Apple's Top 5 Blunders

NEW YORK ( TheStreet) -- Apple's ( AAPL) sudden change of heart on application developer restrictions last week was a rare humbling moment for tech's top agenda setter.

The move was most accurately seen as a reversal of Steve Jobs' 'Thoughts on Flash' letter written in April. It was a bold, principled stand that went against the majority of the tech community that uses Flash. It also probably rubbed Federal trade regulators -- who have certain obligations to monitor anti-competitive business practices -- the wrong way.
Steve Jobs

Apple's 180-degree turn probably thwarted a big Adobe ( ADBE) Flash-supporter uprising and possibly spared the company a legal headache. But this Flash tantrum is a reminder of other times in Apple's past when the company's bold moves weren't necessarily the best moves.

Here are the five top blunders in Apple's grand history.

No. 5: the Newton MessagePad

A tablet that was way ahead of its time.

The 7.5 inch touch-screen tablet offered infrared wireless connections at distances as far as three feet away. Users could write notes or draw pictures with a stylus and even fax documents.

But the price tag for all that tech may have been a tad large. The Newton sold for $700 in 1992; that's more than $1,000 in today's money. And it was just a PDA.

Apple pulled the plug on Newton after three years of weak sales.

No. 4: Apple TV

Apple's would-be technology bridge has twice failed to span the divide between the computer and the TV. So why not try it a third time? This month, Apple did just that.

After saying earlier this summer that the solution was to "tear up the set-top box," Steve Jobs introduced Apple TV 3 -- a set-top box.

While this is Apple's third try at building the right TV device, we have not seen the last of it. Apple is expected to introduce as early as next year an all-in-one HDTV, Internet video console that has the set-top box built in.

Stay tuned.

No. 3: Antennagate

The so-called death grip on the new iPhone killed signal reception. But did Apple step up? No.

To spin masters and public relations champions, the episode was probably seen as one of the finest displays of corporate Teflon ever. But to the rest of the world, Apple's refusal to take responsibility for the iPhone antenna flaw is a rare scuff on the Apple shine.

No. 2: Steve Jobs' Health Scare Cover-Up

As an unusually singular source of vision and hands-on manager of the business, Steve Jobs' health and well being are particularly key to Apple's prospects. So when a leader like Jobs becomes gravely ill, it's probably well within the shareholders' rights to know his status.

It turned out that complications from a pancreatic cancer treatment left Jobs emaciated and forced him to undergo a liver transplant. But for nearly a year, from Jobs' last gaunt-looking public appearance in June 2008 to his return from medical leave in June 2009, Apple deflected reports that Jobs was seriously ill and deceived reporters in the interest of protecting Jobs' privacy.

Certainly Jobs is a very private man who no doubt insisted on limiting all public disclosures. But Jobs' solid judgment on product design doesn't carry over to disclosure policy. Ultimately, the board of directors has to balance privacy with shareholder interests.

The board failed to let investors decide for themselves. But fortunately, Steve Jobs regained his health.

No. 1: Firing Steve Jobs

It was easily Apple's greatest blunder, but it cleared the way for one of tech's best second acts.

In 1985, Apple CEO John Scully asked the board to fire the company's co-founder Steve Jobs. At the time, the Mac's huge lead in personal computers had waned and Jobs and Scully were at odds over strategy.

Apple continued to sour after Jobs left and Scully's magic proved powerless. In 1997, Jobs was brought back to lead Apple. But the new Apple was far from an overnight success. For seven years, the company had an unremarkable stretch and the stock remained stuck in a $10 range. It really wasn't until 2004 that Jobs' influence seemed to gel for Apple.

The stock, now at $267, is up more than 60 times its $4 level when Jobs returned to Apple. Not bad. Will there be a third act?

--Written by Scott Moritz in New York.

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