A Brief History of Apple

Apple is currently worth over $2 trillion, yet its beginnings couldn’t have been more humble. How did Apple grow from a Californian garage to the most valuable company in the world? It’s been quite a journey...

Apple is big. Very big. In 2020, its profits could exceed $60 billion, over four times that of American retail giant Walmart. Also in 2020, Apple became the second company to cross a $2 trillion valuation. As the first company to achieve this, Saudi Aramco, was heavily hit by the coronavirus downturn, Apple is now the most valuable company in the world.

“Apple’s $2 trillion valuation represents about ten percent of GDP for the U.S. and about seven percent of the S&P 500,” David Kass, Professor of Finance at the University of Maryland’s Robert H. Smith School of Business told NBC News. “Its iPhone is ubiquitous. It has transformed the way we live. Its ecosystem is self-sustaining.”

Apple’s achievements are even more impressive when you consider the company was founded less than 50 years ago, by three people with very little money but a huge wealth of ideas. On 1st April 1976, Apple Computer Company was founded by Steve Jobs, Steve Wozniak and Ronald Wayne. The two Steves had met five years earlier, when they were introduced by a mutual friend. A year after that, self-educated engineer Wozniak designed a dubious gadget known as a ‘blue box’, which allowed users to make long-distance telephone calls without paying. Jobs acted as salesperson, and managed to shift around 200 blue boxes at $150 each. He later told his biographer, Walter Isaacson, that if it wasn’t for the blue boxes, there would never have been an Apple.

The blue box, as designed by Steve Wozniak and sold by Steve Jobs before they founded Apple. Photo by Maksym Kozlenko

Wozniak’s next project was more ambitious. Taking MOS Technology’s 6502 chip, a budget processor released in 1976, he designed a computer around the CPU and wrote a version of BASIC that ran on it. He initially intended to share the schematics free of charge, but Jobs, ever the businessman, saw its commercial potential. He suggested selling the computer as completed printed circuit boards, and to finance the project, he sold his minibus and Wozniak sold his HP-65 programmable calculator. The Apple I was born.

Apple’s first computer, the Apple I. ArnoldReinhold, CC BY-SA 4.0

As the two Steves were both young at the time (Jobs was 21 and Wozniak 25), they brought on board a third partner who had more experience in business. It wasn’t to last. Ronald Wayne left after only a couple of weeks, selling his 10% share of the company back to Jobs and Wozniak for just $800 (around $3,645 in today’s money). If he had held onto it, he’d be worth $200 billion now.

One thing Apple didn’t have a the time was a premises. Instead, Jobs worked out of his bedroom at his parents’ house, and later the garage. Many sources cite this garage as the place where Apple was founded, but Wozniak is sceptical.

“The garage is a bit of a myth,” he explains. “We did no designs there, no breadboarding, no prototyping, no planning of products. We did no manufacturing there. The garage didn’t serve much purpose, except it was something for us to feel was our home. We had no money. You have to work out of your home when you have no money.”

Where it all started. This is the garage in Los Altos, California, where Apple is said to have begun.

The Apple I computer went on sale in July 1976. Wozniak set the price at $666.66, because he ‘liked repeating digits’; he claims to have been unaware that it represented the number of the beast from The Revelation. Around 200 Apple I computers were eventually sold. Today, 63 are known to still exist, with six in working order. In the Autumn of 2019, a working Apple I was listed on eBay for $1.75 million, which is quite an appreciation in value.

It was time for Apple to expand. Jobs secured financing, and a CEO with relevant business experience was brought aboard. The company was incorporated on 3rd January 1977, and the new corporation bought out the two Steves. It was time to launch another computer.

 

Wozniak had been working on the Apple II, or more correctly, Apple ][, as soon as the Apple I launched. As he told Byte magazine in 1977, “To me, a personal computer should be small, reliable, convenient to use, and inexpensive.” Unfortunately, at $1,298 (around $5,515 today) the Apple ][ could hardly be described as ‘inexpensive’, and despite groundbreaking specs (for the time) that included up to 64K of memory, a 280 x 192 display and colour graphics, businesses struggled to find a reason to buy one. That reason came along a few months later with Visicalc, the Apple’s first killer app.

The Apple ][, with a display and 5.25-inch floppy drive.
Devised by Harvard Business School student Dan Bricklin, VisiCalc was imagined as “a heads-up display, like in a fighter plane, where I could see the virtual image [of a table of numbers] hanging in the air in front of me. I could just move my mouse/keyboard calculator around on the table, punch in a few numbers, circle them to get a sum and do some calculations.” It was the first example of what we now call a spreadsheet, the first ever such program for a personal computer. Unveiled in 1979, it quickly turned heads in the business tech field. According to analyst Benjamin M Rosen, VisiCalc was “so powerful, convenient, universal, simple to use and reasonably priced that it could well become one of the largest-selling personal computer programs ever. It could some day become the software tail that wags (and sells) the personal computer dog.” It did. In its first six years, it sold over 700,000 copies and spurred sales of the Apple ][, but to small and medium-sized businesses, not the hobbyists Jobs and Wozniak expected.

Apple’s third computer was called, unsurprisingly, the Apple III. Built to compete with the newly launched IBM PC, it went on sale in November 1980 for between $4,340 and $7,800 depending on the model (around $13,152 to $23,637 in today’s money). It was not a success. Stability issues forced a recall of the first 14,000 units sold, and damage to the computer’s reputation meant it only sold around 65,000–75,000 units, with the revised Apple III Plus (December 1983) bringing the figure up to around 120,000.

Apple’s third foray into the computer market, the unimaginatively titled Apple III.

Like the earliest PCs, Apple’s first three computers used a text-based interface. Jobs wasn’t satisfied, and wanted to find something more intuitive. He found it at Xerox’s research centre at Palo Alto, Xerox PARC.

Jobs had negotiated three days’ access for himself and a number of employees in exchange for Xerox being allowed to buy 100,000 Apple shares at $10 each. It was a phenomenal deal for both parties. Jobs came away very impressed with the Xerox Alto, an expensive machine that wasn’t on sale to the public. It boasted a number of firsts for a personal computer. It was the first, for example, to centre on the mouse as an input controller. But its most important innovation was the graphical user interface. Instead of the text-based interface used by PCs and the first three Apple machines, the user interacted with the Alto by clicking objects on the screen. Sound familiar? As Jobs later told his biographer, “[It was] like a veil being lifted from my eyes. I could see what the future of computing was destined to be.”

At the time, Apple had two teams working on two different computers; the Apple Lisa and the Apple Macintosh. A new graphical user interface was incorporated into both as their respective teams raced to be the first to be released; former IBM employee John Couch led the Lisa team, and Jeff Raskin the Macintosh.

The Lisa team prevailed. Officially, ‘Lisa’ stood for ‘Local Integrated System Architecture’, but Jobs admitted before he died that it was actually named after his daughter. It was an impressive machine, featuring a 5MB hard drive, a 5MHz Motorola 68000 processor and, of course, a graphical interface. However, it was not cheap, selling for $9,995, which is around $25,811 in today’s money. A relaunch with the Lisa 2 at around half the price failed to generate much enthusiasm – or sales. The Lisa sold only 10,000 units in two years, as most customers turned to the Macintosh, released a year later at a much better price.

After being forced off the Lisa team in 1982, Steve Jobs had become more involved with the Apple Macintosh. Even though it was by then at an advanced stage of development, Jobs made wholesale changes, including building a new graphical user interface and redesigning the exterior. Frustrated, Jeff Raskin left the project, leaving Jobs in overall control.

The very first Apple Macintosh boasted a great graphical interface, but no colour options.

Jobs’ philosophy in building the Macintosh was, ‘simpler is smarter’. While the very expensive three-button mouse on the Xerox PARC impressed, he opted for a far, far cheaper one-button design for the Macintosh. An all-in-one build was favoured, with the display, the computer boards and the 3.5-inch floppy drive all packed into a single cabinet. It boasted a 6MHz Motorola 68000 processor, 128KB of RAM and a nine-inch monochrome screen with a pixel resolution of 512 by 342. For its day, this was a very good specification, especially as it cost just $2,495 ($7,560 today), around a quarter of the price of the Lisa. It ran Apple’s System 1.0 operating system, Apple’s first fully graphical user interface, which offered a menu bar, icons for folders, documents and apps, the trash can for deleting files and an icon for a floppy disk when inserted. The familiar Macintosh operating system was born.

Yet for all its strengths, the Macintosh had one or two drawbacks. It lacked colour, and also a hard drive, forcing users to boot from a floppy. Some high-end users failed to take it seriously due to its friendly, all-in-one design, but we can’t help feeling this turned more people on to the Macintosh than it did off it. Perhaps most importantly of all, its graphical user interface meant software written for text-based operating systems had to be completely rewritten before it could be ported to the Macintosh. If the new computer was to gain enough market penetration to make it worthwhile for third-party developers to do this, it had to find its killer app, the software that would do for the Macintosh what VisiCalc did for the Apple ][. It found it in the desktop publishing app Aldus PageMaker.

PageMaker was the right software at the right time. Released in July 1985 on the Macintosh and a year and a half later for the IBM PC, its Macintosh debut coincided with the release of another piece of Apple hardware; the LaserWriter laser printer launched in March of that year. It wasn’t cheap but it was far more affordable than many of its rivals, and it could be networked with up to 16 Macintoshes, making it the ideal office printer. It was the perfect printer for PageMaker, and PageMaker was the perfect software for the LaserWriter. The desktop publishing revolution had begun, and would soon take over the production of newspapers and magazines, with Apple leading from the front.

But although Apple had established a market it was to lead for decades, the company’s former leaders would not be a part of it. By now, Apple’s CEO was John Scully, the former Pepsi president who Jobs had famously brought on board two years earlier, saying “Do you want to sell sugar water for the rest of your life, or come with me and change the world?” But with Apple failing to comprehensively outsell IBM’s PC, the two began to clash. The Apple ][ and Macintosh divisions by now operated as separate entities. Jobs wanted to concentrate on the Macintosh, and continue to fight IBM for the business market, while Sculley preferred to focus on selling the Apple ][ to the home and small business users. Jobs also wanted to invest heavily in Apple’s desktop publishing product, Macintosh Office, though the product had yet to reach fruition, while Scully didn’t. Jobs’ respect for Sculley had greatly cooled.

Steve Wozniak’s enthusiasm was also waning. In early 1985, the Apple ][ division accounted for over 85% of Apple’s sales, but at the January annual meeting it wasn’t mentioned at all. Wozniak was frustrated, claiming the company “had “been going in the wrong direction for the last five years.” On 6th February 1985, he left Apple on amicable terms and founded a new company, CL 9 (Cloud Nine).

The other Steve would be gone by the end of the year. In March, Sculley removed him as head of the Macintosh division, with the support of Apple’s board. Jobs planned a counter-coup in May, when Sculley was due to be out of the country on business, but unfortunately for him he confided in senior members of his old team. One of them reported back to Sculley, who cancelled his trip and called a board meeting. Once again, the board backed Sculley and Jobs was was stripped of all operational duties. He was also ‘promoted’ to company Chairman, but this was largely a ceremonial role.

Frustrated and feeling pushed out of the company he co-founded, Jobs sold all but one of his Apple shares and resigned from the company on 16th September 1985. Taking a number of key Apple employees with him, he founded NeXT Inc.

Without Jobs, Apple floundered. His successors proved far less capable at integrating design excellence with technological innovation. As a result, computers released during this period lacked the verve associated with Jobs-era designs, and became just another computer. Sales dropped, and the Mac’s customer base began to lose its passion for the machine. Prices were inflated to ridiculous levels, and the Macintosh range became confused and overblown. Customers found it difficult to understand which Mac they should buy, if they wanted to buy one at all.

Apple released some terrible products during this period too. Take the MessagePad, a Personal Digital Assistant (PDA) palmtop computer with handwriting recognition. Released in August 1993, it ran the Newton operating system and used a stylus-based interface. Its main selling point was handwriting recognition. In theory, you could write on the screen in your own handwriting and have it converted into editable text. In practice, it proved hopelessly inaccurate, and was even lampooned in a Doonesbury comic strip and an episode of The Simpsons. This feature improved with later releases, but the damage was done.

Another woeful release that typified the first post-Jobs era was the Pippin games console. Released on 1st December 1994, it was halfway between a regular gaming machine and a multimedia device. It cost far more than the Sony PlayStation, which was released two days later, and offered a fraction of the power. Inevitably, it flopped.

 

Apple’s situation was desperate. Described by Time magazine as “a chaotic mess without a strategic vision and certainly no future,” the company had lost over $1billion in the 1997 financial year. The then-CEO Gil Amelio was ousted and Steve Jobs was brought back as interim CEO, and later CEO. He immediately began restructuring the company, killing poor-performing lines and trimming the disparate, confusing computer range down to a manageable stable of solid products.

The product that reversed Apple’s decline was the iMac. Released in August 1998, it took the Mac back to its original all-in-one design, with the monitor, computer and DVD drive housed in one unit. And what a unit it was. Eschewing the dull, beige boxes that dominated computing at the time, it featured a translucent blue and white body that looked great on your desk. Other colours soon followed, including Strawberry, Tangerine, Grape, Graphite and eventually patterned models. Based on the G3 processor and Internet-ready out of the box, it was a revolutionary machine that proved very popular in both the home and business markets.

Steve Jobs with the original iMac, an instant design classic.

Today, over 20 years later, the iMac is still at the heart of Apple’s computing lines. Flatscreen displays took over from cathode ray monitors, aluminium unibody enclosures succeeded polycarbonate designs and screen sizes grew up to 27 inches, but all iMacs have one thing in common; they’re beautiful to look at as well as to use.

Jobs made similar revisions to Apple’s pro-level tower Mac range. The Power Macintosh G3 released in 1999 boasted a similar blue-and-white design as the previous year’s iMac, and followed a similar update path. The polycarbonate body was eventually replaced by an aluminium build, but in a rare misstep, this in turn was replaced by a drum-shaped design in 2013. This proved unpopular with power users, so Apple reverted to a tower shape for the radically-different Late 2019 Mac Pro. With consumer lines such as the iMac and the entry-level Mac mini growing in power, the Mac Pro was redesigned to appeal to those with very high-end needs – and deep pockets. It’s extremely expensive, but amazingly powerful.

 

But even with Jobs back in charge, Apple wasn’t immune from errors. On 19th July 2000, the Power Mac G4 Cube was released. Featuring an eight-inch cube-shaped architecture suspended in a ten-inch clear enclosure, it looked great but as a working Mac, it fell between two stools. It wasn’t a convenient all-in-one like the iMac, and it wasn’t easily upgraded like the tower Power Mac G4. Despite proving popular with Mac collectors, sales were poor.

Of course, the Mac range that really took off in the first two decades of the 21st Century is the notebooks. The iBook, released in the summer of 1999, was clearly based on the design aesthetic of the original iMac. It was less capable but cheaper than Apple’s PowerBook range, making it ideal for low-needs users, while the PowerBook served the pro market.

This is how Apple’s notebook range has progressed to this day, with high-end models for pro users, and cheaper laptops for the mass market. Many technical innovations were made during their evolution, such as the unibody chassis, milled from a single piece of aluminium, making it strong but light. Removable batteries were dropped in favour of built-in cells, with the space saved by dropping the casing and fixtures used to add more power, and Apple’s trackpads grew in versatility, culminating in today’s trackpads that accept multitouch gestures. The notebooks also pioneered the use of built-in solid state storage instead of hard disk drives, a feature which eventually found its way to all Mac lines.

Apple’s key strength isn’t in coming up with brand new concepts, but in taking an existing product and getting it right where others got it wrong. Never was this clearer than with the iPod. First released in the Autumn of 2001, it was far from the first digital audio player, but it’s with the iPod that the concept finally came of age. While other MP3 players skimped on storage to keep the price down, Apple’s boasted a 5GB hard drive, enough for 1,000 songs. An intuitive interface kept them all at your fingertips too.

Since the release of the first iPod, the range evolved to offer even more storage space. Hard drives were eventually replaced with solid state chips, a colour screen was added and a new range of screenless music players proved popular for joggers and gym-goers. Yet the iPod wasn’t to last until the present day, largely thanks to another Apple innovation; the smartphone.

It was in June 2007 that Steve Jobs announced the iPhone during an Apple keynote. A revolutionary new mobile phone, it incorporated PDA functions such as Internet connectivity, notes, a calendar and an address book, and could be synced with your Mac to keep both up to date. Its music app was great for listening to your digital music, and other software applications, or apps, could be added using the online App Store. It had no stylus; Jobs was adamant that it’s easier to use your fingers than a dedicated tool that was easily lost, a judgement that proved its worth over the next decade or so. Soon other manufacturers were imitating the iPhone and its operating system, iOS.

In 2010, the tablet computer scene was moribund. They had their uses (such as the medical market, for example), but outside a few very niche interests, no one wanted one. That changed in April when Apple released the original iPad, and later that month, the first iPad with both Wi-Fi and 3G connectivity. Using the same iOS operating system as the iPhone, the iPad had excellent battery life, instant-on and a multitouch interface with which iPhone users were already familiar. It was the ideal device for email and web browsing on the move, and also for entertainment like watching movies and playing games. Apps for the iPhone also work on the iPad, but developers soon started bringing out iPad-specific versions that took advantage of the larger screen.

Another change of CEO soon followed, not because of a boardroom coup or lack of success, but because Steve Jobs had been battling cancer for some time. He resigned as CEO on 24th August 2011, appointing Tim Cook as his successor. On 5th October of that year, Jobs sadly died. It was the end of an era, and the world had lost a technology genius.

Thankfully for Apple, Jobs had spent his second tenure with the company surrounding himself with a talented team of businessmen, innovators and engineers, a team that was quite capable of taking the company into the second decade of the 21st Century. His successor, Tim Cook, proved extremely capable as CEO.

The first major product line released in the post-Jobs era was 2015’s Apple Watch, a smartwatch that proved the ideal iPhone companion for runners, the health-conscious and anyone who wants a capable, stylish watch. Again, it wasn’t the first such device, but it’s arguably the first to get it right. Today, the Apple Watch is the world’s leading brand of smartwatch.

Another product that was right on the money for its target audience is the Apple Pencil. A stylus for the iPad, it was released in November 2015 and soon found favour with artists and those who wanted to make handwritten notes on their tablet. True to Jobs’ original vision, the Apple Pencil is an optional extra; you can still use your fingers with your iPad if you prefer.

Another innovation under Tim Cook is the growth of streaming services. Apple Music launched in November 2015, and allowed subscribers to listen to as much music as they liked for a set monthly fee, streaming it from Apple’s servers. It’s like Netflix, but for music. It was followed by Apple Arcade in September, providing a similar service for gamers, and in November, Apple TV+, a subscription service for movies and TV shows.

On the 31st July 2020, Apple overtook the oil giant Saudi Aramco to become the world’s most valuable company. Once written off as “a chaotic mess without a strategic vision and certainly no future,” today it’s worth more than $2 trillion (US dollars). It’s been quite a turn-around, and the future is looking bright.

Why Apple?

According to Steve Wozniak, it was Steve Jobs who came up with the name ‘Apple’. In a 1984 interview with Byte magazine, he said, “[Jobs] was working from time to time in the orchards up in Oregon. I thought that it might be because there were apples in the orchard or maybe just its fructarian nature. Maybe the word just happened to occur to him. In any case, we both tried to come up with better names but neither one of us could think of anything better after Apple was mentioned.”

The new company name had its advantages. As it started with an ‘A’, it would be near the front of any listings. It also brought to mind Isaac Newton and the famous story of how he discovered gravity when an apple fell on his head, as depicted in the very first Apple logo.

Russ Ware

Russ has been testing, reviewing and writing guides for tech since the heady days of Windows 95 and the Sega Saturn. A self-confessed (and proud) geek about all things tech, if it has LED's, a screen, beeps or has source code, Russ will want to master it (and very likely take it apart to see how it works...)

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