Apple Inc.-History of Apple, 1976-2017

We start with the early days, the tale of how Apple was founded, moving on through the Apple I, to the Apple II, the launch of the Macintosh and the revolution in the DTP industry… To the tech-industry behemoth that we know and love today.

1976–84: Founding and incorporation

Apple was founded on April 1, 1976, by Steve Jobs, Steve Wozniak, and Ronald Wayne and was incorporated January 3, 1977.

The two Steves – Jobs and Wozniak – may have been Apple‘s most visible founders, but were it not for their friend Ronald Wayne there might be no iPhone, iPad or iMac today. Jobs convinced him to take 10% of the company stock and act as an arbiter should he and Woz come to blows, but Wayne backed out 12 days later, selling for just $500 a holding that today would be worth $72bn.

The company was basically founded to sell the Apple I personal computer kit. The Apple I kits were computers single-handedly designed and hand-built by Wozniak and first shown to the public at the Homebrew Computer Club. The Apple I was sold as a motherboard (with CPU, RAM, and basic textual-video chips), which was less than what is now considered a complete personal computer. The Apple I went on sale in July 1976 and was market-priced at $666.66 ($2,806 in 2017 dollars, adjusted for inflation).

How Jobs met Woz?

Jobs met Woz at the Homebrew Computer Club; a gathering of enthusiasts in a garage in California’s Menlo Park. Woz had seen his first MITS Altair there – which today looks like little more than a box of lights and circuit boards – and was inspired by MITS’ build-it-yourself approach (the Altair came as a kit) to make something simpler for the rest of us. You can see this philosophy shining through in Apple’s products today.

Speaking to NPR in 2006, he explained that “When I built this Apple I… the first computer to say a computer should look like a typewriter – it should have a keyboard – and the output device is a TV set, it wasn’t really to show the world here is the direction  should go. It was to really show the people around me, to boast, to be clever, and to get acknowledgment for having designed a very inexpensive computer.”

Jobs saw the computer, recognized its brilliance, and sold his VW microbus to help fund its production.

Selling the Apple I

Apple I at $666.66, and inked a deal with the Byte Shop in Mountain View to supply it with 50 computers at $500 each. Byte Shop was going out on a limb: the Apple I didn’t exist in any great numbers, and the nascent Apple Computer Inc didn’t have the resources to fulfill the order. Neither could it get them. Atari, where Jobs worked, wanted cash for any components it sold him, a bank turned him down for a loan, and although he had an offer of $5,000 from a friend’s father, it wasn’t enough.

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 the US $500 each on delivery.

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 and showed it to Terrell.

Terrell couldn’t even test the board without buying two transformers… Since the Apple didn’t have a keyboard or a television, no data could be funneled in or out of the computer. Once a keyboard had been hooked to the machine it still couldn’t be programmed without somebody laboriously typing in the code for BASIC since Wozniak and Jobs hadn’t provided the language on a cassette tape or in a ROM chip… finally, the computer was naked. It had no case.”

The debut of the Apple II

The Apple II debuted at the West Coast Computer Faire of April 1977, going head to head with big-name rivals like the Commodore PET. It was a truly groundbreaking machine, just like its predecessor, with color graphics and tape-based storage (later upgraded to 5.25in floppies). Memory ran to 64K in the top-end models and the image it sent to the NTSC display stretched to a truly impressive 280 x 192, which was then considered a high resolution. Naturally, there was a payoff, and pushing it to such limits meant you had to content yourself with just six colors, but dropping to a more reasonable 40 rows by 48 columns would let you enjoy as many as 16 tons at a time.

The first app on an Apple computer: Visicalc

Dan Bricklin was a student at Harvard Business School when he visualized “a heads-up display, like in a fighter plane, where I could see the virtual image [of a table of numbers] hanging in the air in front of me. I could just move my mouse/keyboard calculator around on the table, punch in a few numbers, circle them to get a sum, do some calculations…”

Many of the concepts he used are still familiar today – in particular, letters above each column and numbers by the rows to use as references when building formulae. (Wondering how it compares to Numbers today? Here’s our Numbers review.)

Writing in Morgan Stanley’s Electronics Letter, shortly before its launch, analyst Benjamin M Rosen expounded his belief that VisiCalc was “so powerful, convenient, universal, simple to use and reasonably priced that it could well become one of the largest-selling personal computer programs ever… could someday become the software tail that wags (and sells) the personal computer dog.”

How right he was, as Tim Barry revealed in a later InfoWorld piece in which he described an experience that would have been familiar to many:

“When I first used VisiCalc on an Apple II, I wanted to get a version that could take advantage of the larger system capabilities of my CP/M computer. Alas, it was not to be… We ended up buying an Apple II just to run VisiCalc (a fairly common reason for many Apple sales, I’m told).”

Apple itself credited the app with being behind a fifth of all series IIs it sold.

Apple II success: color graphics

So a piece of software worth a little more than $100 was selling a piece of hardware worth ten times as much. That was uncharted territory, but even with the right software, the Apple II wouldn’t have been a success if it hadn’t adhered to the company’s already established high standards.

The February 1984 edition of PC Mag, looking back at the Apple II in the context of what it had taught IBM, put some of its success down to the fact that “its packaging did not make it look like a ham radio operator’s hobby. A low heat-generating switching power supply allowed the computer to be placed in a lightweight plastic case. Its sophisticated packaging differentiated it from … computers that had visible boards and wires connecting various components to the motherboard.”

In short, Apple had designed a computer that embodied what we came to expect of desktop machines through the 1980s, 1990s and the first few years of this century – before Apple turned things on its head again and moved increasingly towards sealed boxes without the option for internal expansion.

Almost six million series IIs were produced over 16 years, giving Apple its second big hit. Really, though, the company was still getting started, and its brightest days were still ahead.

The Lisa versus the Macintosh

It kicked off a race inside Apple between the teams developing the Lisa and the Macintosh.
The official line at the time was that Lisa stood for Local Integrated System Architecture, and the fact it was Jobs’ daughter’s name was purely coincidental. It was a high-end business machine slated to sell at close to $10,000. Convert that to today’s money and it would buy you a mid-range family car. The project was managed by John Couch, formerly of IBM.

Jeff Raskin, meanwhile, was heading up development of the Macintosh, which had smaller businesses and home users firmly in its sights, and each team wanted to be the first to ship an Apple computer with a graphical interface.
Michael Scott was Apple’s president and CEO at the time, having been brought to the post by Mark Markkula (Apple employee number three, and investor to the tune of $250,000). The two men worked out a new corporate structure, which sidelined Jobs with immediate effect, and handed control of the Lisa project back to John Couch. Jobs, also stripped of responsibility for research and development within the company, was little more than a figurehead. That left him on the lookout for a new project.

Perhaps inevitably, he turned to the Macintosh.

However, this enforced switching of sides meant that Jobs – technically – ended up on the losing team. The Lisa launched in 1983, with its graphical user interface in place; the Macintosh debuted the following year. The race had been won by the more expensive machine.

It was a pyrrhic victory, though. The Macintosh, which we’ll be covering in more detail in the next installment of the series, was a success, and Apple’s current computer line-up – iOS devices aside – descends directly from that first consumer machine.

You can’t say the same of the Lisa. It cost four times the price of the Macintosh, and although it had a higher resolution display and could address more memory, it wasn’t nearly as successful. Apple released seven applications for it, covering all of the usual business bases, but third party support was poor.

Nonetheless, Apple didn’t give up. The original Lisa was followed by the Lisa 2, which cost around half the price of its predecessor and used the same 3.5in disks as the Macintosh. Then, in 1985, it rebranded the hard drive-equipped Lisa 2 as the Macintosh XL and stimulated sales with a price cut.

At this point, though, the numbers didn’t add up, and the Lisa had to go. The Macintosh went on to define the company.

By 1984, Apple had proved twice over that it was a force to be reckoned with. It had taken on IBM, the biggest name in business computing, and acquitted itself admirably. The Apple I and II were resounding successes, but while the Apple III and Lisa had been remarkable machines, they hadn’t captured the public imagination to the same degree as their predecessors. Apple needed another hit, both to guarantee its future and to target the lower end of the market, which to date it had largely ignored.

That hit, we all now know, was the Macintosh: the machine that largely guaranteed the company’s future.

Decline and restructuring

The success of Apple’s lower-cost consumer models, especially the LC, also led to cannibalization of their higher priced machines. To address this, management introduced several new brands, selling largely identical machines at different price points aimed at different markets. These were the high-end Quadra, the mid-range Centris line, and the ill-fated Performa series. This led to significant market confusion, as customers did not understand the difference between models.

Throughout this period, Microsoft continued to gain market share with Windows by focusing on delivering software to cheap commodity personal computers, while Apple was delivering a richly engineered but expensive experience. Apple relied on high-profit margins and never developed a clear response; instead, they sued Microsoft for using a GUI similar to the Apple Lisa in Apple Computer, Inc. v. Microsoft Corp.

In 1994, Apple allied with IBM and Motorola in the AIM alliance with the goal of creating a new computing platform (the PowerPC Reference Platform), which would use IBM and Motorola hardware coupled with Apple software. The AIM alliance hoped that PReP’s performance and Apple’s software would leave the PC far behind and thus counter Microsoft. The same year, Apple introduced the Power Macintosh, the first of many Apple computers to use Motorola’s PowerPC processor.

In 1996, Spindler was replaced by Gil Amelio as CEO. Amelio made numerous changes at Apple, including extensive layoffs and cut costs. After numerous failed attempts to improve Mac OS, first with the Taligent project and later with Copland and Gershwin, Amelio chose to purchase NeXT and its NeXTSTEP operating system and bring Steve Jobs back to Apple.

Return to profitability

The NeXT deal was finalized on February 9, 1997, bringing Jobs back to Apple as an advisor. On July 9, 1997, Amelio was ousted by the board of directors after overseeing a three-year record-low stock price and crippling financial losses. Jobs acted as the interim CEO and began restructuring the company’s product line; it was during this period that he identified the design talent of Jonathan Ive, and the pair worked collaboratively to rebuild Apple’s status.
On August 15, 1998, Apple introduced a new all-in-one computer reminiscent of the Macintosh 128K: the iMac. The iMac design team was led by Ive, who would later design the iPod and the iPhone. The iMac featured modern technology and a unique design and sold almost 800,000 units in its first five months.

On May 19, 2001, Apple opened its first official eponymous retail stores in Virginia and California. On October 23 of the same year, Apple debuted the iPod portable digital audio player. The product, which was first sold on November 10, 2001, was phenomenally successful with over 100 million units sold within six years. In 2003, Apple’s iTunes Store was introduced. The service offered online music downloads for $0.99 a song and integration with the iPod.

The iTunes store quickly became the market leader in online music services, with over 5 billion downloads by June 19, 2008.

Apple’s success during this period was evident in its stock price. Between early 2003 and 2006, the price of Apple’s stock increased more than tenfold, from around $6 per share (split-adjusted) to over $80. In January 2006, Apple’s market cap surpassed that of Dell. Nine years prior, Dell’s CEO Michael Dell had said that if he ran Apple he would “shut it down and give the money back to the shareholders. “Although Apple’s market share in computers had grown, it remained far behind competitors using Microsoft Windows, accounting for about 8% of desktops and laptops in the US.

Since 2001, Apple’s design team has progressively abandoned the use of translucent colored plastics first used in the iMac G3. This design change began with the titanium-made PowerBook and was followed by the iBook’s white polycarbonate structure and the flat-panel iMac.

Success with mobile devices

During his keynote speech at the Macworld Expo on January 9, 2007, Jobs announced that Apple Computer, Inc. would thereafter be known as “Apple Inc.”, because the company had shifted its emphasis from computers to consumer electronics. This event also saw the announcement of the iPhone and the Apple TV. The following day, Apple shares hit $97.80, an all-time high at that point. In May, Apple’s share price passed the $100 mark. Apple would achieve widespread success with its iPhone, iPod Touch and iPad products, which introduced innovations in mobile phones, portable music players, and personal computers respectively. Furthermore, by early 2007, 800,000 Final Cut Pro users were registered.

In July 2008, Apple launched the App Store to sell third-party applications for the iPhone and iPod Touch.

On December 16, 2008, Apple announced that 2009 would be the last year the corporation would attend the Macworld Expo, after more than 20 years of attendance, and that senior vice president of Worldwide Product Marketing Philip Schiller would deliver the 2009 keynote address in lieu of the expected Jobs.

On January 6, 2011, the company opened its Mac App Store, a digital software distribution platform similar to the iOS App Store.

On August 24, 2011, Jobs resigned his position as CEO of Apple. He was replaced by Cook and Jobs became Apple’s chairman. Prior to this, Apple did not have a chairman and instead had two co-lead directors, Andrea Jung and Arthur D. Levinson, who continued with those titles until Levinson became Chairman of the Board in November.

Present: Post-Steve Jobs era; Tim Cook leadership

On October 5, 2011, Steve Jobs died, marking the end of an era for Apple. The first major product announcement by Apple following Jobs’s passing occurred on January 19, 2012, when Apple’s Phil Schiller introduced iBooks Textbooks for iOS and iBook Author for Mac OS X in New York City. Jobs had stated in his biography that he wanted to reinvent the textbook industry and education.

From 2011 to 2012, Apple released the iPhone 4S and iPhone 5, which featured improved cameras, an intelligent software assistant named Siri, and cloud-sourced data with iCloud; the third and fourth generation iPads, which featured Retina displays; and the iPad Mini, which featured a 7.9-inch screen in contrast to the iPad’s 9.7-inch screen.

On October 29, 2011, Apple purchased C3 Technologies, a mapping company, for $240 million, making it the third mapping company that Apple has purchased.

Apple Inc. reported that the company sold 51 million iPhones in the Q1 of 2014 (an all-time quarterly record), compared to 47.8 million in the year-ago quarter. Apple also sold 26 million iPads during the quarter, also an all-time quarterly record, compared to 22.9 million in the year-ago quarter. The Company sold 4.8 million Macs, compared to 4.1 million in the year-ago quarter.

In 2016, it was revealed that Apple would be making its first original scripted series, a six-episode drama about the life of Dr. Dre. Music Video director Paul Hunter will direct the series.

On May 12, 2016, Apple Inc., invested US$1 billion in Didi Chuxing, a Chinese competitor to Uber. The Information reported in October 2016 that Apple had taken a board seat in Didi Chuxing, a move that James Vincent of The Verge speculated could be a strategic company decision by Apple to get closer to the automobile industry, particularly Didi Chuxing’s reported interest in self-driving cars.

On June 6, 2016, Forbes released their list of companies ranked on revenue generation. In the trailing fiscal year, Apple appeared on the list as the top tech company. It ranked third, overall, with $233 billion in revenue. This represents a movement upward of two spots from the previous year’s list.

On September 22, 2016, Apple Inc. acquired Tuplejump, an India/US-based machine learning company.
On April 6, 2017, Apple launched Clips, an app that allows iPad and iPhone users to make and edit videos. The app provides a way to produce short videos to share with other users on the Messages app, Instagram, Facebook and other social networks. Apple also introduced Live Titles for Clips that allows users to add live animated captions and titles using their voice.

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