garym@telesoft.UUCP (Gary Morris @shine) (09/24/85)
Computer Age Bulletin Board Information Exchange
Category: 1 General Macintosh news
Message #: 160
Submitted: 9/18/85 6:30
Submitted by: RICH PIZZO
Subject: Steven Jobs, Wall Street Journal;
Wall Street Journal 9/17/85
Cupertino, CA-- Apple Computer Inc. chairman and co-founder Steven
P. Jobs is preparing to start another computer company and has hired
away five Apple employees.
The move could prompt Apple to seek the resignation of Mr. Jobs, who
was forced out of day-to-day responsibilities at Apple in a major
reorginization four months ago.
Mr. Jobs jolted Apple Officials late last week when he anounced plans
to create a company to make computers for universities, one of
Apples fastest-growing markets. Though there has been widespread
speculation that Mr. Jobs might embark on a new venture, his
disclosure that he hired five Apple employees --including some of the
computer makers brightest young engineers and marketers-- created
some turmoil and resentment among top management.
"The executive staff has been stunned and shocked that this has
happened" said William V. Campbell, an Apple executive vice
president.
"I'm quite surprised that all this was being done while he was
chairman, and, furthermore, it would concern me if he gets into
business that's competitive with Apple," said Delbert W. Yocam, the
Apple executive vice president who, with Mr. Campbell, oversees the
companys two corporate divisions.
Apple said it probably will convene a special board meeting to discuss
Mr. Jobs's plans. None of the board's seven members, including Mr.
Jobs and Apple President John Sculley, was available for comment,
and it isn't clear whether the board will ask Mr. Jobs to resign. But
Apple executives are said to be discussing whether the board should
determine if Mr. Jobs violated his fiduciary responsibilities by hiring
away company employees.
According to a senior Apple executive, Mr. Jobs told the board at its
meeting Thursday that he intended to start the new company. Mr.
Jobs assured the board that the new concern wouldn't compete with
Apple, and the board reacted favorably to the plan, the executive
said.
According to the executive, who spoke on the condition that he
wouldn't be identified, board members even said Apple would invest
in the start-up and resolved to determine possible links between
Apple and the new company later this week.
Hiring Away Five Employees
But the next morning, before a 7:30 staff meeting, Mr. Jobs
presented Mr. Sculley with a letter that said he had recruited five
Apple employees to join the new concern, the official said. That
information, according to Apple insiders, sparked the firestorm that
now surrounds Mr. Jobs plans.
"The board was upset to find out that this wasn't an idea-it was an
accomplished fact," an official said.
As reported, Mr. Jobs this summer said he would sell about a fifth of
his stake in Apple for roughly $20 million. With about 5.5 million
shares of Apple left in his portfolio, he remains the company's
largest inside shareholder, with about 9% of the 61.8 million shares
outstanding.
In national over-the-counter trading yesterday, Apple closed at
$15.25 a share, down 50 cents.
Mr. Jobs apparently plans for the new company to build a computer
workstation for universities that would be more powerful than
current personal computers. Beyond that broad goal, however, the
direction the start-up will take is still hazy.
Plans for New Company
"We don't have a name, we don't have a bank account," said Rich
Page, a senior Apple engineer who is leaving to work with Mr. Jobs.
Mr. page said the new company's specific plans have been on hold
until the five Apple employees involved in the venture resign. He
said the five met with Mr. Jobs at his home Thursday night and
offered their resignations from Apple the following morning.
The market for a powerful computer for universities could be a
fertile one. Many university officials seeking to install computer
networks complain that there is a big gap between today's personal
computers and the next most powerful machines available: high-level
scientific computers.
Apple has been seeking to narrow that gap by developing more
powerful versions of its Macintosh personal computer. Even if
Mr. Jobs's start-up doesn't compete directly with the Macintosh,
the new company and Apple could wind up fighting for the same
university dollars earmarked for high-level computer products.
Douglas Van Houweling, vice provost for information technology at
the University of Michigan, said he estimates that the market for
high-powered university computers is between one million and two
million units a year. He said such computers, if they were priced
around $6,000, could be used widely for writing, research and
communication in fields ranging from science to music.
The quintet joining Mr. Jobs includes some of Apple's most talented
engineers and managers. Mr. Page is an Apple Fellow, a prestigious
title that lets him engage in a wide range of advanced research
projects. He said he has built four computers at Apple in the past
several years, including some high-powered models in the category
Mr. Jobs's new firm appears to be targeting.
Another influential employee in the group is Dan'l Lewin, currently
Apple's manager of education marketing and one of Apple's cheif
contacts with universities. The other three are Bud Tribble, Apple's
manager of software engineering; George Crow, a manager of
hardware engineering; and Susan Barnes, controller for U.S. sales
and marketing.
Mr. Tribble was one of the original architects of the computer-
program that controls Apple's Macintosh, and Mr. Crow helped design
some of the Macintosh's key electrical features, such as its power
supply.
The furor over Mr. Jobs's plans comes just as Apple is settling from
the turbulence of its reorganization in May. As reported, two weeks
after that realignment Apple fired 1,200 employees, or 21% of its
work force.
"We've had a good quarter-the organization has come together after
the reorganization,: Mr. Campbell said. "This incident seems to
highlight turmoil at Apple, and nothing could be further from the
truth."
--
GARY A. MORRIS -- TeleSoft, San Diego, CA (619) 457-2700
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