With their founding of Apple Computer in 1976, Steven Jobs and Stephen Wozniak established a company that would revolutionize personal computing.
Apple Computer was officially founded on April 1, 1976, by twenty-one-year-old Steven Jobs and twenty-six-year-old Stephen Wozniak. Their initial idea was that they would assemble computers for their friends. They did not realize the potential their ideas had to revolutionize the personal computer industry. Ultimately, Jobs and Wozniak’s goal became making computer technology widely accessible to the mass population. These entrepreneurs recognized that most consumers at that time saw computers as too expensive and too complex to use. Jobs envisioned the firm offering products that would contribute to human efficiency as much as had the electric typewriter, the calculator, and the photocopy machine.
Jobs and Wozniak, both graduates of Homestead High School in Santa Clara, California, began collaborating in 1976 at the Homebrew Computer Club,
Their first model, the Apple I, was introduced and sold without a monitor, keyboard, or casing, at a price of $666. It was the first single-board computer with onboard read-only memory (ROM), which told the machine how to load other programs from an external source, and with a built-in video interface. Orders for their “personal computer,” mainly from hobbyists, soon reached six hundred units.
Jobs and Wozniak now faced the problem of improving the original model without sacrificing its key selling features, its simplicity and compactness. Their efforts resulted in the introduction in 1977 of the Apple II, the first fully assembled, programmable microcomputer that did not require users to know how to solder, wire, or program. The Apple II had a keyboard, a color monitor, and expansion capabilities for peripheral devices. These features gave the new model considerable flexibility and inspired numerous independent firms to develop third-party add-on devices and software programs. The resulting software library soon included more than ten thousand programs ranging from games to sophisticated business applications.
Demand soon outstripped the founders’ ability to produce the machine. They turned to Mike Markkula, who had been a marketing manager at Intel Corporation, a fast-growing manufacturer of integrated circuits. Markkula contributed at least $91,000 to the company (by some estimates, as much as $250,000), secured a line of credit with Bank of America, and raised more than $500,000 from venture capitalists; he was named chairman of the company in May, 1977. One month later, Michael Scott was placed in the position of president of the firm.
Markkula wrote Apple’s first business plan. Its objectives included capturing a market share at least twice that of the nearest competitor, realizing at least 20 percent pretax profit, and growing to $500 million in annual sales within ten years by continuing to make significant contributions to the home computer industry. In addition, the plan called for the establishment and maintenance of a corporate culture that would be conducive to personal growth and development for the firm’s employees. The plan also called for an “easy exit” for its founders within five years, should they wish to disassociate themselves from the enterprise.
The firm’s strategy called for continual marketing of peripheral products for the basic computer so as to generate sales equal to or greater than the initial computer purchase, the allocation of funds for research and development to guarantee technological leadership, and the ability to attract and retain outstanding personnel. The plan called for initially targeting the hobbyist market as a stepping-stone to wider distribution. The company also sought to refine manufacturing processes to reduce costs. Apple computers were to be designed and marketed as more economical than a dedicated system in specific applications, even though a particular user might not use all the features of the computer.
By 1980, with the help of Regis McKenna,
The Apple II Plus model did not fare as well as its predecessors. The Apple III, aimed at the professional market, was hampered by production problems that resulted in a recall of some units. These problems and the attention required to solve them offered International Business Machines (IBM)
The problems with the Apple II Plus and Apple III models were at least partially responsible for the firm’s first major managerial shake-up. Apple president Scott fired forty employees and was then himself dismissed by Markkula, who became president. Jobs assumed Markkula’s former position as chairman. Meanwhile, Wozniak was injured in 1981 and took a leave of absence from the firm. After his recovery, he founded an organization dedicated to fostering a spirit of cooperation among people. He expressed an interest in returning to Apple in a troubleshooting capacity, with a mission to restore the spirit that led Apple to its early successes.
In January, 1983, Jobs announced the introduction of the Apple IIe, a successor to the Apple II Plus. He simultaneously announced the introduction of Lisa, the first of a generation of computers aimed at the business market. Lisa
As Apple Computer evolved, its approach to management changed dramatically. Realizing that selling computers had become an increasingly complex marketing problem, Jobs sought help. Computers no longer would sell themselves on the basis of their technological innovations. In April, 1983, perceiving that marketing expertise was lacking within the firm, Jobs recruited John Sculley from PepsiCo. The move was controversial, given that Sculley had developed his reputation selling soft drinks in a mature market, an environment very unlike the growth industry of personal computers. Some foresaw a conflict of corporate cultures between the freewheeling style of Silicon Valley and the more traditional style that Sculley embodied. Although an outsider, Sculley brought marketing skills to Apple that had been missing.
In 1984, Apple introduced the Macintosh.
In 1985, after a series of tumultuous conflicts with Sculley and Apple’s board of directors, Jobs resigned his position, closing the chapter on Apple’s origin and founders. Jobs later formed his own firm, Next, Inc., dedicated to providing sophisticated workstations for the education market.
Apple’s unique approach to personal computing altered the manner in which computer manufacturers competed. Apple pioneered the concept of integrating hardware and software to offer new possibilities. For example, integration of high-resolution displays with scalable fonts (alphanumeric characters that can be printed in a variety of sizes) and graphics capabilities allowed people to create sophisticated documents on their personal computers. Through the integration of a microphone and a CD-ROM drive with specialized software, users could now work with sound, video, and animation. Most other computer manufacturers could not integrate hardware and software as expediently because they did not manage the software development for their systems. Most, instead, licensed the same system software (MS-DOS)
By 1986, with the introduction of the Mac Plus and the LaserWriter printer, Apple began to make significant inroads into the business market. The company also embarked on a program to reduce both costs and prices, allowing it to sell aggressively to large businesses, a historically weak market for Apple. Combining traditional computer applications such as word processing and spreadsheets with pioneering concepts such as desktop publishing, three-dimensional computer-assisted design, and interactive multimedia tools (with text, animation, and sound) carried the Apple tradition for innovation forward.
In a surprising change in direction, given the maverick style of the firm’s beginnings, strategic partnerships became increasingly important for Apple. The company collaborated with Sony in introducing the Macintosh Powerbook notebook computer, and in 1991, in a move that shocked the computer industry, Apple and rival IBM announced a joint venture to develop new software, operating systems, and hardware that would allow easier integration of the products of the two firms.
Apple Computer rose from its modest origins in a garage to become the second-largest manufacturer of personal computers, behind IBM. The company’s Macintosh line became widely known for its user-friendliness and superior graphics capabilities. As a result of planning and the vision of Jobs and Wozniak in Apple’s early years, personal computing became accessible to the general population. Apple successfully changed how general users view personal computing, and some of the company’s significant product features were soon mimicked by competing firms. Through its continual emphasis on product innovations, Apple redefined how people process and transmit information.
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Levering, Robert, Michael Katz, and Milton Moskowitz. The Computer Entrepreneurs: Who’s Making It Big and How in America’s Upstart Industry. New York: New American Library, 1984. Provides a series of brief biographical sketches of the pioneers of the computer industry, including Apple’s founders and their contemporaries. -
Linzmayer, Owen W. Apple Confidential 2.0: The Definitive History of the World’s Most Colorful Company. 2d ed. San Francisco: No Starch Press, 2004. History of the company by a writer who has covered Apple for computer industry magazines since 1980. Includes bibliography and index. -
Moritz, Michael. The Little Kingdom: The Private Story of Apple Computer. New York: William Morrow, 1984. Covers the early history of the firm and provides a behind-the-scenes look into the founders and the unique corporate culture they fostered. -
Price, Rob, Jill Savini, and Thom Marchionna. So Far: The First Ten Years of a Vision. Cupertino, Calif.: Apple Computer, 1987. Although published as a public relations vehicle for the firm, richly illustrated volume provides an interesting and entertaining historical overview of the firm’s early years. -
Rose, Frank. West of Eden: The End of Innocence at Apple Computer. New York: Viking Press, 1989. A behind-the-scenes account of the managerial upheaval at Apple Computer that led Steve Jobs to leave the company as it sought to penetrate the business market. -
Sculley, John, with John A. Byrne. Odyssey: Pepsi to Apple—A Journey of Adventure, Ideas, and the Future. New York: Harper & Row, 1987. Readable personal account of the firm from the standpoint of Apple’s chief executive officer and successor to Steve Jobs. Focuses on the struggle between Sculley and Jobs and its implications for the direction of the firm. -
Young, Jeffrey S., and William L. Simon. iCon: Steve Jobs—The Greatest Second Act in the History of Business. Hoboken, N.J.: John Wiley & Sons, 2005. Presents a detailed portrait of Jobs’s career, including the creation of Apple.
Intel Introduces the First “Computer on a Chip”
Apple II Becomes the First Successful Preassembled Personal Computer
IBM Introduces Its Personal Computer
Introduction of Optical Discs for Data Storage
Introduction of the Apple Macintosh
Microsoft Releases the Windows Operating System
IBM and Apple Agree to Make Compatible Computers
Intel Introduces the Pentium Processor