In reaction to cost cutting by competitors. Apple cut prices. Profits declined. Market share also was declining causing major software development firms to be reluctant to write versions of their software to run on Macintosh machines. Many observers faulted Sculley for not having licensed Macintosh software to other computer maker and for not allowing other companies to clone its machines so there would be more Mac-compatible computers in the marketplace. Under pressure from the board of directors Sculley resigned in1993.
He was succeeded by his chief operating officer. Michael Spindler who began licensing clone maker but by now there were only a few takers. Apple introduced a new more powerful line of Power Macs that were far more popular than anticipated. Backorders mushroomed to 1 billion. As the shortage eased Apple's market share began to rise but the company was reporting losses. Spindler was fired in early 1995 and was replace by Gilbert Amelio former chairman and chief executive of National Semiconductor. He refocused Apple on a differentiation strategy and initiated a reorganization. The redesigned a reorganization four new product divisions: Power Macintosh products, imaging (printers, scanners, etc.) , information appliance (low-cost, special- purpose products like New-ton, the electronic personal assistant), and servers and alternate platform products (servers and non-Macintosh based products). Soft-ware was consolidated into a single functional department called Apple-Soft. Other functional departments include AppleNet ( Internet technologies), reliability and quality assurance, segment marketing, worldwide sales, human resources, and legal.