In his first extended interview since undergoing surgery for pancreatic cancer last summer, Apple CEO Steve Jobs talked with Fortune Magazine’s Brent Schlender.

“As we’ll see, software wizardry is how Steve brought Apple back from oblivion and even breathed new life into the Mac, which turned 20 years old the day we sat down to talk. Software, in a word, is the genie in Apple’s multibillion-dollar hardware business… Think back about just how irrelevant Apple seemed even two years ago. Its share of the personal-computing market had shrunk inexorably throughout the 1990s to a tiny 2%… By the late 1990s, Apple was making even its most loyal users doubt the point of sticking with the company. Its operating system was an unstable patchwork, and programmers were growing ever more reluctant to write for Macs or adapt their PC programs to run on the machines. Apple knew it needed help. It turned to a man who had started it all: Steve Jobs.

Some interesting tidbits come to light in Schlender’s article:
– That deal where Microsoft bought $150 million of non-voting Apple stock is now worth well over $1 billion.
– Schlender describes Mac OS X as “the software equivalent of a cross between a Porsche and an Abrams tank: an operating system with sleek, animated graphics and an abundance of useful and novel features built on top of industrial-strength code.”
– Adobe blew it: “In a 1998 meeting in which Jobs asked Adobe Systems executives to develop a Mac version of their consumer video-editing program changed his mind. ‘They said flat-out no,’ Jobs recalls. ‘We were shocked, because they had been a big supporter in the early days of the Mac. But we said, ‘Okay, if nobody wants to help us, we’re just going to have to do this ourselves,'” Schlender reports.
– That started Apple’s Applications Software Division which is now a 1,000-engineer-strong group.
– Schlender writes, “Jobs sees applications like iLife as the centerpiece of his marketing strategy, which is to differentiate the Macintosh from Windows PCs by positioning it as a complete multimedia machine. Right out of the box, the Mac with iLife gives users (especially the creative types) everything they need for creating, editing, managing, and playing digital content. While comparable applications are available for Windows machines, matching what Apple initially throws in free costs hundreds of dollars, and the various Windows programs don’t interact easily with one another. “Everyone in every corner of the software business could learn a lot from iLife,” says Bill Joy, the legendary computer scientist, now a Silicon Valley venture capitalist.”
– “‘I felt like a dope,’ says Jobs, thinking back to summer 2000, when his fixation on perfecting video editing on the Mac distracted him from noticing that millions of kids were using computers and CD burners to make audio CDs and to download digital songs called MP3s from illegal online services like Napster. Yes, even Jobs, the technological visionary of his generation, occasionally gets caught looking in the wrong direction. ‘I thought we had missed it. We had to work hard to catch up,'” Schlender writes. Apple did more than catch up, as we all know.

There’s so much information in the full article – it’s an embarrassment of riches. There are the stories of how iTunes came to be (started from scratch and pounded out in less than four months), how the iPod was born in November 2001 (another crash project that yielded the iPod in just nine months), and the enormous challenge of creating the iTunes Music Store.

Schlender reports, “Merrill Lynch analyst Steve Milunovich predicts that the iPod business alone will hit $6.2 billion in fiscal 2006, roughly as big as all of Apple when Jobs took over.”

“Apple has cast a shadow over Microsoft too. Jobs likes to say that the upcoming Tiger version of OS X will have everything that Bill Gates and Microsoft are promising in Longhorn, the often delayed major upgrade of Windows, now due in mid-2006. ‘They copied the original Mac with Windows 95,’ Jobs gloats, ‘and now they’re going to be copying us again,'” Schlender reports. “Mac OS X is so solid that Apple is beginning to sell Macs into markets that never before would even consider them, like the military and university supercomputer centers. Most tantalizing of all is scuttlebutt that three of the biggest PC makers are wooing Jobs to let them license OS X and adapt it to computers built around standard Intel chips. Why? They want to offer customers, many of whom are sick of the security problems that go with Windows and tired of waiting for Longhorn, an alternative.”

This article just keeps going, a highly-recommended read, (subscription required for full article) here.

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iPod success opens door to Mac OS X on Intel – March 04, 2004