Apple's core product lines are the iPhone smart phone, iPad tablet computer, iPod portable media players, and Macintosh computer line. Founders Steve Jobs and Steve Wozniak created Apple Computer on April 1, 1976, and incorporated the company on January 3, 1977, in Cupertino, California.
Apple Inc., formerly Apple Computer, Inc., is a multinational corporation that creates consumer electronics, personal computers, servers, and computer software, and is a digital distributor of media content. The company also has a chain of retail stores known as Apple Stores. Apple's core product lines are the iPhone smart phone, iPad tablet computer, iPod portable media players, and Macintosh computer line. Founders Steve Jobs and Steve Wozniak created Apple Computer on April 1, 1976,[1] and incorporated the company on January 3, 1977,[2] in Cupertino, California.
For more than three decades, Apple Computer was predominantly a manufacturer of personal computers, including the Apple II, Macintosh, and Power Mac lines, but it faced rocky sales and low market share during the 1990s. Jobs, who had been ousted from the company in 1985, returned to Apple in 1996 after his company NeXT was bought by Apple.[3] The following year he became the company's interim CEO,[4] which later became permanent.[5] Jobs subsequently instilled a new corporate philosophy of recognizable products and simple design, starting with the original iMac in 1998.
With the introduction of the successful iPod music player in 2001 and iTunes Music Store in 2003, Apple established itself as a leader in the consumer electronics and media sales industries, leading it to drop "Computer" from the company's name in 2007. The company is now also known for its iOS range of smart phone, media player, and tablet computer products that began with the iPhone, followed by the iPod Touch and then iPad. As of 30 June 2015, Apple was the largest publicly traded corporation in the world by market capitalization,[6] with an estimated value of US$695 billion as of February 9, 2017.[7] Apple's worldwide annual revenue in 2010 totaled US$65 billion, growing to US$127.8 billion in 2011[8] and $156 billion in 2012.[9]
Garage of Steve Jobs' parents' home in Los Altos, California
Steve Jobs and Steve Wozniak had withdrawn from Reed College and UC Berkeley respectively by 1975. Wozniak designed a video terminal that he could use to log on to the minicomputers at Call Computer. Alex Kamradt commissioned the design and sold a small number of them through his firm. Aside from their interest in up-to-date technology, the impetus for Jobs and Wozniak, also referred to collectively as "the two Steves", seems to have had another source. In his essay From Satori to Silicon Valley (published 1986), cultural historian Theodore Roszak made the point that the Apple Computer emerged from within the West Coast counterculture and the need to produce print-outs, letter labels, and databases. Roszak offers a bit of background on the development of the two Steves' prototype models.
In 1975, Wozniak started attending meetings of the Homebrew Computer Club. New microcomputers such as the Altair 8800 and the IMSAI inspired him to build a microprocessor into his video terminal and have a complete computer.
At the time the only microcomputer CPUs generally available were the $179 Intel 8080 (equivalent to $797 in 2016), and the $170 Motorola 6800 (equivalent to $757 in 2016). Wozniak preferred the 6800, but both were out of his price range. So he watched, and learned, and designed computers on paper, waiting for the day he could afford a CPU.
When MOS Technology released its $20 (equivalent to $84 in 2016) 6502 chip in 1976, Wozniak wrote a version of BASIC for it, then began to design a computer for it to run on. The 6502 was designed by the same people who designed the 6800, as many in Silicon Valley left employers to form their own companies. Wozniak's earlier 6800 paper-computer needed only minor changes to run on the new chip.
Wozniak completed the machine and took it to Homebrew Computer Club meetings to show it off. At the meeting, Wozniak met his old friend Jobs, who was interested in the commercial potential of the small hobby machines.
Steve Wozniak's Apple I design was sold as an assembled circuit board and lacked basic features such as a keyboard, monitor, and case. The owner of this unit added a keyboard and a wooden case.
The very first Apple Computer logo, drawn by Ronald Wayne, depicts Isaac Newton under an apple tree.
Created by Rob Janoff in 1977, the Apple logo with the rainbow scheme was used from April of that year[10] until August 26, 1999. Steve Jobs has asserted the apple logo was inspired by the story of his childhood.
Apple I and company formation[edit]
The two Steves had been friends for some time, having met in 1971, when their mutual friend, Bill Fernandez, introduced then 21-year-old Wozniak to 16-year-old Jobs. They began their partnership when Wozniak, a talented, self-educated electronics engineer, began constructing boxes which enabled one to make long-distance phone calls at no cost, and sold several hundred models.[11] Later, Jobs managed to interest Wozniak in assembling a computer machine and selling it.
Jobs approached a local computer store, The Byte Shop, who said they would be interested in the machine, but only if it came fully assembled. The owner, Paul Terrell, went further, saying he would order 50 of the machines and pay US $500 each on delivery (equivalent to $2,100 in 2016).[12] Jobs then took the purchase order that he had been given from the Byte Shop to Cramer Electronics, a national electronic parts distributor, and ordered the components he needed to assemble the Apple I Computer. The local credit manager asked Jobs how he was going to pay for the parts and he replied, "I have this purchase order from the Byte Shop chain of computer stores for 50 of my computers and the payment terms are COD. If you give me the parts on a net 30-day terms I can build and deliver the computers in that time frame, collect my money from Terrell at the Byte Shop and pay you."[13][14]
The credit manager called Paul Terrell, who was attending an IEEE computer conference at Asilomar in Pacific Grove, and verified the validity of the purchase order. Amazed at the tenacity of Jobs, Terrell assured the credit manager if the computers showed up in his stores, Jobs would be paid and would have more than enough money to pay for the parts order. The two Steves and their small crew spent day and night building and testing the computers, and delivered to Terrell on time to pay his suppliers and have a tidy profit left over for their celebration and next order. Steve Jobs had found a way to finance his soon-to-be multimillion-dollar company without giving away one share of stock or ownership.
The machine had only a few notable features. One was the use of a TV as the display system, whereas many machines had no display at all. This was not like the displays of later machines, however; text was displayed at 60 characters per second. However, this was still faster than the teleprinters used on contemporary machines of that era. The Apple I also included bootstrap code on ROM, which made it easier to start up. Finally, at the insistence of Paul Terrell, Wozniak also designed a cassette interface for loading and saving programs, at the then-rapid pace of 1200 bit/s. Although the machine was fairly simple, it was nevertheless a masterpiece of design, using far fewer parts than anything in its class, and quickly earning Wozniak a reputation as a master designer.
Joined by another friend, Ronald Wayne, the two Steves started building the machines. Using a variety of methods, including borrowing space from friends and family, selling various prized items (like Wozniak's HP scientific calculator and Jobs' VW bus) and scrounging, Jobs managed to secure the parts needed while Wozniak and Wayne assembled them. Building such a machine was going to be financially burdensome, and the owner of the Byte Shop was expecting complete computers, not just printed circuit boards. The boards being a product for the customers, Terrell still paid them.[15] Jobs started looking for cash, but banks were reluctant to lend him money; the idea of a computer for ordinary people seemed absurd at the time. Jobs eventually met Mike Markkula who co-signed a bank loan for $250,000 (equivalent to $1,050,000 in 2016), and Jobs, Wozniak and Wayne formed Apple Computer on April 1, 1976. Wayne was somewhat gun-shy due to a failed venture four years earlier and soon dropped out of the company, leaving the two Steves as the active primary co-founders.[1] The name Apple was chosen because the company to beat in the technology industry at the time was Atari, and Apple Computer came before Atari alphabetically and thus also in the phone book. Another reason was that Jobs had happy memories of working on an Oregon apple farm one summer.[16] Eventually, 200 of the Apple I's were built.
Apple II[edit]
Main article: Apple II series
Wozniak had soon moved on from the Apple I. Many of the design features of the I were due to the limited amount of money they had to construct the prototype, but with the income from the sales Wozniak was able to start construction of a greatly improved machine, the Apple II; the two Steves presented it to the public at the first West Coast Computer Faire on April 16 and 17, 1977. On the first day of the exhibition, Jobs introduced the Apple II to a Japanese chemist named Toshio Mizushima, who became the first authorized Apple dealer in Japan.
The main difference internally was a completely redesigned TV interface, which held the display in memory. Now not only useful for simple text display, the Apple II included graphics and, eventually, color. Jobs meanwhile pressed for a much improved case and keyboard, with the idea that the machine should be complete and ready to run out of the box. This was almost the case for the Apple I machines sold to The Byte Shop, but one still needed to plug various parts together and type in the code to run BASIC.
With both cash and a new case design in hand thanks to designer Jerry Manock, the Apple II was released in 1977 and was one of the three "1977 Trinity" computers generally credited with creating the home computer market (the other two being the Commodore PET and the Tandy Corporation TRS-80).[17] Millions were sold well into the 1980s. A number of different models of the Apple II series were built, including the Apple IIe and Apple IIGS, which continued in public use for nearly two decades thereafter.
Apple III[edit]
Main article: Apple III
Apple III
While the Apple II was already established as a successful business-ready platform because of Visicalc, Apple was not content. The Apple III was designed to take on the business environment. The Apple III was released on May 19, 1980.
The Apple III was a relatively conservative design for computers of the era. However, Steve Jobs did not want the computer to have a fan; rather, he wanted the heat generated by the electronics to be dissipated through the chassis of the machine, forgoing the cooling fan.
However, the physical design of the case was not sufficient to cool the components inside it. By removing the fan from the design, the Apple III was prone to overheating. This caused the integrated circuit chips to disconnect from the motherboard. Customers who contacted Apple customer service were told to "raise the computers six inches in the air, and then let go", which would cause the ICs to fall back into place.
Thousands of Apple III computers were recalled. A new model was introduced in 1983 to try and rectify the problems, but the damage was already done.
Apple IPO[edit]
In the July 1980 issue of Kilobaud Microcomputing, publisher Wayne Green stated that "the best consumer ads I've seen have been those by Apple. They are attention-getting, and they must be prompting sale."[18] In August, the Financial Times reported that
Apple Computer, the fast growing Californian manufacturer of small computers for the consumer, business and educational markets, is planning to go public later this year. [It] is the largest private manufacturer in the U.S. of small computers. Founded about five years ago as a small workshop business, it has become the second largest manufacturer of small computers, after the Radio Shack division of the Tandy company.[19]
On December 12, 1980, Apple launched the Initial Public Offering of its stock to the investing public. When Apple went public, it generated more capital than any IPO since Ford Motor Company in 1956 and instantly created more millionaires (about 300) than any company in history.[20] Several venture capitalists cashed out, reaping billions in long-term capital gains.
In January 1981, Apple held its first shareholders meeting as a public company in the Flint Center, a large auditorium at nearby De Anza College (which is often used for symphony concerts) to handle the larger numbers of shareholders post-IPO. The business of the meeting had been planned so that the voting could be staged in 15 minutes or less. In most cases, voting proxies are collected by mail and counted days or months before a meeting. In this case, after the IPO, many shares were in new hands.
Steve Jobs started his prepared speech, but after being interrupted by voting several times, he dropped his prepared speech and delivered a long, emotionally charged talk about betrayal, lack of respect, and related topics.[citation needed]
The IBM PC[edit]
By August 1981 Apple was among the three largest microcomputer companies, perhaps having replaced Radio Shack as the leader.[21] IBM entered the personal computer market that month with the IBM PC,[22] but Apple had many advantages. While IBM began with one microcomputer, little available hardware or software, and a couple of hundred dealers, Apple had five times as many dealers in the US and an established international distribution network. The Apple II had an installed base of more than 250,000 customers, and hundreds of independent developers offered software and peripherals; at least ten databases and ten word processors were available, while the PC had no databases and one word processor.[23] The company's customers gained a reputation for devotion and loyalty. BYTE in 1984 stated that[24]
There are two kinds of people in the world: people who say Apple isn't just a company, it's a cause; and people who say Apple isn't a cause, it's just a company. Both groups are right. Nature has suspended the principle of noncontradiction where Apple is concerned.
Apple is more than just a company because its founding has some of the qualities of myth ... Apple is two guys in a garage undertaking the mission of bringing computing power, once reserved for big corporations, to ordinary individuals with ordinary budgets. The company's growth from two guys to a billion-dollar corporation exemplifies the American Dream. Even as a large corporation, Apple plays David to IBM's Goliath, and thus has the sympathetic role in that myth.
The magazine noted, however, that the loyalty was not entirely positive for Apple; customers were willing to overlook real flaws in its products, even while comparing the company to a higher standard than for competitors.[24] The Apple III was an example of the company's reputation among dealers that one described as "Apple arrogance".[25][26] After examining a PC and finding it unimpressive, Apple confidently purchased a full-page advertisement in The Wall Street Journal with the headline "Welcome, IBM. Seriously". Microsoft head Bill Gates was at Apple headquarters the day of IBM's announcement and later said "They didn't seem to care. It took them a full year to realize what had happened".[22] By 1983 the PC surpassed the Apple II as the best-selling personal computer.[27] By 1984 IBM had $4 billion in annual PC revenue, more than twice that of Apple and as much as the sales of it and the next three companies combined.[28] Most Apple II sales had been to companies,[29] but a Fortune survey found that 56% of American companies with personal computers used IBM PCs, compared to 16% for Apple.[30] Small businesses, schools, and some homes became the II's primary market.[29]
Xerox PARC and the Lisa[edit]
Main article: Apple Lisa
Apple Lisa
Apple Computer’s business division was focused on the Apple III, another iteration of the text-based computer. Simultaneously the Lisa group worked on a new machine that would feature a completely different interface and introduce the words mouse, icon, and desktop into the lexicon of the computing public. In return for the right to buy US$1,000,000 of pre-IPO stock, Xerox granted Apple Computer three days access to the PARC facilities. After visiting PARC, they came away with new ideas that would complete the foundation for Apple Computer's first GUI computer, the Apple Lisa.[31][32][33][34]
The first iteration of Apple's WIMP interface was a floppy disk where files could be spatially moved around. After months of usability testing, Apple designed the Lisa interface of windows and icons.
The Lisa was introduced in 1983 at a cost of US $9,995 (equivalent to $24,000 in 2016). Because of the high price, Lisa failed to penetrate the business market.
Macintosh and the "1984" commercial[edit]
Main article: Macintosh
The Macintosh 128k was announced to the press in October 1983, followed by an 18-page brochure included with various magazines in December.[35] Its debut, however, was announced by a single national broadcast of the now famous US$1.5 million television commercial, "1984" (equivalent to $3,500,000 in 2016). It was directed by Ridley Scott, aired during the third quarter of Super Bowl XVIII on January 22, 1984,[36] and is now considered a "watershed event"[37] and a "masterpiece."[38] 1984 used an unnamed heroine to represent the coming of the Macintosh (indicated by her white tank top with a Picasso-style picture of Apple’s Macintosh computer on it) as a means of saving humanity from "conformity" (Big Brother).[39] These images were an allusion to George Orwell's noted novel, Nineteen Eighty-Four, which described a dystopian future ruled by a televised "Big Brother."
For a special post-election edition of Newsweek in November 1984, Apple spent more than US$2.5 million to buy all 39 of the advertising pages in the issue.[40] Apple also ran a “Test Drive a Macintosh” promotion, in which potential buyers with a credit card could take home a Macintosh for 24 hours and return it to a dealer afterwards. While 200,000 people participated, dealers disliked the promotion, the supply of computers was insufficient for demand, and many were returned in such a bad shape that they could no longer be sold. This marketing campaign caused CEO John Sculley to raise the price from US$1,995 (equivalent to $4,600 in 2016) to US$2,495 (equivalent to $5,800 in 2016).[41]
Two days after the 1984 ad aired, the Macintosh went on sale. It came bundled with two applications designed to show off its interface: MacWrite and MacPaint. Although the Mac garnered an immediate, enthusiastic following, it was too radical for some, who labeled it a mere "toy". Because the machine was entirely designed around the GUI, existing text-mode and command-driven applications had to be redesigned and the programming code rewritten; this was a challenging undertaking that many software developers shied away from, and resulted in an initial lack of software for the new system. In April 1984 Microsoft's MultiPlan migrated over from MS-DOS, followed by Microsoft Word in January 1985.[42] In 1985, Lotus Software introduced Lotus Jazz after the success of Lotus 1-2-3 for the IBM PC, although it was largely a flop.[43] Apple introduced Macintosh Office the same year with the lemmings ad, infamous for insulting potential customers. It was not successful.[41]
Macintosh also spawned the concept of Mac evangelism which was pioneered by Apple employee, and later Apple Fellow, Guy Kawasaki.[citation needed]
Despite initial marketing difficulties, the Macintosh brand was eventually a success for Apple. This was due to its introduction of desktop publishing (and later computer animation) through Apple's partnership with Adobe Systems which introduced the laser printer and Adobe PageMaker. Indeed, the Macintosh would become known as the de facto platform for many industries including cinema, music, advertising, publishing and the arts.
1985: Jobs leaves Apple[edit]
Sculley and Jobs' visions for the company greatly differed. The former favored open architecture computers like the Apple II, sold to education, small business, and home markets less vulnerable to IBM. Jobs wanted the company to focus on the closed architecture Macintosh as a business alternative to the IBM PC. President and CEO Sculley had little control over Chairman of the Board Jobs' Macintosh division; it and the Apple II division operated like separate companies, duplicating services.[44] Although its products provided 85% of Apple's sales in early 1985, the company's January 1985 annual meeting did not mention the Apple II division or employees. Many left, including Wozniak, who stated that the company had "been going in the wrong direction for the last five years" and sold most of his stock.[45]
The Macintosh's failure to defeat the PC strengthened Sculley's position in the company. In June 1985, the board of directors sided with Sculley and Jobs was stripped of all duties. Jobs, while taking the position of Chairman of the firm, had no influence over Apple's direction and subsequently resigned. Sculley reorganized the company, unifying sales and marketing in one division and product operations and development in another.[46][44] In a show of defiance at being set aside by Apple Computer, Jobs sold all but one of his 6.5 million shares in the company for $70 million. Jobs then acquired the visual effects house, Pixar for $5M (equivalent to $10,900,000 in 2016). He also went on to found NeXT Inc., a computer company that built machines with futuristic designs and ran the UNIX-derived NeXTstep operating system. NeXTSTEP would eventually be developed into Mac OS X. While not a commercial success, due in part to its high price, the NeXT computer would introduce important concepts to the history of the personal computer (including serving as the initial platform for Tim Berners-Lee as he was developing the World Wide Web).[47]
1985–1997: Sculley, Spindler, Amelio[edit]
Macintosh SE
Corporate performance[edit]
See also: List of mergers and acquisitions by Apple
Under leadership of John Sculley, Apple issued its first corporate stock dividend on May 11, 1987. A month later on June 16, Apple stock split for the first time in a 2:1 split. Apple kept a quarterly dividend with about 0.3% yield until November 21, 1995.[citation needed] Between March 1988 and January 1989, Apple undertook five acquisitions, including software companies Network Innovations,[48] Styleware,[49] Nashoba Systems,[50] and Coral Software,[51] as well as satellite communications company Orion Network Systems.[52]
Apple continued to sell both lines of its computers, the Apple II and the Macintosh. A few months after introducing the Mac, Apple released a compact version of the Apple II called the Apple IIc. And in 1986 Apple introduced the Apple IIgs, an Apple II positioned as something of a hybrid product with a mouse-driven, Mac-like operating environment. Even with the release of the first Macintosh, Apple II computers remained the main source of income for Apple for years.[53]
The Mac family[edit]
See also: Timeline of Macintosh models
At the same time, the Mac was becoming a product family of its own. The original model evolved into the Mac Plus in 1986 and spawned the Mac SE and the Mac II in 1987 and the Mac Classic and Mac LC in 1990. Meanwhile, Apple attempted its first portable Macs: the failed Macintosh Portable in 1989 and then the more popular PowerBook in 1991, a landmark product that established the modern form and ergonomic layout of the laptop. Popular products and increasing revenues made this a good time for Apple. MacAddict magazine has called 1989 to 1991 the "first golden age" of the Macintosh.
On February 19, 1987, Apple registered the "Apple.com" domain name, making it one of the first hundred companies to register a .com address on the nascent Internet.[54]
Early-mid-1990s[edit]
In the late 1980s, Apple's fiercest technological rivals were the Amiga and Atari ST platforms. But computers based on the IBM PC were far more popular than all three, and by the 1990s, they finally had a comparable GUI thanks to Windows 3.0, and were out-competing Apple.
Apple's response to the PC threat was a profusion of new Macintosh lines such as Quadra, Centris, and Performa. However, these new lines were marketed poorly by what was now "arguably one of the worst-managed companies in the industry".[55] For one, there were too many models, differentiated by very minor graduations in their tech specs. The excess of arbitrary model numbers confused many consumers and hurt Apple's reputation for simplicity. Apple's retail resellers like Sears and CompUSA often failed to sell or even competently display these Macs. Compounding matters was the fact that, although the machines were cheaper than a comparable PC (when taken into account all the components built-in which had to be added to the 'bare bones PC'), the poor marketing gave the impression that the machines were more expensive.[citation needed] Inventory grew as Apple consistently underestimated demand for popular models and overestimated demand for others.[55]
In 1991, Apple partnered with long-time competitor IBM and Motorola to form the AIM alliance. The ultimate goal was to create a revolutionary new computing platform, known as PReP, which would use IBM and Motorola hardware and Apple software. As the first step toward the PReP platform, Apple started the Power Macintosh line in 1994, using PowerPC processors from Motorola and IBM. These processors used a RISC architecture, which differed substantially from the Motorola 680X0 series that were used by all previous Macs. Parts of Apple's operating system software were rewritten so that most software written for older Macs could run in emulation on the PowerPC series.[citation needed] Apple also refused IBM's offer to purchase the company, but later unsuccessfully sought another offer from IBM,[56] and at one point was "hours away" from an acquisition by Sun Microsystems.[55][57]
In addition to computers, Apple has also produced consumer devices. In 1993, Apple released the Newton, an early personal digital assistant (PDA). It defined and launched the PDA category and was a forerunner and inspiration of devices such as Palm Pilot and Pocket PC.[citation needed]
In 1994 Apple launched eWorld, an online service providing email, news and a bulletin board system to replace AppleLink. It was shut down in 1996.
During 1995, a decision was made to (officially) start licensing the Mac OS and Macintosh ROMs to 3rd party manufacturers who started producing Macintosh “clones”. This was done in order to achieve deeper market penetration and extra revenue for the company. This decision lead to Apple having over a 10% market share until 1997 when Steve Jobs was re-hired as interim CEO to replace Gil Amelio. Jobs promptly found a loophole in the licensing contracts Apple had with the clone manufacturers and terminated the Macintosh OS licensing program, ending the Macintosh clone era. The result of this action was that Macintosh computer market share quickly fell from 10% to around 3%.
In 1996, the struggling NeXT company beat out Be Inc.'s BeOS in its bid to sell its operating system to Apple. Apple purchased Steve Jobs' company, NeXT on December 10, 1996, and its NeXTstep operating system. This would not only bring Steve Jobs back to Apple's management, but NeXT technology would become the foundation of the Mac OS X operating system.