The original Macintosh enjoyed robust sales following its spectacular launch in January 1984. Steve Jobs defined success as selling 50,000 units in the first 100 days, a high hurdle for a brand new computer with only a handful of applications available. Apple sold more than 72,000 Macintoshes by the end of April and over 60,000 units in June 1984 alone.
Trade Show Triumph and Overconfidence
At the 1984 National Computer Conference, Apple showcased over a dozen small software developers who had created cool applications for the Macintosh. Steve Jobs was ebullient, convinced that the sprouting applications and blossoming sales meant they had turned the corner. However, as summer turned into fall, Macintosh sales began to decline.
The Reality Gap and Leadership Strain
Despite high initial sales, volumes dropped significantly by Thanksgiving 1984. The marketing team forecasted over 75,000 units per month for the holiday season, but sales barely reached 20,000. Steve Jobs seemed oblivious to the slowing sales, continuing to behave as if the Macintosh was an unqualified success. His lieutenants in the Macintosh division struggled to reconcile his ambitious plans with the persistent bad news.
Stagnation in Product Development
The Macintosh engineering team had not been very productive, with no significant upgrades on the horizon. In the fall of 1984, Steve Jobs tried to rally the team around the "Turbo Mac" project, but internal conflicts and obstacles led to key resignations, including Burrell Smith's departure in February 1985.
Introduction of the LaserWriter Printer
The only upcoming new product was the LaserWriter printer, based on Canon's 300 dots/inch engine with Adobe's Postscript software. Despite its advanced capabilities, the LaserWriter's retail price of over $7,000 was almost triple the cost of a Macintosh, making it less accessible.
Sales Forecast Adjustments and Internal Tensions
Joanna Hoffman, the Mac team's marketing person, slashed the inflated sales forecasts to more realistic numbers, providing relief to the sales and manufacturing team. The weak sales began to pressure Steve Jobs and John Sculley's relationship, which had previously been strong.
Boardroom Conflict and Steve Jobs' Removal
The board of directors urged Steve Jobs to return to his role as a product visionary, but he lobbied for Sculley's removal at the April 10th board meeting. The board ultimately sided with Sculley, instructing him to reorganize the Macintosh division and strip Steve of his authority.
Aftermath and Emotional Fallout
Apple announced Steve's removal, along with the first quarterly loss in their history and significant layoffs, on Friday, May 31, 1985. The atmosphere at Apple was sombre and uncertain. Bill Atkinson, Bud Tribble, Steve Capps, and the author visited Steve at his house in Woodside, where he expressed deep resentment and depression over the situation.
Transition and Uncertain Future
Steve Jobs spent most of the summer traveling, trying to figure out his next steps. Despite remaining chairman, he was at odds with Apple's leadership, making his long-term role at the company uncertain. The reorganization marked a significant turning point in Apple's history, with profound implications for its future.
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