by Mark Milian
People aspiring to do business with Apple were not immune to its co-founder’s hypnotic charm. With their blinders on, Steve was able to derail them, and still provide a great story for them to tell to friends. Panic Inc., a successful independent software maker, chronicles on its website a story told by its co-founder, Cabel Sasser, about how he was tricked and then bested by Steve. It started, as most stories in this book do, with an e-mail. “I couldn't help myself. I'd always heard that Steve Jobs, founder and CEO of Apple, actually reads his e-mail,” Cabel recounts. “It's pretty hard to resist e-mailing God if you know He checks his e-mail.” Cabel sent Steve a short pitch for Audion in August 1999, a few days after version 1.0 of his music app was released, but did not receive a response. No surprise, says Cabel.
Then, a couple of weeks after that first e-mail to Steve, Cabel received a cryptic message from Charles Wiltgen, then the QuickTime video technology manager for Apple developer relations. “I’d like to talk Audion future directions,” Charles wrote. This is a request many small technology startups field from Apple. Swype, the innovative touchscreen keyboard software developer, says it had one such meeting, too, before Nuance Communications Inc. acquired it. Between the long lead time associated with such a “future directions” meeting, Cabel’s Panic software studio engaged with AOL Time Warner Inc. about an acquisition. (This was before the conglomerate experienced a myriad of its own problems.) Cabel was excited about the prospect of offering Audion for free in order to get the program in the hands of more people. However, he was not keen on working for a lurching corporate giant. At the height of those negotiations in the summer of 2000, Apple showed up again. Panic tried to include AOL in the meeting with Apple, but the AOL execs said they were busy, and then Apple balked. No meeting took place.
Later that year, rumors began to swirl that Apple was getting serious about developing music software. Cabel Sasser sent an e-mail to Phil Schiller, Apple’s head of marketing, who declined to address the speculation. Cabel mentioned in those exchanges that Panic’s talks with AOL had ended. In a last-ditch effort, Cabel sent a message to Steve Jobs. Steve responded this time — on Christmas Eve, and bearing what looked like a present. “I hear that your deal with AOL fell through. Any interest in throwing in with us at Apple?” Steve wrote, as Cabel recalls, with much enthusiasm, the high of having received a message from “the guy who we basically owe our entire professional existence to, who basically created the very platform we want to hug, the computers we want to crush into little pure plump pieces of joy.”
Panic and Apple set a time for a meeting a few weeks after that, which happened to take place only days after the annual Macworld Conference & Expo, where Apple traditionally announced new products back then. And Apple did indeed announce new initiatives. Cabel and his colleagues sat in San Francisco’s Moscone keynote auditorium on January 9, 2001 watching Steve Jobs saunter around the stage and show, for the first time, the simple and, more important, free iTunes. This sent the Panic guys into, well, a panic. They wondered whether Apple had instantly vaporized their market.
Cabel met Steve for the first time in the expo hallway after the keynote. They had a brief conversation, and Steve asked Cabel what he thought of iTunes. Cabel said it was very well designed but that Audion would still have a market because iTunes lacked advanced features. “Yeah? Like what?” Steve snapped. Cabel explained that Audion had the ability to keep track of play counts and rate songs. “Why the hell would anybody want to do that?” Steve asked incredulously. (Apple added those features in later versions of iTunes.) “Because honestly? I don't think you guys have a chance.” Steve taunted.
Panic went ahead with its meeting with Apple scheduled for soon after the Macworld convention. Upfront, Phil Schiller explained, “You guys remember the last time we tried to meet with you? It was actually because we wanted you guys to make iTunes.” This landed heavily with Cabel and his associate. Then, the Apple bigwigs ushered the pair from Panic into a conference room. Soon after, Steve Jobs entered, sat down and plopped his feet on the table. Steve inquired about Audion’s progress and usage numbers. The developers obliged, and Steve returned his evaluation. “It's like you guys are a little push-cart going down the railroad tracks, and we’re a giant steam engine about to run you down,” Steve explained. “Do you have any other ideas for apps you want to work on?” Cabel replied, genuinely, “Well, we’ve got an idea for a digital photo management program.” To which, Steve said, “Yeah. Don’t do that one.” The other Apple execs in the room laughed as Cabel struggled to pick up on the hint that Apple was working on that very product, which would be called iPhoto.
After more questioning, Steve had the last word before exiting: “We want you guys to work with us. You guys have shown us that you can do a lot with a little. You guys kick ass. Your software totally kicks ass. Cabel, your marketing kicks ass. We think you do incredible work and we'd love to have you join us.” Cabel and his colleagues decided to stay independent, but the experience provided them with great stories to tell about having personally been the marks in a Steve Jobs magic show.
Steve Jobs ran Apple under a cloak of secrecy. He muscled partners to work overtime and city governments to issue zoning permits with few public hearings. Apple sued bloggers. After Steve returned to Apple in 1997 as interim CEO, he sent a companywide e-mail about how the company previously had trouble keeping information under wraps and that in advance of new products coming in the next few weeks, people needed to respect confidentiality requests, according to John Lilly, a venture capitalist who was at Apple at the time. A few days later, Apple’s financial chief sent a followup memo to staff saying that administrators had been tracking people’s account activity after Steve sent his message, and that four people forwarded the details to outsiders. They were immediately fired. Steve told Time in that same year that he followed rumors about Apple online every day. Later, he would contribute to that mill with his e-mails.
At a news conference in September 2010, the one where Apple typically announces new versions of the entire iPod line, the company did not talk about the iPod Classic. A concerned customer e-mailed Steve urging him not to kill the product. “We have no plans to,” Steve replied. At the next fall product event held in October 2011, Apple again did not address the iPod Classic, but it also did not say it would stop selling the product.
Steve’s brevity was able to cause confusion and keep the rumormongers guessing. Perhaps this was a strategic game he played. Fernando Valente wrote Steve in April 2010 asking if there was truth to speculation about an App Store for Apple computers and whether Mac OS X would require that all software be authorized through it. “Nope,” Steve offered. This was interpreted by many, including the publications that reported on it, as a denial from Steve that a Mac App Store was in the works. In fact, such a market was being developed and eventually was released, but OS X did not require authentication. The latter part of the question is what Steve was denying, but that apparently wasn’t clear in his terseness.
In hindsight, it wasn’t always clear whether Steve was purposely using misdirection or whether he simply did not have the full lay of the land. Before the Wall Street Journal reported that the Apple board was pondering the company’s CEO succession plan as Steve’s health declined, a reporter sought Steve’s comment via e-mail. “I think it’s hogwash,” he replied.
In another ambiguous circumstance, a San Bernardino, California high school student named Nathan wrote Steve a gushing note three months before Christmas 2010 to ask whether the oft-delayed white version of the iPhone 4 would arrive in time for “Xmas.” Nathan mentioned that Apple had said the white iPhone would be released later in the year. Steve cryptically responded, “Christmas is later this year.” After reading this, bloggers foamed at the mouth and debated whether Steve was making a wisecrack, whether he was making a play on an old expression to imply that Nathan’s Christmas gift would come later than expected, or whether Steve was avoiding the question. Regardless of what it wa
s, Apple delayed the product again, pushing it to spring 2011, and finally delivered on April 28, 2011. The tagline Apple used for the product, whose early prototypes suffered from problems associated with the camera’s flash component and from the proximity sensor on the front, was, “Finally.”
Taking such a confident, perhaps arrogant, stance in order to reassure a customer can backfire on the company. The white iPhone was a blunder but not one with much consequence. A customer named Sean Berry wrote Steve Jobs on August 8, 2008 about a widespread problem with a chipset from NVIDIA Corp. that Dell Inc. and Hewlett-Packard Co. offered to replace for affected customers. Some criticized Apple for not acknowledging the problem in its computers. Steve said, “We used a different chip than the ones affected.” However, two months later, Apple finally acknowledged that some MacBook Pro computers were faulty, and offered free repairs or refunds. Apple pinned the blame on NVIDIA for the delay in identifying the problem, saying that while the chipmaker had assured Apple that its products were not affected, an investigation led by Apple found otherwise.
In Steve’s third act, Apple appeared less concerned with computers. The iPod quickly came to make up about half of Apple’s revenues, and the moneymakers later came from mobile phones and tablets. This refocusing was embodied in a corporate rebranding in January 2007 when Apple Computer Inc. changed its name to Apple Inc.
When Steve announced the iPad 2, he riffed on his “post-PC era” concept: “A lot of folks in this tablet market are rushing in, and they're looking at this as the next PC. The hardware and the software are done by different companies, and they’re talking about speeds and feeds just like they did with PCs. And our experience and every bone in our body says that that is not the right approach to this; that these are post-PC devices that need to be even easier to use than a PC; that need to be even more intuitive than a PC; and where the software and the hardware and the applications need to intertwine in an even more seamless way than they do on a PC.” Even in 1996, before returning to Apple, Steve told Forbes: “If I were running Apple, I would milk the Macintosh for all it’s worth, and get busy on the next great thing. … The PC wars are over. Done. Microsoft won a long time ago.”
Contrary to Apple’s actions and Steve’s sage-like monologues that concern the fervent followers of the company, executives publicly maintained that computers, too, were important to the company. Apple held an event at its headquarters in Cupertino called Back to the Mac in October 2010 where Steve introduced new MacBook Air laptops. Tim Cook, then the operating chief, prefaced by saying how important computers still are to Apple and how the Mac made up one-third of Apple’s revenues in 2009 and how if Apple had spun off a computer division, it would rank 110 on the Fortune 500 list. The presentation provided opportunities for some chest beating, but mostly, it felt like Apple was giving some attention to the long-neglected Mac cult.
These disciples are perhaps the most intimately familiar with Apple and were the most adept at staying on Steve Jobs’ radar. They constantly sent Steve e-mails. Readily, Steve put their minds at ease, but meanwhile, his focus clearly remained on other parts of the business that were more central to the future of Apple. “Not to worry,” Steve told one customer who prefaced his message about the bleak state of Apple’s pro hardware by saying, “This is a sad e-mail for me to compose.” Greg Walker, a computer technician, inquired in April 2010 about whether Apple planned to emphasize mobile software over Mac OS X. “No,” Steve said. Matthias Gansrigler, an independent software developer, fretted over whether the Mac’s absence from Apple’s annual design awards was a sign of things to come. Steve assured him: “We are focusing primarily (though not exclusively) on iPhone OS this year. Maybe next year we will focus primarily on the Mac. Just the normal cycle of things. No hidden meaning here.” The next year, Apple did bring back the Mac showcase, though not as the centerpiece.
Following the developers conference where Apple gave out its iPhone-specific awards in 2010, podcaster Mike Gdovin wrote Steve to suggest that Apple should not sacrifice the Mac in favor of the iPhone and iPad. He signed off by saying that, while he likes mobile devices, he still prefers to use a computer at his desk. “Yep, we agree,” Steve replied. Two days later, Dennis Sellers wrote Steve to highlight a mock obituary for the Mac that had recently run in Newsweek. “Completely wrong. Just wait,” Steve said. A year later, Steve explained Apple’s new position on computers. Apple was demoting them, Steve said, to be just another device. All of this hardware would be linked via iCloud, but still, it was an admission that the computer would no longer be core to what Apple does.
“When we were an agrarian nation, all cars were trucks, because that’s what you needed on the farm,” Steve Jobs explained at a conference in 2010, the first hard evidence that Mac lovers had reason to be concerned about a slowdown in computer development. “PCs are going to be like trucks. They’re still going to be around. They’re still going to have a lot of value. … This transformation is going to make some people uneasy, people from the PC world, like you and me. It’s going to make us uneasy, because the PC has taken us a long ways. It’s brilliant. And we like to talk about the post-PC area, but when it really starts to happen, I think it’s uncomfortable for a lot of people, because it’s change. A lot of vested interests are going to change. It’s going to be different. And I think we’re embarked on that.”
Chapter 6
Undeliverable
Steve Jobs did not seem uncomfortable in controversies. With a smile on his face, he created trouble himself. One of his first business endeavors with Steve Wozniak in the 1970s was to build and sell “blue boxes,” which allowed users to illegally get free long-distance phone calls. Decades later, Steve used an Apple earnings call to fire a machine gun of insults at the company’s competitors, including BlackBerry-maker Research in Motion Ltd., Google and Nokia Corp. Strike first, and when struck, a nasty comment deserves a nastier one, as Steve demonstrated. When an employee asked Steve in a meeting at a campus auditorium about his thoughts on Michael Dell’s suggestion then that Apple should shut down the company and give the money back to the shareholders, Steve said, according to former Apple employee John Lilly: “Fuck Michael Dell.”
Steve was not known for being politically correct, but his ability to negotiate with opponents and his tight control over his public persona rivals that of any great politician. The e-mails became a tool of his “reality distortion field,” meaning he used the medium to shape the public narrative. Perhaps he should have been a politician. Indeed, Steve considered running for Alan Cranston’s seat in the U.S. Senate in the 1980s and even sought the advice of a big-time political consultant, the New York Times reported in 1987. At an annual Western Electronic Manufacturers convention in the early 1980s, Steve gave an impassioned 40-minute presentation on the dangers of nuclear warfare and left the audience dumbfounded about the choice of topic; he sat down without taking questions, as former Compaq Computer Corp. executive Benjamin Rosen recalls.
Conversation around the Jobs’ dinner table in the 1990s, according to Time, often centered on politics. Steve leaned left, which perhaps wasn’t a surprise considering his hippie background but could have oscillated during his later years when he ran a powerful corporate enterprise. Steve dined with presidents including Barack Obama and Bill Clinton, who the Jobses hosted at their house. In one meeting with President Obama, as recounted in the biography Steve Jobs, Steve cautioned him less-than-cordially on perceived antibusiness sentiments, and said, “You’re headed for a one-term presidency.”
Apple, under Steve Jobs, was not a company much involved in the political process. It has never been the target of a formal antitrust inquiry, as its principal rivals, Google and Microsoft, have. Apple doesn’t needlessly involve itself in federal lawsuits and has mostly avoided being called into U.S. courtrooms, with a few exceptions such as when several tech companies had to explain their policies on tracking customers’ phones. Apple also tends to avoid making contributions to political c
ampaigns, though it did donate $100,000 in 2008 to fight California’s Proposition 8, a measure to end same-sex marriage.
Apple generally takes great pains to avoid the appearance of taking a side on the political spectrum. Alec Vance, who runs a small development company called Juggleware LLC., vented to Steve by e-mail when his app showing a goofy George W. Bush cartoon clock counting down to “freedom time,” which is when President Bush was set to leave office. Steve reasoned: “Even though my personal political leanings are democratic, I think this app will be offensive to roughly half our customers. What’s the point?”
In a never-before-published exchange, Joel Sercel, a technical consultant in Southern California, e-mailed Steve Jobs about a scandal that had been making a small splash on conservative blogs, including Andrew Breitbart’s influential Big Journalism website. The assertion apparently originated in a column penned by prominent media commentator Howard Kurtz in the Washington Post. Deep within a lengthy article about Glenn Beck’s show on the Fox News channel, Howard mentions, almost in passing, that more than 200 companies had joined together to boycott Glenn Beck, and that “a handful of advertisers, such as Apple, have abandoned Fox altogether.” When Joel posed this matter to Steve, the then Apple CEO squashed rumors of a sweeping Glenn Beck and Fox ban, saying: “We have never advertised on Fox news.” He offered no further explanation.
The political right has its reasons for criticizing Apple as a liberal-minded operation, and the left has offered its own justifications to reject Apple’s need to control every aspect of its products, to exploit Chinese workers who manufacture its products cheaply, and to shut out certain competitors and media. A private e-mail correspondence, and the article posted to the gossip blog Gawker that soon announced them, were rife with the latter sorts of condemnations. Gawker had already had a brush with Steve before when its sister site, Gizmodo, outed a prototype iPhone 4 before Apple’s official unveiling. But in this case, Gawker blogger Ryan Tate e-mailed Steve late one night in May 2010 after seeing an iPad advertisement describing the product as “revolutionary.” The combative Ryan had consumed a few drinks, he admitted, and that much is evident.
