Apple Inc., originally Apple Computer, Inc., is an American multinational corporation that creates and markets consumer electronics and attendant computer software, and is a digital distributor of media content. Apple's core product lines are the iPhone line of smartphones, the iPad line of tablet computers, and the Mac line of personal computers. The company offers its products online and has a chain of retail stores known as Apple Stores. Founders Steve Jobs, Steve Wozniak, and Ronald Wayne created Apple Computer Co. on April 1, 1976, to market Wozniak's Apple I desktop computer, and Jobs and Wozniak incorporated the company on January 3, 1977, 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 1997 after his company NeXT was bought by Apple. The following year he became the company's interim CEO, which later became permanent. 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 also known for its iOS range of smartphone, media player, and tablet computer products that began with the iPhone, followed by the iPod Touch and then iPad. , Apple was the largest publicly traded corporation in the world by market capitalization, with an estimated value of US$1 trillion . Apple's worldwide annual revenue in 2010 totaled US$65 billion, growing to US$127.8 billion in 2011 and $156 billion in 2012.
1971–1985: Jobs and Wozniak Pre-foundation
Steve Jobs and Steve Wozniak, referred to collectively as "the two Steves", first met in mid-1971, when their mutual friend Bill Fernandez introduced then 21-year-old Wozniak to 16-year-old Jobs. Their first business partnership began in the fall of that year when Wozniak, a self-educated electronics engineer, read an article in Esquire magazine that described a device that could place free long-distance phone calls by emitting specific tone chirps. Wozniak started to build his original “blue boxes”, which he tested by calling the Vatican City pretending to be Henry Kissinger wanting to speak to the pope. Jobs managed to sell some two hundred blue boxes for $150 each, and split the profit with Wozniak. Jobs later told his biographer that if it hadn't been for Wozniak's blue boxes, "there wouldn't have been an Apple."
By 1972, Jobs had withdrawn from Reed College and Wozniak from UC Berkeley. 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 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 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, the two Steves started attending meetings of the Homebrew Computer Club. New microcomputers such as the Altair 8800 and the IMSAI 8080 inspired Wozniak to build a microprocessor into his video terminal circuit to make a complete computer. At the time the only microcomputer CPUs generally available were the $179 Intel 8080 (), and the $170 Motorola 6800 (). 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 () 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.
By March 1, 1976, Wozniak completed the machine and took it to a Homebrew Computer Club meeting to show it off. When Jobs saw Wozniak's computer, which later became the Apple I, he was immediately interested in its commercial potential. Initially, Wozniak intended to share schematics of the machine for free, but Jobs insisted that they should instead build and sell bare printed circuit boards for the computer. Wozniak originally offered the design to Hewlett-Packard (HP), where he worked at the time, but was denied by the company on five occasions. Jobs eventually convinced Wozniak to go into business together and start a new company of their own. In order to raise the money they needed to produce the first batch of printed circuit boards, Jobs sold his Volkswagen Type 2 minibus for $1,500, and Wozniak his HP-65 programmable calculator for $500.
Apple I and company formation
On April 1, 1976, Apple Computer Company was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne. The company was registered as a California business partnership. Wayne, who worked at Atari, Inc. as a chief draftsman, became a co-founder in return for a 10% stake. Wayne was gun-shy due to the failure of his own venture four years earlier. On April 12, less than two weeks after the company's formation, Wayne left Apple, selling his 10% share back to the two Steves for $800.
Operations started at Steve Jobs' parents' home on Crist Drive in Los Altos, California. Wozniak called the popular belief that the company was founded in the garage "a bit of a myth", although they moved some operations to the garage when the bedroom became too crowded.
According to Wozniak, Jobs proposed the name “Apple Computer” when he had just come back from Robert Friedland's All-One Farm in Oregon. Jobs told Walter Isaacson that he was "on one of my fruitarian diets," when he conceived of the name and thought "it sounded fun, spirited and not intimidating ... plus, it would get us ahead of Atari in the phone book." p. 63
The two Steves made a last trip to the Homebrew Computer Club and demonstrated the Apple I (AKA: The Apple Computer). Paul Terrell, who operated the computer store chain Byte Shop, was impressed, and gave the two Steves his card, asking them to keep in touch. The next day, Jobs visited Terrell at the Mountain View Byte Shop store, and tried to sell him the bare circuit boards for the Apple I. Terrell said he was only interested in purchasing the machine fully assembled, and that he would order 50 assembled computers and pay US$500 each on delivery (). Jobs took the purchase order from the Byte Shop to national electronic parts distributor Cramer Electronics, and ordered the components needed. When asked by the credit manager how he would pay for the parts, Jobs 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 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."
To verify the purchase order, the credit manager called Paul Terrell, who assured him if the computers showed up, Jobs would have more than enough money 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. Terrell was surprised to receive a batch of assembled circuit boards, as he had expected complete computers with a case, monitor and keyboard. Nonetheless, he kept his word and paid the two Steves the money promised.
The Apple I went on sale in July 1976 as an assembled circuit board with a retail price of $666.66. Wozniak later said he had had no idea about the relation between the number and the mark of the beast, and that he came up with the price because he liked repeating digits. About 200 units of the Apple I were eventually sold.
The Apple I computer had some notable features, including the use of a TV display, whereas many machines had no display at all. This was not like the displays of later machines; the text was displayed at 60 characters per second – still faster than the teleprinters of contemporary machines of that era. The machine had bootstrap code on ROM, making it easier to start up. At the insistence of Paul Terrell, Wozniak designed a cassette interface for loading and saving programs, at the then-rapid pace of 1200 bit/s. The simple machine was a masterpiece of design using far fewer parts than anything in its class, and earned Wozniak his reputation as a designer.
Jobs looked for investments to expand the business, but banks were reluctant to lend him money; the idea of a computer for ordinary people seemed absurd at the time. In August 1976, Jobs approached his former boss at Atari, Nolan Bushnell, who recommended that he meet with Don Valentine, the founder of Sequoia Capital. Valentine was not interested in funding Apple, but in turn introduced Jobs to Mike Markkula, a millionaire who had worked under him at Fairchild Semiconductor. Markkula saw great potential in the two Steves, and became an angel investor of their company. He invested $92,000 in Apple out of his own property while securing a $250,000 () line of credit from Bank of America. In return, Markkula received a one-third stake in Apple. Apple Computer, Inc. was incorporated on January 3, 1977. The new corporation bought out the partnership the two Steves had formed nine months earlier.
In February 1977, Markkula recruited Michael Scott from National Semiconductor to serve as the first president and CEO of Apple Computer, as the two Steves were both insufficiently experienced and he was not interested in taking that position himself. That same month, Wozniak resigned from his job at Hewlett-Packard to work full-time for Apple.
Apple II
Almost as soon as Apple had started selling its first computers, Wozniak moved on from the Apple I and began designing a greatly improved computer: the Apple II. Wozniak completed a working prototype of the new machine by August 1976. p. 344–346 The two Steves presented the Apple II computer to the public at the first West Coast Computer Faire on April 16 and 17, 1977. At the exhibition, Jobs introduced the Apple II to Japanese textile maker Toshio Mizushima, who became the first authorized Apple dealer in Japan. In the May 1977 issue of Byte, Wozniak said of the Apple II design, "To me, a personal computer should be small, reliable, convenient to use, and inexpensive."