Apple Inc., formerly
Apple Computer, Inc., is a
multinational corporation that creates
consumer electronics, personal computers, computer software, and
commercial servers, and is a
digital distributor of media content. Apple's core product lines are the
iPhone smart phone,
iPad tablet computer,
iPod portable media players, and
Macintosh computer line. Founders
Steve Jobs and
Steve Wozniak effectively created
Apple Computer on April 1, 1976, with the release of the
Apple I, and incorporated the company on January 3, 1977,
[1] in
Cupertino, California.
For more than two decades, Apple Computer was predominantly a manufacturer of personal computers, including the
Apple II,
Macintosh, and
Power Mac
lines, but it faced rocky sales and low market share during the 1990s.
Jobs, who had been ousted from the company in 1985, returned to Apple in
1996 after his company
NeXT was bought by Apple.
[2] The following year he became the company's interim CEO,
[3] which later became permanent.
[4] Jobs subsequently instilled a new corporate philosophy of recognizable products and simple design, starting with the
original iMac in 1998.
With the introduction of the successful
iPod music player in 2001 and
iTunes Music Store
in 2003, Apple established itself as a leader in the consumer
electronics and media sales industries, leading it to drop "Computer"
from the company's name in 2007. The company is now also known for its
iOS range of smart phone, media player, and tablet computer products that began with the
iPhone, followed by the
iPod Touch and then
iPad. As of 2012, Apple is the
largest publicly traded corporation in the world by market capitalization, with an estimated value of US$626 billion as of September 2012.
[5][6] Apple Inc's market cap is larger than that of
Google and
Microsoft combined.
[7][8] Apple's worldwide annual revenue in 2010 totaled US$65 billion, growing to US$127.8 billion in 2011
[9] and $156 billion in 2012.
[10]
1969–1984: Jobs and Wozniak
Pre-foundation
Garage of Steve Jobs' parents' home in Los Altos, California
Steve Jobs and
Steve Wozniak had withdrawn from
Reed College and
UC Berkeley,
respectively by 1975. Wozniak designed a video terminal that he could
use to log on to the minicomputers at Call Computer. Alex Kamradt
commissioned the design and sold a small number of them through his
firm. Aside from their interest in up-to-date technology, the impetus
for "the two Steves" seems to have had another source. In his essay
From Satori to Silicon Valley (published 1986), cultural historian
Theodore Roszak made the point that the Apple Computer emerged from within the West Coast
counterculture
and the need to produce print-outs, letter labels, and databases.
Roszak offers a bit of background on the development of the two Steves’s
prototype models.
In 1976, Wozniak started attending meetings of the
Homebrew Computer Club. New microcomputers such as the
Altair 8800 and the
IMSAI inspired him to build a microprocessor into his video terminal and have a complete computer.
At the time the only
microcomputer CPUs generally available were the $179
Intel 8080 ($777.00 in present-day terms
[11]), and the $170
Motorola 6800 ($738.00 in present-day terms
[11]).
Wozniak preferred the 6800, but both were out of his price range. So he
watched, and learned, and designed computers on paper, waiting for the
day he could afford a CPU.
When
MOS Technology released its $20 ($82.00 in present-day terms
[11])
6502 chip in 1976, Wozniak wrote a version of
BASIC
for it, then began to design a computer for it to run on. The 6502 was
designed by the same people who designed the 6800, as many in Silicon
Valley left employers to form their own companies. Wozniak's earlier
6800 paper-computer needed only minor changes to run on the new chip.
Wozniak completed the machine and took it to Homebrew Computer Club
meetings to show it off. At the meeting, Wozniak met his old friend
Jobs, who was interested in the commercial potential of the small hobby
machines.
The Apple I was sold as an assembled circuit board and lacked basic
features such as a keyboard, monitor, and case. The owner of this unit
added a keyboard and a wooden case.
The Apple logo in 1977 created by
Rob Janoff with the rainbow color theme used until 1998.
Steve Jobs and Steve Wozniak had been friends for some time, having met in 1971, when their mutual friend,
Bill Fernandez,
introduced 21-year-old Wozniak to 16-year-old Jobs. They began their
partnership when Wozniak, a talented, self-educated electronics
engineer, began constructing boxes which enabled one to make
long-distance phone calls at no cost, and sold several hundred models.
[12] Later, Jobs managed to interest Wozniak in assembling a computer machine and selling it.
Jobs approached a local computer store,
The Byte Shop, who
said they would be interested in the machine, but only if it came fully
assembled. The owner, Paul Terrell, went further, saying he would order
50 of the machines and pay US $500 ($2.05 thousand in present-day terms
[11]) each on delivery.
[13]
Jobs then took the purchase order that he had been given from the Byte
Shop to Cramer Electronics, a national electronic parts distributor, and
ordered the components he needed to assemble the Apple I Computer. The
local credit manager asked Jobs how he was going to pay for the parts
and he replied, "I have this purchase order from the Byte Shop chain of
computer stores for 50 of my computers and the payment terms are
COD.
If you give me the parts on a net 30-day terms I can build and deliver
the computers in that time frame, collect my money from Terrell at the
Byte Shop and pay you."
[14][15]
The credit manager called Paul Terrell who was attending an IEEE
computer conference at Asilomar in Pacific Grove and verified the
validity of the purchase order. Amazed at the tenacity of Jobs, Terrell
assured the credit manager if the computers showed up in his stores Jobs
would be paid and would have more than enough money to pay for the
parts order. The two Steves and their small crew spent day and night
building and testing the computers and delivered to Terrell on time to
pay his suppliers and have a tidy profit left over for their celebration
and next order. Steve Jobs had found a way to finance his soon-to-be
multimillion-dollar company without giving away one share of stock or
ownership.
The machine had only a few notable features. One was the use of a
TV
as the display system, whereas many machines had no display at all.
This was not like the displays of later machines, however; text was
displayed at a terribly slow 60 characters per second. However, this was
still faster than the teleprinters used on contemporary machines of
that era. The
Apple I also included
bootstrap code on
ROM,
which made it easier to start up. Finally, at the insistence of Paul
Terrell, Wozniak also designed a cassette interface for loading and
saving programs, at the then-rapid pace of 1200 bit/s. Although the
machine was fairly simple, it was nevertheless a masterpiece of design,
using far fewer parts than anything in its class, and quickly earning
Wozniak a reputation as a master designer.
Joined by another friend,
Ronald Wayne,
the three started to build the machines. Using a variety of methods,
including borrowing space from friends and family, selling various
prized items (like
calculators and a
VW bus)
and scrounging, Jobs managed to secure the parts needed while Wozniak
and Wayne assembled them. But the owner of the Byte Shop was expecting
complete computers, not just printed circuit boards. The boards still
being a product for the customers Terrell still paid them.
[16] Eventually 200 of the Apple I's were built.
Apple II
Wozniak had already moved on from the Apple I. Many of the design
features of the I were due to the limited amount of money they had to
construct the prototype, but with the income from the sales he was able
to start construction of a greatly improved machine, the
Apple II; it was presented to the public at the first
West Coast Computer Faire
on April 16 and 17, 1977. On the first day of exhibition, Jobs
introduced Apple II to a Japanese chemist named Toshio Mizushima who
became the first authorized Apple dealer in Japan.
The main difference internally was a completely redesigned TV
interface, which held the display in memory. Now not only useful for
simple text display, the Apple II included graphics, and, eventually,
color. Jobs meanwhile pressed for a much improved case and keyboard,
with the idea that the machine should be complete and ready to run out
of the box. This was almost the case for the Apple I machines sold to
The Byte Shop, but one still needed to plug various parts together and
type in the code to run BASIC.
Building such a machine was going to be financially burdensome. Jobs
started looking for cash, but Wayne was somewhat gun-shy due to a failed
venture four years earlier, and eventually dropped out of the company.
Banks were reluctant to lend Jobs money; the idea of a computer for
ordinary people seemed absurd at the time. Jobs eventually met
Mike Markkula
who co-signed a bank loan for US$250,000, and the three formed Apple
Computer on April 1, 1976. The name Apple was chosen because the company
to beat in the technology industry at the time was
Atari,
and Apple Computer came before Atari alphabetically and thus also in
the phone book. Another reason was that Jobs had happy memories of
working on an Oregon apple farm one summer.
[17]
With both cash and a new case design in hand thanks to designer
Jerry Manock, the Apple II was released in 1977 and became the computer generally credited with creating the
home computer market.
[citation needed] Millions were sold well into the 1980s. A number of different models of the
Apple II series were built, including the
Apple IIe and
Apple IIGS, which could still be found in many schools as late as 2005.
[citation needed]
Apple III
While the Apple II was already established as a successful
business-ready platform because of Visicalc, Apple was not content. The
Apple III was designed to take on the business environment. It was
released on May 19, 1980.
The Apple III was a relatively conservative design for computers of
the era. However, Steve Jobs did not want the computer to have a fan;
rather, he wanted the heat generated by the electronics to be dissipated
through the
chassis of the machine, forgoing the cooling fan.
Unfortunately, the physical design of the case was not sufficient to
cool the components inside it. By removing the fan from the design, the
Apple III was prone to overheating. This caused the
integrated circuit
chips to disconnect from the motherboard. Customers who contacted Apple
customer service were told to "raise the computers six inches in the
air, and then let go", which would cause the ICs to fall back into
place.
Thousands of Apple III computers were recalled and, although a new
model was introduced in 1983 to rectify the problems, the damage was
already done.
Apple IPO
In August 1980, the
Financial Times reported that
- "Apple Computer, the fast growing Californian manufacturer of small
computers for the consumer, business and educational markets, is
planning to go public later this year. [It] is the largest private
manufacturer in the U.S. of small computers. Founded about five years
ago as a small workshop business, it has become the second largest
manufacturer of small computers, after the Radio Shack division of the Tandy company."[18]
On December 12, 1980, Apple launched the
Initial Public Offering of its stock to the investing public. When Apple went public, it generated more capital than any IPO since
Ford Motor Company in 1956 and instantly created more millionaires (about 300) than any company in history.
[19] Several venture capitalists cashed out, reaping billions in long-term capital gains.
In January 1981, Apple held its first shareholders meeting as a public company in the
Flint Center, a large auditorium at nearby
De Anza College,
which is often used for symphony concerts. (Previous meetings were held
quietly in smaller rooms, because there had only been a few
shareholders.) The business of the meeting had been planned (or
choreographed) so that the voting could be staged in 15 minutes or less.
In most cases, voting proxies are collected by mail and counted days or
months before a meeting. In this case, after the IPO, many shares were
in new hands.
Steve Jobs
started his prepared speech, but after being interrupted by voting
several times, he dropped his prepared speech and delivered a long,
emotionally charged talk about betrayal, lack of respect, and related
topics.
[citation needed]
Xerox PARC and the Lisa
While Apple Computer’s business division was focused on the Apple
III, a separate group was focused on a computer that would change the
world.
[citation needed]
While the Apple III was another iteration of the text-based computer,
this new machine would feature a completely different interface and
introduce the words
mouse,
icon, and
desktop into the
lexicon of the computing public.
In return for the right to buy US$1,000,000 of pre-
IPO
stock, Xerox granted Apple Computer three days access to the PARC
facilities. After visiting PARC, they came away with new ideas that
would complete the foundation for Apple Computer's first
GUI computer, the
Apple Lisa.
[20][21][22][23]
The first iteration of Apple's
WIMP
interface was a floppy disk where files could be spatially moved
around. After months of usability testing, Apple designed the LISA
interface of windows and icons.
The Lisa was introduced in 1983 at a cost of US$9,995 ($23.4 thousand in present-day terms
[11]). Because of the high price, Lisa failed to penetrate the business market.
Macintosh and the "1984" commercial
The
Macintosh 128k was announced to the press in October 1983, followed by an 18-page brochure included with various magazines in December.
[24] Its debut, however, was announced by a single national broadcast of the now famous US$1.5 million television commercial, "
1984". It was directed by
Ridley Scott, aired during the third quarter of
Super Bowl XVIII on January 22, 1984,
[25] and is now considered a "watershed event"
[26] and a "masterpiece."
[27] 1984 used an unnamed heroine to represent the coming of the Macintosh (indicated by her white
tank top with a
Picasso-style picture of
Apple’s
Macintosh computer on it) as a means of saving humanity from "conformity" (
Big Brother).
[28] These images were an
allusion to
George Orwell's noted novel,
Nineteen Eighty-Four, which described a
dystopian future ruled by a televised "
Big Brother."
For a special post-election edition of
Newsweek in November 1984, Apple spent more than US$2.5 million to buy all 39 of the advertising pages in the issue.
[29]
Apple also ran a “Test Drive a Macintosh” promotion, in which potential
buyers with a credit card could take home a Macintosh for 24 hours and
return it to a dealer afterwards. While 200,000 people participated,
dealers disliked the promotion, the supply of computers was insufficient
for demand, and many were returned in such a bad shape that they could
no longer be sold. This marketing campaign caused CEO
John Sculley to raise the price from US$1,995 to US$2,495 ($5.61 thousand in present-day terms
[11]).
[30][31]
Two days after the 1984 ad aired, the Macintosh went on sale. It came
bundled with two applications designed to show off its interface:
MacWrite and
MacPaint.
Although the Mac garnered an immediate, enthusiastic following, it was
too radical for some, who labeled it a mere "toy". Because the machine
was entirely designed around the GUI, existing text-mode and
command-driven applications had to be redesigned and the programming code rewritten; this was a challenging undertaking that many
software developers shied away from, and resulted in an initial lack of software for the new system. In April 1984
Microsoft's
MultiPlan migrated over from
MS-DOS, followed by
Microsoft Word in January 1985.
[32] In 1985,
Lotus Software introduced
Lotus Jazz after the success of
Lotus 1-2-3 for the
IBM PC, although it was largely a flop.
[33] Apple introduced
Macintosh Office the same year with the
lemmings ad, infamous for insulting potential customers. It was not successful.
[30]
Macintosh also spawned the concept of
Mac evangelism which was pioneered by Apple employee, and later
Apple Fellow,
Guy Kawasaki.
[citation needed]
Despite initial marketing difficulties, the Macintosh brand was
eventually a success for Apple. This was due to its introduction of
desktop publishing (and later
computer animation) through Apple's partnership with
Adobe Systems which introduced the
laser printer and
Adobe PageMaker.
Indeed, the Macintosh would become known as the de facto platform for
many industries including cinema, music, advertising, publishing and the
arts.
1985: Jobs leaves Apple
After an internal power struggle, the board of directors sided with
Sculley and Jobs was stripped of all duties. Jobs, while taking the
position of Chairman of the firm had no influence over Apple's direction
and subsequently resigned.
[34]
In a show of defiance at being set aside by Apple Computer, Jobs sold
all but one of his 6.5 million shares in the company for $70 million.
Jobs then acquired the
visual effects house,
Pixar for $5M ($10.6 million in present-day terms
[11]). He also went on to found
NeXT Inc., a computer company that built machines with futuristic designs and ran the UNIX-derived
NeXTstep
operating system. NeXTSTEP would eventually be developed into Mac OS X.
While not a commercial success, due in part to its high price, the NeXT
computer would introduce important concepts to the history of the
personal computer (including serving as the initial platform for
Tim Berners-Lee as he was developing the
World Wide Web).
[35]
1985–1997: Sculley, Spindler, Amelio
Corporate performance
Under leadership of John Sculley, Apple issued its first corporate
stock dividend on May 11, 1987. A month later on June 16, Apple stock
split for the first time in a 2:1 split. Apple kept a quarterly dividend
with about 0.3% yield until November 21, 1995.
[citation needed] Between March 1988 and January 1989, Apple undertook five acquisitions, including software companies Network Innovations,
[36] Styleware,
[37] Nashoba Systems,
[38] and Coral Software,
[39] as well as satellite communications company Orion Network Systems.
[40]
Apple continued to sell both lines of its computers, the Apple II and
the Macintosh. A few months after introducing the Mac, Apple released a
compact version of the Apple II called the
Apple IIc. And in 1986 Apple introduced the
Apple IIgs,
an Apple II positioned as something of a hybrid product with a
mouse-driven, Mac-like operating environment. Even with the release of
the first Macintosh, Apple II computers remained the main source of
income for Apple for years.
[41]
Mac family
At the same time, the Mac was becoming a product family of its own. The original model evolved into the
Mac Plus in 1986 and spawned the
Mac SE and the
Mac II in 1987 and the
Mac Classic and
Mac LC in 1990. Meanwhile, Apple attempted its first portable Macs: the failed
Macintosh Portable in 1989 and then the more popular
PowerBook in 1991, a landmark product that established the modern form and
ergonomic layout of the laptop. Popular products and increasing revenues made this a good time for Apple.
MacAddict magazine has called 1989 to 1991 the "first golden age" of the Macintosh.
On February 19, 1987, Apple registered the "
Apple.com" domain name, making it one of the first hundred companies to register a
.com address on the nascent Internet.
[42]
Early-mid-1990s
In the late 1980s, Apple's fiercest technological rivals were the
Amiga and
Atari ST platforms. But by the 1990s, computers based on the
IBM PC had become more popular than all three; they finally had a comparable
GUI thanks to
Windows 3.0, and were out-competing Apple.
Apple's response to the PC threat was a profusion of new Macintosh lines including
Quadra,
Centris, and
Performa.
Unfortunately, these new lines were marketed poorly by what was now
"arguably one of the worst-managed companies in the industry".
[43] For one, there were too many models, differentiated by very minor graduations in their
tech specs.
The excess of arbitrary model numbers confused many consumers and hurt
Apple's reputation for simplicity. Apple's retail resellers like
Sears and
CompUSA
often failed to sell or even competently display these Macs.
Compounding matters was the fact that, although the machines were
cheaper than a comparable PC (when taken into account all the components
built-in which had to be added to the 'bare bones PC'), the poor
marketing gave the impression that the machines were more expensive.
[citation needed] Inventory grew as Apple consistently underestimated demand for popular models and overestimated demand for others.
[43]
In 1991, Apple partnered with long-time competitor
IBM to form the
AIM alliance. The ultimate goal was to create a revolutionary new computing platform, known as
PReP, which would use IBM and Motorola hardware and Apple software. As the first step toward the PReP platform, Apple started the
Power Macintosh line in 1994, using IBM's
PowerPC processor. These processors used a
RISC architecture, which differed substantially from the Motorola
680X0
series that were used by all previous Macs. Parts of Apple's operating
system software were rewritten so that most software written for older
Macs could run in
emulation on the PowerPC series.
[citation needed] Apple also refused IBM's offer to purchase the company, but later unsuccessfully sought another offer from IBM,
[44] and at one point was "hours away" from an acquisition by
Sun Microsystems.
[43][45]
In addition to computers, Apple has also produced consumer devices. In 1993, Apple released the
Newton, an early
personal digital assistant (PDA). It defined and launched the PDA category and was a forerunner and inspiration of devices such as
Palm Pilot and
Pocket PC.
[citation needed]
During 1995, a decision was made to (officially) start licensing the
Mac OS and Macintosh ROMs to 3rd party manufacturers who started
producing Macintosh “clones”. This was done in order to achieve deeper
market penetration and extra revenue for the company. This decision lead
to Apple having over a 10% market share until 1997 when Steve Jobs was
re-hired as interim CEO to replace Gil Amelio. Jobs promptly found a
loophole in the licensing contracts Apple had with the clone
manufacturers and terminated the Macintosh OS licensing program ending
the Macintosh clone era. The result of this action was that Macintosh
computer market share quickly fell from 10% to around 3%.
1996: Return of Steve Jobs
In 1996, the struggling
NeXT company beat out Be Inc.'s
BeOS in its bid to sell its operating system to Apple. Apple purchased
Steve Jobs'
company, NeXT on December 10, 1996, and its NeXTstep operating system.
This would not only bring Steve Jobs back to Apple's management, but
NeXT technology would become the foundation of the
Mac OS X operating system.
On November 10, 1997, Apple introduced the
Apple Store, an online retail store based upon the
WebObjects application server the company had acquired in its purchase of
NeXT. The new direct sales outlet was also tied to a new build-to-order manufacturing strategy.
[46][47]
CEO
On July 9, 1997,
Gil Amelio
was ousted as CEO of Apple by the board of directors. Jobs stepped in
as the interim CEO to begin a critical restructuring of the company's
product line. He would eventually become CEO and served in that position
until August 2011. On August 24, 2011 Steve Jobs resigned his position
as chief executive officer of Apple before his long battle with
pancreatic cancer took his life on October 5, 2011.
[48]
Microsoft deal
At the 1997
Macworld Expo, Steve Jobs announced that Apple would be entering into a partnership with
Microsoft. Included in this was a five-year commitment from Microsoft to release
Microsoft Office
for Macintosh as well as a US$150 million investment in Apple. As part
of the deal Apple and Microsoft agreed to settle a long-standing dispute
over whether Microsoft's Windows operating system infringed on any of
Apple's patents.
[49] It was also announced that
Internet Explorer would be shipped as the default browser on the Macintosh, with the user being able to have a preference. Microsoft chairman
Bill Gates
appeared at the expo on-screen, further explaining Microsoft's plans
for the software they were developing for Mac, and stating that he was
very excited to be helping Apple return to success. After this, Steve
Jobs said this to the audience at the expo:
If we want to move forward and see Apple healthy and prospering
again, we have to let go of a few things here. We have to let go of this
notion that for Apple to win, Microsoft has to lose. We have to embrace
a notion that for Apple to win, Apple has to do a really good job. And
if others are going to help us that's great, because we need all the
help we can get, and if we screw up and we don't do a good job, it's not
somebody else's fault, it's our fault. So I think that is a very
important perspective. If we want Microsoft Office on the Mac, we better
treat the company that puts it out with a little bit of gratitude; we
like their software.
So, the era of setting this up as a competition between Apple and
Microsoft is over as far as I'm concerned. This is about getting Apple
healthy, this is about Apple being able to make incredibly great
contributions to the industry and to get healthy and prosper again.[50]
The day before the announcement Apple had a market cap of $2.46 billion,
[51] and had ended its previous quarter with quarterly revenues of US$1.7 billion and cash reserves of US$1.2 billion,
[52]
making the US$150 million amount of the investment largely symbolic.
Apple CFO Fred Anderson stated that Apple would use the additional funds
to invest in its core markets of education and creative content.
[49]
1998–2001: Apple's comeback
iMac, iBook, and Power Mac G4
While discontinuing Apple's licensing of its operating system to
third-party computer manufacturers, one of Jobs's first moves as new
acting CEO was to develop the
iMac,
which bought Apple time to restructure. The original iMac integrated a
CRT display and CPU into a streamlined, translucent plastic body. The
line became a sales smash, moving about one million units each year. It
also helped re-introduce Apple to the media and public, and announced
the company's new emphasis on the design and aesthetics of its products.
In 1999, Apple introduced the
Power Mac G4, which utilized the Motorola-made PowerPC 7400 containing a 128-bit instruction unit known as
AltiVec, its flagship processor line. Also that year, Apple unveiled the
iBook, its first consumer-oriented laptop that was also the first Macintosh to support the use of
Wireless LAN
via the optional AirPort card that was based on the 802.11b standard;
it helped popularize the use of Wireless LAN technology to connect
computers to networks.
Mac OS X
Company headquarters on Infinite Loop in Cupertino
In 2001, Apple introduced
Mac OS X, an operating system based on
NeXT's
NeXTstep and incorporating parts of the
FreeBSD kernel.
[53] Aimed at consumers and professionals alike, Mac OS X married the stability, reliability and security of
Unix with the ease of a completely overhauled user interface. To aid users in transitioning their applications from
Mac OS 9, the new operating system allowed the use of Mac OS 9 applications through the
Classic environment. Apple's
Carbon API also allowed developers to adapt their Mac OS 9 software to use Mac OS X's features.
Retail stores
Main article:
Apple Store
In May 2001, after much speculation, Apple announced the opening of a
line of Apple retail stores, to be located throughout the major U.S.
computer buying markets. The stores were designed for two primary
purposes: to stem the tide of Apple's declining share of the computer
market, as well as a response to poor marketing of Apple products at
third-party retail outlets.
iPod
In October 2001, Apple introduced its first
iPod
portable digital audio player. The iPod started as a 5 gigabyte player
capable of storing around 1000 songs. Since then it has evolved into an
array of products including the
Mini (now discontinued), the
iPod Touch, the
Shuffle, the
iPod Classic, the
Nano, the
iPhone and the
iPad. Since March 2011, the largest storage capacity for an iPod has been 160 gigabytes.
[54]
2002–2007: iTunes, iPods, Intel transition
Moving on from colored plastics and the PowerPC G3
In early 2002, Apple unveiled a completely redesigned iMac, using the G4 processor and LCD display. The new
iMac G4
design had a white hemispherical base and a flat panel all-digital
display supported by a swiveling chrome neck. After several iterations
increasing the processing speed and screen sizes from 15" to 17" to 20"
the iMac G4 was discontinued and replaced by the
iMac G5 in the summer of 2004.
In 2002, Apple also released the
Xserve 1U rack mounted
server. Originally featuring two G4 chips, the Xserve was unusual for
Apple in two ways. It represented an earnest effort to enter the
enterprise computer market and it was also relatively cheaper than
similar machines released by its competitors. This was due, in no small
part, to Apple's use of Fast ATA drives as opposed to the SCSI hard
drives used in traditional rack-mounted servers. Apple later released
the
Xserve RAID, a 14 drive
RAID which was, again, cheaper than competing systems.
In mid-2003, Steve Jobs launched the
Power Mac G5, based on
IBM's
G5 processor. Its all-metal
anodized aluminum
chassis finished Apple's transition away from colored plastics in their
computers. Apple claims this was the first 64-bit computer sold to the
general public. The Power Mac G5 was also used by Virginia Tech to build
its prototype
System X
supercomputing cluster, which at the time garnered the prestigious
recognition of the third fastest supercomputer in the world. It cost
only US$5.2 million to build, far less than the previous No. 3 and other
ranking supercomputers. Apple's Xserves were soon updated to use the G5
as well. They replaced the Power Mac G5 machines as the main building
block of
Virginia Tech's
System X, which was ranked in November 2004 as the world's seventh fastest
supercomputer.
[55]
A new iMac based on the G5 processor was unveiled August 31, 2004 and
was made available in mid-September. This model dispensed with the base
altogether, placing the CPU and the rest of the computing hardware
behind the flat-panel screen, which is suspended from a streamlined
aluminum foot. This new iMac, dubbed the
iMac G5, was the world's thinnest desktop computer, measuring in at around two inches (around 5 centimeters).
[citation needed]
2004, however, was a turning point for Apple. After creating a
sizable financial base to work with, the company began experimenting
with new parts from new suppliers. As a result Apple was able to produce
new designs so quickly over a short amount of time, with the release of
the iPod Video, then the iPod Classic, and eventually the iPod touch
and iPhone. Each Apple product thus far has been under equally high
demand.
On April 29, 2005, Apple released
Mac OS X v10.4 "Tiger" to the general public.
Apple's wildly successful
PowerBook and
iBook products relied on Apple's previous generation G4 architecture which were produced by
Freescale Semiconductor,
a spin off from Motorola. Engineers at IBM had minimal success in
making their PowerPC G5 processor consume less power and run cooler but
not enough to run in iBook or PowerBook formats. As of the week of
October 24, 2005 Apple released the Power Mac G5 Dual that features a
Dual-Core processor. This processor contains two cores in one rather
than have two separate processors. Apple has also developed the Power
Mac G5 Quad that uses two of the Dual-Core processors for enhanced
workstation power and performance. The new Power Mac G5 Dual cores run
individually at 2.0 GHz or 2.3 GHz. The Power Mac G5 Quad cores run
individually at 2.5 GHz and all variations have a graphics processor
that has 256-bit memory bandwidth.
[56]
Retail store expansion
Initially, the
Apple Stores were only opened in the United States, but in late 2003, Apple opened its first Apple Store abroad, in Tokyo's
Ginza district. Ginza was followed by a store in
Osaka, Japan in August 2004. In 2005, Apple opened stores in
Nagoya, the
Shibuya district of Tokyo,
Fukuoka, and
Sendai. Another store was opened in
Sapporo in 2006. Apple's first European store opened in London in November 2004, and is currently the largest store. A store in the
Bullring shopping centre in
Birmingham opened in April 2005, and the
Bluewater shopping centre in
Dartford, Kent opened in July 2005. Apple opened its first store in Canada in the middle of 2005 at the
Yorkdale Shopping Centre in
North York,
Toronto. Later on in 2005 Apple opened the
Meadowhall Store in
Sheffield and the
Trafford Centre Store in
Manchester (UK). Recent additions in the London area include the
Brent Cross Apple Store (January 2006) and the Apple Store in
Westfield in Shepherd's Bush (September 2008).
Also, in an effort to court a broader market, Apple opened several
"mini" stores in October 2004 in attempt to capture markets where demand
does not necessarily dictate a full scale store. The first of these
stores was opened at Stanford Shopping Center in
Palo Alto, California.
These stores follow in the footsteps of the successful Apple products:
iPod mini and Mac mini. These stores are only one half the square
footage of the smallest "normal" store and thus can be placed in several
smaller markets.
Intel transition
In a keynote address on June 6, 2005, Steve Jobs officially announced
that Apple would begin producing Intel-based Macintosh computers
beginning in 2006.
[57] Jobs confirmed rumors that the company had secretly been producing versions of its current operating system
Mac OS X
for both PowerPC and Intel processors over the past 5 years, and that
the transition to Intel processor systems would last until the end of
2007. Rumors of cross-platform compatibility had been spurred by the
fact that Mac OS X is based on
OpenStep, an operating system that was available for many platforms. In fact, Apple's own
Darwin, the
open source underpinnings of Mac OS X, was also available for Intel's x86 architecture.
[58][59][60]
On January 10, 2006, the first Intel-based machines, the
iMac and
MacBook Pro, were introduced.
[61][62] They were based on the
Intel Core
Duo platform. This introduction came with the news that Apple would
complete the transition to Intel processors on all hardware by the end
of 2006, a year ahead of the originally quoted schedule.
Apple and "i" Web services
In 2000, Apple introduced its iTools service, a set of free web-based
tools that included an email account, internet greeting cards called
iCards, a service called
iReview that gave internet users a place to read and write reviews of Web sites, and a tool called
KidSafe which promised to prevent children from browsing inappropriate portions of the
web.
The latter two services were eventually canceled because of lack of
success, while iCards and email became integrated into Apple's
.Mac
subscription based service introduced in 2002 and discontinued in
mid-2008 to make way for the release of the new MobileMe service,
coinciding with the iPhone 3G release. MobileMe, which carried the same
US$99.00 annual subscription price as its .Mac predecessor, featured the
addition of "push" services to instantly and automatically send emails,
contacts and calendar updates directly to users' iPhone devices. Some
controversy surrounded the release of MobileMe services to users
resulting in expected downtime and a significantly longer release
window. As a result of this, Apple extended the subscriptions of
existing MobileMe subscribers by an additional 30 days free-of-charge.
[63] At the WWDC event in June 2011, Apple announced its most up to date cloud service,
iCloud,
replacing MobileMe. This service kept most of the core services that
MobileMe offered, however dropping iDisk, Gallery, and iWeb.
Additionally, it added a number of other features to the group,
including Find my Mac, iTunes Match, Photo Stream, Documents & Data
Backup, and iCloud backup for iOS devices. The service requires users to
be running iOS 5 and OS X 10.7 Lion.
iPod and iTunes store
Main articles:
iPod and
iTunes Store
iPod mini with the user interface set to German
On October 23, 2001, Apple introduced the iPod, a portable digital music player. Its signature features included an
LED,
easy to use interface, and a large capacity drive (initially 5 GB)
which was enough to hold approximately 1,000 songs. It was quite large
when compared to the 20–30 songs of
Flash-based
players of the time. Apple has since revised its iPod line several
times, introducing a slimmer, more compact design, Windows compatibility
(previous iPods only interacted with Macintosh computers),
AAC
compatibility, storage sizes of up to 160 GB, and easier connectivity
with car or home stereo systems. On October 26, 2004, Apple released a
color version of their award winning iPod which can not only play music
but also show photos. In early 2005, Apple unveiled a smaller iPod: the
iPod Shuffle,
which is about the size of a pack of gum. Speaking to software
developers on June 6, 2005, Steve Jobs said the company's share of the
entire portable music device market stood at 76%.
[citation needed]
Apple has revolutionized the computer and music industry by signing
the five major record companies to join its new music download service,
the successful iTunes Music Store, now known as
iTunes Store.
Unlike other fee-based music services, the iTunes Store charges a flat
US$0.99 per song (or US$9.99 per album). Users have more flexibility
than on previous on-line music services. For example, they can burn CDs
including the purchased songs (although a particular playlist containing
purchased music may only be burned seven times), share and play the
songs on up to five computers, and, of course, download songs onto an
iPod.
The iTunes Music Store commercial model is one-time purchase, which
contrasts with other commercial subscription music services where users
are required to pay a regular fee to be able to access musical content
(but are able to access a larger volume of music during the
subscription).
The iTunes Music Store was launched in 2003 with 2 million downloads
in only 16 days; all of which were purchased only on Macintosh
computers. Apple has since released a version of
iTunes for
Windows,
allowing Windows users the ability to access the store as well.
Initially, the music store was only available in the United States due
to licensing restrictions, but there were plans to release the store to
many other countries in the future.
In January 2004 Apple released a more compact version of their iPod player, the 4 GB
iPod Mini.
Although the Mini held fewer songs than the other iPod models at that
time, its smaller size and multiple colours made it popular with
consumers on debut with many stores having "sold out" their initial
inventories of the devices.
In June 2004 Apple opened their iTunes Music Store in the United Kingdom, France, and Germany. A
European Union version opened October 2004 (actually, a
Eurozone version; not initially available in the
Republic of Ireland due to the intransigence of the
Irish Recorded Music Association
(IRMA) but eventually opened Thursday January 6, 2005.) A version for
Canada opened in December 2004. On May 10, 2005, the iTunes Music Store
was expanded to
Denmark, Norway,
Sweden, and
Switzerland.
On December 16, 2004, Apple sold its 200 millionth song on the iTunes Music Store to Ryan Alekman from
Belchertown, Massachusetts. The download was
The Complete U2, by
U2.
[64] Just under three months later Apple sold its 300 millionth song on March 2, 2005.
[65] On July 17, 2005, the iTunes Music Store sold its 500 millionth song.
[citation needed] At that point, songs were selling at an accelerating annualized rate of more than 500 million.
On January 11, 2005, an even smaller version of the iPod was
announced, this one based on flash memory instead of using a
miniaturized hard drive. The iPod Shuffle, like its predecessors, proved
so popular that it sold out almost immediately, causing delays of up to
four weeks in obtaining one within a single week of its debut.
[citation needed]
This is despite the fact that critics had gawked at the lack of LCD
screen in the Shuffle, a norm in almost all current flash memory based
mp3 players.
The iPod is giving an enormous lift to Apple's financial results.
[66]
In the quarter ending March 26, 2005, Apple earned US$290 million, or
34¢ a share, on sales of US$3.24 billion. The year before in the same
quarter, Apple earned just US$46 million, or 6¢ a share, on revenue of
US$1.91 billion.
In July 2005, the iPod was given a color screen, merging the iPod and iPod Photo.
On September 7, 2005, Apple replaced the iPod Mini line with the new
iPod Nano.
While some consumers were put off by the high price tag (US$199 for
2 GB), and easily scratchable surface, the Nano had sold 1 million units
in the first 17 days.
A month later, on October 12, 2005 Apple introduced the new 5th
generation iPod with video playback abilities. The device is also 40%
thinner than a 4th generation iPod and has a larger screen.
On October 25, 2005, the iTunes Store went live in Australia, with songs selling for
A$1.69 each, albums at (generally) A$16.99 and music videos and Pixar short films at A$3.39. Briefly, people in
New Zealand were able to buy music off the Australian store. However, that loophole was quickly closed.
On February 23, 2006, the iTunes Music Store sold its 1 billionth song.
[67]
The iTunes Music Store changed its name to iTunes Store on September
12, 2006 when it began offering video content (TV shows and movies) for
sale. Since iTunes' inception it has sold over 2 billion songs, 1.2
billion of which were sold in 2006. Since downloadable TV and movie
content was added 50 million TV episodes and 1.3 million movies have
been downloaded.
In early 2010, Apple celebrated the 10 billionth song downloaded from the iTunes Music Store.
[68]
2007–present: Apple Inc., iPhone, iOS, and iPad
On January 9, 2007, Apple Computer, Inc. shortened its name to simply Apple Inc. In his
Macworld Expo
keynote address, Steve Jobs explained that with their current product
mix consisting of the iPod and Apple TV as well as their Macintosh
brand, Apple really wasn't just a computer company anymore. At the same
address, Jobs revealed a product that would revolutionize an industry in
which Apple had never previously competed: the Apple
iPhone.
The iPhone combined Apple's first widescreen iPod with the world's
first mobile device boasting visual voicemail, and an internet
communicator able to run a fully functional version of Apple's web
browser,
Safari, on the then-named
iPhone OS (later renamed
iOS).
iOS evolution: iPhone and iPad
Main articles:
iOS,
iPhone, and
iPad
The first version of the iPhone became publicly available on June 29,
2007 in selected countries/markets. It was another 12 months before the
iPhone 3G became available on July 11, 2008. Apple announced the
iPhone 3GS
on June 8, 2009, along with plans to release it later in June, July,
and August, starting with the U.S., Canada and major European countries
on June 19. This 12-month iteration cycle has continued with the
iPhone 4
model arriving in similar fashion in 2010, a Verizon model was released
in February 2011, and a Sprint model in October 2011, shortly after
Jobs' death.
The Macs that are available as of February 2011 are the iMac, Mac
Pro, MacBook, MacBook Pro, MacBook Air, and Mac mini. The latest version
of Mac OS X is Lion (10.7). On February 10, 2011, the iPhone 4 was made
available on both Verizon Wireless and AT&T. Now two iPod types are
multi-touch: the iPod nano and the iPod touch, a big advance in
technology. Apple TV currently has a 2nd generation model, which is 4
times smaller than the original Apple TV. Apple has also gone wireless,
selling a wireless trackpad, keyboard, mouse, and external hard drive.
Wired accessories are, however, still available.
The Apple
iPad
was announced on January 27, 2010 with retail availability commencing
in April and systematically growing in markets throughout 2010. The iPad
fits into Apple's iOS product line, being twice the screen size of an
iPhone without the phone abilities. While there were initial fears of
product cannibalisation the FY2010 financial results released in Jan
2011 included commentary of a reverse 'halo' effect, where iPad sales
were leading to increased sales of iMacs and MacBooks.
[69] On March 2, 2011, Apple unveiled the iPad's second generation model, the
iPad 2.
Like the 4th generation iPod Touch and iPhone, the iPad 2 comes with a
front-facing camera as well as a rear-facing camera, along with three
new apps that utilize these new features: Camera, FaceTime, and
Photobooth (only on iPad2).
Resurgence compared to Microsoft
Since 2005, Apple's revenues, profits, and stock price have grown
significantly. On May 26, 2010 Apple's stock market value overtook
Microsoft's,
[70] and Apple's revenues surpassed those of Microsoft in the third quarter of 2010.
[71]
After giving their results for the first quarter of 2011 Microsoft's
net profits of $5.2 billion were lower for the quarter than those of
Apple Inc., which earned $6 billion in net profit for the quarter.
[72][73][74]
The late April announcement of profits by the Five companies marks the
first time in twenty years that Microsoft's profits have been lower than
Apple's.,
[73] and according to
Arstechnica "this would have been 'unimaginable' 10 years before."
[72]
The Guardian
reported that one of the reasons for the change is because PC software,
where Microsoft dominates, has become less important compared to the
tablet PC and smartphone markets, where Apple has a strong presence.
[73] One reason for this was a surprise drop in PC sales in the quarter.
[73]
Another issue for Microsoft is that their online search business has
lost a lot of money, with a loss of $700 million in the first quarter of
2010.
[73]
Although Microsoft's online division losses were high, even if they had
made no loss Apple's profits would have been slightly higher.
[72][75]
Financial history
As cash reserves increased significantly in 2006, Apple created
Braeburn Capital on April 6, 2006 to manage its assets.
[76]
| Financial period |
Net sales (Mil USD) |
Net profits (Mil USD) |
Revenue growth |
Return on net sales |
| FY 1977[77] |
0.773 |
unknown |
--- |
--- |
| FY 1978 |
7.856 |
0.793 |
916% |
10% |
| FY 1979 |
47.867 |
5.073 |
509% |
11% |
| FY 1980 |
117.126 |
11.698 |
145% |
10% |
| FY 1981[78] |
335 |
39.420 |
186% |
12% |
| FY 1982 |
583 |
61 |
74% |
10% |
| FY 1983 |
983 |
77 |
69% |
8% |
| FY 1984 |
1,516 |
64 |
54% |
4% |
| FY 1985 |
1,918 |
61 |
27% |
3% |
| FY 1986 |
1,902 |
154 |
-1% |
8% |
| FY 1987 |
2,661 |
218 |
40% |
8% |
| FY 1988 |
4,071 |
400 |
53% |
10% |
| FY 1989 |
5,284 |
454 |
30% |
9% |
| FY 1990 |
5,558 |
475 |
5% |
9% |
| FY 1991 |
6,309 |
310 |
12% |
5% |
| FY 1992 |
7,087 |
530 |
12% |
7% |
| FY 1993 |
7,977 |
87 |
13% |
1% |
| FY 1994 |
9,189 |
310 |
46% |
3% |
| FY 1995 |
11,062 |
424 |
20% |
4% |
| FY 1996 |
9,833 |
-816 |
-11% |
-8% |
| FY 1997 |
7,081 |
-1,045 |
-28% |
-15% |
| FY 1998 |
5,941 |
309 |
-16% |
5% |
| FY 1999 |
6,134 |
601 |
3% |
10% |
| FY 2000 |
7,983 |
786 |
30% |
10% |
| FY 2001 |
5,363 |
-25 |
-33% |
0% |
| FY 2002 |
5,247 |
65 |
-2% |
1% |
| FY 2003 |
6,207 |
57 |
18% |
1% |
| FY 2004 |
8,279 |
266 |
33% |
3% |
| FY 2005 |
13,931 |
1,328 |
68% |
10% |
| FY 2006 |
19,315 |
1,989 |
39% |
10% |
| FY 2007 |
24,578 |
3,495 |
27% |
14% |
| FY 2008 |
37,491 |
6,119 |
53% |
16% |
| FY 2009[79] |
42,905 |
8,235 |
14% |
19% |
| FY 2010 |
65,225 |
14,013 |
52% |
21% |
| FY 2011 |
108,249 |
25,922 |
66% |
24% |
| FY 2012 |
156,508 |
41,733 |
45% |
27% |
Stock
'AAPL' is the
stock symbol under which
Apple Inc. trades on the
NASDAQ stock market. Apple originally went public on December 12, 1980, with an
initial public offering at US$22.00
[80]
per share. The stock has split 2 for 1 three different times on June
15, 1987, June 21, 2000 and February 28, 2005. Apple initially paid
dividends from June 15, 1987 to December 15, 1995. On March 19, 2012,
Apple announced that it would again start paying a dividend of $2.65 per
quarter (beginning in the quarter that starts in July 2012) along a $10
billion
share buyback which would commence September 30, 2012, the start of its fiscal 2013 year.
Gene Munster and Michael Olson of
Piper Jaffray
are the main analysts who track Apple stock. Piper Jaffray estimate
future stock and revenue of Apple annually, and have been doing so for
several years.
[81]
Timeline of Apple Inc. products
- Products on this timeline indicate introduction dates only and
not necessarily discontinued dates, as new products begin on a
contiguous product line.
This timeline may not be accurate.
23:12
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