When Fred’s retirement was announced in June 2004, Ed Woolard, the former Apple chairman, sent him a note thanking him for, among many other things, serving as “Chief Tantrum Controller of Steve.” At the last Top 100 meeting of Apple management that Fred attended as an employee, Steve broke down and cried during a video he showed in Fred’s honor. In his remarks at a going-away party at Cafe Macs, the company commissary, Steve reflected on the warmth everyone felt for Fred. Anderson still keeps two mementos from his retirement in his office at venture capital firm Elevation Partners: a plaque from Steve calling him “The World’s Greatest CFO” and a commissioned caricature portrait signed by all his closest coworkers, including Steve.
Jon Rubinstein and Avie Tevanian were the next members of the “Save Apple” team to depart. Ruby and Avie had been a buddy act of sorts, managing the hardware and software sides of Apple’s whole widget. Says Ruby, “There’s as much of the turnaround team’s DNA in Apple as there is of Steve’s, and you can still see it today.” They had been involved in every key decision at Apple since 1997. And before they left they helped pull off a move that they’d been talking about with Steve and with Tim Cook for years—switching the microprocessors that powered every Apple personal computer from the PowerPC chip to one made by Intel.
The primary buyers of the PowerPC chip were IBM and Apple. This was a customer base that paled next to Intel’s enormous market for Windows PCs and servers—millions of units a year for the PowerPC versus hundreds and hundreds of millions for Intel. Motorola could not match Intel’s manufacturing prowess. Intel reinvested much of the profit from selling all those processors into building more state-of-the-art manufacturing facilities (called “fabs”), which had come to cost in excess of $1 billion each. The bottom line was that switching to Intel held irresistible price and performance advantages, especially after Steve negotiated yet another sweetheart deal, this time with Intel CEO Paul Otellini.
The whole executive team at Apple anticipated that the switch would be difficult. For starters, the change would infuriate some customers, because users who wanted the latest and greatest software would eventually be forced to replace their older iMacs, PowerMacs, MacBooks, and PowerBooks. Second, Avie and his team had to make sure there would be no software glitches, so that buyers of the new Intel-powered Macs would be able to use the OS X–ready software they’d purchased for their older machines. Despite all that, the move was far smoother than anyone had anticipated. Since Avie’s team had ported the NeXT operating system to run on Intel-based systems years and years earlier, they were very familiar with the strengths and idiosyncrasies of the Intel’s microprocessors. The first Apple machines switched over in February 2006. The rest made the transition by that summer. The operation came off without any noticeable glitches.
This was the kind of technological excellence Avie and Ruby had helped ensure throughout their time at Apple. Nevertheless, neither one could see an interesting career path forward there, especially now that the iPod and other mobile devices had become Apple’s growth engines. Steve saw Avie and Ruby as, first and foremost, “old-time” computer guys. Tony Fadell and Scott Forstall were early members of the post-PC generation, and seemed destined to be the key leaders of the iPhone hardware and software efforts. The wheel was turning for Avie and Ruby, just as it had for Fred.
“Steve kept people in a box,” says Avie. Tevanian had talked to his boss several times about his itch to do something new, and in 2003, Steve had moved him into a role as the company’s “chief software technology officer.” It was unquestionably a promotion, but it turned out to be a job without much of a portfolio. Tevanian found himself with little concrete responsibility. He felt out of the loop, and realized that his new role would not work. “Being a pseudo individual staff person working for Steve doesn’t work, because he already has all the answers. He didn’t like it when I would be in a meeting where he was reviewing a product, and I would have an opinion. He just didn’t like it. And he grew to not like that I could be a senior person like that without having day-to-day responsibilities to deliver something,” he says.
Tim Cook, now Apple’s CEO, says that he worried about Tevanian leaving, and urged Steve in 2004 to figure out another challenge to keep the brilliant software engineer at Apple. “Steve looked at me,” Cook remembers, “and goes, ‘I agree he’s really smart. But he’s decided he doesn’t want to work. I’ve never found in my whole life that you could convince someone who doesn’t want to work hard to work hard.’ ” Another time, shortly after Steve had learned that Tevanian had taken up golf, Steve carped to Cook that something was really amiss. “Golf?!” he thundered incredulously. “Who has time for golf?”
Rubinstein, meanwhile, noticed that he too was getting less and less attention after Steve returned from his cancer operation in 2004. “In the beginning at Apple, it was a pleasure because we were all really in it together. I mean, it was really a team, we were partners,” he says. “But once Apple started getting really successful, Steve moved himself to the next level and started separating himself from all of us. It started to become all about him versus about the team. Over time it changed, where you were much less working with Steve and much more working for Steve.”
Ruby saw himself as CEO material, and envied Cook’s growing role. He also had started clashing with Ive, who had once reported to him but now reported directly to Steve. And he couldn’t stand Tony Fadell, the lead engineer for the iPod. Ruby and Fadell would resent one another for years, long after they’d each left Apple, each claiming responsibility for the iPod’s success, and each demeaning the other’s contribution. (Some wags took to calling Fadell “Tony Baloney.”)
Finally, it all got to be too much. Ruby says he went in to Steve’s office one day and told him he was tired, that he was ready to quit and go build his dream house in Mexico. He left on March 14, 2006—just a few weeks before Avie’s own departure. “It was a great experience,” Ruby says. “I wouldn’t have traded it for anything. It was wonderful in so many dimensions. I mean, it changed my life in so many different ways and I learned a lot from Steve. Steve could be a real jerk, no question about it, but I feel very warmly about him. I really do.”
Steve had considered himself friends with both men. But that personal level of involvement made their departures personally fraught. Every personable executive must confront this problem, but it was especially tough for Steve. While he had changed over the years, he still didn’t have a natural soft touch when it came to discussing career options with his closest colleagues. So things ended badly with both Avie and Ruby. Steve’s relationship with Avie, who had organized his bachelor party back in 1991, just petered out. His relationship with Ruby, on the other hand, ended with a bang.
Ruby built his dream house after leaving, but he was still ambitious. In late 2007 he was hired by Palm Computing, which remained a significant player in the handheld market. Ruby sent Steve an email to give him a heads-up that he was heading to Palm. Steve called him back about four seconds later, according to Ruby, and started saying things that left him flabbergasted. “He couldn’t understand,” Rubinstein remembers. “He said, ‘You’ve got plenty of money, why are you going to Palm?’ I’m like, ‘Steve, what are you talking about? I mean, you’ve got orders of magnitude more money than I have and you’re asking me? Are you joking?’ ”
To Steve, Ruby’s move was akin to treason. By taking another job, at an ostensible competitor to Apple, Ruby had, “failed the loyalty test,” to cite the words of Susan Barnes.