Jobs' personal falling out with Sculley is well-documented, not least in the Isaacson bio. Now I suspect there were also hard policy disagreements behind Jobs' departure which haven't got enough attention (I think that NeXT is probably very close to what Jobs had wanted to do as an initiative inside Apple, while the more conservative Macintosh II "Big Mac" is what Apple did instead) but the personal drama was quite real.
That's a hard hypothetical question, and the failure of NeXT to sell hardware doesn't give that much insight into the answer. What Apple (near-)ideally needed in the mid-to-late '80s was probably both a high-end Macintosh offering and an in-house NeXT: ideally on the same hardware like the early OS X-compatible Macs, though that was probably not a hard necessity in the early stages. Whether Jobs could have been made to go along with that mixed approach is unclear. However we do know that without Jobs Apple flailed around with Taligent/Pink for so long that it almost destroyed the company while NeXT shipped before 1989. (Why Apple didn't just choose to get serious about A/UX is another mystery.) What really seems to have hurt NeXT, at least as a Macintosh competitor or successor, was lack of support from the important Macintosh ISVs. An in-house Apple NeXT would have had a much better shot at charming or squeezing the ISVs into supporting the platform, though again there are questions such as when or if a never-fired late-'80s or early-'90s Jobs would have gone along with something like Carbon. Similarly the Apple branding and imprimatur would have helped to reassure purchasers who were leery of jumping ship to an independent NeXT. By contrast the high cost of NeXT hardware was probably not a critical problem, at least for the NeXT as a next Macintosh: Macintosh IIs cost about the same as equivalent NeXT systems. And in any case NeXT's cost problems seem to have been partly due to the expense of its own, gold-plated manufacturing operation, something even Jobs would not have replicated at an Apple-internal NeXT. The independent NeXT was also hindered by the legal agreements and legal actions between it and Apple. Finally, it also faced increasing pressure to turn a profit at a time when Apple was highly profitable and would have been able to treat an in-house NeXT as a vital strategic investment in its future.
Apple was very successful in the 80s and was more profitable than MS up until 1993. Teo things almost killed Apple in the mid 90s.
They didn’t focus enough on market share around 1988-1993. They focused on high margins. When Windows 3.1 came along, it was good enough. But even as late as 1992-1993, they were the number one or number geo computer seller.
Next was a high end product. Apple needed to be more mass market.
Apple did fall behind Windows technically from 1995 - 2003. But remarkably enough, they were able to sell enough Macs running pre OS X to become profitable.
