INTRODUCTION:

Apple Inc., formerly Apple Computer, Inc., is a multinational corporation that creates consumer electronics, computer software, and commercial servers. Apple's core product lines are the iPhone, iPod music player, and Macintosh computers. 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, in Cupertino, California. For over two decades, Apple Computer has been predominantly a manufacturer of personal computers, including the Apple II, Macintosh, and Power Mac lines, but faced rocky sales and low market share during the 1990s. Jobs, who had been ousted from the company in 1985, returned to become Apple's CEO in 1996, and brought with him a new corporate philosophy of recognizable products and simple design. With the introduction of the successful iPod music player in 2001, Apple established itself as a leader in the consumer electronics industry, dropping "Computer" from its name. The latest era of phenomenal success for the company is in the iOS (Apple) range of products that began with the iPhone, iPod Touch and now iPad. Today, Apple is the largest technology firm in the world, with annual revenue of over $60 billion.[1] In mid 2010, Apple overtook Microsoft to become the largest technology by market capitalization. While breaking the $300 billion market value in January 2011, Apple currently is the world's second largest company behind Exxon Mobil.

Company History

Company History: 1976-1981 Steven Wozniak and Steven Jobs had been friends in high school. They had both been interested in electronics, and both had been perceived as outsiders. They kept in touch after graduation, and both ended up dropping out of school and getting jobs working for companies in Silicon Valley. (Woz for Hewlett-Packard, Jobs for Atari) Wozniak had been dabbling in computer-design for some time when, in 1976, he designed what would become the Apple I. Jobs, who had an eye for the future, insisted that he and Wozniak try to sell the machine, and on April 1, 1976, Apple Computer was born. Hobbyists did not take the Apple I very seriously, and Apple did not begin to take off until 1977, when theApple II debuted at a local computer trade show. The first personal computer to come in a plastic case and include color graphics, the Apple II was an impressive machine. Orders for Apple machines were multiplied by several times after its introduction. And with the introduction in early '78 of the Apple Disk II, the most inexpensive, easy to use floppy drive ever (at the time), Apple sales further increased. With the increase in sales, however, came an increase in company size, and by 1980, when the Apple III was released, Apple had several thousand employees, and was beginning to sell computers abroad. Apple had taken on a number of more experienced mid-level managers and, more importantly, several new investors, who opted to take seats on the board of directors. Older, more conservative men, the new directors made sure that Apple became a "real company," much to the dismay of many of its original employees. In 1981, things got a bit more difficult. A saturated market made it more difficult to sell computers, and in February. Apple was forced to lay off 40 employees. Wozniak was injured in a plane crash. He took a leave of absence and returned only briefly. Jobs became chairman of Apple computer in March.

Company History: 1981-1983 Following the historic visit to Xerox PARC in 1979, Jobs and several other engineers began to develop the Lisa, which would redefine personal computing. Jobs, however, proved to be a poor project manager, and was taken off the Lisa by Mike Markkula, then president of Apple, and one of the major stockholders. Jobs, who owned only 11% of Apple, decided to take over someone else's project, and began working with the Macintosh--which had started as a $500 personal computer. Jobs made sure it was much more. In 1981, IBM released its first PC. With the power of Big Blue behind it, the PC quickly began to dominate the playing field. Jobs' team would have to work very quickly if they hoped to compete with IBM in the personal computer market. Jobs began to realize that Apple would have to become a "grown-up" company, and realized he was not the man for the job. In early 1983, Jobs began to court John Sculley, then president of Pepsi-Cola. In April, he was successful, and Sculley became president and CEO of Apple. Jobs believed Sculley would help Apple "grow up," but had no idea how right he would turn out to be. Eventually, it cost him his job. Company History: 1983-1985 Although a successful businessman, it soon became clear that Sculley did not know much about the computer industry. He and Jobs were at odds almost immediately. As the announcement of the Macintosh drew closer, Jobs went into hyperdrive. He worked hard to get developers to write programs for the upcoming machine--Jobs had realized that the Mac would ultimately be made or broken by the software industry.

On January 22nd, 1984, during the third quarter of the Super Bowl, Apple aired its infamous 60 second commercial (13.4 MB) introducing the Macintosh. Directed by Ridley Scott, the Orwellian scene depicted the IBM world being shattered by a new machine. Initially, the Mac sold very well, but by Christmas of 1984, people were becoming fed up with its small amount of RAM, and lack of hard drive connectivity. It was around the beginning of 1985 that Jobs and Sculley began to argue. Sculley believed Jobs was dangerous and out of control; Jobs believed that Sculley knew nothing about the computer industry, and was making a poor effort to learn. In May of 1985 Jobs decided to make a play for control of the company. He enticed Sculley to schedule a meeting in China, and planned to stage a boardroom coup while Sculley was gone. At the last minute someone leaked the information to Sculley, and he decided to confront Jobs. After a heated argument between the two, the board took a vote, and sided unanimously with Sculley. Jobs resigned that day, leaving Sculley as the head of Apple. Company History: 1985-1993 Sculley became the de facto head of Apple in May 1985. Over the next few months, Apple was forced to lay off a fifth of its work force, some 1,200 employees. The company also posted its first quarterly loss. All this, and the resignation of Jobs, served to erode confidence in Sculley's abilities as CEO of Apple. At the same time, Sculley became locked in a battle with Microsoft's Bill Gates over the introduction of Windows 1.0, which had many similarities to the Mac GUI. Gates finally agreed to sign a statement to the effect that Microsoft would not use Mac technology in Windows 1.0--it said nothing of future versions of Windows, and Gates' lawyers made sure it was airtight. Apple had effectively lost exclusive rights to its interface design. This would prove to be an important document in future lawsuits between Apple and Microsoft, involving the Windows interface. What brought Mac out of the hole were the twin introductions of the LaserWriter, the first affordable PostScript laser printer for the Mac, and PageMaker, one of the first Desktop

Publishing programs ever. These two in tandem made the Mac an ideal solution for inexpensive publishing, and the Mac became an overnight success, again. In 1987, Apple introduced the Mac II. Built with expandablity in mind, the Mac II made the Macintosh line a viable, powerful family of computers. Apple was a "Wall Street darling" again, (Rolling Stone) shipping 50,000 Macs a month. It seemed in 1989 that Windows would be a flop, and the Mac would be riding high for the next decade. It didn't. By 1990 the market was saturated with PC-clones of every conceivable configuration, and Apple was the only company selling Macs. In late May, Microsoft rolled out Windows 3.0, which could run on virtually all of the PC-clones in the world. Apple was in trouble. Apple's top idea for a solution was to license the Mac OS. While many believed it would erode the quality of the Mac, or that it would create even more competition, it was becoming clear that Apple could not provide both the hardware and the software to drive an industry. There was also talk of porting the OS to run on Intel-based machines. It was Michael Spindler, Apple's new COO, who nixed the idea, saying that it was "too late to license." In late 1991, Apple released its first generation of PowerBooks, which were an instant success. Work was being done on a new type of computer, the Personal Digital Assistant (PDA), which Apple called the Newton. Sculley took an immediate interest in the Newton, and drove the Newton to completion in August 1993. The first generation of Newtons had extremely poor hand-writing recognition (2.1 MB), and did not sell particularly well. Sculley began to lose interest in the day to day operations of Apple. Eventually the Apple Board of Directors decided they'd had enough. In June of 1993, They relieved Sculley of his position as CEO, putting Spindler in the big chair. Sculley remained with the company as chairman for several months and then resigned.

Company History: 1993-1996 Spindler, by all accounts, was the wrong man for the job. A fairly impersonal man, Spindler's office was nearly impossible to get into. However, in his two and a half years as CEO, Spindler oversaw several accomplishments. In 1994 Apple announced the PowerMac family, the first Macs to be based on the PowerPC chip, an extremely fast processor co-developed with IBM and Motorola. The PowerPC processor allowed Macs to compete with, and in many cases surpass, the speed of Intel's newer processors. Spindler also decided to license the Mac OS to several companies, including Power Computing, one of the more successful Mac-clone makers. But many believe the Apple was too restrictive in its licensing agreements, and only a handful of companies ever licensed the Mac OS. Apple's worst problem wasn't selling computers--it was building them. By June 1995 Apple had $1 billion dollars in backorders--and did not have the parts to build them. Apple's problems were added to by the late-summer release of Windows '95, which mimicked the Mac GUI better than ever. Apple took its worst plunge ever in the winter of 1995-96. Misjudging the market, Apple pushed low-costPerformas over mid-range PowerMacs, and failed to make a profit at all. Apple posted a $68 million loss for that quarter. In January 1996, Spindler was asked to resign as CEO and was replaced by Gil Amelio, the former president of National Semiconductor.

Company History: 1996-1997 Amelio made a strong effort to bring Apple back to profitability, but his efforts would prove to be largely unsuccessful. Following his first 100 days as CEO, Amelio announced broad changes in the corporate structure of the company. The company was to be split into 7 separate divisions, each responsible for its own profit or loss. He has also made an effort to keep developers and customers better informed about the day-to-day affairs of the company. Although the company announced a staggering $740 million loss for Q1 1996, they brought that loss down to $33 million for Q2, beating all estimates by the best financial experts. In Q3 Apple profited nearly $30 million, again astounding financial experts, who had predicted a loss of as much. (Apple lost considerably more in Q4.) In late december 1996, Apple made an industry-shattering announcement that it would be acquiring NeXT, and that Steven Jobs would be returning to the fold. The merger was brought about in order to acquire NeXTstep, which was to become the basis for Apple's next-generation OS, Rhapsody, which was slated for a 1998 release. The Newton department was spun off into a wholly-owned subsidiary, Newton, Inc. In early July 1997, Apple announced the resignation of Gil Amelio, following another multi-million dollar quarterly loss. This came as a surprise to nearly everyone, and at this time a new CEO has yet to be announced. The Executive Board reportedly felt that Amelio had done all he could for Apple, and that while he had been responsible for a number of improvements at Apple, he could do no more. In the meantime Fred Anderson, Apple's CFO, has been put in charge of day-to-day operation, and Steve Jobs was given an "expanded role" at Apple for the interim.

Company History: 1997-2000 Jobs' presence was known almost as quickly as NeXT was acquired. The degree of Jobs' "expanded role" soon became quite clear. With no CEO and Apple Stock lower than it had been in 5 years, there were many decisions to be made, and not much time to make them. Jobs began to make striking changes in the structure of Apple, including the canceling of the Newton spin-off. (The Newton was discontinued several months later.) The time and place for the most ground breaking

announcements, however, would be MacWorld Boston in August 1997. Jobs, who by now was being referred to as "interim CEO," made the keynote speech, and spoke of the company's upcoming aggressive advertising campaign, upcoming new Macs, and Rhapsody. He also announced an almost entirely new Board of Directors, including Larry Ellison, CEO of Oracle. But he saved the best for last. In a ground breaking decision, Jobs announced an alliance with Microsoft. In exchange for $150 million in Apple Stock, Microsoft and Apple would have a 5-year patent cross-license and, more importantly, a final settlement in the ongoing GUI argument. Microsoft agreed to pay an unreleased sum of additional funds to quiet the allegations that it had stolen Apple's intellectual property in designing its Windows OS. Microsoft also announced that Office '98, its popular office package, would be available for the Mac by years end. These announcements gave Apple new life, but Jobs was not finished. There was one more big obstacle to tackle: Clones. Jobs felt that Clone Vendors such as Power Computing were cutting into Apple's high-end market, where they traditionally made the most profit. Clones had failed to effectively expand the MacOS market, instead taking customers away from Apple. Jobs remedied this apparent failure of the Clone experiment by all but pulling its plug. In early Fall 1997, Apple announced its intention to buy out Power Computing's MacOS license, and much of
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its engineering staff. Power went out of business several months later, with Apple taking over its product support. Apple also bought out its MacOS licences from Motorola and IBM. Umax was allowed to stay in the game, but with the tacit understanding that it would fill the low-end market, with machines selling for under $1000. Umax sold its remaining inventory of Macs, and is now selling "Wintel" boxes. On November 10, 1997, Apple held another press conference, in which Jobs announced further changes to Apple's corporate strategy. Apple would now sell computers direct, both over the web and the phone, as Power Computing had done so well in the past. Jobs also announced two new Apple machines: the PowerMac G3, and the PowerBook G3. The Apple Store was a runaway success, and within a week was the third-largest eCommerce site on the web. At MacWorld San Francisco in January, Jobs announced that Apple had, for the first time in more than a year, had a profitable First Quarter--to the tune of $44 Million. This far eclipsed analysts' projections, and sent Apple's stock back into the 20s. In April 1998, Jobs announced another profitable quarter ($57 Million), which came as a big surprise to nearly everyone. Jobs kept momentum moving, and in early May announced a newPowerBook G3, an Educational Apple Store, and an entirely new Mac design--the iMac. The iMac would be Apple's answer to the low-end consumer question, with more than enough computing power for most people, at an affordable price. Later that month, in his keynote at the WWDC, Jobs announced a dramatic shift in Apple's OS direction. Mac OS X would merge OS 8 and Rhapsody--Apple's upcoming version of NeXTStep--into one robust OS, with all the features of a modern OS and backward compatibility with most OS 8 applications. In July 1998, Jobs announced that Apple had profited for the 3rd consecutive quarter--to the tune of $101 million. This helped to push Apple's stock to several 52-week highs in just a few days. The iMac was the best-selling computer in the nation for most of the fall, and it drove Apple sales well beyond most predictions. In the fall, Jobs announced another profitable quarter, making a full year of profitability. In January 1999, Jobs announced a 5th consecutive profitable quarter, with year-over-year growth, and a sleek new PowerMac G3.

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In July 1999, Steve Jobs filled the final quadrant in the "Apple Product Matrix"--The consumer portable--when he introduced the iBook. Based on the same principles that had made iMac such a hot sell a year earlier, the iBook brought style to the low-end portable market. Several months later, Jobs announced the PowerMac G4, a significant new professional desktop machine. Apple's stock had risen all summer, and by mid-September was trading at an all-time high, in the high 70s. In a dramatic Keynote at MacWorld Expo SF in January 2000, Jobs unveiled Apple's new Internet strategy: a suite of mac-only internet-based applications called "iTools" and an exclusive partnership with Earthlink as Apple's recommended ISP. Jobs also announced that he would be dropping the "interim" from his title, becoming the permanent CEO of Apple. Apple's sales continued to rise, as did the stock price, which had climbed to 130 by early March. In July 2000, Apple announced a slew of new machines, including the PowerMac G4 Cube, which added a fifth category to Apple's four-corner product strategy. The Cube was Apple's answer to those who wanted an iMac without a monitor, as well as challenge to the computing industry to continue to minimize the size of computers while increasing their visual appeal. The Cube was the biggest gamble Jobs had made since the release of the iMac. It would turn out to be a resounding failure. Company History: 2000-2004 The second half of 2000 was rocky for Apple. Slower sales (both for Apple and the industry as a whole), combined with a misunderstanding of the consumer market resulted in the first unprofitable quarter in three years. One factor in this decline was the G4 Cube, which sold poorly due primarily to its high price compared to Apple's other products. Another factor was Apple's decision to include DVD-ROM drives in their consumer and professional machines instead of CD-RW drives. As a result, Apple missed sales opportunities to customers

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who wanted to burn their own CDs. Apple began to rectify these problems in late 2000, when it cut prices on the entire PowerMac line. Apple took the next step in January of 2001, when it announced a new line of PowerMacs, with either CD-RW drives or a new "SuperDrive" which could read and write both CDs and DVDs. Apple also announced two new application: iDVD, a DVD-authoring program, and iTunes, which allowed users to encode and listen to MP3 songs, and then burn them to CDs. All this was part of Apple's new corporate strategy, developed in the face of a massive slow down in the Technology industry: Apple would take advantage of the explosion of personal electronic devices--CD-players, MP3 players, digital cameras, DVD-players, etc.--by building Mac-only applications that added value to those devices. Just as iMovie had added tremendous value to Digital Cameras, iDVD would add value to Digital Cameras and to DVD-players, and iTunes would add value to CD and MP3 players. It was Apple's hope that making the Mac the "Digital Hub" of the new "Digital Lifestyle" would revitalize Apple's sales and guarantee the long-term security of the company. In May 2001, Steve Jobs announced that Apple would be opening a number of retail stores across America, selling not only Apple computers, but various third-party "digital lifestyle" products, such as mp3 players, digital still and video cameras, and PDAs. Apple also announced a major update to the iBook line, a smaller and lighter design that borrowed heavily from the PowerBook G4. In July, Apple refreshed iMacs and G4, and "suspended production" of the G4 Cube, ending months of speculation as to how Apple would deal with the Cube's resounding failure in the marketplace. The Fall of 2001 brought new revisions to the PowerBook G4 and iBook lines, the latter of which had sold extremely well during the summer. In late October, Apple announced its first non-computer product in several years, the iPod. The iPod was a small hard-drive-based digital music player, and represented Apple's first hardware addition to its "digital hub" strategy. At $399, the iPod faced a similar challenge to the woeful G4 Cube: it favored style and form-factor over price. Apple was taking another gamble by charging a premium for the iPod's superior design and small size.

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In January 2002, Apple reinvented the consumer desktop, again, when it released its flat panel iMac. It also announced iPhoto, a new software package aimed at improving the digital camera user experience. Apple rolled through the first half of 2002, showing profits through the first two quarters. Apple stumbled in the second half of 2002, however, largely due to macroeconomic conditions. With fewer PC purchases being made, Apple scrambled to keep itself fresh in a shrinking marketplace. In June, Apple introduced its "Switchers" ad campain, which would grow to be one of the most popular and successfull of Apple's history. Based on non-scripted monologues of real people, the Switchers campain made the strongest case yet for Macs in a PC world. In July 2002, Steve Jobs announced that the free iTools service would be rolled into a new subscription-based "dotMac" service. Combined with the newly announced iCal and iSync, dotMac was aimed at futher centralizing the Mac in the high-tech lifestyle. In January 2003, Apple released iLife, a bundled software package that included iTunes, iPhoto, iMovie and iDVD, for $50. (all but iDVD could be freely downloaded from Apple's site), in a play to further push the digital-hub concept into the consumer space. Apple's financial troubles continued throughout 2002. In October, it announced a quarterly loss of $45 million, due to weak PowerBook and PowerMac sales. In 2003, however, Apple began to recover, and to build for the future. In January, Apple announced two new PowerBook G4 models, a 12" model similar to existing 12" iBooks, and a giant, wide-screen 17" model, aimed squarely at the graphic design market. Apple also announced that it would be shipping its own Web Browser, Safari, in an apparent attempt to depend less on Microsoft for what was widely believed to be an inferior product. The new PowerBooks sold well, and sales of flat panel iMacs remained steady, but Apple was still in trouble in the professional desktop market. Motorola's development and production of the G4-family of processors continued to lag well behind Apple's expectations. It appeared that the G4 processor had hit a dead end. Apple worked to remedy the situation by developing a new processor with IBM, and in June 2003 came to fruition with the release of the PowerMac G5. The G5 chip, based on IBM's Power4 chip, was a 64-bit processor, meaning it could address

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more memory and process larger numbers than its 32-bit G4 cousin. The PowerMac G5 represented a hugh shift for Apple, who redesigned the motherboard and case from scratch. Unlike the PowerMac G4, which was based strongly on existing G3 hardware, the G5 was all new, and fast. Though supplies were constrained, the G5 sold well and did much to improve Apple's bottom line. Meanwhile, the iPod was beginning to take off. In April of 2003, Apple unveiled the iTunes Music Store, which would sell individual songs through the iTunes application, for 99 cents each. These songs could be played only on Macs or iPods, but Apple felt that by offering an easy to use, no-nonsense music service, it could make significant inroads to the digital music market. Apple did their homework: when announced, the iTunes Music Store already had the backing of the five major record labels, and a catalog of more than 200,000 songs. In October 2003, Apple released iTunes for Windows. While the iPod had been available for Windows for some time, it had used third-party software which failed to provide the unique user experience that iTunes/iPod integration allowed. With the release of a stable, user-friendly Windows version of iTunes, which included both iPod and Music Store integration, Apple was poised to take the digital music industry by storm. Apple cemented its position with the January 2004 release of the iPod mini, which while smaller in capacity than the original iPod, was smaller than many cellphones. In the first year alone, the iTunes Music Store sold more than 70 million songs, and by July this number had increased to more than 100 million. The iTunes Music Store had a 70% market share among all legal online music download services. iPods had moved from expensive toys to musthave Christmas presents, and Apple found itself in the position of having a monopoly for the first time in several decades.

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1969-1984: Jobs and Wozniak

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1969-1984: Jobs and Wozniak Pre-foundation:

Garage of Steve Jobs' parents on Crist Drive in Los Altos, California Steve Jobs and Steve Wozniak were outcasts while they were in high school; by 1975, they had withdrawn from Reed College and UC Berkeley, respectively. Wozniak designed a video teletype 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 prototype models. In 1975, 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 teletype and have a complete computer. At the time the only microcomputer CPUs generally available were the US$179 Intel 8080, and the US$170 Motorola 6800. Wozniak preferred the 6800, but both were out of his price range.

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So he watched, and learned, and designed computers on paper, waiting for the day he could afford a CPU. When MOS Technology released its US$20 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 Main article: Apple I

The very first Apple Computer logo, drawn by Ronald Wayne, depicts Isaac Newton under an apple tree.

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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. Jobs managed to interest Wozniak in assembling a 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 each on delivery. 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 cr 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. With that, the cr 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 cr 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.

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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 teletypes 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 thenrapid 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.[6] Eventually 200 of the Apple I's were built. The Apple II Main article: Apple II series But 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 April 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

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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 fiscally 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. Why Apple? At the time, the company to beat 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.[7] 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 cred 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] The Apple III Main article: Apple III

Apple III

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By the early 1980s, Apple Computer faced increasing competition. While the Apple II was already established as a successful business-ready platform because of Visicalc, Apple was not content. The Apple III (Apple 3) was designed to take on the IBM PC in the business environment. 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 "drop the computer on the desk", which would cause the ICs to fall back in to 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. The Apple IPO 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[citation
needed]

and instantly created more millionaires (about 300) than any

company in history. 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.
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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 Main article: Apple Lisa

Lisa While Apple Computers business division was focused on the Apple III, a separate group was focused on a computer that would change the world. 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
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Lisa.[8][9][10][11] (Popular folklore states that "Lisa" was Steve Jobs' first daughter; Apple maintains it means Locally Integrated Software Architecture.)[citation needed] Apple Computer's engineers did not come up with the LISA interface overnight. In fact, the first iteration of the soon-ubiquitous WIMP interface was a poorly-drawn picture of a floppy disk. It was only after months of usability testing and work that Apple settled on the LISA interface of windows and icons. The Lisa was introduced in 1983 at a cost of US$9,995. Because of the high price, it failed to penetrate the market, however it was a useful proof of concept. The release of the Macintosh and the 1984 commercial Main article: Macintosh The Macintosh 128k was announced to the press in October 1983, followed by an 18-page brochure included with various magazines in December.[12] 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,[13] and is now considered a "watershed event"[14] and a "masterpiece."[15] 1984 used an unnamed heroine to represent the coming of the Macintosh (indicated by her white tank top with a Picasso-style picture of Apples Macintosh computer on it) as a means of saving humanity from "conformity" (Big Brother).[16] 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 ion of Newsweek in November 1984, Apple spent more than US$2.5 million to buy all 39 of the advertising pages in the issue.[17] Apple also ran a Test Drive a Macintosh promotion, in which potential buyers with a cr 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

23

Sculley to raise the price from US$1,995 to US$2,495 (adjusting for inflation, about US$5,000 in 2007).[18][19] 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.[20] 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.[21] Apple introduced Macintosh Office the same year with the lemmings ad, infamous for insulting potential customers. It was not successful.[18] 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. While it did briefly license some of its own designs, Apple did not allow other computer makers to "clone" the Mac until the 1990s, long after Microsoft dominated the marketplace with its broad licensing program. By then, it was too late for Apple to reclaim its lost market share and the Macintosh clones achieved limited success before being axed after Steve Jobs returned to Apple Computer in 1997.[citation needed]

24

1985: Jobs leaves Apple After an internal power struggle the board of directors sided with Sculley and Jobs was asked to resign. Jobs then co-founded the visual effects house, Pixar. 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).[22]

25

1985-1997: Sculley, Spindler, Amelio

26

1985-1997: Sculley, Spindler, Amelio

Macintosh SE Corporate Performance See also: List of mergers and acquisitions by Apple 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., August 2010 Between March 1988 and January 1989, Apple undertook five acquisitions, including software companies Network Innovations, Styleware, Nashoba Systems, and Coral Software, as well as satellite communications company Orion Network Systems. The Apple II family of the 1980s See also: Timeline of Apple II Family

27

Apple now had two separate, incompatible platforms: the Apple II, an affordable, expandable home computer, and the Apple Macintosh, the closed platform for professionals. John Gruber, among others, has speculated that this platform incompatibility was the main reason the Macintosh did not share the initial commercial success which was experienced by the Apple II in the late 1970s.[23] However, by the mid - 1980s, the Apple II was now competing with the IBM PC and its clones, and a new energy was focused upon marketing the Macintosh.[citation needed] Thus, Apple continued to sell both lines promoting them to different market segments: the Macintosh to colleges, college students, and knowledge workers, and the Apple II to home users and public schools. 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. Apple II computers remained an important part of Apple's business until they were discontinued in the early 1990s.[citation needed] The Mac family See also: Timeline of Macintosh models 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.[24] The early-mid 1990s

28

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. 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 while the machines were cheaper than a comparable PC (counting all the things 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] 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.[25] In addition to computers, Apple has also produced consumer devices. In 1993, Apple released the Newton, an early PDA. Though it failed commercially, it defined and launched the category and was a forerunner and inspiration of devices such as Palm Pilot and Pocket PC.[citation needed] 1997: The Return of 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.
29

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.[26][27] CEO On July 9, 1997, Gil Amelio was ousted as CEO of Apple by the board of directors after turning the company around from a multibillion loss to a $25 million dollar profit.[citation needed] Jobs stepped in as the interim CEO to begin a critical restructuring of the company's product line. He would eventually become CEO and has served in that position to the present day. The Microsoft deal At the 1997 Macworld Expo, Steve Jobs announced that Apple would be entering into partnership with Microsoft. Included in this was a five-year commitment from Microsoft to release Microsoft Office for Macintosh as well a US$150 million investment in Apple. It was also announced that Internet Explorer would be shipped as the default browser on the Macintosh. 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.[28]

30

1998- 2001: Apple's Renaissance

31

1998- 2001: Apple's Renaissance

The original iMac The 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 a 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. More recent products include the iBook, the Power Mac G4, and the AirPort product series, which helped popularize the use of Wireless LAN technology to connect computers to networks. 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.

32

Mac OS X Main article: 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 the FreeBSD kernel.[29] 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. Apple 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.

33

2002 - Present: the iTunes-iOS Juggernaut

34

2002 - Present: the iTunes-iOS Juggernaut In early 2002, Apple unveiled a redesigned iMac, using the G4 processor. The new design had a hemispherical base and a flat panel all-digital display supported by a swiveling neck. This model was discontinued 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. Apple claims this was the first 64-bit computer sold to the general public, but in fact that title actually goes to the AMD Opteron line (Opteron processors were however marketed more directly to the enterprise for use in rackmount servers and in workstations). Both 64-bit CPUs were pre-dated by the 64-bit Alpha architecture, although the Alpha was aimed more at servers and workstations and not at 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 #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.[30] 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 aluminium foot. This new iMac, dubbed the iMac G5, is the world's thinnest desktop computer, measuring in at around two inches (around 5 centimeters).

35

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. Through the 1990s, personal computers based on Microsoft's Windows operating system began to gain a much larger percentage of new computer users than Apple. As a result, Apple fell from controlling 20% of the total personal computer market to 5% by the end of the decade. The company was struggling financially under then-CEO Gil Amelio when on August 6, 1997 Microsoft bought a US$150 million non-voting share of the company as a result of a court settlement with Apple. Perhaps more significantly, Microsoft simultaneously announced its continued support for Mac versions of its office suite, Microsoft Office, and soon created a Macintosh Business Unit. This reversed the earlier trend within Microsoft that resulted in poor Mac versions of their software and has resulted in several award-winning releases. However, Apple's market share continued to decline, reaching 3% by 2004.[citation needed] 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 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
36

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. 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.[31] The Intel transition Main article: AppleIntel transition In a keynote address on June 6, 2005, Steve Jobs officially announced that Apple will begin producing Intel-based Macintosh computers beginning in 2006.[32] 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.[33][34][35] On January 10, 2006, the first Intel-based machines, the iMac and MacBook Pro, were introduced.[36][37] They were based on the Intel Core Duo platform. This introduction came with

37

the news that Apple will complete the transition to Intel processors on all hardware by the end of 2006, a year ahead of the originally quoted schedule. In January 2007, Apple Computer, Inc. shortened its name to simply Apple Inc. In his Keynote address, 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 capable of running a fully functional version of Apple's web browser Safari on the iPhone OS. Apple and "i" Web services In 2000, Apple introduced its iTools service, a collection 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 carries the same US$99.00 annual subscription price as its .Mac predecessor, features the addition of "push" services to instantly and automatically send emails, contacts and calendar updates directly to user's 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 existing MobileMe subscribers by an additional 30 days free-of-charge.[38]

38

iPod and iTunes Store Main articles: iPod and iTunes Store

A 2nd generation iPod

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 LCD, 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,
39

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.

40

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.[39] Just under three months later Apple sold its 300 millionth song on March 2, 2005. [40] 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.[41] 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.

41

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 capabilities. 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.[42] 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.[43] iOS Evolution - iPhone & iPad Main articles: iPhone, iPad, and iOS (Apple) First announced on January 9, 2007, Apple introduced the first version of the iPhone being publicly available on June 29 that same year 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 iPhone4 model arriving in similar fashion in 2010. January 2011 has also seen a Verizon model being announced with expected availability in February 2011.
42

The Macs that are available now (Jan. 2011) are the 27 iMac, the mac pro, the mac book, mac book air, mac book pro and the mac mini. The latest version or mac os x is Snow leopard (10.6). In summer 2011, Apple will have Mac OS X lion (10.7). On February 10, 2011, the Apple iPhone will be on Verizon Wireless and AT&T. Now 2 iPod types are touch screen (Jan. 2011), the iPod nano and the iPod touch, a big advance in technology. Apple TV now has a 2nd generation (Jan 2011) 4 times smaller, but 4 times better! And now Apple has gone wireless, Apple now has a wireless touch pad, a wireless keyboard, a wireless mouse, and even a wireless external hard drive. 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 product line snuggly, as an iOS device, twice the screen size of an iPhone without the phone capabilities. 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.[44] Considering that both product ranges have only been in existence for a combined 4 years, the fact that over 70 million iPhones[45] and earning the company billions is a remarkable success. Apple now rates highly as a mobile phone manufacturer and continues to break new ground with the iPad.

43

Financial history

44

Financial history As cash reserves increased significantly in 2006, Apple created Braeburn Capital on April 6, 2006 to manage its assets.[46] Financial period Net sales (Mil USD) Net profits (Mil USD) Revenue growth Return on net sales FY 1981 FY 1982 FY 1983 FY 1984 FY 1985 FY 1986 FY 1987 FY 1988 FY 1989 FY 1990 FY 1991 FY 1992 FY 1993 FY 1994 FY 1995 FY 1996 FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 335 583 983 1,516 1,918 1,902 2,661 4,071 5,284 5,558 6,310 7,087 7,977 9,189 11,062 9,833 7,081 5,941 6,134 7,983 5,363 5,247 unknown 61 77 64 61 154 218 400 454 475 310 530 87 310 424 -816 -1,045 309 601 786 -25 65 --74% 69% 54% 27% -1% 40% 53% 30% 5% 14% 12% -11% 46% 20% -11% -28% -16% 3% 30% -33% -2% --10% 8% 4% 3% 8% 8% 10% 9% 9% 4% 7% 1% 3% 4% -8% -15% 5% 10% 10% 0% 1%

45

FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009[47] FY 2010 Stock

6,207 8,279 13,931 19,315 24,578 37,491 42,905 65,225

57 266 1,328 1,989 3,495 6,119 8,235 14,013

18% 33% 68% 39% 27% 53% 14% 52%

1% 3% 10% 10% 14% 16% 19% 21%

'AAPL' is the stock symbol under which Apple Inc. trades on the NASDAQ stock market. Apple originally went public in on December 12, 1980, with an initial public offering at US$22.00
[48]

per share. Apple does not currently pay dividends on its common stock. Apple paid dividends from June 15, 1987 to December 15, 1995. 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.

46

Contents

1 1969-1984: Jobs and Wozniak

o o o o o o o

1.1 Pre-foundation 1.2 The Apple I 1.3 The Apple II 1.4 The Apple III 1.5 The Apple IPO 1.6 Xerox PARC and the Lisa 1.7 The release of the Macintosh and the 1984 commercial

1.7.1 1985: Jobs leaves Apple

2 1985-1997: Sculley, Spindler, Amelio

o o o o o

2.1 Corporate Performance 2.2 The Apple II family of the 1980s 2.3 The Mac family 2.4 The early-mid 1990s 2.5 1997: The Return of Jobs

2.5.1 CEO 2.5.2 The Microsoft deal

3 1998- 2001: Apple's Renaissance

o o o o

3.1 The iMac, iBook, and Power Mac G4 3.2 Mac OS X 3.3 Apple retail stores 3.4 The iPod

4 2002 - Present: the iTunes-iOS Juggernaut

o o o

4.1 The Intel transition 4.2 Apple and "i" Web services 4.3 iPod and iTunes Store
47

4.4 iOS Evolution - iPhone & iPad

5 Financial history
o

5.1 Stock

48