February 9, 1993: NeXT Inc., founded by Steve Jobs after being forced out of Apple, is ending computer production. The company changes its name to NeXT Software and focuses its efforts exclusively on producing code for other platforms.
In mass layoffs, 330 of NeXT’s 500 employees will lose their jobs in an event known internally as “Black Tuesday.” It is cruel that many people hear about their fate on the radio.
The NeXT computer is dead
NeXT displayed typical Jobs chutzpah by describing the transition from hardware to software as less of a failure than the democratization of technologies previously only available to NeXT customers.
“Today we’re releasing” software that “has been locked away in a black box,” gushed an ad for NeXT Software The Wall Street Journal.
However, the wrong direction fooled few.
The reality is that while the company’s two computers (the 1988 NeXT Computer and the smaller 1990 NeXTstation) were good, they didn’t sell as mass-market machines. Due to Jobs’ willingness to pour his personal fortune into the company, NeXT ran a series of back-to-back quarters without turning a profit. In 1992, NeXT lost $40 million.
NeXT shipped only 50,000 computers – total!
Apple began its own decline in the early 1990s, but its sales blew away NeXT. In his whole life as a hardware company, NeXT shipped just 50,000 computers. To put that number in perspective, the seven-year total was roughly equal to the sales Apple achieved in a single week in early 1993.
When NeXT’s founding executives left the company, Jobs looked like a definite prodigy that some unkind publications kept joking about. (Jobs’ other company, Pixar Animation Studios, also operated a failing hardware division at the time. But within a few years, Pixar’s post-Toy Story The IPO made Jobs a billionaire.)
NeXT proves that there is money in software
Photo: Next
However, as reflections go, focusing on creating software rather than building computers turned out to be a great move for NeXT. People weren’t clamoring to buy NeXT software by any means, but the hardware division was the company’s biggest expense.
NeXT’s object-oriented, multitasking, Unix operating system, NeXTStep, proved to be far ahead of what most companies were offering at the time. Although not yet ready for prime time, a reconfigured version of the “OpenStep” operating system was eventually sold by Apple when it purchased NeXT.
This eventually led to Jobs returning to Cupertino and becoming CEO of Apple in 1997. OpenStep then became the basis of Apple’s new Mac OS X Server 1.0 operating system in 1999. And that turned into Mac OS X in 2001.
Have you used any NeXT computers or software in the past? Leave your comments below.
More about Next, Inc.
Watch Steve Jobs’ 1990 presentation introducing NeXTStep 2.0:
Watch the PBS documentary titled Businessmenabout Jobs and NeXt Inc.:
