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You are here: MacNN Forums > News > Mac News > This Week in Apple History: March 19 through 25

This Week in Apple History: March 19 through 25
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Mar 21, 2016, 12:25 PM
In all the research we've done analyzing Apple's four decades and in all the slicing through it week by week, we've never asked whether Apple has made more products or more legal cases. For this week of March 19 through 25 in the years 1976 to 2016, we get a rare situation where Apple wins in the courts –– and perhaps shouldn't have.

There's also corporate machinations aplenty, some of which is arcane and some of which is far more personal. Then this same week sees the launch of one of Apple's most beloved computers and of perhaps its most important software ever.

Wicked fast

On March 19, 1990, Apple launched the Macintosh IIfx, the machine it called "wicked fast" and was, even if it's pretty certain that the iPad is faster. Curiously, the price was $9,900 which was only $95 less than the Apple Lisa was at launch yet the Lisa died while the IIfx needed a wicked fast production line to keep up with demand.

If both prices seem expensive then remember that was in 1990. Adjusted for inflation, the approximate equivalent cost of a IIfx today would be $17,960.21. The IIfx did come in various configurations that all added power and price, but then so does today's Mac Pro. Just for the very broadest price comparison, the latest Mac Pro launched in 2013 with the base model at $2,999 so a time-traveller with a check book would have a choice between one IIfx then and nearly six Mac Pros now. Despite that, in 1990 there probably wasn't a single magazine production desk that didn't switch to the IIfx at the first chance.

Whereas it took longer for this week's other big product, though it has had a greater impact than anything other software that Apple has made and at $129 it was a lot cheaper than the IIfx. On March 24, 2001, Mac OS X Cheetah, or 10.0.0, was officially released. We're still using a version of this today, 15 years later, where the IIfx was discontinued in April 1992 or nearly a quarter of a century ago.

Apple fought the law

Especially now in 2016 when Apple is deep into its legal case with the FBI and it recently lost its appeal about e-book price fixing, you'd be forgiven for assuming that Apple takes a beating in the courts. True, the FBI one is ongoing but there was that pesky situation with Microsoft and Windows where Apple was trounced. You have to blame Apple's naivety for how it wrote its contracts at the time but still you look at the Mac, you look at Windows, you wonder at that court decision.

Yet that's pretty much the kind of tennis-match head movement that was probably taking place on March 23, 1990 when Apple triumphed in court. That was the date that Judge Vaughn R. Walker of the Federal District Court in San Francisco ruled against Xerox and rejected five of its six lawsuit counts. The sixth barely mattered: it wasn't one that sought damages, it was to do with establishing ownership of a Xerox computer and Apple probably didn't care then any more than you do now.

Xerox owned PARC which –– no one ever disputed –– Apple engineers saw a graphical user interface and a mouse. Many years after the Lisa and Macintosh launched, Xerox sued for over $150m in damages saying that the Mac specifically used copyrighted technology that was developed for the Xerox Star computer. You don't remember that one: it came out in 1981 and nobody has a clue when it fizzled away. You can see various versions of it in this 1984 video though don't you dare discuss any of this in public or in private:

In today's money, the equivalent of that 1990 claim for damages is $272 million and at the time could've bought Xerox some 835 Mac IIfx computers. So it was a big deal and if Apple had lost it would've been a big blow to the company. Its victory wasn't an exoneration of Apple, though, as the basis for the judgement was more that the points in question belonged in a copyright claim rather than the unfair competition one that Xerox had filed. Still, Apple's lawyer Jack E. Brown of Brown & Blair said "We welcome the ruling in every way". During the hearing he'd been more eloquent, reportedly saying that Xerox's claim of having invented the Macintosh was as preposterous as a beaver taking credit for the Hoover Dam.

Xerox wasn't amused and said in a statement that: "The ruling does not mean Apple hasn't taken substantial portions of the Star and claimed them as their own. The court merely held, we believe erroneously, that Xerox does not have standing to present facts in support of our contention."

Another year, another case

That Xerox case went the distance but many others do not and one of those took place in 1996. Perhaps because it is something else that fizzled out, it's not possible to pin it down to a particular day but in March 1996 a number of Apple shareholders filed a class-action suit against the company arguing that then-CEO Gil Amelio's pay was "wildly excessive".

Remember that this case didn't go anywhere and decide for yourself whether it should have: according to Apple Confidential 2.0 by Owen W. Linzmeyer, Amelio was being paid $990,000 a year. Don't decide yet: he also got a $200,000 signing bonus, another bonus based on performance which ultimately became $1.134 million and the other, minor, small, piddling elements such as a $5 million loan. It gets complicated after that with some payments being credited against that loan, reimbursements for the use of his airplane, plus options on shares.

Apparently there are enough jobs with complicated salaries that there is a role in this world for a compensation consultant. One of them, the Pearl Meyer company of New York, reportedly reckoned at the time that Gil Amelio's total package was about $10-$12 million per year. Or between 557 and 668 IIfx computers.

Speaking around this time, Amelio said yeah, so, and? Actually he said "Frankly, it was a very competitive package, in the 75th percentile of executive compensation", but that's just the same thing. Later, after leaving Apple, he said yeah, well, there is that. "You don't expect your religious leaders to be making big bucks, and I was leading a religion."

Leaders and exits

Flash forward just a year to March 25, 1997 and Amelio actually asked Apple's board for more money –– albeit for advertising. He felt that Apple products were improving but the word wasn't getting out and he was sure that marketing was the answer. Seemingly the board also thought marketing was the answer but specifically that this is one reason they'd hired him. Consequently you can point the route from that boardroom to the exit from this meeting.

It was possibly the very same boardroom that on March 19, 2003 saw the entrance of Al Gore to the company, though that was officially announced the following day alongside changes to corporate governance rules that we'd probably find exciting if we understood them. Gore is still there but something else isn't: that same March 19, 2003 was the end of the iMac G3. That was the final version of the bulbous, brightly-colored iMacs that saved Apple and marked the first collaboration between Steve Jobs and Jony Ive.

For more on Apple's history, sliced up into weekly bites, check out last week's March 12-18 or go to the start of the series now.

-William Gallagher (@WGallagher)
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Mar 21, 2016, 04:16 PM
Executive compensation is ridiculous, of course, but the glaring part of Amelio's overpayment was really the "performance bonus" greater than his base pay for what amounted to nearly driving the company out of business--the only notably good thing he did in his tenure was to inadvertently hire his own replacement. If only we could all double our salary by being crappy at our jobs.

The IIfx, though, man, I remember drooling over one of those (and a single-pass *color* scanner!) in a showroom back in the day. I did one of those mental "If I were rich, I'd get a IIfx, and a bunch of RAM, and a color monitor, and that super-expensive scanner" games. The setup probably would have totaled over $30K.

Now I have a year-old thing in my pocket with 8x the RAM, 800x the storage, is somewhere between 500x and 5000x faster, and has a higher-resolution monitor. Doesn't have 6 expansion slots, though. I do own a single-pass color scanner, though.
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