Since the beginning of personal computing, Apple has had
an impact out of proportion to its relatively modest market
share. In a world generally dominated by IBM PC-compat-
ible machines and the Microsoft DOS and Windows operat-
ing systems, Apple’s distinctive Macintosh computers and
more recent media products have carved out distinctive
market spaces.
Headquartered in Cupertino, California, Apple was
cofounded in 1976 by Steve Jobs, Steve Wozniak, and Ron-
ald Wayne (the latter sold his interest shortly after incor-
poration).Their
first product, the Apple I computer, was demonstrated to
fellow microcomputer enthusiasts at the Homebrew Com-
puter Club. Although it aroused considerable interest, the
hand-built Apple I was sold without a power supply, key-
board, case, or display. (Today it is an increasingly valuable
“antique.”)
Apple’s true entry into the personal computing mar-
ket came in 1977 with the Apple II. Although it was more
expensive than its main rivals from Radio Shack and Com-
modore, the Apple II was sleek, well constructed, and fea-
tured built-in color graphics. The motherboard included
several slots into which add-on boards (such as for printer
interfaces) could be inserted. Besides being attractive to
hobbyists, however, the Apple II began to be taken seri-
ously as a business machine when the first popular spread-
sheet program, VisiCalc, was written for it.
By 1981 more than 2 million Apple IIs (in several varia-
tions) had been sold, but IBM then came out with the IBM
PC. The IBM machine had more memory and a somewhat
more powerful processor, but its real advantage was the
access IBM had to the purchasing managers of corporate
America. The IBM PC and “clone” machines from other
companies such as Compaq quickly displaced Apple as
market leader.
The Macintosh
By the early 1980s Steve Jobs had turned his attention to
designing a radically new personal computer. Using tech-
nology that Jobs had observed at the Xerox Palo Alto
Research Center (PARC), the new machine would have a
fully graphical interface with icons and menus and the abil-
ity to select items with a mouse. The first such machine,
the Apple Lisa, came out in 1983. The machine cost almost
$10,000, however, and proved a commercial failure.
In 1984, however, Apple launched a much less expen-
sive version.
Viewers of the 1984 Super
Bowl saw a remarkable Apple commercial in which a female
figure runs through a group of corporate drones (represent-
ing IBM) and smashes a screen. The “Mac” sold reasonably
well, particularly as it was given more processing power and
memory and was accompanied by new software that could
take advantage of its capabilities. In particular, the Mac
came to dominate the desktop publishing market, thanks to
Adobe’s PageMaker program.
In the 1990s Apple diversified the Macintosh line with
a portable version (the PowerBook) that largely set the
standard for the modern laptop computer. By then Apple
had acquired a reputation for stylish design and superior
ease of use.
However, the development of the rather similar
Windows operating system by Microsoft as well as constantly dropping prices for IBM-
compatible hardware put increasing pressure on Apple and
kept its market share limited. (Apple’s legal challenge to Microsoft alleging misappropriation of intellectual property
proved to be a protracted and costly failure.)
Apple’s many Macintosh variants of the later 1990s
proved confusing to consumers, and sales appeared to bog
down. The company was accused of trying to rely on an
increasingly nonexistent advantage, keeping prices high,
and failing to innovate.
However, in 1997 Steve Jobs, who had been forced out of
the company in an earlier dispute, returned to the company
and brought with him some new ideas. In hardware there
was the iMac, a sleek all-in-one system with an unmistak-
able appearance that restored Apple to profitability in 1998.
On the software side, Apple introduced new video-edit-
ing software for home users and a thoroughly redesigned
UNIX-based operating system. In general, the
new incarnation of the Macintosh was promoted as the ideal
companion for a media-hungry generation.
Consumer Electronics
Apple’s biggest splash in the new century, however, came
not in personal computing, but in the consumer electronics
sector. Introduced in 2001, the Apple iPod has been phe-
nomenally successful, with 100 million units sold by 2006.
The portable music player can hold thousands of songs and
easily fit into a pocket. Further, it was accompanied by an easy-to-
use interface and an online music store (iTunes). (By early
2006, more than a billion songs had been purchased and
downloaded from the service.) Although other types of por-
table MP3 players exist, it is the iPod that defined the genre
(see also podcasting). Later versions of the iPod include
the ability to play videos.
In 2005 Apple announced news that startled and perhaps
dismayed many long-time users. The company announced
that future Macintoshes would use the same Intel chips
employed by Windows-based (“Wintel”) machines like the
IBM PC and its descendants. The more powerful machines
would use dual processors (Intel Core Duo). Further, in
2006 Apple released Boot Camp, a software package that
allows Intel-based Macs to run Windows XP. Jobs’s new
strategy seems to be to combine what he believed to be a
superior operating system and industrial design with indus-
try-standard processors, offering the best user experience
and a very competitive cost. Apple’s earnings continued
strong into the second half of 2006.
In early 2007 Jobs electrified the crowd at the Mac-
world Expo by announcing that Apple was going to “rein-
vent the phone.” The product, called iPhone, is essentially
a combination of a video iPod and a full-featured Inter-
net-enabled cell phone (see smartphone). Marketed by
Apple and AT&T (with the latter providing the phone ser-
vice), the iPhone costs about twice as much as an iPod but
includes a higher-resolution 3.5-in. (diagonal) screen and a
2 megapixel digital camera. The phone can connect to other
devices and access Internet services such
as Google Maps. The user controls the device with a new
interface called Multitouch.
Apple also introduced another new media product, the
Apple TV (formerly the iTV), allowing music, photos, and
video to be streamed wirelessly from a computer to an exist-
ing TV set. Apple reaffirmed its media-centered plans by
announcing that the company’s name would be changed from
Apple Computer Corporation to simply Apple Corporation.
In the last quarter of 2006 Apple earned a record-
breaking $1 billion in profit, bolstered mainly by very
strong sales of iPods and continuing good sales of Macin-
tosh computers.
Apple had strong Macintosh sales performance in the
latter part of 2007. The company has suggested that its
popular iPods and iPhones may be leading consumers to
consider buying a Mac for their next personal computer.
Meanwhile, however, Apple has had to deal with ques-
tions about its backdating of stock options, a practice by
which about 200 companies have, in effect, enabled execu-
tives to purchase their stock at an artificially low price.
Apple has cleared Jobs of culpability in an internal investi-
gation, and in April 2007 the Securities and Exchange Com-
mission announced that it would not take action against the
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