clones. As a result, a number of vendors like Power Computing, Umax etc announced clones and started selling in good numbers. But Apple's hope that these clones would expand the market for Macs were belied. Rather, what happened was exactly the reverse. Instead of expanding the market, the clones started eating into Apple's own market. As a result, Apple quickly moved to shut down the clone market by stopping the license of new Macintosh technology to other companies. It also agreed to buy back Power Computing's Macintosh licensing agreement for $ 100 million in Apple stock.

Apple's decision to end its licensing program was the result of the increasing role played by Jobs, who was strongly opposed to the clone program. He felt the clones were costing Apple a lot of money in sales and profits and that Apple was merely subsidizing the R&D for the

clonemakers.

The other more pressing problem for Apple for a long time was the absence of a proper CEO, a slot which fell vacant after the ouster of the previous incumbent Gilbert Amelio about three years back. It is not that the company has not made any effort towards this. In fact, a list of potential candidates for the CEO slot was developed. Almost a dozen candidates remained under consideration and the board's search committee even began interviewing the prospective candidates.

Jobs, who was the interim CEO for a long time, wanted an executive with heavy operational experience rather than someone with a strong sales and marketing background. But to no avail as the right candidates for Apple reportedly turned down the offer. At the same time, Jobs repeatedly turned down the CEO and Chairman position.

Amidst all these dark clouds, Jobs has managed to put Apple back on rails as the company has now posted net profits for 10 quarters in a row. What he has managed to achieve is nothing less than a miracle. However, he attributes the success to higher gross margins and continued cost cutting.