What Apple owes to Steve Jobs


This post is part of a series brought to you by Columbia Pictures Moneyball. As always, VentureBeat is adamant about maintaining editorial objectivity.

With Steve Jobs stepping down from the CEO post at Apple, it’s a good time to take a look back at just how much he’s accomplished in 15 years.

When Jobs returned to Apple in late 1996, the company was on death’s doorstep. Its market share stood at 5% and it was losing money, badly, for the first time in its 20-year history. In 2011, Apple is the most valuable technology company in the world, with a market capitalization that has even surpassed Exxon Mobil’s.

The key to that success has been a dogged focus on innovation and execution. It enabled the company to release a string of products that caught its competitors by surprise, from the iMac to the iPhone to the iPad, disrupting whole markets in the process. The secret to Jobs’ success? Cleaning house, streamlining the company, and building an unequaled innovation engine. Jobs’ return was part of the company’s purchase of NeXT, a company Jobs had founded, and which focused on a new programming environment standard.
steve jobs
While NeXT was a failure in the computer market, its operating system showed promise, and then-CEO Gil Amelio thought that it had what Apple needed to take its operating system to the next level. Little did Amelio suspect that within a few months, Apple’s board would fire him, then install Jobs as acting CEO. Jobs wasted no time cleaning house and turning the company around. He quickly struck a deal with Microsoft that gave Apple a much-needed infusion of cash plus the guarantee that Microsoft would continue to develop Office for the Mac.

He repurchased Power Computing, a maker of Mac clones and wound down the clone business entirely. And he discontinued unprofitable sideline products, like the eMate and Newton. By 1998, Jobs had returned the company to profitability, and net profits have been on a steady upward march since 2001. What was the secret? According to former Apple executive Jay Elliot, it was a relentless focus on products. Elliot worked closely with Jobs in the 1980s, when the company was still young. He helped set up operational systems that are reflected in the company to this day.

But more importantly, says Elliot, Jobs’ success is due to the fact that he’s obsessed with the company’s products, and he is Apple’s primary customer. Instead of following market research and looking for ways to make incremental improvements on existing products in order to satisfy focus groups, Jobs went big. He built products he actually wanted, confident that in time consumers would also want them too. When he returned to Apple in 1996, it’s clear that Jobs reinvigorated that mindset.

The company soon started building innovatively-designed, eye-catching iMacs. In 2001 it debuted the iPod, which wasn’t the first MP3 player but quickly became one of the most popular due to its sleek look and ease of use. The innovations generated a virtuous cycle: The iPod necessitated iTunes, which gave Apple a big platform (on Windows PCs as well as Macs) for distributing content, an asset that turned into a huge advantage later. The iPod work led the company to the iPhone, and the iPhone to the iPad.

Something is clearly working. Even though Apple ranks far behind Microsoft in the number of patents it creates each year, Apple has disrupted markets far more than Microsoft in the past two decades and has generated far more value in the past five years. The question now is whether Apple can continue generating innovative new ideas with Jobs out of the CEO’s office. It will all depend on how well-built the structures are that he put into place. Only time will tell.