my sister's fiancee (two 'e's?) /boyfriend/guy told me that the only reason apple exists is because microsoft bailed them out of bankruptcy, an dnow they basically own apple's ass. i realize that this in its entirety is probably not true, but is there any truth to this? come ye historians.
MS invested a chunk ($10 million, was it?) in Apple back when Jobs returned and MS was in the thick of their antitrust battles. I'm pretty sure the stake in Apple no longer exists.
It was seen at the time as a symbolic gesture: look at Microsoft, bolstering the competition. Since it was accompanied by a commitment to continue developing MS Office for Mac, it also helped restore people's confidence in Apple's prospects.
But MS never had enough of a stake in Apple to be said to "own apple's ass."
Jobs, who took the stage to a standing ovation, said that the Microsoft Anderson on how Jobs put the MS deal in motion investment cannot be sold for three years and covers non-voting shares in the company. "We have to let go of a few things here. We have to let go of the notion that for Apple to win, Microsoft has to lose," Jobs told the crowd soon after it reacted negatively to Gates's satellite appearance.
Yes MS did invest $150 million and made a handsome profit on it.
Apple was NEVER in a bankruptcy mode - always had a lot of cash just badly managed.
IBM at one point were bleeding 5 billion a quarter - Apple was never in that dire a strait.
They WERE however a serious takeover target.
Their school business always was a huge profit centre - they were just being mismanaged.
Had they continues in the 1996-97 mode then cash reserves would have been gone and it would have been a different story.
They were always a "high right" style business so that margin approach kept them solvent but with purportedly low marketshare thos that is a can of worms as well.
This is a good if dated outline of Apple's historical approach.
That's #3 on the Apple Myths. Apple is a Fortune 500 company that has always had lots of money, not as much as M$, but in the billions. Apple definitely hasn't been in bancruptcy. In fact, as Artistseries article points out, it had more to do with an agreement that Apple would stop trying to go after Microsoft for infringing on Apple patents.
In Macuser Conspiracy talk, Microsoft and Apple did some behind the scenes deal, to help each other out (I'll scratch your back if you scratch mine). Apple got a guarantee that Office and IE would be around for several years, and Microsoft got some help on their anti-trust case as well as probably Apple's agreement to keep it's mouth closed about certain issues. This probably also closed the books on Apple trying to prove that MS infringed on some of their patents (and stole the Mac OS to create windows).
This is how long it takes for some of my posts to be put together (although I helped my son with his homework as well and nuked a frozen dinner). I hit "reply" after planders' post!
So, here we go anyway:
There's a little more to the story. It wasn't just $10,000,000.00 in shares; it was $150,000,000.00 in NON VOTING Apple stock. That's a lot of dough!
But... the reality is that Microsoft did not save Apple; Apple founder and CEO Steve Jobs did, who was originally ousted in a failed boardroom coup against Apple CEO John Sculley that Jobs attempted as Chairman back in 1985.
Prior to Jobs' return in 1997, Apple had been experiencing a precipitous fall in marketshare and revenues. Over a period of about two years, Apple lost around $2,000,000,000.00!! That is A LOT of zeroes. On average, Apple was losing between $50,-70,000,000.00 every quarter! But, by the time Jobs took over as interim CEO (dubbed "iCEO" in the press and Mac circles), Apple still had around $2,000,000,000.00 in CASH
As you can see, the amount of money that Apple had was more than what Microsoft invested. Apple was indeed in a death spiral, but that kind of money would NOT have bought Apple. And if Apple's management and product lines were not completely overhauled when Jobs took over, $150,000,000.00 would have been pissed away inside of six months.
Below are some relevant archives and quotes from the website, themacobserver.com.
Apple Stock Tumbles To 12-Year Low
Since the afternoon of June 17th, Apple stock has dropped in price each successive trading day, cumulating yesterday with the street's reaction to Power Computing's filing of their initial public offering. The stock dropped by 7%, putting the price at a twelve-year low of 13 3/16.
Apple Posts $56 Million Loss, Beats Street
(isn't it nice when you "beat the street by losing 56 mill? -- Maca )
In a day in which Wall Street saw the Dow Jones Industrial Average surpass the 8,000 milestone, even Apple shareholders had something to be encouraged about, despite the negative superficial appearance of Apple's quarterly results. The company posted a net loss of $56 million, or 44 cents a share, for its fiscal third quarter, but beat the street's expectation of a loss of $70 million, or 54 cents a share. This compares with a loss of $32 million in the year ago period. Revenues for the third quarter were $1.7 billion, compared to $1.6 billion in the quarter ended March 28, 1997 and $2.2 billion in year ago period.
As had been expected, the sea of red ink continued to flow in Cupertino as Apple Computer announced their fiscal fourth quarter results today, results which missed analysts expectations, in part because of weak overseas demand. The company posted a net loss of $161 million
JANUARY 1998 APPLE POSTS ITS FIRST PROFITABLE QUARTER IN TWO YEARS!
With Costs Down, Apple Posts $47 Mln. Profit
[TOP STORY 5:15PM] As was forecasted during Steve Jobs' keynote speech at Macworld Expo in San Francisco last week, Apple Computer reported today its first real profit in nearly two years. For its fiscal first quarter of 1998, the company turned a profit of $47 million on revenues of $1.6 billion, up from a net loss of $120 million in the year-ago period. Gross margins were also up sequentially during the quarter, reaching 22 percent on the 635,000 units sold. And with several cutbacks during the quarter, the company continued to reduce its recurring cost structure, trimming expenses to $313 million, down considerably from the $353 million it posted in its fourth quarter of 1997. Apple also reiterated the success of the Power Macintosh G3 family in today's quarterly statement. Since the line's introduction on November 10th, over 133,000 units were shipped, making it the most successful product launch in Apple's history.
Apple Announces Quarterly Profits Of US$106 Million
[7:52 AM] At yesterday's press conference, Steve Jobs announced quarterly profits of USS$106 million. As expected, this caps off 4 consecutive quarters of profits for Apple, and the first full profitable year since 1995. In addition, Mr. Jobs announced that over 278,000 iMacs had been shipped in the first 6 weeks of its introduction.
A MAJOR psychological boost with Steve Jobs returning.
Almost completely new Board of Directors.
Complete cutting down of Apple's bloated and confusing (and some terrible) product lines ("lines", plural). Like go to Apple History dot com. Scroll down on the right-hand side timeline. Apple was OUT OF CONTROL with their gear! The years from 1993 to 97 were NUTS. Then, in 1998, you start to see the new Board's influence.
Inventory reduction!! A quote from one of the above URLs:
Apple Lowers Inventory To All Time Low
[2:13 AM] Apple has successfully lowered inventory on-hand figures to an all-time low. The company ended the quarter with only 6 days of inventory on-hand. This is a major accomplishment for Apple which has historically been plagued with inventory problems. Inventory on-hand is a vitally important aspect of any manufacturing concern as it reduces cash-flow. Computer manufacturers in particular have to be very careful because of the volatile nature of hardware and the large amounts of cash required to maintain it. On the other hand, a Just-In-Time manufacturing policy is necessary to maintain low-levels, and Apple instituted JIT in a remarkably short time. Current inventory levels for Apple are 6 days which beats Wintel leading Dell by 2 days. Dell is often praised as the most successful JIT manufacturer ever, a title which Apple may be able to claim if they can improve their ability to meet demand.
And finally... another reason for the turnaround: a solid vote of confidence by Microsoft.
But all of this is In that order, as far as I am concerned. There's no way that Gates would have bought into Apple the way it was before Jobs returned! It would have been like throwing his money... out a Window(s)
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