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I think this acquisition may go down in history as one of the most successful ever, delivering shareholders a return of over 82,200% (the Nasdaq returns have on
by spchampion2 5y ago
I think this acquisition may go down in history as one of the most successful ever, delivering shareholders a return of over 82,200% (the Nasdaq returns have only been about 1,100% in the same timeframe). According to Google Finance, Apple was trading at $0.21 in December, 1996 (price adjusted to reflect subsequent splits). Today they're trading at $172.99.
It's very rare that you see acquisitions work out like this. Apple traded away about 13% of their 1996 market cap to buy NeXT, and then allowed NeXT's leadership to take over and run the place. Most M&A stories like this usually result in massive underperformance for shareholders. Instead, Steve Jobs turned NeXTSTEP into OS X and iOS, driving an incredible turnaround.
People like to point out that this merger was different because of Steve Jobs and his history with Apple, but I don't think that's so obvious. Neither Apple nor NeXT were strong companies at the time, and Apple's culture had drifted considerably since Jobs was fired in 1985.
For anyone who has been involved in a big acquisition integration, it can be like pulling teeth to get a buyer to properly adopt the target's technology. There are always barriers from the junior engineer all the way to the CEO. While it certainly helped that Jobs was the original founder, even that was no guarantee of success. Jobs had learned a lot running NeXT and Pixar, but that was not obvious at the time. I imagine there was a lot of internal resistance within Apple.
This acquisition probably would have failed miserably anywhere else, and yet Jobs and Apple made it one of the best ever.
- macintux 5y agoThere was certainly much lamentation at the time that Apple didn’t purchase BeOS. I’m also reminded of Sun’s near-acquisition of Apple (apparently multiple times), which McNealy(?) later acknowledged would never have worked out so well. Jobs gets a lot of grief here and elsewhere for his personal failings and management style, but this was an epochal moment in the computer business. I remember roughly at the same time dreading what seemed like the inevitable Windows victory over all of personal computing.
- dev_tty01 5y agoIt is remarkable that Apple's hapless management at the time did manage to make the right deal for stockholders.
- redler 5y agoIn a sense, this move elevates the uncelebrated Gil Amelio to the pantheon of CEOs who made world-changing decisions.
- TheOtherHobbes 5y agoBeOS would have been a disaster. Jobs gave Ive a chance to design an iconic iMac, which handily restored Apple's credibility and also helped get some money rolling in. And then the iPod, iPhone, iPad and the rest. I can't imagine BeOS going in the same direction. Macs would have been increasingly PC-like - but with a much nicer OS, and maybe brightly coloured plastic [1] instead of beige - and someone else would have eaten mobile. I suspect BeOS Macs would have ended up more like the Amiga - an item of nostalgia. Apple would likely have been sold off within a couple of years. [1] Probably purple.
- adventured 5y agoAs told in the Walter Isaacson book about Jobs, Larry Ellison wanted to buy a controlling interest (or all of it) in Apple and install Jobs back as CEO around the time Jobs was attempting to accomplish the same end goal by acquisition. Jobs was responsible for preventing Ellison from using that tactic, on the argued basis of claiming the moral high ground. https://www.businessinsider.com/steve-jobs-larry-ellison-2011-10 https://www.businessinsider.com/steve-jobs-larry-ellison-201...
- firecall 5y agoThey came super close to buying Be as I recall. From what I remember reading, it was only because JLG wanted too much money that the whole thing fell apart. I don’t have a source. Maybe JLG said as much himself somewhere at some point on an interview or book :-)
- GDC7 5y ago> It's very rare that you see acquisitions work out like this The acquisition was a normal acquisition. What made it special was the DOJ stepping in to destroy Microsoft because Bill Gates was essentially too rich and his riches were so talked about that people in DC wanted to show him who's the alpha. Apple would have gone to zero without Microsoft essentially saving it from bankruptcy, and it would be irrelevant had the DOJ not attacked Microsoft with such vigor.
- macintux 5y agoI don’t believe it was the money that really mattered, but the commitment to provide Office for Mac made a big difference.
- superdug 5y agoWasn't there some language in the deal about Internet Explorer as well as Office?
- mattl 5y agoYes but Apple shipped both IE and Netscape.
- MBCook 5y agoYes. As part of the deal Apple was required to include Internet Explorer on Macs (for some amount of time). IE 5 and 5.5 on the Mac were actually very good browsers. But Apple was not prohibited from including other browsers as well. For example, years later, Safari.
- GDC7 5y agoIn any event it was state intervention. When that happens the victory/defeat of a company becomes political , not technical or due to financial or business acumen. The worst thing is that the majority of the American population would have not found themselves competing against Bill Gates for anything, except those in DC who had him as their #1 enemy in order to win their size measuring contest. Matter of fact the small individual consumer and small businesses were getting away robbing Microsoft blind as they didn't do anything to stop piracy. Microsoft would just treat it as free marketing or just pass those losses onto big paying customers such as the Fortune 500 companies, thus compensating for piracy losses at the base of the pyramid. After DOJ intervention nowadays we have Apple shipping a 1700$ phone which is completely closed off and out of the box is impossible to charge while listening to music at the same time. Irony if you think about how passionate Jobs was about music
- zitterbewegung 5y agoThis wasn’t a merger it was a reverse takeover. Jobs basically got rid of a large amount of unprofitable projects and merge NextStep with a Mac UX and make a compelling computer to use it with. The result was what Apple needed to compete. A modern OS made of with a modern UI with XNU that had memory protection that can compete with Windows. Also a transition VM for older software.The iMac broke away and showed that computers could look cool. The iPod showed Apple could make compelling Consumer electronics XNU got adopted with the iPhone iPad and with what they learned with the iPod. And moving Apple to Intel and then to Apple Silicon was similar to going from MacOS 9 to 10. Not many companies can claim so many innovative devices and most get 2 or 3.
- xuki 5y agoYeah, NeXT acquired Apple for minus 400 million.
- User23 5y agoHaha, only serious. And it was a great deal for Apple shareholders.
- KerrAvon 5y agoI think people forget that the iMac really didn’t save Apple in the long term; the iPod did. Money and production knowledge from the iPod enabled the first iPhone. And the iPod was not based on NeXT-derived technology. (Until the iPod Touch, after the iPhone).
- MBCook 5y agoThe iMac saved them from bankruptcy. The iPod rocketed them to massive profit.
- zitterbewegung 5y agoSorry that's a typo the iPod ran on an internally devised software and a mobile CPU but the real thing they were targeting is a large amount of storage.
- bluedino 5y agoI wonder how apples current culture compares to in 1982 or 1997
- sydthrowaway 5y agoProbably a fraud just like Google.
- JKCalhoun 5y agoThe whole industry has changed — not just Apple. Those were the halcyon days for software engineering. Programmers called the shots because the "users" were them. An engineer knew what features to add because it is what they wanted. Upper management could let the cowboys run a little loose because shipping software was like printing money. These days the stakes are much too high and the customer is everyone. I see this causing management to be hamstrung by accountability. To help accountability, more and more process is layered on, loose cannons weeded out.... Culture is nothing like it was two decades ago.
- dangus 5y agoRight, you can't even think about culture in terms of the company. Working for a company in an office job is wildly different than 1997.
- cmrdporcupine 5y agoIn my opinion it wasn't NeXT tech that saved Apple. It was just shifts in market trends and a move towards lifestyle branding over the grey-box commodity stuff they were doing. The first successful product after the return of Jobs was the iMac, which used zero NeXT expertise and ran Mac OS 8 or 9. Jobs' "innovation" in this era was to slash slash slash Apple down to the bone and implement a Dell-like just in time delivery model. Apple was still in some trouble, market wise for at least 5-6 years after Jobs returned. They also didn't ship the NeXTstep based OSX until 2000/2001. My wife worked in marketing there from 2003-2010 and we saw it first hand. In the end what transformed Apple from a marginal company 'in trouble' was the iPod. Apple stopped being a computer company and became a consumer electronics lifestyle brand. Their actual computers are still fairly marginal in the market and last I looked not a major profit centre. They make their real money on iPhones and paraphernalia. Insofar as NeXT's tech has helped Apple it's just that they've had a portable operating system that they could move between ISAs and form factors. That isn't unique to NeXT/OpenStep, it could have come from somewhere else, including BeOS.
- andrekandre 5y ago> the iMac, which used zero NeXT expertise and ran Mac OS 8 or 9. im not so sure about that, iirc the various hardware and software divisions were all headed by next people
- LeoPanthera 5y agoThe iMac was so popular mostly because of its design, designed by Jonathan Ive, who did not work at Next.
- MBCook 5y agoBut was reportedly basically being ignored at Apple until Steve Jobs “found” him and used his designs.
- Damogran6 5y agoAs much as I loved BeOS, it was no NeXT…it was a single user OS without the underpinnings Mach brought to the table.
- deleted 5y ago[deleted]
- sys_64738 5y agoIt wasn't always successful. When or what event was the turning point?