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How Apple Works

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How Apple works: Inside the world's

biggest startup

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By Adam Lashinsky, Sr. Editor at Large May 9, 2011: 5:00 AM ET

From Steve Jobs down to the janitor: How America's most successful -- and most
secretive -- big company really operates.

Apple doesn't often fail, and when it


does, it isn't a pretty sight at 1 Infinite Loop. In the summer of 2008, when Apple launched the
first version of its iPhone that worked on third-generation mobile networks, it also debuted
MobileMe, an e-mail system that was supposed to provide the seamless synchronization
features that corporate users love about their BlackBerry smartphones. MobileMe was a dud.
Users complained about lost e-mails, and syncing was spotty at best. Though reviewers gushed
over the new iPhone, they panned the MobileMe service.

Steve Jobs doesn't tolerate duds. Shortly after the launch event, he summoned the MobileMe
team, gathering them in the Town Hall auditorium in Building 4 of Apple's campus, the venue
the company uses for intimate product unveilings for journalists. According to a participant in the
meeting, Jobs walked in, clad in his trademark black mock turtleneck and blue jeans, clasped
his hands together, and asked a simple question:

"Can anyone tell me what MobileMe is supposed to do?" Having received a satisfactory answer,
he continued, "So why the fuck doesn't it do that?"

Related story: Meet Apple's all-star team


For the next half-hour Jobs berated the group. "You've tarnished Apple's reputation," he told
them. "You should hate each other for having let each other down." The public humiliation
particularly infuriated Jobs. Walt Mossberg, the influential Wall Street Journal gadget columnist,
had panned MobileMe. "Mossberg, our friend, is no longer writing good things about us," Jobs
said. On the spot, Jobs named a new executive to run the group.

Jobs' handling of the MobileMe debacle offers a rare glimpse of how Apple (AAPL) really
operates. To Apple's legion of admirers, the company is like a tech version of Wonka's factory,
an enigmatic but enchanted place that produces wonderful items they can't get enough of. That
characterization is true, but Apple also is a brutal and unforgiving place, where accountability is
strictly enforced, decisions are swift, and communication is articulated clearly from the top.
(After Jobs' tirade, much of the MobileMe team disbanded, and those left behind eventually
turned MobileMe into the service Jobs demanded.)

Apple's ruthless corporate culture is just one piece of a mystery that virtually every business
executive in the world would love to understand: How does Apple do it?

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