How was apple started

How Did Apple Get So Big?

The Story Behind Apple’s Success

On August 2, 2018, Apple made history by becoming the first publicly traded U.S. company to be valued at $1 trillion, as measured by market capitalization.   In August of 2020, the company broke records again by becoming the first U.S. company to reach a $2 trillion market cap.   Apple (AAPL) hovered just below that level as of early October 2020.

Since 2010, Apple has been one of the most valuable companies in the world.   It stayed at or near the top for many years after that.   The reason Apple is so highly valued is simple on the surface: the company makes popular products with generous margins. However, a curious reader who digs a little deeper will find mistakes, overthrown CEOs, and much more. In this article, we’ll look at the story behind Apple’s success.

Key Takeaways

• Steve Jobs and Steve Wozniak co-founded Apple in 1977, introducing first the Apple I and then the Apple II.
• Apple went public in 1980, but Jobs eventually left—only to triumphantly return several years later.
• Apple’s success lies in a strategic vision that transcended simple desktop computing to include mobile devices and wearables.
• Both performance and design are key drivers of the Apple brand and its ongoing success.

From Apple I to Steve Jobs 2.0

Understanding why Apple became so successful requires looking back at its origins and history. From the first Apple computer (the Apple I, which was just a motherboard without a monitor or keyboard) to the latest iWatch, here is a brief overview of the chronology of Apple’s innovative products.

Apple, founded by Steve Jobs and Steve Wozniak, started out in the business of kit computers with the Apple I.   This initial production run is popular as a collectible now. However, it will mainly be remembered for helping the company get enough capital to build the Apple II in 1977—the same year Apple officially incorporated.   Wozniak primarily built both these computers, and Jobs handled the marketing side. 

The Apple II drove the company’s revenue until the mid-1980s, despite the hardware remaining largely the same. Apple attempted updates like the Apple III and the Apple Lisa, but these failed to catch on commercially. Although the Apple II was still selling, Apple as a company was in trouble when the 1980s began.

The 1984 release of the Macintosh was a leap forward for Apple. However, in the intervening years between the Apple II and the Macintosh, IBM had caught up. Disappointing revenues from the Macintosh and internal struggles for control led to Apple’s board dismissing Jobs in favor of John Sculley (some sources say Jobs decided to leave). 

In any case, Jobs worked on NeXT Inc. after leaving Apple. Under Sculley, Apple started growing its product lines.

Sculley served as Apple’s CEO until 1993.   During those years, Apple enjoyed strong growth. It created new products, including laser printers, Macintosh Portable, PowerBooks, the Newton, and much more. Apple products continued to sell at a premium, so the margins were generous for Apple and led to strong financial results. During the same period, however, cheaper computers running Windows were serving a far larger middle market, while Windows also benefited from powerful Intel processors. By comparison, Apple seemed to be stalling.

Two CEOs, Michael Spindler and Gil Amelio, failed to turn the tide against the relentless spread of systems running Microsoft operating systems.   Microsoft’s new operating system, Windows, was becoming the industry standard, and the Apple Macintosh was showing signs of age. Amelio eventually set about addressing some of these issues by buying NeXT Inc.—the company run by none other than Apple founder Steve Jobs.

The Second Chance CEO

From the Macintosh onward, Apple has either been a reflection of or a reaction to Steve Jobs. In the Macintosh, Apple was trying to create a machine that made computing simple and enjoyable. In particular, Jobs was out to create a user experience that would convince everyone to buy a Mac.

Jobs believed a truly revolutionary product couldn’t depend on customers’ needs and wants. He thought customers could not understand the value of a product until they were actually using it. Unfortunately, Jobs was ahead of his time in 1985—precisely 12 years ahead of his time.

When Jobs overthrew Amelio and took Apple’s reins once more in 1997, the hardware had caught up to his vision for all things digital. He launched the iMac with a strong marketing campaign featuring the «Think Different» slogan. Although Jobs is often given credit for spending the money and time on marketing, excellent marketing and branding have always been key to Apple’s growth. The real difference between the iMac and all the products preceding it was the beauty and design.

It was not a tower and monitor setup like every other PC on the market. The iMac almost looked like a racer’s helmet photographed at speed, a colorful blur sweeping back from the screen. In 1998, the iMac was the most aesthetically pleasing machine on the market. It was the computer no one knew they wanted until they saw it. It was elegant and, thanks to the OS upgrade, it was user-friendly.

The iEcosystem

The iMac was just the start as Apple released a string of hit products that reflected the new focus on elegance and user experience. These included the iBook, the iPod, the iPhone, the MacBook Air, and the iPad. The iPod became the category killer in MP3 players, and the iPhone essentially launched and then dominated the smartphone market. The iPad then somehow convinced millions of people that they needed yet another screen to consume content.

All these devices were perceived as being better in quality—and certainly in design—than competing products. Jobs was relentless on design and indoctrinated the entire culture of Apple into the art of design.

The other point he brought Apple back to in his second tenure is the ease of use. After a few minutes of using the wheel on an iPod or tapping icons on an iPad, these new forms of control became part of the simplicity that makes Apple appealing. Now every product update from Apple is anticipated by the media and the general public, in addition to the fans that the company had from the start.

More importantly, all of these products moved Apple into a new business model of creating a tight ecosystem of hardware, software, and content. Apple didn’t create iTunes to be a simple program for users to transfer MP3s onto iPods, as was the case with many other manufacturers’ offerings. Instead, the company attacked the concept of an album by breaking them into songs that would be sold individually at a fraction of the whole album’s price.

The same process took place with software. Many popular computer functions could be done on Apple’s mobile devices using stripped-down apps—available, of course, on Apple’s App Store.

Being the first big mover into many of these markets, Apple built the stadium and set the rules for the game. When you pay for books, movies, apps, or music on an Apple device, Apple gets a cut. Of course, this business doesn’t generate as much revenue as selling an iPhone or an iPad, where the markup is much more generous.

That said, it is the content you buy through Apple that locks many people into buying Apple again when their i-devices get old. So the content part of the ecosystem pays off for Apple in the short-term and the long-term. Once you migrate to Apple because of the design or the simplicity, it is the integration with your content that keeps you there.

The Post-Jobs Era

Steve Jobs died in 2011 of pancreatic cancer.   Serving as CEO until shortly before his death, Steve Jobs turned the reins of the company over to Tim Cook.   The post-Jobs era at Apple has nonetheless been a success by most measures. Apple continued to be the dominant tech company in both market share and stock price.

Some analysts feel that without Jobs as the creative force, Apple has become solely iterative in its tech releases rather than transformative. The major release of the post-Jobs era has been the Apple Watch. The firm also created Apple TV devices and launched the Apple TV+ streaming video-on-demand service to go with it.

In the absence of a groundbreaking new product, Apple is heavily reliant on the iPhone’s production cycle to power its financial success. Critics say that without Steve Jobs at the helm, Apple has lost its innovative edge in recent years and is riding on its brand to drive sales.

The company still produced some of the best products with the most integrated ecosystem. However, the gap between Apple and competitors like Samsung and Google was no longer as pronounced as it once was. Indeed, companies like Samsung were increasingly poised to take the lead when it comes to product innovation in some categories.

Apple in the 20s

Apple’s market capitalization reached new highs in 2020, as the company enjoyed some successes and set new goals for the future. The company’s revenue from wearable technology, such as the Apple Watch, set new records. Apple’s revenue from services also rose to record highs during the 2020 crisis, as contactless payment options like Apple Pay became more popular.

Apple also announced two major changes to the Mac in 2020. First, Apple is transitioning the Mac away from Intel processors to its own custom-designed chips. Apple’s new processors are based on the ones used in iPhones and iPads, making them more energy-efficient. The new chips have the potential to give Apple’s laptops longer battery life and more processing power than PCs.

Secondly, Apple is changing the macOS so that developers can make iOS and iPadOS apps run on the Mac without modifications. That will dramatically expand the number of apps available on the Mac and make it more competitive with PCs.

The Bottom Line

There is a fairly good chance that you are reading this article either on an Apple device or with one near you. Maybe you are doing it on a MacBook Air while listening to an iPod touch and occasionally glancing at the newest Apple Watch for alerts from your iPhone. The reason behind that—and behind Apple’s success—is that its devices are beautiful to look at and a pleasure to use. That’s why the company has such a powerful brand and lofty stock valuation.

The marketing helps, and the media and fan frenzy never hurt. However, it is the quality of the products that drive Apple’s success. Add to this the iEcosystem that makes it much easier to stay with Apple than try something new, and you have a company with what Warren Buffett called an economic moat. It should not be surprising that Buffett invested heavily in Apple.

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How and When Apple Was Founded: Steve Jobs, Wozniak and Ronald Wayne

Today Apple is undoubtedly one of the most important multinationals in the world, both for its market volume and for its market value. All tech giants have a beginning that at times may not be the most glamorous as Apple did. In this article we tell you

Steve Wozniak, the computer genius

To talk about how Apple was founded, you certainly have to start with the childhood of one of its founders: Steve Wozniak. Woz’s wizard, as he liked to be called, was born in 1950 with a knack for computing. At an early age he created a machine that allowed adding and subtracting. This may seem relatively straightforward today, but in 1950 computing and how to create intelligent machines were still being explored. His studies took place at Barkeley where he studied computing.

Wozniak was dedicated to designing different circuits on paper and then trying to put them into practice. This was undoubtedly the great trigger to bring his knowledge to other minds, such as his neighbor Bill Fernández . Both Wozniak and Bill tried to create a first personal computer between the two that ended up being a real disaster. This inconvenience caused Steve Jobs and Wozniak to meet in 1971 in order to start working together on a new personal computer. Steve Jobs was no electronic scholar, Wozniak himself being the one who taught him everything he knew by actually starting to work on what would be the Apple Lisa I.

It is important to note that Steve Jobs was only 15 years old at the time, but he already showed leadership and ambition attitudes that were combined with Wozniak’s great idea: creating a personal computer. The first work they did together was blue boxes that allowed long distance phone calls to be made at no cost. This product was sold for $ 150 each, with the proceeds being divided between Wozniak and Jobs. Although this may seem somewhat insignificant, this was undoubtedly the beginning of Apple by showing the projects that the two founders of the company could carry out.

The first inspiration for Jobs and Wozniak

The fact of making a personal and functional computer is something that at first surpassed the two geniuses. The failure of the first Wozniak-designed prototype did not set a good precedent, but technology was advancing rapidly. Attendance at Homebrew Computer Club meetings and the launch of the new Atair 8800 and IMSAI microcomputers inspired Wozniak to create his own computer. The problem that arose was the high price of the components to design the product. That is why for several months he limited himself to making designs on paper until a CPU could be allowed to bring it to reality. It was MOS Technology that launched the 6502 processor in 1976 for a price of $ 20. Although he had in his designs focused on the 6800 processor, he was able to make the appropriate changes to adapt to the new chip.

It was on March 1, 1976 when Steve Wozniak completed the design of the computer. To receive feedback from the rest of his colleagues, he decided to send it to the Homebrew Computer Club, a group of electronics enthusiasts that met in Menlo Park. This team was essential to be able to make important advances in the world of computing by being open to sharing ideas among all members.

The ambition of Steve Jobs, unleash the initial success

Where Wozniak saw in his plans a perfect machine to turn into a personal computer, Jobs saw an incredible business idea. This was the moment where the abilities of both founders were combined to be able to create a company from scratch with a project that was on paper. Initially, Wozniak’s goodwill made him think of showing his project for free to all the big companies of the time. This is something that Jobs obviously did not want, offering the possibility of selling only totally naked motherboards in the beginning. In parallel Steve Wozniak traveled to Hewlett Packard (HP) to show his plans. The result he obtained was five negative, as he did not find the meaning of this personal computer.

Finally, thanks to the insistence that Steve Jobs put, Wozniak agreed to do business together in order to create a new company.

The seed funding problem

The beginnings of Apple were quite humble since none of the founders had the money to begin their journey. That is why they had to start selling all the valuables they had to get enough money. This was used to start creating the printed circuit boards proposed by Steve Jobs in the beginning.

The original funding was less than $ 1,000. These came after Jobs’s Volkswagen Type 2 van sold for about $ 300 and Wozniak’s HP-65 programmable calculator for $ 500. With this initial investment, it was possible to start the production and sale of the first printed circuit boards that would allow the necessary financing to be obtained to produce and design the Apple I, the company’s first personal computer.

Steve Jobs’ garage: the origin of everything?

It has always been thought that the founding of Apple was made in Steve Jobs’ garage in the house located at 2066 Crist Drive in Los Altos (California). Although, this is a simple myth since Wozniak himself stated in different interviews that neither designs, nor tests nor prototypes were made in the garage. Apparently it only served as a home for the founders of the company, not having much money for it. Although the biography of Steve Jobs details that it was at this address that many of the interviews with companies were carried out to sell their ideas, taking effect.

Recreation of Steve Jobs’ garage (not true to life) from the movie Jobs

In this house, the founding agreement of Apple was also officially signed on April 1, 1976. It was signed by three people: Steve Wozniak, Steve Jobs and also the ‘unknown’ Ronald Wayne. This date is where the company began to function as a commercial company. Importantly, Ronald Wayne left the company 12 days after it was founded in exchange for $ 800. This decision was motivated by the bad experiences he had had in the past as an entrepreneur.

Origin of ‘Apple Computer’

In the agreement that all parties signed, the company was called Apple Computer. According to Steve Wozniak, it was Jobs himself who came up with this name after returning from Robert Friedland’s All-One farm in Oregon. As he reflected on this farm, he was doing one of his typical frugivorous diets and the thought of that name came to mind that it was fun, upbeat and not intimidating. Other major factors that favored the choice of this new one was the competition with Atari. By choosing ‘Apple Computer’ in the telephone directory, they would come out first in the face of agreements with other companies. It is interesting to see how the ambition and desire to succeed that Steve Jobs had at that time is so present in the name.

Apple startup problems

As we have said before, Wozniak received numerous negatives when he went with his project to different leading technology companies such as HP. The main problem that arose was the price of the components at that time, making it very difficult to produce and market due to the high existing risk. When you start with a new product, it is not known exactly whether it will end up catching on with users. Companies cannot afford such a high level of risk when making an investment, because if it goes wrong it would be money lost.

The second problem that arises is that at that time it was not conceived that there was a computer in homes. It was normally used for business rather than domestic use, but Wozniak argued that a personal computer could be implemented in homes. In the end it has been seen that not having a computer at home is something that is not conceived, but at that time the uses were not found. That is why up to 5 refusals were received at HP and that forced Steve Jobs to seek financing elsewhere. If they did not get this financing, they should continue to sell bare plates, which was not the objective they had set.

Apple’s first big deal

Once Steve Wozniak had perfected what would be the company’s first personal computer, the Apple I, they again traveled to the Homebrew Computer Club. It was here that they caught the attention of Paul Terrell, head of the computer store Byte Shop. He was so impressed that he offered his cards to both founders and stated that they would be in touch. But Jobs was not a person to wait for deals, and the next day he went to the Byte Shop in Mountain View so he could sell Terrell the circuit boards they were making. But he did not make it easy for him as he asked that the computers be fully assembled, and that there be a total of 50 units. In exchange, he would pay her $ 500 each. The problem that arose in this case is that they did not have the money to pay for the components of the Apple I.

In order to get the financing Steve Jobs went to see a credit manager. When they saw the project and the large figures he was claiming, they were not going to grant him the loan, but thanks to the purchase order and the promise to return it in 30 days. Although it was somewhat risky, he ended up convincing the lender and granted him the loan he was requesting. The problem is that building so many teams is that there were few people and a lot of work ahead. They spent night and day working to be able to fulfill the delivery and in the end they finished manufacturing the assembled circuit factories. Terrell was surprised as he did not expect the deadline to be met but was met with an unpleasant surprise. It was expected that the plates would be accompanied by a screen, keyboard and housing but they were bare. Similarly, the agreement was fulfilled and Terrell made the promised payment.

Apple I launch and success

In July 1976 the Apple I was officially launched with a price of $ 666.66. The truth is that this figure is quite peculiar, but according to Wozniak they decided on it since he loves the repetition of numbers. Sales reached 200 units thanks to characteristics that differentiated it from other computers. For example, a television could be connected as a display medium displaying 60 characters per second. Wozniak designed a cassette player as an accessory to be able to upload and download information at a speed of 1200 bits per second. This computer was considered a work of art in computing, since it hardly used parts, although the functions it could perform were very simple if you look at the current context. Without a doubt, Steve Wozniak established himself as one of the best engineers thanks to his creativity and ingenuity when developing new equipment. From here Wozniak focused solely on the creation of the Apple II while Steve Jobs sought financing and was the visible face of the company.

That is why to this day we remember and have in mind the person of Jobs at the head of Apple much more deeply rooted. In the end, he was a true visionary who knew how to move the masses and convince whoever was necessary, such as a lender, to offer him financing for his project as we have commented previously.

Apple’s real takeoff

Obviously the company that was starting could not settle for loans and specific orders. Jobs aspired to the high ground and began looking for major investments. There were many investors who spoke with Jobs like Don Valentine but most closed the door to them because they did not see enough security behind the business. It was finally the millionaire Mike Markkula who saw great potential in Apple Computer and that is why he became the company’s first investor. He initially offered the two Steve a line of credit of $ 250,000. Obviously in return this investor received 33% of the company to be able to participate in decision-making

Finally, the corporation that was created with this investor bought Apple Computer, which was only 9 months old. In February 1977, the first president and CEO of Apple, Michael Scott, was appointed since neither Steve Jobs nor Wozniak had the necessary experience to lead the company. Eventually both founders took their project very seriously, Wozniak resigning from his position at HP to work full time at Apple. From here they continued to design new computers that came out over the years, Apple continued to consolidate itself as a leading company in technology and innovation.

Goal accomplished: the legacy of the founders is fulfilled

More than 40 years after the founding of Apple, the company continues to grow like never before. The good foundations that both Steve Jobs and Wozniak built have made the company worth more than a trillion dollars right now. Of the first 200 personal computers that were sold, they now number in the millions. This undoubtedly is an indication that the work that began several years ago, despite the stones in the way, has culminated in success. It is always interesting to know how a billion dollar company started from scratch with two teenagers drawing pictures on paper. And there are still many years ahead for this company that faithfully meets the objectives set at the beginning.

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