Apple Story

How two Steves built a better computer

Apple Computer has had an unparalleled resurgence with the introduction of the iMac. This cute little computer was the brainchild of interim CEO Steve Jobs but, let's look back and find out how two guys in a garage changed the way we think about computers.

Apple Computer’s two primary founders, Steve Wozniak and Steve Jobs, were introduced to each other by a mutual friend, Bill Fernandez. Fernandez was a classmate of Jobs, who was then in high school, and a neighbor of Wozniak, who was then 20 years old.

Jobs and Wozniak shared a number of common interests, including electronics and pranks. Both were loners more interested in tinkering with electronics than partying the night away.

When Wozniak was studying engineering at U.C. Berkeley, he and Jobs began building and selling a device of his own design. This “blue box” could mimic the tones used in long distance telephone switching to net the user free long distance calls. The two sold the devices door-to-door in the Berkeley dorms, and managed to make a nice profit doing so.

Woz began attending meetings of the newly formed Homebrew Computer Club. He was intrigued by what he saw there: the new Altair computer, the very first personal computer. Although he would have loved to buy an Altair and start tinkering with it, he couldn't afford one, so he built his own. Wozniak’s computer was based on the relatively inexpensive 6502 processor built by MOS Technology rather than the Intel 8800 in the Altair. By that time, Steve Jobs was attending the club meetings as well. When Woz demonstrated his new computer, Jobs was impressed. He convinced Woz that they should try to sell the computers. Wozniak agreed after his employer, Hewlett Packard, decided to waive any rights they might have had to his invention.

Steve Jobs and Stephen Wozniak set up shop in the garage of Jobs' parents' home in Cupertino, California. Jobs sells his Volkswagen van and Wozniak sells his programmable calculator to finance the building of the first 50 Apple I circuit boards.

The company's first computer, featuring a wooden frame, appeals mainly to hobbyists.

A.C. Markkula joins Apple as partner and chairman when it incorporates.

The company introduces a more advanced computer called the Apple II that helps launch the era of desktop computers.

Apple goes public.

Riding a boom in personal computers, Apple enters the Fortune 500 and hires former Pepsi executive John Sculley as chief executive officer.

Apple introduces the Macintosh computer in a television ad during the Super Bowl. The 60-second commercial airs only once but the image of an athletic woman bursting into a drab room of corporate drones and smashing an image of Big Brother crystallizes Apple's message as an alternative to IBM.

In a stunning boardroom coup, Sculley ousts Jobs in an attempt to put an end to a bitter split between those who believed in the Macintosh vs. those who supported the Apple II. Apple also announces layoffs of 1,200 employees in the face of losses.

Apple launches the Mac II.

Apple files lawsuit against Microsoft Corp. over the company's Windows operating system.

Apple announces that it will cut 10 percent of its 15,600 work force in a restructuring program.

Apple loses copyright ruling in its lawsuit against Microsoft.

Apple introduces Newton personal digital assistant, a hand held computer, which flops. The fallout from the device prompts Apple to replace Sculley with President and Chief Operating Officer Michael Spindler. Apple reports a sharp decline in profits and announces layoffs of 2,500 employees, or about 15 percent of its work force. Michael Spindler becomes CEO.

Apple launches a new line of computers called the Power Macintosh, which uses a RISC microprocessor developed in alliance with IBM and Motorola.

IBM reportedly makes a bid for Apple but is rebuffed.

Apple launches a new line of laptop computers but is forced to recall them after two models burst into flames. While other computer markers are cashing in on the PC craze, a shortage of components keeps Apple customers waiting. By mid-year, Apple's backlog soars to $1 billion.

Apple reports a larger-than-expected 48 percent drop in fourth-quarter profits to $60 million despite a 20 percent rise in sales to a record $3 billion.

January 1996
Apple posts a $69 million first-quarter loss, a first for the normally robust Christmas quarter. The company also announces 1,300 layoffs as part of a restructuring plan amounting to 8 percent of its work force.

Pressure builds on Spindler to step down. At the company's annual meeting, shareholders berate Spindler but the company's chairman, A.C. Markkula, says Spindler has the board's full support.

Apple and Sun Microsystems Inc. discuss a possible merger, but talks break down over price.

Apple's board of directors meets in New York and decides to replace Spindler with board member Gilbert Amelio, who previously served as chairman and chief executive for National Semiconductor Corp.

March 1996
Apple names former Automated Data Processing executive Fred Anderson as chief financial officer and announces an alliance with online information giant America Online Inc.

Apple Chairman Amelio warns investors the company will post a second-quarter loss of $700 million.

December 1996
Apple announces plans to acquire Steve Jobs' Next Software Inc. for $400 million, reuniting the former co-founder with the company.

January 1997
Apple posts an unexpected $120 million loss for the first quarter of fiscal 1997 as sales of its flagship Macintosh model fall sharply. After promising a return to profitability by March, Amelio tells investors the company now expects to remain in the red until the September quarter.

Faced with shrinking revenues, he also announces plans for another restructuring.

Dataquest, which tracks PC sales worldwide, says Apple's share of the worldwide market fell in 1996 to 5.2 percent from 7.9 percent.

March 1997
Larry Ellison, the billionaire founder of software firm Oracle Corp., says he's thinking about making a bid for Apple. Apple hires Goldman Sachs to help fend off Ellison's bid.

April 1997
Ellison decides to put off a bid for Apple for the moment.

July 1997
Amelio resigns and Apple begins search for a new CEO. Meanwhile, Jobs assumes an expanded role, fueling speculation he may take over the troubled computer firm.

September 1997
Unbeknownst to the world at large, the day after Jobs becomes interim CEO, he starts the iMac project.

November 1997
Apple introduces two new models that reshape the Macintosh community: the PowerBook G3 and the Power Mac G3.

The most debated decision of 1997 though, was the ending of the Macintosh cloning industry. Although Umax continued to sell their SuperMac line through mid-1998, the two year experiment ended with Motorola, Umax, and Daystar losing money and Power Computing owned by Apple.

January 1998
Apple was bleeding in many areas: printers, monitors, computers (too many models), and more. They streamlined their entire product line and chose to cut their losses by completely discontinuing the Newton, Apple's personal digital assistant.

August 1998
The iMac is introduced and is soon recognized as the most significant computer of 1998. Apple's already profitable year becomes an incredible success. This momentum continues into 1999.

February 1999
Apple unveils the new, faster iMac, now available in 5 different colors. Also introduced was Mas OS X server, a network operating system that is the basis for the next Mac OS. And finally, the new Power Mac G3, a totally redesigned tower configuration referred to as the Blue & White G3 or Yosemite.

July 1999
Apple introduces their 4 point product line: Pro desktop, Powermac G3; consumer desktop, the iMac; pro laptop, PowerBook G3 and completing their consumer line of products, the iBook. This consumer priced laptop is touted as an iMac to go. Time will tell.

August 1999
Steve Jobs introduces the new G4, touted as the world's first personal supercomputer. The G4 is capable of up to 4 billion floating point calculations per second. One indication of a company's financial health is how long they maintain their inventory, the less the better. Apple's average is a mere 15 hours.