Go to Main Story

Go to Business Section

Go to Home Page

John Sculley Steps Down as Chairman of Apple

By Steven Pearlstein
Washington Post Staff Writer
Saturday, October 16, 1993; Page C01

John Sculley, the former soft drink executive who transformed Apple Computer Inc. from entrepreneurial upstart into a corporate giant, yesterday resigned as the company's chairman, chief visionary and most recognized spokesman.

Sculley's departure from the Apple board caught no one by surprise. It comes almost four months after he relinquished his title as Apple's chief executive in a boardroom coup that was engineered by the company's outside directors, according to a lawsuit filed last month by a former Apple director.

"How hard they fall," said Jon Swartz, business editor at MacWeek, an industry newspaper. "In January, John Sculley was the best known businessman in the country, sitting next to Hillary Clinton at the State of the Union {address}, the model of a New Age CEO. Nine months later, he's unemployed."

Sculley's departure comes as Apple confronts a myriad of financial, technological and management woes.

As a result of a price war in the personal computer market that has chopped prices by 30 percent, Apple closed out its fiscal year last month with only $86 million in profits, down from $530 million in 1992, despite almost a billion-dollar increase in sales. Apple's stock price, nudging $60 in early spring, had dipped as low as $22.

Over the summer, Apple introduced its newest product, the hand-held Newton, which drew often back-handed reviews and the ridicule of the Doonesbury comic strip. A new generation computer, developed with chipmaker Motorola Inc. and former arch rival International Business Machines Corp., will not be released until next spring.

Morale at Apple has been low since the company announced earlier this year that it would eliminate 2,500 jobs.

Sculley's successor as board chairman is A.C. "Mike" Markkula Jr., one of the three founders of Apple. It was Markkula, ironically, who was instrumental in luring Sculley from PepsiCo Inc. and helping him to force out the computer maker's first guiding visionary, Steven P. Jobs, during an earlier financial crisis.

Sculley, 53, announced no immediate plans. He and his wife had moved from the West Coast to Greenwich, Conn. He recently disavowed interest in the top job at Eastman Kodak Co.

Some industry observers said yesterday they expect he will end up at the head of a company that would take advantage of the coming technological convergence of the telephone, cable television and the personal computer.

"I've had some wonderful years at Pepsi, an extraordinary journey at Apple, and now I am ready to head off to new challenges," Sculley said yesterday in a prepared statement. Apple officials put a positive spin on its management makeover.

"John Sculley took Apple from a $600 million company to an $8 billion company," said Michael Spindler, the company's new chief executive. Spindler praised Sculley for his "intelligence, vision and a profound understanding of the incredible potential of high technology."

In a lawsuit filed last month, however, Albert A. Eisenstat, Apple's former executive vice president, claimed that Spindler secretly had conspired with outside directors to remove Sculley from day-to-day control of Apple. Eisenstat claims he subsequently was fired by Spindler because of his long association with Sculley.

Sculley won't leave Apple empty handed. He still controls 700,000 shares of stock, which were worth almost $20 million at yesterday's closing price of $28.25, up $4.50.

© Copyright The Washington Post Company

Back to the top

Navigation image map
Home page Site Index Search Help! Home page Site Index Search Help!