Apple returned from a $1B loss after Jobs cut the product line and bet on the iMac.

By 1997 Apple was near collapse: fiscal 1997 net sales fell 28% to $7.08 billion and the company lost $1,045 million, a year after an $816 million loss. The board's 1996 decision to buy NeXT brought Steve Jobs back, and in 1997 he became interim CEO.

Jobs moved by subtraction. He canceled roughly 70% of Apple's product line, cut headcount and inventory, and in August 1997 accepted a $150 million investment and patent cross-license from Microsoft, which also committed to keep developing Office for the Mac.

The company then bet on one product: the iMac, launched in August 1998. Apple returned to profitability in fiscal 1998 with $309 million of net income on $5.94 billion of sales, and the iMac became Apple's fastest-selling computer at the time.

Within three years Apple had rebuilt its product line around the iMac, iBook and Mac OS X strategy, and the 1997 decisions set the template for everything that followed.

Apple swung from a $1,045M loss in FY1997 to $309M net income in FY1998, and the iMac became a hit that re-established the brand.

The NeXT acquisition gave Apple a credible product leader and a modern operating system.

Cutting 70% of products concentrated engineering and cash on a single hit.

The Microsoft deal ended the platform war and reassured developers and customers.

The iMac gave customers one emotional product to rally around.

When a company is bleeding, the decisive move is subtraction: cut the product line to what matters, then rebuild around one focus product — and accept help even from a rival.

Apple followed with the iBook, Mac OS X, retail stores and the iPod (2001), compounding the recovery through the dot-com bust. Jobs' 1997–2001 sequence — subtract, refocus, one hero product — became the standard playbook for the company's later revivals.