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Board member's inside story on Amelio

Gil Amelio's time at Apple began running out three months ago, an Apple board member tells NEWS.COM.

Gilbert Amelio's time at Apple (AAPL) began running out back in April, an Apple board member told CNET's NEWS.COM today.

Edgar Woolard, Apple board member and part of the search committee for a new Apple CEO, said that three months ago the company's board of directors began to seriously worry about the company's credibility. "And as each month went by, there were not sufficient reports from the sales of the products to?lead us to believe there would be a high probability that things would turn around."

Woolard said that despite "significant improvements" Amelio made in reducing costs, developing a strong management team, and improving the product line, Amelio didn't have the background to successfully sell to consumers and to enlist developer loyalty.

Amelio conducted discussions with board members over the July 4 weekend, according to an Apple spokeswoman. Yesterday, as part of a mutual decision, Amelio resigned, ending a brief but tumultuous 17-month tenure as Apple's CEO.

"Gil is a very decent and good person," Woolard said. "Despite the progress that he made, the next vital step we had to make was to regain credibility."

Woolard said that Apple will no longer state its goals for achieving sustained profitability. The company had previously said its goal was to reach profitability by the fourth quarter.

"It does not serve any benefit to say when we think we'll be profitable," he said.

Woolard maintained that pressure from institutional investors like shareholder activist CalPERS did not play a factor in Amelio's departure.

CalPERS had a July 8 meeting scheduled with Apple's board and management, but a week before the meeting, Apple called it off, said a CalPERS spokesman. Woolard said that decision came from Apple's management, because he was not aware the meeting had been canceled.

Meanwhile, Apple cofounder Steve Jobs has been asked to find the "best CEO" to replace Amelio and set a strategy for the company to execute, Woolard said.

"Jobs will work with the management team and come forth with a plan in the next few weeks," Woolard said.

He added that Jobs has requested "not to be considered a candidate" for the CEO slot.

And what about rumors that Jobs was the single investor who recently sold a 1.5 million block of stock? Apple says it will not comment on the investment activities of its shareholders.

Woolard referred the question to Jobs, who was not available for comment.  

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