From Steve Jobs and Steve Wozniak’s April Fool’s start to a $3.7 trillion empire
Michael Liedtke
A skinny hippie and his wisecracking friend, a nerdy engineer, vowed to change the world 50 years ago on April Fool’s Day when they founded a startup in Silicon Valley, and then—no joke—they did it.
This unlikely journey began on April 1, 1976, when a then-rather shaggy Steve Jobs and fellow gadget tinkerer Steve Wozniak signed a two-page partnership document creating Apple Computer Co.
Jobs, a 21-year-old college dropout, and Wozniak, a 25-year-old Hewlett-Packard employee, each bought 45 percent of Apple’s shares. The remaining 10 percent went to their 41-year-old consultant, Ron Wayne.
The company got off to such a shaky start as it attempted to build a personal computer in Los Altos, California, the home of Jobs’ parents, that Wayne relinquished his shares for US$2,300. Apple’s current boast of a market cap of $3.7 trillion turns out to be a $370 billion ($534 billion) mistake, considering how much its holdings could grow.
However, Apple was almost toppled before establishing its current empire.
After sidelining Jobs in a bitter split in 1985, the tech firm made a surprise deal that brought its exiled co-founder back in 1997. Reluctantly agreeing to be an interim consultant, Jobs took over as CEO and masterminded an innovation factory that churned out iPods, iPhones and iPads in a feverish burst of creativity that lasted a decade.
Here’s a look at Apple’s journey so far.
surprising rise
Although founded in 1976, Apple did not achieve its first major success until June 1977 with the release of the Apple II computer, which was priced at US$1298 (about US$7000 when adjusted for inflation).
Apple, with its sales booming, went public in late 1980 at $22 per share; That works out to $10 per share after adjusting for stock splits. This means the $2200 spent to buy 100 shares at the IPO price would be worth more than $5.5 million today.
Apple’s next big event occurred at the annual shareholders meeting on January 24, 1984, when Jobs recited the opening lines of a Bob Dylan song. Times They Changed and introduced the first Macintosh, a machine that introduced the computer mouse and graphical interface to the public.
This launch party took place two days after Apple introduced its Macintosh computer with a 60-second ad directed by Ridley Scott that evoked George Orwell. 1984 novel during that year’s Super Bowl. The ad was such a hit that it is widely credited with turning Super Bowl commercials into an art form and part of the cultural psyche.
Despite its groundbreaking features, the Macintosh (named after an engineer’s favorite type of apple) cost US$2500 (equivalent to approximately US$7900/AU$11,400 today), which is one of the reasons it did not sell as well as expected.
This frustration resulted in firings and other cost cuts by Apple CEO John Sculley, a former PepsiCo executive whom Jobs personally helped recruit to the company in 1983.
A year after the introduction of the Macintosh, the once close relationship between Sculley and Jobs had degenerated into a power struggle. Apple’s board sided with Sculley, causing Jobs to resign in September 1985; He felt such a deep sense of betrayal that he sold all but one of his Apple shares.
jobless descent
After Jobs left, Apple produced popular versions of the Mac with Sculley at the helm. However, Apple’s stylishly designed computers could not slow the sales momentum of lower-priced computers running Microsoft software; These computers’ brazen tactics of copying the Mac’s graphical interface triggered a seven-year legal battle that culminated in a lawsuit. 1994 US Supreme Court decision This defeated Apple’s copyright claims.
Before this failure, Apple fired Sculley in mid-1993 and replaced him with Michael Spindler; this post continued until early 1996; he was also dismissed due to the company’s increasing losses. In desperation, Apple recruited its next CEO from its own board of directors; Gil Amelio, who had engineered a turnaround at computer chip maker National Semiconductor.
Almost all of Amelio’s moves failed; except for one: a staggering $428 million operating system deal from NeXT, the computer startup Jobs founded after leaving Apple.
extraordinary resurrection
Jobs only wanted to mentor Amelio for a few months in 1997, insisting that he wanted to focus on his family when he wasn’t busy as chief executive of Pixar, the computer animation studio he had acquired. Star Wars He bought director George Lucas for $5 million in 1986.
But those plans changed when Apple fired Amelio in July 1997, setting the stage for Jobs to orchestrate a dramatic comeback.
By August 1997, Jobs made peace with his long-time rival, Microsoft founder Bill Gates, and struck a deal that included US$150 million in cash support from the Windows maker.
This money paved the way for Jobs to launch a new line of candy-colored, translucent computers called “iMacs.” The “i” on the front of the Mac heralded a new five-item doctrine consisting of “internet, individual, instruct, inform and inspire.”
In October 2001, Jobs introduced the first iPod, a music storage device that could initially store up to 1,000 songs. While Apple sold 450 million devices with different designs, it would completely eliminate the CD format and pave the way for the era of music streaming.
On January 9, 2007, Jobs took a stage in San Francisco and announced that he would demonstrate to the crowd three groundbreaking inventions: an iPod with touch-screen controls, a revolutionary mobile phone, and an internet communications device.
Then came the bombshell statement: “These are not three separate devices. This is a single device! And we call it iPhone.”
More than 3 billion iPhones have been sold since then, and nearly 15 years after Jobs’ death from cancer, the device still accounts for more than half of Apple’s $416 billion in annual revenue.
Apple’s dependence on the iPhone stems in part from the company’s inability to create another captivating product under the leadership of Jobs’ hand-picked successor, Tim Cook.
Even so, Apple is worth 10 times more than its $350 billion market cap at the time of Jobs’ death; It’s proof that Cook is a worthy caretaker of the legacy left behind by the visionary who embraced an advertising campaign celebrating “those who see things differently.”
access point
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