Year apple was started

The History Of Apple

Apple has officially become the first $1 trillion company in history! It must come as no surprise as Apple continues to astonish the world with its innovative products and services.

The company had to go through years of struggle, various failures and accomplishments which finally led to the way it stands today – the first ever company to be valued $1 trillion.

Join us on this memory lane as we go back in time to explore the history of Apple from the days when Apple was limited to only a garage in California to the present when it is the most successful company in history.

The Foundation Of Apple

In 1976, Apple was founded by three men: Steve Jobs, Steve Wozniak and Ronald Wayne with the intention of selling Wozniak’s hand-built Personal Computer named Apple 1.

The Apple 1 was sold as a motherboard with CPU, RAM and basic textual-video chips. It then lacked a built-in keyboard, monitor, case or any other Human Interface Devices (which was later added in 1977).

In July 1976, the Apple 1 went on sale and was sold for $666.66. Steve Wozniak took a special liking for repeated numbers and hence the fancy number as the price.

However, Ronald Wayne decided to leave the company only a couple of weeks after it was founded. Wayne then took a cheque of $800 which would have been worth almost $72 billion 40 years later. Wayne was the one to hand sketch the first Apple logo which was then replaced by the bitten apple logo designed by Rob Janoff in 1977.

The Apple Computer Inc. was incorporated on January 3 rd , 1977. Mike Markkula, the multimillionaire who had taken interest in the Apple-1 provided the company required funding and business expertise. Mike Markkula was the 3 rd employee with a one-third share in the company. He suggested a man named Michael Scott be the company’s first president and CEO as he thought Steve was too young and undisciplined to be the CEO.

The Apple II and III

It was in 1977 that the Apple II was introduced, also by Wozniak. VisiCalc (the world’s first ‘killer-app’), a ground-breaking spreadsheet and calculating software helped the Apple II computers to stand ahead of market leaders Tandy and Commodore PET. VisiCalc gave users an additional reason to buy the Apple II because of its office compatibility. With the introduction of colour graphics, the Apple II was able to revolutionize the computer industry.

By 1978, Apple had a real office with several employees and an Apple II production line.

In the years that followed, revenues grew exponentially for the Apple company doubling every four months. Their yearly sales grew from $775,000 to $118 million between September 1977 and September 1980 (average annual growth rate of 533%).

Jobs and several employees were allowed to visit the Xerox PARC lab in 1979. It is world famous for the laser printer, mouse, ethernet networking and other technological accomplishments. Jobs and his engineers visited the PARC campus in return for the option to buy 100,000 shares of apple for $10 a share.

By the year 1980, the competition was growing difficult with IBM and Microsoft in the market. Apple released Apple III in the same year to compete with these companies in the corporate computing market. The Apple III was not as successful due to a design flaw. In order to reduce noise, Jobs insisted computers not have fans or vents which in turn created problems due to dangerous overheating. Thus, the Apple III lost to IBM computers.

However, Jobs had been convinced from the visit to the Xerox PARC labs that all future computers required to use a Graphical User Interface (GUI) like the ones used today. He immediately began the development of a GUI for Apple’s next generation computer, Apple Lisa.

Unfortunately, Jobs was removed from the Lisa team due to infighting and became a part of the low-cost-computer project, the Macintosh. Lisa was released in 1983 and met with disastrous sales due to its high price and limited software support.

Apple went public on December 12, 1980, at $22 per share. According to EDN Network, Apple’s $4.6 million shares sold out immediately and generated more capital than any other IPO (Initial Public Offering) since the Ford Motor Company in 1956. The IPO created $217 million in wealth for Steve Jobs, the largest shareholder. The company’s IPO also created 300 other millionaires instantly.

The Macintosh

After being replaced from the Lisa team, Jobs became the lead of the Macintosh team. The Apple Macintosh is known as the most user-friendly computer to date. It is also known as the first mass-market personal computer to feature an integral GUI and mouse.

The Macintosh, unlike Lisa, was a success thanks to the intense marketing with the iconic “1984” commercial directed by Ridley Scott which aired during the Super Bowl and never again.

Even though the graphics hardware used was very expensive, Apple decided to sell the Macintosh for a price that would put it in the reach of home users. Its black and white graphics and visual abilities attracted design professionals and it was particularly successful in the desktop publishing market due to it’s the same. It had a carrying handle which made it portable and it looked friendly too.

The Macintosh was priced at $2,495 and went on sale in January 1984. It was good value for the money although not cheap. By the beginning of May 1984, 70,000 units were shipped as a result of the “1984” commercial.

In 1983, around the time of launch of the Macintosh, Jobs hired John Sculley as the new Apple CEO when Mark Markkula, the second CEO wanted to retire. Scully was the youngest CEO of Pepsi during the time, but jobs brought him to Apple with the legendary question “Do you want to sell sugared water for the rest of your life? Or do you want to come with me and change the world?”

However, tension grew between Jobs and Sculley when the Macintosh failed to break IBM’s dominance. Moreover, Jobs liked doing things his own way while Sculley wanted strict oversight on future products as both Lisa and the Macintosh had not been able to compete with IBM and others at the time.

Apple without Steve Jobs

In 1985, as friction grew between Jobs and Sculley, Jobs attempted to oust Sculley by staging a coup which then backfired. The Apple’s board took Sculley’s side and removed Jobs from his managerial duties. Jobs then quit his job and founded a new company making advanced workstations name NeXT. Steve Wozniak too left around the same time selling most of his shares saying the company was going in the wrong direction.

With Jobs now out of the company, the board was free to think what kind of machines Apple was going to produce. They decided to target high-end markets with more expensive Macs. Steve Jobs was opposed to the idea of hiking the prices and so it was only after he left that they could implement this policy. They agreed that although fewer units may be sold, similar or higher profits are to be achieved. This policy was called “55 or die” which is Jean-Louis Gassée’s rule that the Macintosh II should deliver at least 55% profit per machine. Gassée was the man whom Sculley hired in place of Steve Jobs.

Although the Apple computers were quite expensive compared to the other computers in the market, they had benefits such as the user interface that kept their users loyal. Apple introduced its PowerBook laptop and system 7 operating system in 1991. The system 7 was behind giving colour to the Macintosh OS and was used until 2001 when OS X was released.

The 1990s saw Apple trying to get into new markets. Gassée also took part in the development of new products such as the Newton MessagePad and the eMate dreaming that these products will drive the company towards new heights.

However, with prices as high as $700 and functions limited to taking notes and managing contacts these new products did not work out in the market. And the Newton MessagePad became the Apple flop of the 1990s. Gassee’s tenure too came to an end in 1990. Apple then introduced the Macintosh Classic, Macintosh LC and Macintosh IIsi, which were lower cost models and they also managed to bring up significant sales.

The Decline of Apple

Apple’s “55 or die” policy backfired in the last years of the decade when IBM clones were getting cheaper and Microsoft’s influence started to rise. Even though Macs offered an excellent library of software, they were limited. Windows 3.0, on the contrary, was on sale for cheap commodity computers.

Apple needed to find its way back in the market and so they introduced a whole new line of computers: the Quadra, Centris and the Performa. The Performa was meant to be a stock item for department stores and other lifestyle outlets as Apple computers were then available only through mail or authorized dealers. There was no Apple Store back then. These lines of computers were, in fact, their existing stock rebranded by adding new consumer-friendly software like ClarisWorks and Grolier Encyclopaedia to attract home users.

This, on the contrary, created confusion among the customers as they did not quite understand the difference between these models.

Apple also experimented on products like digital cameras, portable CD audio players, speakers, TV appliances etc, but they were all unsuccessful. Apple’s market shares and stock prices continued to decline.

To add to the mistakes, Sculley spent a lot of time and cash on bringing System 7 to the new IBM/ Motorola PowerPC microprocessor instead of Intel Processor. As most software were written for Intel processors, and they were cheaper, Apple had no luck finding its way back in the market.

With the highly unsuccessful line of products and the costly decision to move to PowerPC, the Apple board had had enough. In 1993 Sculley was fired and replaced by Michael Spindler as the new CEO, a German expatriate who had been with Apple since the 1980s.

Spindler, unfortunately, had to follow through Sculley’s PowerPC mistake. The first PowerPC run by Macintosh was released in 1994 but Apple’s misfortune continued. One reason was because of the popularity of Windows in the market then.

In 1996, Spindler was replaced by Gil Amelio as CEO. Amelio made several changes such as including extensive layoffs and cut costs. His tenure was also troubled as the Apple stock hit a 12-year low. Amelio then decided to purchase Jobs’ NeXT Computer for $429 million in February of 1997 and brought back Steve Jobs to Apple.

Rise To Profits

Jobs convinced the board to make him the interim CEO in July 1997. Due to the huge financial losses and a three-year record low stock price the board agreed with Jobs. Amelio resigned a week later.

During the 1997 Macworld Expo, Jobs announced Apple was joining hands with Microsoft to create new versions of Microsoft for the Macintosh. He also announced that Microsoft had invested $150 million in non-voting Apple stock. On November 10, 1997, Apple introduced the Online Apple Store.

Jobs was impressed by the design talent of Jonathan Ive and they paired to rebuild Apple’s status. The iMac was introduced on August 15, 1998, an all in one computer. Jonathan Ive lead the iMac design team and he would later design the iPod and the iPhone. 80,000 units of the iMac were sold in just 5 months as a result of modern technological features and a unique design.

Jobs did not want a wide range of products and preferred to concentrate on a narrow range of products. He reduced the range of computers to four- two for businesses and two for consumers. He also closed down a lot of other divisions including the Newton MessagePad.

In 1998, Apple purchased Macromedia’s Key Grip Software Project, thus expanding its video editing market. The product was named Final Cut Pro when it was launched in April 1999. It was unfinished even at the time of its sales. Key Grip Software’s development led to Apple’s release of the video editing product called iMovie in October 1999.

The Mac OS X was introduced in place of System 7 in 2001 which was based on the operating system from NeXT computers. In the same year, the iPod portable digital audio player was released, and it sold 100 million units within six years.

Following this, Apple acquired German company Astarte and Apple created iDVD for the consumer market using Astarte’s DVD authoring technology. Apple purchased two companies in 2002 – Nothing Real for digital composing application and Emagic for music productivity application Logic. Apple became the first computer manufacturer to own a music company after purchasing Emagic.

Apple’s iTunes music store was introduced in 2003 and the service offered online music downloads for $0.99 per song and also integrated it to the iPod. iTunes became the world’s largest music retailer by 2005.

In 2006, Apple finally decided to switch to an Intel-based system architecture. The MacBook Pro was the Apple’s first laptop with an intel core processor.

Between 2003 and 2006 the Apple’s stock price increased by more than ten times, from $6 per share to $80 per share.

The iPhone

The iPhone was announced at the Macworld Expo on January 9, 2007. Jobs also announced that Apple Computer, Inc would thereafter be called Apple Inc. as the company had widened its emphasis to consumer electronics as well. 270,000 iPhones were sold during the first 30 hours of its sales and it came out to be known as a “game-changer for the industry”. Widespread success was achieved with the introduction of iPhone, iPod Touch and iPad products.

The App Store was launched by Apple in July 2008 to sell third-party applications for the iPhone and iPod-Touch. Within a month, 60 million applications were sold through the App store and it was able to register an average daily revenue of $1 million. Apple also became the third-largest mobile handset supplier in the world thanks to the popularity of the iPhone.

Apple shares hit a staggering $300 in October 2010.

Steve Jobs resigned from his position as CEO due to health factors on August 24, 2011, and was replaced by Tim Cook. Jobs passed away on October 5, 2011, which marked the end of an incredible era for Apple and brought a big diversion in Apple’s history.

However, Apple still continues to influence the markets with ground-breaking technological wonders to date.

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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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