COMPANY APPLE SPECIAL..................... When Apple was Nearly Bankrupt

When Apple was Nearly Bankrupt





Looking back on "the greatest second act" in corporate history

OK, so Apple is the greatest company God ever created. Tech pundits say it is only a matter of time before Apple's market cap crosses the historic $1 trillion mark which is more than the GDP of Saudi Ara bia. It has displaced the mighty Coca-Cola as the world's No. 1 brand, with a brand value of $119 billion. It has arguably changed the world four times in the past 17 years, with its iMac, iPod, iPhone and iPad, respectively. And it may now be on the cusp of changing the world yet again, with the launch of Apple Watch on Friday.

So it's strange to recall Apple when it was on the brink of bankruptcy. That was in 1997, when the rest of the tech in dustry was on a never-before high. Ap ple, on the other hand, had annual loss es of over $1 billion. Its board members were trying to sell the company, but there were simply no takers. Instead, a spate of cruel jokes were going around, like: “Why is Apple changing its URL from Apple.com to Apple.org? Because it's a non-profit organization“.

At that point in time, a group of Silicon Valley thought leaders were asked to make recommendations on `How to save Apple?' Their proposals, made in all earnestness back then, make ironic reading today. Like: · Get out of the hardware business and compete directly with Microsoft · Sell yourself to IBM or Motorola · Merge with Sony, which now wants to move up into the computer business · Merge with Sega and become a com puter game company · Relocate the company to Bangalore and reposition it as `the cheap computer' · Partner with Oracle, and combine its famous technology with your user interface Other suggestions reflect the hopelessness of Apple's position, as generally perceived at the time. Like: · Rename the company `Papaya' and focus on the South Pacific market · Rename the company `Snapple' and con Quaker Oats into buying you · Get Ben & Jerry's to name an icecream flavour after you, like `Apple silicon chip cookie' · Pay Scott Adams $10 million to have Dilbert fall in love with an Apple repair-lady But the most interesting were the recommendations that sound strange today, but which in hindsight were what Apple ended up doing (albeit laterally, rather than literally). Like: · Licence out the Apple name and technology to appliance manufacturers and design user interfaces for every possible device -from washing machines to telephones. (Hmm. Isn't that what Apple has, in effect, done, by transforming itself from a computer company into a consumer electronics company?) · Re-launch your famous Mac Plus as a hip retro machine. (Isn't that what, in ef fect, the revolutionary iMac was?) · Don't lose your visibility: rent space in computer stores and flood it with Apple products. (Isn't that what Apple has, in effect, done, by launching its own Apple Stores -scoffed at by everyone at first?) · Hire a design group like Porsche Philippe Starck Giorgetto Giugiaro to design a really sexy-looking machine.(Isn't that exactly what Apple did, except that Jonathan Ive did it in-house?) · Work with a company like Casio or HP, who really understand power management, unlike you. (Isn't that what Apple has, in effect, done, but by becoming a leader in power management itself?) · Start wooing independent software vendors. (Isn't that what Apple has, in effect, done, by creating platforms that developers find really, really attractive?) · Create a new Special Projects Group led by some really passionate designer, like Steve Jobs, to create the next insanely great technology. (Isn't that exactly what Apple did, except that they turned the entire company into one great big `Special Projects Group'?) Since then, thanks to its strategy of marrying technology, design and intuitiveness, Apple has insinuated itself into the fabric of our lives, transforming business, as well as culture, like nothing we've ever known before. And, in the process, it has increased its shareholders' wealth approximately 300 times.Which brings us to the Apple Watch, which goes on sale on April 24 in nine countries.

So is it going to repeat the phenomena of the iMac, iPod, iPhone and iPad?
Technology watchers are betting that it won't. Sources inside Apple have let on that it's the most difficult thing the company has ever designed, because of the challenge of trying to cram all those sophisticated chips and sensors onto a circuit board the size of a postage stamp.And that is also a challenge for all the third-party app developers, on whose ability to come up with killer apps the Apple Watch will ultimately succeed -or fail. How do they deliver a killer app experience on a screen that's just two and a half inch square? So for now the Apple Watch is being called “Tim Cook's Newton“ -a reference to Apple's disastrous 1990s Newton hand-held device that was too far ahead of its time.

But if technology watchers are sceptical about the Apple Watch, let's not forget that they were also sceptical about the iPod, the iPhone and (most of all) the iPad -until Apple proved them wrong.In the next couple of weeks, we'll know for sure, one way or the other.

Anvar Alikhan

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