BOSTON--Apple Computer (AAPL)
cofounder Steve Jobs announced new board members and an expanded partnership with Microsoft
during an upbeat keynote here at this week's Macworld Expo Boston.
New board members include Oracle
and CEO Larry
Ellison, Jerry York, former CFO of IBM and Chrysler, Bill
Campbell, CEO of Intuit, and Jobs
himself. They join two executives remaining from the previous regime:
Edgar Woolard, chairman and former CEO of Dupont, and Gareth Chang, president of
company has authorized a total of nine board seats; directors receive stock
options, but no cash compensation for their service.
Investors who wondered whether Jobs recently
dumped the 1.5 million shares
earned from the sale of his Next Software company to Apple, will soon get
an answer. Board members are required to disclose their stake in the companies they serve.
York's financial expertise is expected to give the company added weight on Wall Street, according to observers.
The new board members replace departing members Mike Markkula, Katherine Hudson, Bernard Goldstein, Delano Lewis, and former CEO Gilbert
Markkula, who financed Apple in the early years and is a major investor,
surprisingly stepped down after being a force on the board for years, one of the
directors with the longest tenure. Markkula could not be reached for comment.
But another director had this to say about his own departure: "I served on the board a long time and it was time for some new people and some new approaches," Goldstein said.
Goldstein added that pressure from shareholder activist and Apple investor the California Public Employees' Retirement
System (CalPERS) was not an issue in his decision to step down.
Apple executives are scheduled to meet with the nation's largest pension
fund investor on September 3 to address their concerns about the way the
company is managed. CalPERS placed the troubled computer maker on its top
10 target list of corporate underperformers. Apple's board members and their inexperience in the computer industry was one area they
outlined as a concern.
"The announcement is a good step for the company," said Brad Pacheco, a
CalPERS spokesman. "But the feeling here is that although they stacked
their board with some heavy hitters, they aren't out of the woods until we
talk to them about their process for choosing a CEO. This is the most
critical element as far as CalPERS is concerned."
"We would like to bring someone onto the board
Fred Anderson, Apple CFO, on the new board
that has a strong education
background because of our focus on the education marketplace...if we
add a ninth one, it would be nice to have someone from a strong marketing
and maybe even a consumer products background," said Fred Anderson, Apple's
chief financial officer.
Jobs shed no light on the currently vacant
CEO and chairman of the board posts. He said a chairman would be announced
after a CEO is found. Jobs, thought to be a leading candidate despite
reports concerning his rejection of an offer to lead the
company, is currently CEO of Pixar
To scattered boos in the crowd, Jobs
Anderson on Apple loyalists' reaction to investment
also announced new agreements with
Microsoft that include a
$150 million investment. (See related
The troubled computer maker is the subject of intense scrutiny in the
aftermath of former CEO Gil Amelio's ouster last month. And before Jobs's
rumor mill was working overtime: It seemed the Apple guru would take the
stage wearing a cape, save Gotham from impending ruin, and, in his spare
time, remake Apple's strategy for the Internet, introduce a network
computer device, unveil a new management
team, and maybe fill John Lennon's role in a newly reformed Beatles.
But Jobs may have given the Apple faithful something more visceral than
Greg Maffei, Microsoft CFO, on Apple and NT
products and appointments: renewed faith.
Jobs's confident though sometimes critical words
over the audience like a soothing melody: "Apple is executing
on many of the wrong things. They're doing some of the wrong things
the plan has been wrong," Jobs told the packed hall. "What I see is the
makings of a very healthy company.
"Apple needs to find where it is still relevant and focus on those
Jobs noted two specific markets as Apple strongholds: what he called
creative content (advertising and
arts, for example) and education. These two areas have long been filled
loyalists. The company continues to hold dominant shares in both
He also highlighted what he believes are the two fundamental strengths
Apple: 20 to 25 million fiercely devoted active users and the
Mac operating system, which some believe is still superior to the
Microsoft Windows alternative.
"We've been walking all over it," Jobs said of the previous marketing
strategy for the software. "We are going to invest a lot more in it.
is about the Mac OS."
Despite signs bearing the phrase "We demand
choice," Jobs did not address the ongoing controversy over licensing
agreements for the Mac OS with hardware clone vendors. Reports suggest
Apple is rethinking its licensing arrangement with cloners because of their
success in stealing market share. The company
is thought to want to raise licensing fees. (See related story)
The cloner controversy is only the latest episode in a recent string of
unwanted attention for Apple. Former CEO Amelio, once billed as the
Anderson on Apple's use of Internet Explorer
savior of the company, was pushed out of his CEO post in early July after a
of disappointing financial quarters. Devotees gained a minor reprieve
Apple posted a narrower loss than expected a week later, bleeding $56
million in red ink for its fiscal third quarter.
Then rumors started to swirl around Silicon Valley that Jobs would fill the
breach and regain a formal leadership role
the company. Some reports quelled the initial optimism, as insiders
disclosed that Jobs had rejected the chairman role. But others surmised
that the mercurial Jobs simply wanted to
make a big splash when he returned to the Apple fold.
Jobs returned to Apple late last year as a technical advisor when Apple
purchased his new company, Next Software. Jobs had been ousted himself in the
1980s by former Apple CEO John Sculley. Jobs cofounded Apple nearly two
Macworld Expo continues through the end of the week.
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