Execs question Amelio leadership

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Spindler made the same mistake the Christmas quarter of 1995; Apple ended up stuck with $388 million in excess inventory. The company was forced to declare an astounding $740 million loss for that quarter.

But Amelio turned a deaf ear. When sales of the Performa line slowed in November, Landi wanted to slash prices to the point where they were selling below cost. "Marco wanted to wrap a dollar around every Performa we sold and Gil approved the action," said the former corporate marketing executive.

The missing Performa sales resulted in the $120 million loss, which Amelio publicly admitted at Macworld Expo in January.

This decision permanently alienated some of Apple's top managers, who felt that Amelio had abandoned many of the strategies he'd walked in with in February and demonstrated poor judgment by deferring to Landi's advice over the objections of other senior managers.

Landi is on vacation and could not be reached for comment.

Even after the news of the $120 million loss, some managers felt that Amelio didn't try hard enough to present an image of a leader in control, within the company or to the public. Staff worked late into the night crafting the program for his widely publicized presentation on January 15 at Macworld Expo in San Francisco and asked Amelio to rehearse his speech the night before. He declined, saying he had a dinner planned with his wife.

"I would have thought he would rehearse in the morning but he didn't," said one former executive who worked on the speech. "Instead, he started making changes to the script a few hours before, saying he wanted to make a few bulleted points and wanted the freedom to ad-lib."

Amelio's speech was later panned for being too long and lacking focus.

Four weeks later, Amelio appeared to have taken charge, announcing a second major reorganization that simplified the management structure and installed several Steve Jobs-recommended managers in key positions. But here again, some insiders say that the announcement was made quickly without much advance planning. "This latest restructuring was done over a weekend," said

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a former executive.

But for better or for worse, the structure is now in place and soon the layoffs that will mark the next era of Apple's history will be completed. While this may give a boost to the public perception of Amelio as a tough leader who can make the hard decisions, some inside the company are already whispering that it's not Amelio who is in charge, but Jobs.

One executive said, for example, that Amelio routinely reverses decisions reached with the executive committee after discussing it with Jobs. "The committee would meet and say this equals A,B,C. But then Gil would talk to Jobs and return to the committee saying it was now X,Y, Z," said the former corporate marketing executive.