Steve Jobs

All of the good cheer served to sugarcoat, or distract attention from, the bad news. When it came time to announce the price of the new machine, Jobs did what he would often do in product demonstrations: reel off the features, describe them as being “worth thousands and thousands of dollars,” and get the audience to imagine how expensive it really should be. Then he announced what he hoped would seem like a low price: “We’re going to be charging higher education a single price of $6,500.” From the faithful, there was scattered applause. But his panel of academic advisors had long pushed to keep the price to between $2,000 and $3,000, and they thought that Jobs had promised to do so. Some of them were appalled. This was especially true once they discovered that the optional printer would cost another $2,000, and the slowness of the optical disk would make the purchase of a $2,500 external hard disk advisable.

There was another disappointment that he tried to downplay: “Early next year, we will have our 0.9 release, which is for software developers and aggressive end users.” There was a bit of nervous laughter. What he was saying was that the real release of the machine and its software, known as the 1.0 release, would not actually be happening in early 1989. In fact he didn’t set a hard date. He merely suggested it would be sometime in the second quarter of that year. At the first NeXT retreat back in late 1985, he had refused to budge, despite Joanna Hoffman’s pushback, from his commitment to have the machine finished in early 1987. Now it was clear it would be more than two years later.

The event ended on a more upbeat note, literally. Jobs brought onstage a violinist from the San Francisco Symphony who played Bach’s A Minor Violin Concerto in a duet with the NeXT computer onstage. People erupted in jubilant applause. The price and the delayed release were forgotten in the frenzy. When one reporter asked him immediately afterward why the machine was going to be so late, Jobs replied, “It’s not late. It’s five years ahead of its time.”

As would become his standard practice, Jobs offered to provide “exclusive” interviews to anointed publications in return for their promising to put the story on the cover. This time he went one “exclusive” too far, though it didn’t really hurt. He agreed to a request from Business Week’s Katie Hafner for exclusive access to him before the launch, but he also made a similar deal with Newsweek and then with Fortune. What he didn’t consider was that one of Fortune’s top editors, Susan Fraker, was married to Newsweek’s editor Maynard Parker. At the Fortune story conference, when they were talking excitedly about their exclusive, Fraker mentioned that she happened to know that Newsweek had also been promised an exclusive, and it would be coming out a few days before Fortune. So Jobs ended up that week on only two magazine covers. Newsweek used the cover line “Mr. Chips” and showed him leaning on a beautiful NeXT, which it proclaimed to be “the most exciting machine in years.” Business Week showed him looking angelic in a dark suit, fingertips pressed together like a preacher or professor. But Hafner pointedly reported on the manipulation that surrounded her exclusive. “NeXT carefully parceled out interviews with its staff and suppliers, monitoring them with a censor’s eye,” she wrote. “That strategy worked, but at a price: Such maneuvering—self-serving and relentless—displayed the side of Steve Jobs that so hurt him at Apple. The trait that most stands out is Jobs’s need to control events.”

When the hype died down, the reaction to the NeXT computer was muted, especially since it was not yet commercially available. Bill Joy, the brilliant and wry chief scientist at rival Sun Microsystems, called it “the first Yuppie workstation,” which was not an unalloyed compliment. Bill Gates, as might be expected, continued to be publicly dismissive. “Frankly, I’m disappointed,” he told the Wall Street Journal. “Back in 1981, we were truly excited by the Macintosh when Steve showed it to us, because when you put it side-by-side with another computer, it was unlike anything anybody had ever seen before.” The NeXT machine was not like that. “In the grand scope of things, most of these features are truly trivial.” He said that Microsoft would continue its plans not to write software for the NeXT. Right after the announcement event, Gates wrote a parody email to his staff. “All reality has been completely suspended,” it began. Looking back at it, Gates laughs that it may have been “the best email I ever wrote.”

When the NeXT computer finally went on sale in mid-1989, the factory was primed to churn out ten thousand units a month. As it turned out, sales were about four hundred a month. The beautiful factory robots, so nicely painted, remained mostly idle, and NeXT continued to hemorrhage cash.

CHAPTER NINETEEN

PIXAR

Technology Meets Art

Ed Catmull, Steve Jobs, and John Lasseter, 1999

Lucasfilm’s Computer Division

When Jobs was losing his footing at Apple in the summer of 1985, he went for a walk with Alan Kay, who had been at Xerox PARC and was then an Apple Fellow. Kay knew that Jobs was interested in the intersection of creativity and technology, so he suggested they go see a friend of his, Ed Catmull, who was running the computer division of George Lucas’s film studio. They rented a limo and rode up to Marin County to the edge of Lucas’s Skywalker Ranch, where Catmull and his little computer division were based. “I was blown away, and I came back and tried to convince Sculley to buy it for Apple,” Jobs recalled. “But the folks running Apple weren’t interested, and they were busy kicking me out anyway.”

The Lucasfilm computer division made hardware and software for rendering digital images, and it also had a group of computer animators making shorts, which was led by a talented cartoon-loving executive named John Lasseter. Lucas, who had completed his first Star Wars trilogy, was embroiled in a contentious divorce, and he needed to sell off the division. He told Catmull to find a buyer as soon as possible.

After a few potential purchasers balked in the fall of 1985, Catmull and his colleague Alvy Ray Smith decided to seek investors so that they could buy the division themselves. So they called Jobs, arranged another meeting, and drove down to his Woodside house. After railing for a while about the perfidies and idiocies of Sculley, Jobs proposed that he buy their Lucasfilm division outright. Catmull and Smith demurred: They wanted an investor, not a new owner. But it soon became clear that there was a middle ground: Jobs could buy a majority of the division and serve as chairman but allow Catmull and Smith to run it.