Profits at Apple soared again in the quarter ending 21 January. At a time when all around there is dismay, Apple enjoyed its best quarter ever, making net quarterly profits of $1.61 billion. To put these figures in context, in the corresponding quarter three years ago, profits were barely more than a third of that level, and yet, at the time, eulogy was heaped upon Apple for its startling performance.
It shows that companies with the right products can still rake in the bucks. Then again, the company is an exception. Among the ranks of companies that have enjoyed meteoric growth this decade, only Google can rival the maker of iPods.
And yet, as you probably know, the company’s CEO, not to mention largest shareholder in Disney, and full time miracle worker, Steve Jobs, is off until June of this year, while he recovers from illness.
Shares in the company have dived in recent months over fears of the top man’s health. And now, in what seems to be a somewhat heartless criticism, shareholders are up in arms over the way the company has revealed information on its leader’s illness. The rumour mill is even saying that the Securities and Exchange Commission is investigating the matter.
It’s cruel, but then the Apple story is cruel.
It is time now for a short digression, to recall what is perhaps the most fascinating of all business stories.
Oh, how the mighty fall. There was a time when Steve Jobs was the bitter, angry ex-Apple man, kicked out, out on the streets, with his Apple dream in tatters. For years, the Steve Jobs story was a tale with a salutary warning.
It seems that Jobs’ error was to believe his own hype. He had pulled off a master stroke, recruiting the former Pepsi vice president John Sculley, after he famously appealed to Sculley’s sense of adventure, asking: “Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?”
For a while, it seems Sculley and Jobs were the best of friends. At meetings they were known to finish each other’s sentences. But Apple messed up. It overestimated sales, produced far too many computers, and was left with a massive over supply of stock.
According to one account of the story, Jobs blamed everyone for the crisis except himself. “He just did not see that the ‘problem was with him.’”
Eventually, the relationship between Jobs and Sculley deteriorated, until Sculley, with backing from other senior members of the management team, ousted Jobs from his position within the company. Jobs was left without a senior management position in the company. He was left depressed, and eventually quit the company altogether, selling all his shares.
For years it was the textbook case of how your job isn’t safe, even if it was you who founded the company.
Sculley, on the other hand, reigned supreme.
And yet, the circle rotated, and then it was the turn of Sculley to feel the pattern of the fates. Sure, Sculley was able to cement the Mac position as a desktop publishing system, but the company was relegated to the also-rans in the pantheon of hardware companies.
In 1987, Sculley famously predicted that the Soviet Union would land a man on Mars within 20 years.
By 1993, Sculley himself was out. Three years later, Jobs was back.
Jobs didn’t weave his magic straight away. The company was hit hard by the dotcom crash, and as recently as 2003 was still posting losses.
The real master stroke was the iPod. The iPod seemed to create what was known as a halo effect; people were so chuffed with their iPods that they went out and bought themselves a Mac.
But the story seems to say that things change. Jobs was seen as brilliant and innovative, then he was seen as a loose cannon, and then brilliant and innovative again. Sculley was seen as the safe pair of hands (he was the man behind the Pepsi Challenge TV advertising campaign, by the way – do you remember that), and yet he couldn’t maintain it.
Maybe it all boils down to that famous thing Napoleon once said about a new general. When asked to review a list of candidates to be a new general in his army, he was asked do you want a courageous or a brilliant general? “Neither,” Bonaparte is supposed to have said, “give me a lucky general.”
But you can never rely on luck. If you occupy the top position for a while, and everyone celebrates your cleverness, then no doubt you were indeed clever, but you will have had a lot of luck too. But it is very rare for anyone to stay at the top for very long, without seeing that luck desert them. Gordon Brown is a good example. So, too, are all those banking bosses who for years were feted for their skill. The ones who were lucky enough to retire earlier in the decade now look on, of course, and say it would have been different if they had stayed on. But then, they would say that wouldn’t they.
But now, Jobs is ill. Earlier in January, Apple suggested his illness was not that serious and he required “relatively simple” treatment for hormone imbalance. Then, a few days ago, it was revealed his illness was more serious, and he wouldn’t be back until June.
Shareholders were up in arms. An enquiry may well be launched. But it all seems to be terribly cruel. Is it not human nature to understate the nature of an illness you become inflicted with? Is it not human nature to say: “I am all right?” Well, if nothing else, Jobs is the type of person to try and struggle on.
Maybe the company should be given a bit of slack.
It just goes to show, luck comes, and it goes.

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