High school friends and college drop-outs, Steven Jobs, age 21, and Stephen Wozniak, age 26, combine their electronic interests and aspirations to create Apple Computers, Inc. on January 3, 1977. Their journey of success started after high school, when they had both left for college. Soon after, Wozniak and Jobs both dropped out of college to begin working; Wozniak with Hewlett-Packard and Jobs with Atari. Wozniak had been working on developing Apple I. Although it was considered “basic,” he offered to sell the machine to Hewlett-Packard for $800, they declined his offer. On April 1, 1976, Jobs encouraged Wozniak that they should sell the machine; that is when Steve Jobs, Stephen Wozniak, and Ronald Wayne founded Apple Computer Company. In turn, Wozniak and Jobs were able to sell 50 orders of Apple I, at $666.66 each, to Paul Terell, the president of Byte Shop.
In April of 1977, after Apple Computer, Inc. became incorporated, Wozniak and Jobs had developed the Apple II; which was the first personal computer to come inside a plastic cover and include color graphics. After the introduction of the Apple II at a local computer trade show, sales for this personal computer thrived. They sold Apple II to consumers for $1298. Armas Clifford “Mike” Markkula, a recommended investor from Jobs’ former boss and a significant person in the history of the company, invested $92,000 into Apple Computer, Inc. He was proposing to invest a quarter of a million dollars. In August of 1979, Apple paid $21,000 to license Microsoft’s AppleSoft BASIC for eight years. Randy Wigginton had written AppleSoft BASIC, along with creating MacWrite.
Exactly one year after becoming incorporated, Jef Raskin becomes Apple Computer’s 31st employee. In early 1978, Wozniak and Jobs created another major seller in the industry, the Apple Disk II. This floppy disk, at the time, was the least expensive and most ease of use to be introduced to the market. In 1978, Apple Computer, Inc. faces their first lawsuit against Apple Corps. for trademark infringements. They settled for $80,000 (Logan, 2010).
The eventful year of 1979 began in May, with Raskin working on a proposal for the PITS (Person In The Street’s) Computer. This was his idea of a laptop, so that business people and others who needed a computer while they were out of their homes had an easily accessible one. In June, the Apple II+ is introduced to consumers in the market place for $1195. In late July, Ken Rothmuller begins working on the Lisa Project, which was known to be the same as an Apple III. Apple planned to launch this project in March of 1981. In November of 1979, Xerox invests $1 million in Apple.
By 1980, the Apple Computer, Inc. had established themselves as a major competitor in the industry, with sales increasing along with the size of their corporation. Apple established a manufacturing plant in Ireland and a customer support center in the Netherlands. They had nearly 800 dealers in the United States and Canada and over 1000 distributers in other countries overseas. In May, Apple III is released and sells for between $4340 and $7800. This was an extremely high cost to consumers, along with many other computers in the industry at the time. However, Apple was one of the best in the industry at the time and was able to charge the higher price. That summer, Jobs not only replaced Rothmuller, with John Couch, for a disagreement that had about the cost, configuration, and schedule time of the Lisa Project but Jobs also hired 15 Xerox employees to work on the Lisa Project. In December of the same year, Apple went public with 4.6 million shares. The day they went public, the shares increased by 32 percent, which made over 40 employees earn more than a million dollars. Steve Jobs, at the time, was the largest shareholder and made $217 million, Markkula makes $203 million on that day alone.
In 1981, the market for computers became very saturated and made it a struggle for companies to compete. Markkula becomes president of Apple and Jobs becomes chairman. Apple is forced to lay off 40 employees. In March, Apple misses that release date of the Lisa Project. In August, IBM introduced their personal computer to the market for $1565. This PC was not nearly as capable as the Apple II, which was released 4 years prior, in 1977; however, consumers bought enough to view the product as a success. Apple opened European headquarters in Paris and England during this year.
In 1982, Raskins resigns because of disagreements with Jobs. In the same year, Apple reaches their $1 billion annual sales mark. A more eventful year of 1983, in January, the Lisa is introduced to the market for $9998, and is released in September for $6995, 2 years behind schedule. The Apple IIe was also introduced this year, selling for $1395. Apple viewed this computer as being a major success for the company. Apple III+ was introduced in December for $2995. In April of 1983, John Sculley, president of PepsiCo, becomes president and CEO of Apple. Jobs thought that Sculley being president and CEO would help improve the image of Apple.
During the 1984 Super Bowl, Apple’s first commercial for the Macintosh was aired. Later that year, the Macintosh was released to the market selling for $2495. The Lisa 2 was also released to the market for $3495. The Apple IIc was introduced to the market and won the Industrial Design Excellence Award in September 1984. Failing to succeed in the market, Apple III+ was discontinued. Consumers were becoming very dissatisfied with Apple because of the small amount of memory.
In May of 1985, after a disagreement between president and CEO, Sculley, and chairman, Jobs, Jobs tried to drive Sculley out of Apple, in the end Jobs resigns from Apple. The Board of Directors sided with Sculley. Jobs announces that he plans to start his own company, Next Software. This causes another dispute between Sculley and Jobs. Apple sues Jobs on grounds that he has knowledge of technological secrets that he may take into his new company. They ended up settling outside of court in January of 1986 agreeing that Jobs would not hire Apple employees for 6 months. To start his company, NeXT, Inc. Jobs sells all of his nearly all of his 6.5 million shares of Apple stock. In May of 1985, Apple was forced to lay off 1,200 employees, nearly a fifth of their workforce. In September of 1986, the Apple IIGS is introduced to the market for $999. This year Apple also recorded their first quarterly loss.
In 1987, Apple celebrates the company’s 10 year anniversary. In this same year, Ross Perot invests $20 million in Jobs’ company, NeXT, Inc. In October of 1988, NeXT released a computer into the market for $6500. Compared to Apple’s newest Mac computer the Mac had half the speed and was selling $1000 more. In 1989, Jobs at NeXT released the NeXTstep OS.
In 1990, Microsoft 3.0 was released and had the ability to run on practically any PC. This became a major problem for not only Apple, but many other computer companies in the industry. Apple knew that they were unable to provide the hardware and software that were driving the industry. Apple’s sales had only grown by $10 million this year, compared to the $2 billion from 1987 to 1989 (Hormby, 2006). In September of 1990, NeXT released 3 new products: NeXTstation for $4995, NeXTstation Color for $7995, and NeXTcube for $7995.
The year of 1991 Apple, had someone of a turnaround from the previous year. They released PowerBooks, which consumers seemed to love. Microsoft released the second version of Windows, Windows 2.03. The improvements from Windows 1.01 to Windows 2.03 were significant; however, many thought that they were very similar to those of the Mac. Apple and IBM made their alliance official; they produced two companies, Taligent and Kaleida. Taligent was not founded until 1992 and was created to develop the next and newest generation of the microcomputer operating system (A Brief Taligent History). Kaleida was a multimedia company. Apple and IBM co-owned these two subsidiaries.
In 1991, Apple Computer was again sued by Apple Corps. This time it was for a violation of their original agreement from the first lawsuit. Apple Corps. claimed that Apple Computer was putting music-recording software on their computers. Apple Computer paid a $26.5 million settlement (Logan, 2010).
In the spring of 1992, Microsoft releases Windows 3.1. In the fall of 1992, NeXTstep 3.0 is released. Apple reports their first $2 billion sales revenue quarter.
Sculley was released from his position as CEO by the Board of Directors in 1993, Sculley was now a chairman. Michael Splinder became the new CEO of Apple Computer, later that year Sculley resigned and went to work for Spectrum. Apple reported a third quarter loss of $183.5 million. Jobs lays off nearly half of the NeXT employees, because he wants to narrow the scope of the organization to the operating systems. Jobs is now the only remaining founder of the company, NeXT; all the rest of the founders had resigned over the years.
Apple’s Newton MessagePad was released for $699 in 1993, this device lead Apple to a new and emerging market of Personal Digital Assistants (PDA’s). This market was very new to the industry and many companies were working on these types of devices to try to break into this market as well. Although the Newton had all the right features, address book, calendar, email, and fax, it was remembered for its poorly-developed, hard to use handwriting recognition. The handwriting recognition engine had been developed by a third-party and had improved as they came out with new models; however, Apple was remembered for this loss (Company History, 2010).
In 1994, Apple introduced the PowerMac family which was based on the PowerPC chip. This processor was developed by IBM and Motorola and actually gave Apple the opportunity to once again compete with Intel in the market place. Apple licensed the Mac OS to many companies this year, including Radius and Power Computing.
In 1995, Apple produces their one millionth PowerMac. However, Apple did not have any trouble selling computers, they had problems producing them. One million PowerMac’s was not enough to save the company. Apple had $1 billion in backorder sales and did not have the non-financial resources to produce these computers. To make Apple’s situation worse, Windows 95 was released in the summer of 1995.
During the winter of 1995 to 1996, Apple made one of their biggest mistakes and paid for it financially. Apple judged the market wrong, thinking they should produce the low-cost Performas rather than the mid-priced PowerMacs. Apple reported a $68 million loss for the quarter. In early 1996, CEO, Splinder was released from his position and Gil Amelio took his place. Amelio was the former president of National Semiconductor. Amelio tried his hardest to bring Apple back to being profitable. He separated the company into seven divisions, having each division report their own earnings and losses for each quarter. This would help control the financial aspect of how to allocate money to certain divisions. Amelio also attempted to keep stakeholders informed of the day-to-day activities of Apple. The first quarter Apple reported a loss of $740 million, the second quarter Apple reported a loss of $33 million, and the third quarter Apple reported a profit of approximately $30 million, the fourth quarter Apple lost substantially more (Company History, 2010). This year, Apple bought NeXT, Inc. for approximately $400 million (Kawamoto, Pelline, & Yamamoto, 1996). This transaction brought co-founder and former CEO, Jobs, back to Apple. Jobs was given a position back as chairman of the company. This merger also helped Apple in the aspect of obtaining a new operating system for their computers. Jobs also explained that this merger would help NeXT also, he had planned to go public but realized that this would be a better offer for the company, he also stated that it would increase NeXT, Inc. sales volume. NeXT’s financial history had been very unstable and many thought that has what prevented them from going public. Experts estimated that Apple would have a loss of 30 cents per share but they actually had a profit of 20 cents per share, which earned the company $25 million in profit on $2.3 billion in revenue for the fourth quarter of 1996 (Kawamoto, Pelline, & Yamamoto, 1996).
In 1997, after Apple took another multi-million dollar loss Gil Amelio announced his resignation. Amelio and the Board of Directors felt that he had done everything in the entirety that he could to save Apple, yet his resignation still took the company by surprise. Jobs was named the interim CEO. Jobs had major announcements for the company introducing the new Macs and Rhapsody, new members of the Board of Directors, and the largest announcement was their alliance with Microsoft. Microsoft accepted $150 million in Apple stock for a 5 year patent cross-license and a settlement on the Graphical User Interface (GUI) dispute. Microsoft also paid Apple an undisclosed amount of money to public deny any allegations that Apple had stolen intellectual property from them. Microsoft also announced that the Windows 98 OS would soon be available for Macs. In November, Jobs announced the change in Apples strategy; they would now be selling computer by internet and the phone. The Apple Store became the third largest E-commerce website on the internet. Jobs also announced that Apple finally recorded a profit for the first quarter in over a year; their profit was a staggering $44 million, and a profitable second quarter of $57 million.
In May of 1998, Apple announced the PowerMac G3, the PowerBook G3, and the iMac. In July of 1998, Apple announces their third consecutive quarter of profitability at $101 million. After the iMac’s release to the low-end consumers, it was a great success for Apple and pushed them into a fourth quarter and year of profitability, the iMac’s sold for $1299. A large selling factor for the customers was the customization of choosing a color case. The stability of Apple’s financial history seemed to be coming back and was proven through their increasing stock prices.
In early 1999, the PowerMac G3 was successfully released and gave Apple a fifth consecutive profitable quarter. In July of 1999, the iBook was released. Similar to the iMac, but the iBook was the low-end portable market and was sold for $1599. Apple announced the PowerMac G4, an improved version of desktop computer. Apple had been staying on the right track for profitability and reading what the consumers wanted.
By January of 2000, Jobs had introduced the new internet applications call the “iTools” exclusively through Earthlink. Jobs also announced that he would be the permanent CEO of Apple Computers, Inc. From September of 1999 to March of 2000, Apple’s stock price had risen approximately 60 points from the high 70’s to nearly 130. Apple announced their newest machine, the PowerMac G4 Cube. This machine was ideal for the business market. However, the Cube was not as successful as Apple had anticipated. The market noted a few flaws with the audio input/output and viewed it as being “luxury” rather than less-expensive. In December of that year, Apple cut the price of the Cube significantly. In 2001, Apple unofficially discontinued the Cube.
In late 2000, sales slowed for Apple along with competitors in the industry. In sight of this issue, Apple expanded their strategy in the technology industry. In early 2001, Apple announced the release of the new line of PowerMacs and two new applications. One of the new applications was iDVD, a program that allowed users to create and burn DVD’s to share movies and photos. The second application is iTunes, a program that enabled users to listen to MP3’s and burn them onto CD’s. iTunes later became known as a digital music jukebox where users can download music, movies, and TV shows. These applications opened up many opportunities for Apple. In May of 2001, Jobs took advantage of this opportunity and announced that Apple would be opening a chain of retail stores across the United States. The first store was opened in Mclean, Virginia. These stores would be selling Apple products along with third-part products that emphasized the digital lifestyle. This included PDA’s, digital cameras, video cameras, and MP3 players. The iBook, iMacs, and G4 were being updated and sold very well after the revisions.
One of the largest turning points in Apple history was the release of their first non-computer product in a number of years, the iPod. The iPod was released for $399 and was viewed in the same aspect of the Cube. Many people saw that it was a luxury item for a high price.
In early 2002, Apple once again revamped the consumer desktop and released the iMac with a flat panel monitor. Apple announced that they would be going overseas to open a retail store in the Netherlands. Apple showed profits for the first two quarters of the year; however, in the last part of the year Apple struggled, along with the industry as a whole. In October of 2002, Apple reported a $45 million loss. This was caused by the lack of the PowerBook and PowerMac. During this time of resistance, Apple released an application called dotMac. They announced that iTools would be included in the subscription of dotMac, a subscription was approximately $99 per year. dotMac is a personalized web address that allows you to have one gigabyte (GB) of virtual memory to reinforce and promote the digital lifestyle.
Apple had a recovery in 2003, in January they announced two new models of the PowerBook G4. Apple also announced that they were planning to launch Safari, a web browser that they viewed as a way to gain their independence from Microsoft; which was now seen in the marketplace as an inferior product. In April, Apple opened the iTunes Music Store with the cooperation of five major record labels and a library of over 200,000 songs, selling songs and albums for iPods and Macs. In October, iTunes was released for Windows users. By the end of 2003, iTunes Music Store reached 25 million downloads (Kawamoto, Pelline, & Yamamoto, 1996). In June of 2003, Apple released their newest desktop, the PowerMac G5.
In January 2004, Apple released the iPod Mini, which had a smaller capacity than the first generation iPod, but also became available in colors. In the first year iTunes Music Store sold more than 70 million songs and by July of 2004 it had reached 100 million. Apple had made a success of iPods and iTunes, they held nearly 70 percent of the market share for online legal music downloads (Company History, 2010). At the age of 49, Jobs undergoes surgery for pancreatic cancer. Tim Cook, Apple’s executive vice president and head of sales and operations, took over Jobs’ position while he was out.
In 2005, Apple released new versions of the iPod, the iPod Shuffle, the iPod Color, the iPod Nano, and the Video iPod. The 30 GB and 60 GB iPod that was able to store and play video and music files. Apples sales practically tripled from 2001 to 2005 because of the vast growth in popularity for the iPod. Sales went from $5.3 billion to $13.9 billion (Apple Computer, Inc.-Company Profile, Information, Business Description, History, Background Information on Apple Computer, Inc.). By this point in time, Apple owned and operated around 125 retail stores in the United States and retail stores in Canada, Japan, and the United Kingdom.
In 2006, the iMac and MacBook Pro were introduced with the Intel Core Duo processors. The new machines were called the iMac Core Duo. In 2007, Apple Computer, Inc. changed their name to Apple, Inc. Apple clearly knew that they were becoming more than a computer company and wanted to be recognized that way in the industry. Apple was now not only part of the computer industry, but also music and soon to be in telecommunication. Steve Jobs was named the “Most Powerful Man in Business,” by Fortune Magazine (Fortune's 25 Most Powerful People in Business, 2007). In 2007, Apple released the Apple TV and the iPod Touch. The Apple TV enabled customers to stream audio and video, and play YouTube videos. Apple announces the release of the first generation of the iPhone which was scheduled to be released through AT&T on June 29, 2007. The first generation iPhone was sold for $399.
In early 2008, Apple released their thinnest laptop ever, the MacBook Air. The MacBook Air was slower than other Apple laptops, a non-upgradable 2 GB RAM, no Ethernet port, only one USB port, and a few other customer concerns. The MacBook Air sold for $1799 and was updated by late 2008. The iPhone 3G was also released in 2008.
In June 2009, the iPhone 3GS was introduced in a 16 GB and a 32 GB. Both models were replaced in June 2010 by the iPhone 4. A highly anticipated product to be released by Apple was the iPad. In 2009, Apple reported iPhone sales were up 88 percent from 2008, 22.7 million iPods were sold in one quarter, MacBook sales were up 34 percent from the previous year, and net income was up $1.61 billion from the $1.58 billion from the previous year (Vos, 2009). It is clear from these reports that Apple did not feel the pain from the economic crisis.
In January 2010, Apple was a touch screen only tablet created in a segment of its own. The iPad also brought along the market for eBooks, or in Apple’s case iBooks. In 2010, Steve Jobs was named “Person of the Year,” by the United Kingdoms, Financial Times (Osborne, 2010).
In January 2010, Steve Jobs announces that he once again is taking a medical leave of absence. He does not the public why or when he plans to return. Based off of his previous medical history of pancreatic cancer and a liver transplant, stakeholders are questioning Jobs’ health and Apple’s future.
About the CEO and BoD
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