Steve Jobs

Iger asked Jobs to bring Lasseter and Catmull to a secret meeting of the Disney board in Century City, Los Angeles, on a Sunday morning. The goal was to make them feel comfortable with what would be a radical and expensive deal. As they prepared to take the elevator from the parking garage, Lasseter said to Jobs, “If I start getting too excited or go on too long, just touch my leg.” Jobs ended up having to do it once, but otherwise Lasseter made the perfect sales pitch. “I talked about how we make films, what our philosophies are, the honesty we have with each other, and how we nurture the creative talent,” he recalled. The board asked a lot of questions, and Jobs let Lasseter answer most. But Jobs did talk about how exciting it was to connect art with technology. “That’s what our culture is all about, just like at Apple,” he said.

Before the Disney board got a chance to approve the merger, however, Michael Eisner arose from the departed to try to derail it. He called Iger and said it was far too expensive. “You can fix animation yourself,” Eisner told him. “How?” asked Iger. “I know you can,” said Eisner. Iger got a bit annoyed. “Michael, how come you say I can fix it, when you couldn’t fix it yourself?” he asked.

Eisner said he wanted to come to a board meeting, even though he was no longer a member or an officer, and speak against the acquisition. Iger resisted, but Eisner called Warren Buffett, a big shareholder, and George Mitchell, who was the lead director. The former senator convinced Iger to let Eisner have his say. “I told the board that they didn’t need to buy Pixar because they already owned 85% of the movies Pixar had already made,” Eisner recounted. He was referring to the fact that for the movies already made, Disney was getting that percentage of the gross, plus it had the rights to make all the sequels and exploit the characters. “I made a presentation that said, here’s the 15% of Pixar that Disney does not already own. So that’s what you’re getting. The rest is a bet on future Pixar films.” Eisner admitted that Pixar had been enjoying a good run, but he said it could not continue. “I showed the history of producers and directors who had X number of hits in a row and then failed. It happened to Spielberg, Walt Disney, all of them.” To make the deal worth it, he calculated, each new Pixar movie would have to gross $1.3 billion. “It drove Steve crazy that I knew that,” Eisner later said.

After he left the room, Iger refuted his argument point by point. “Let me tell you what was wrong with that presentation,” he began. When the board had finished hearing them both, it approved the deal Iger proposed.

Iger flew up to Emeryville to meet Jobs and jointly announce the deal to the Pixar workers. But before they did, Jobs sat down alone with Lasseter and Catmull. “If either of you have doubts,” he said, “I will just tell them no thanks and blow off this deal.” He wasn’t totally sincere. It would have been almost impossible to do so at that point. But it was a welcome gesture. “I’m good,” said Lasseter. “Let’s do it.” Catmull agreed. They all hugged, and Jobs wept.

Everyone then gathered in the atrium. “Disney is buying Pixar,” Jobs announced. There were a few tears, but as he explained the deal, the staffers began to realize that in some ways it was a reverse acquisition. Catmull would be the head of Disney animation, Lasseter its chief creative officer. By the end they were cheering. Iger had been standing on the side, and Jobs invited him to center stage. As he talked about the special culture of Pixar and how badly Disney needed to nurture it and learn from it, the crowd broke into applause.

“My goal has always been not only to make great products, but to build great companies,” Jobs later said. “Walt Disney did that. And the way we did the merger, we kept Pixar as a great company and helped Disney remain one as well.”

CHAPTER THIRTY-FOUR

TWENTY-FIRST-CENTURY MACS

Setting Apple Apart

With the iBook, 1999

Clams, Ice Cubes, and Sunflowers

Ever since the introduction of the iMac in 1998, Jobs and Jony Ive had made beguiling design a signature of Apple’s computers. There was a consumer laptop that looked like a tangerine clam, and a professional desktop computer that suggested a Zen ice cube. Like bell-bottoms that turn up in the back of a closet, some of these models looked better at the time than they do in retrospect, and they show a love of design that was, on occasion, a bit too exuberant. But they set Apple apart and provided the publicity bursts it needed to survive in a Windows world.

The Power Mac G4 Cube, released in 2000, was so alluring that one ended up on display in New York’s Museum of Modern Art. An eight-inch perfect cube the size of a Kleenex box, it was the pure expression of Jobs’s aesthetic. The sophistication came from minimalism. No buttons marred the surface. There was no CD tray, just a subtle slot. And as with the original Macintosh, there was no fan. Pure Zen. “When you see something that’s so thoughtful on the outside you say, ‘Oh, wow, it must be really thoughtful on the inside,’” he told Newsweek. “We make progress by eliminating things, by removing the superfluous.”

The G4 Cube was almost ostentatious in its lack of ostentation, and it was powerful. But it was not a success. It had been designed as a high-end desktop, but Jobs wanted to turn it, as he did almost every product, into something that could be mass-marketed to consumers. The Cube ended up not serving either market well. Workaday professionals weren’t seeking a jewel-like sculpture for their desks, and mass-market consumers were not eager to spend twice what they’d pay for a plain vanilla desktop. Jobs predicted that Apple would sell 200,000 Cubes per quarter. In its first quarter it sold half that. The next quarter it sold fewer than thirty thousand units. Jobs later admitted that he had overdesigned and overpriced the Cube, just as he had the NeXT computer. But gradually he was learning his lesson. In building devices like the iPod, he would control costs and make the trade-offs necessary to get them launched on time and on budget.

Partly because of the poor sales of the Cube, Apple produced disappointing revenue numbers in September 2000. That was just when the tech bubble was deflating and Apple’s education market was declining. The company’s stock price, which had been above $60, fell 50% in one day, and by early December it was below $15.

None of this deterred Jobs from continuing to push for distinctive, even distracting, new design. When flat-screen displays became commercially viable, he decided it was time to replace the iMac, the translucent consumer desktop computer that looked as if it were from a Jetsons cartoon. Ive came up with a model that was somewhat conventional, with the guts of the computer attached to the back of the flat screen. Jobs didn’t like it. As he often did, both at Pixar and at Apple, he slammed on the brakes to rethink things. There was something about the design that lacked purity, he felt. “Why have this flat display if you’re going to glom all this stuff on its back?” he asked Ive. “We should let each element be true to itself.”