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Corporate Comebacks: Apple


The return of Steve Jobs shakes company to the core.

Abercrombie & Fitch
Dunkin Donuts
Johnny Walker
In 1997, Apple (AAPL) was teetering on the brink of bankruptcy. Ten years later, in 2008, it had $24 billion in sales and a total market value of $108 billion -- more than that of McDonald's, Merck and Goldman Sachs.

Blame it all on Steve Jobs, a man the Apple faithful have compared to Odysseus, Krishna and Jesus Christ. Like that of Jesus, Jobs' story has humble beginnings, a meteoric rise, a sickening fall - and a show-stopping resurrection.

In 1976, at the age of 21, Jobs -- along with his then-partner, Steve Wozniak -- co-founded Apple. Company headquarters could be found in his parents' garage, in the space once occupied by Jobs' Volkswagen bus; he was forced to sell it to finance the design of the Apple I computer.

But by the age of 25, Jobs was worth $200 million; by age 30 -- thanks to his infamously erratic management style -- he was summarily forced out of the company he himself had built. In the decade after his departure (between 1985 and 1996), Apple steadily lost market share and hemorrhaged money by the billions. In desperation, Gil Amelio, Apple's then-CEO, moved to acquire NeXT, the computer company Jobs founded after his departure.

Amelio was uncharacteristically blunt about his reasons for the acquisition: "'I'm not buying [NeXT]. I'm buying Steve."

Upon his return, Jobs -- along with Apple's extraordinary chief designer, Jonathan Ive -- quickly brought the company back from near-extinction. Within a year, Jobs had released the candy-colored, much-beloved iMac. Then, 3 years later, came the debut of iTunes. And the iPod, which appeared soon thereafter, was nothing short of revolutionary.

Meanwhile, Pixar -- the animation studio Jobs quietly bought for $5 million during his time away from Apple -- was acquired by Disney (DIS) for $7.4 billion in 2006 (1500 times his original outlay).

This string of victories did nothing to improve Jobs' managerial style, however. Employees still traded terrifying stories: The time Steve shouted "This is shit" in the middle of a board meeting. The time Steve fired someone on the spot, during a ride in the company elevator. The time Steve accosted one of the board members at home. After midnight. On a weekend. And refused to leave.

In fact, getting fired while trapped in the elevator with the mercurial CEO was commonplace enough to require its own slang: Apple employees called it "being Steved."

Put simply, in the words of Andy Hertzfeld, who worked with Jobs on the original Macintosh: "He's an extremely charming bully who shouts at people," whose "true genius may lie in his ability to inspire both love and fear... [trashing] other people's ideas with Darwinian pitilessness so that only the fittest survive."

That Apple's ideas are the fittest -- the best, the most innovative, the most ingenious -- is inarguable. Over 1 billion people use and download music via iTunes - more than 1 in 7 of all those currently populating the planet. At the time of this writing, Apple has sold over 200 million iPods, more than 30 million iPhones - all without compromising its standards (or lowering its often exorbitant prices).

Can Apple survive without Steve Jobs? We may soon find out: Jobs was forced to take a temporary leave of absence in January 2009, for health reasons.

Regardless of how Apple ultimately fares, he'll be a nearly impossible act to follow.

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No positions in stocks mentioned.

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