From Jony Ive, by Leander Kahney, pg 101-102:
Much was about to change in how Apple was run, beginning with the product lineup. When Jobs returned to Apple in 1997, the company had forty products on the market. To appreciate the baffling nature of Apple’s kitchen- sink strategy at the time, consider the company’s computer lineup. There were four main lines: the Quadra, the Power Mac, the Performa and the PowerBook. Each was split into a dozen different models, which were delineated from one another with confusing product names straight out of a Sony catalogue (for example, the Performa 5200CD, Performa 5210CD, Performa 5215CD and Performa 5220CD). And that was just computers. Apple had branched out into a wide- ranging product portfolio, selling everything from printers, scanners and monitors to Newton handhelds. To Jobs, this made no sense. ‘What I found when I got here was a zillion and one products,’ Jobs later said. ‘It was amazing. And I started to ask people, now why would I recommend a 3400 over a 4400? When should somebody jump up to a 6500, but not a 7300? And after three weeks, I couldn’t figure this out. If I couldn’t figure this out … how could our customers figure this out?’The product line was so complicated that Apple had to print elaborate flowcharts to explain to customers (and as a cheat sheet for employees) what the differences between Apple’s products were.
After several weeks, during a big strategy meeting, Jobs had had enough. ‘Stop!’ he screamed, ‘This is crazy.’ He jumped up and went to the whiteboard. He drew a simple chart of Apple’s annual revenues. The chart showed the sharp decline, from $12 billion a year to $10 billion, and then $7 billion. Jobs explained that Apple couldn’t be a profitable $12 billion company, or a profitable $10 billion company, but it could be a profitable $6 billion company. That meant radically simplifying Apple’s product pipeline. How? Jobs erased the whiteboard and drew a very simple two- by- two grid in its place. Across the top he wrote ‘Consumer’ and ‘Professional’, and down the side, ‘Portable’ and ‘Desktop’. Welcome to Apple’s new product strategy, he said. Apple would sell only four machines. Two would be notebooks, the other two desktops. Two machines aimed at pros, two machines aimed at consumers.
And the corollary to this high minded minimalism:
Over the next eighteen months, more than 4,200 full- time staff were laid off. By 1998, Apple had shrunk to only 6,658 employees, half the 13,191 the company had in 1995. 3 But the balance sheet was brought back into control.