Today in Apple history: John Sculley brings ‘Pepsi Generation’ marketing to Apple

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john-sculley
John Sculley was Apple's third president and CEO.
Photo: Web Summit/Flickr CC

May 17: Today in Apple history: John Sculley starts as Apple CEO May 17, 1983: John Sculley takes the helm as Apple’s third president and CEO. The former Pepsi-Cola boss is short on tech experience but long on marketing, which will become increasingly important as the personal computer revolution ramps up.

Steve Jobs personally lured Sculley to Apple using one of the most famous lines in the history business. “Do you want to spend the rest of your life selling sugared water,” Jobs asked Sculley, “or do you want a chance to change the world?”

Sculley, who followed previous Apple CEOs Mike Scott and Mike Markkula, joined the company with virtually no knowledge of the tech industry. What he did know was how to sell products — and particularly how to sell them as part of an aspirational lifestyle.

John Sculley brings Pepsi marketing to Apple

He pulled this off at Pepsi, where he helped create the “Pepsi Generation” ads that transformed the soft drink from a low-end Coke ripoff to something altogether better. At Apple, he took the helm of a company facing increasing competition from IBM, which launched the IBM Personal Computer in 1981.

“IBM is a formidable competitor,” Sculley said as he moved to Apple. “But so is Coca-Cola.”

To persuade Sculley to leave his $500,000-per-year job at Pepsi, Apple agreed to pay him $1 million per year, with half coming in salary and half in the form of a bonus. He also got a $1 million signing bonus, a $1 million golden parachute clause in his contract, 350,000 AAPL shares, and money to buy a house in California equivalent to his Connecticut home.

At Apple, the idea was that he would run the company alongside Jobs, who served as chairman at the time. Jobs and Apple’s engineers would take care of the cutting-edge technology, while Sculley would use his marketing expertise to legitimize the company.

Everything went well for Sculley at first. Shortly after arriving at Apple, he brought back co-founder Steve Wozniak, who had been enjoying some time away from Cupertino. Woz began work on getting the mouse to work on the in-development Apple IIc.

Mayday!

May turned out to be a very significant month in Sculley’s history. In May 1985, two years after he arrived in Cupertino, he carried out a major, company-wide reorganization of Apple. This involved stripping Jobs of his role running the Mac division and making him head of “new product development.” The move wound up being the first big step toward Jobs’ 1985 departure from Apple.

A couple of years later, in May 1987, Sculley was named Silicon Valley’s top-paid executive, with his annual salary by this point reaching $2.2 million. Finally, in May 1993, Sculley stepped down as Apple CEO, a decade after taking the position. When he quit as CEO, Apple had $2 billion in cash, and $200 million in debt.

Do you remember Sculley’s reign at Apple? Leave your comments below.