Apple

When Bill Fernandez, a young computer enthusiast, introduced his friend Steve Jobs to Steve Wozniak in 1971, few would have predicted that the two would become the creators of one of the most innovative technology companies of the 20th and indeed the 21st century.

After their first meeting, Jobs quickly became fascinated with Wozniak, realising he was the only person he’d met that knew more about electronics than he did. He understood the marketable value of his new friend’s skills.

The pair’s first commercial venture was selling ‘Blue Boxes’: electronic devices which could make free phone calls by imitating dial tone signals made by the phone company. They sold the boxes door-to-door in dorm rooms at Berkeley College, splitting the profits.

Successful as this venture was, Wozniak, who was at this point working for Hewlett Packard, had always wanted to build his own computer, and by 1976 he’d completed the design for his first machine. This processor cost just $20, which compared well to the $179 for Intel chip.

Wozniak showed his computer at the hobbyist group ‘Homebrew Computer Club’, at which point Jobs realised the pair could capitalise off it.

The computer, which ran an early programming language and had no screen, would eventually retail at around $650. Jobs persuaded his friend to pitch the idea to his boss at Hewlett Packard, who declined it. The pair then decided to go it alone.

To fund this plan they would each need to part with a treasured possession: for Jobs it was a red and white Volkswagen Van for $1,500 and for Wozniak it was a HP65 programmable calculator for $250.

The company name came shortly after this, when Jobs returned from a road trip announcing that ’Apple Computer’ had mysteriously popped into his head.

Jobs began to peddle the ‘Apple Computer’ at the Homebrew Computer Club meetings, and got his first order for 50 computers at $500 each – cash on delivery. The only hitch was that they had to arrive fully assembled – cases and all.

However, Jobs’ unflappable nature shone through; he obtained a loan of $5,000 and persuaded suppliers to extend $15,000 worth of parts for 30 days. Apple made its first delivery.

This made a profit of $8,000 and eventually attracted the attention of a business angel, Mark Markkula, who would invest $92,000 in the company. The early profit also helped them secure a line of credit from the Bank of America for $250,000.

During the early years of the company, Jobs was very much driven by money, while Wozniak was more fascinated with the technology they were dealing in. Just a month after the first model had gone on sale, Wozniak had completed the prototype for his second machine.

The catch with the new model – Apple II – was that it cost hundreds of dollars to produce. Fortunately for the young business, Markkula stepped in again with funding.

Product development for the Apple II was rapid: Jobs insisted on a sleek design for the computer, which resulted in a professionally designed case which he said would be more attractive to customers. He also engaged the services of Rob Janoff, who designed the now familiar logo. The business CEO at the time, Michael M. Scott, called the image the “most expensive bloody logo ever designed”.

The computer went on sale in March 1977 for around $1,300 and was an overnight hit. An ad campaign at the time promoted it as a machine for “all the family” allowing users to balance the books, play games and even learn arithmetic.

In 1978, a year after the computer launched, Apple released two products that catapulted the young business into the big leagues. The first was the Disk II drive, which allowed users to store more data than any other microcomputer, and the second was a piece of software called VisiCalc.

VisiCalc was the first software to introduce home users to an electronic spreadsheet. The Apple II saw a huge boost in sales when consumers started buying the hardware just so they could use VisiCalc.

1979 saw the beginning of three major projects, two of which would see Apple itself come close to failure. The company announced the Apple III – a machine which was supposed to mark Apple’s foray into new technologies, but ultimately left their reputation in tatters. This was also the year Jobs came across an early mouse-driven computer with a point-and-click operating system. He was hugely excited by the

concept and demanded his team – which was developing Lisa, Apple’s second technological failure – concentrate on developing a similar interface.

The third project on the cards was called the Macintosh or the “Mac”. Having been booted off the Lisa and Apple III projects by the board as a result of his “interfering” nature, Jobs took control of the Mac project (much to the annoyance of the person in charge at the time, Jef Raskin) and it took on an air of anarchy. The team working on the project were taken out of Apple’s main office and moved to ‘Texas Towers’, where a pirate flag was hoisted over the building.

As the launch date for the Mac approached, engineers were forced to work longer and longer hours. Eventually the workers had t-shirts printed saying: ‘90 hours a week and Loving It’.

In November of 1983, American Super Bowl viewers were given their first glimpse of the hype which would surround the Apple Mac for years to come. A melancholy on- screen voice told viewers “why 1984 won’t be like 1984”, and a generation of consumers’ computing habits were determined.

The Mac launched successfully in 1984, and inspired loyalty and admiration bordering on the obsessive among its fans, who loved how easy it was to use. The personal computing world was growing very rapidly. However, although sales of the Mac rose steadily, the internal workings of the business were not going as smoothly.

After the company’s initial public offering (IPO), back in 1980, rifts had begun to appear between its co-founders. While Jobs was content to see some of Apple’s most influential employees fall by the wayside, Wozniak believed they should be rewarded for their work. As a result, he gave many of his shares away to those who were deserving of them, telling friends he already had enough money.

By 1981, after the failure of the Apple III project, the business was forced to lay off 40 of its employees. Wozniak at this point decided that corporate politics were not for him and went on to start work on other projects, ultimately turning to teaching.

After Wozniak left in 1985, the board became tired of Jobs’ arrogant leadership style and erratic behaviour and forced him to resign. Jobs was heartbroken.

In the years after Jobs’ resignation, Apple was in trouble. In 1995, Microsoft (their biggest competitor) launched Windows 95, which went on to sell three million copies in its first five weeks – compared to the 4.5 million Macs Apple sold that entire year.

Apple’s market share fell steadily; in 1996 the business lost $740 million and the new chairman, Gil Amelio, was embarrassed into resigning. It was clear something needed to be done or Apple would be in serious trouble.

Later in 1996 the decision was made to put Steve Jobs back in the driving seat – initially as interim CEO. In the intervening years Jobs had calmed down, retaining all his passion for the business but now without the volatility.

Most notably, Jobs completed an overhaul of the design of the Mac. He wanted it to be more pleasing on the eye. The result of this work was a simple, brightly coloured, elegant and friendly Mac. These computers were a revolution.

Many people who had been staunch supporters of Microsoft were converted to the Mac. This proved the impetus for a new wave of products, which were as cool to look at as they were to use. This in turn boosted Apple’s market share and its profits dramatically, turning around the fortunes of the company.

The next stage of Apple’s evolution was the launch of the iPod. This literally revolutionised the music industry; you could now listen to your own music from electronic files on a small, attractive device rather than a CD or a tape. Sales of the iPod exploded when Apple launched iTunes in 2003; this website allowed the purchase of songs one at a time, instead of needing to buy a full album. By 2008, Apple announced that over 5 billion songs had been purchased and downloaded from iTunes. Jobs had done it again: he was the business saviour, with sales and profits rising once more.

The company went on to shake up the mobile phone industry with the launch of the iPhone in June 2007 and the App Store in 2008 – both of which had a revolutionary effect. The touch-screen interface transformed the way people accessed the internet, changing mobile web browsing from a slow and often frustrating endeavour into a user-friendly and enjoyable experience.

Hot on the heels of the iPhone came the iPad – a mobile ‘tablet’ computer using the same touch-screen technology as its predecessor. Both devices have been truly game-changing, revolutionising both style and functionality.

Steve Jobs died of cancer on 5th October 2011, having transformed Apple into the world’s most valuable company with one of the most iconic brands of all time.

The news of Jobs’ death prompted tributes from all over the world, including from Barrack Obama, who said:

“The world has lost a visionary and there may be no greater tribute to Steve’s success than the fact that much of the world learned of his passing on a device he invented.”

Steve Jobs is widely regarded as one of the greatest entrepreneurs and visionaries of our generation, and his legacy and innovations will undoubtedly live on for many years to come.

Compare the story of Apple to that of Nokia. Nokia began in Finland in 1865 as a paper mill. By the early 2000s they had the vast majority of the mobile phone worldwide market. They were ahead of the competition and they reaped the rewards… for a while. Within the space of a few years that market share was down to single figures and today Nokia barely registers in the mobile phone market. Did they get lazy and rest on their laurels, or were they just blind to the changes around them? One thing is certain: if you don’t innovate and move with the times, you’ll be left behind.