Apple Corporation

Since the beginning of personal computing, Apple has had an impact out of proportion to its relatively modest market share. In a world generally dominated by IBm PC-compatible machines and the microsoft DOS and Windows operating systems, Apple’s distinctive macintosh computers and more recent media products have carved out distinctive market spaces.

   Headquartered in Cupertino, California, Apple was cofounded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne (the latter sold his interest shortly after incorporation). (See jobs,steve, and Wozniak, steven.) Their first product, the Apple I computer, was demonstrated to fellow microcomputer enthusiasts at the Homebrew Computer Club. Although it aroused considerable interest, the hand-built Apple I was sold without a power supply, keyboard, case, or display. (Today it is an increasingly valuable “antique.”)

   Apple’s true entry into the personal computing market came in 1977 with the Apple II. Although it was more expensive than its main rivals from Radio Shack and Commodore, the Apple II was sleek, well constructed, and featured built-in color graphics. The motherboard included several slots into which add-on boards (such as for printer interfaces) could be inserted. Besides being attractive to hobbyists, however, the Apple II began to be taken seriously as a business machine when the first popular spreadsheet program, VisiCalc, was written for it.

   By 1981 more than 2 million Apple IIs (in several variations) had been sold, but IBm then came out with the IBm PC. The IBm machine had more memory and a somewhat more powerful processor, but its real advantage was the access IBm had to the purchasing managers of corporate America. The IBm PC and “clone” machines from other companies such as Compaq quickly displaced Apple as market leader.

the macintosh

By the early 1980s Steve Jobs had turned his attention to designing a radically new personal computer. Using technology that Jobs had observed at the xerox Palo Alto Research Center (PARC), the new machine would have a fully graphical interface with icons and menus and the ability to select items with a mouse. The first such machine, the Apple Lisa, came out in 1983. The machine cost almost $10,000, however, and proved a commercial failure.

   In 1984, however, Apple launched a much less expensive version (see macintosh). Viewers of the 1984 Super Bowl saw a remarkable Apple commercial in which a female figure runs through a group of corporate drones (representing IBm) and smashes a screen. The “mac” sold reasonably well, particularly as it was given more processing power and memory and was accompanied by new software that could take advantage of its capabilities. In particular, the mac came to dominate the desktop publishing market, thanks to Adobe’s Pagemaker program.

   In the 1990s Apple diversified the macintosh line with a portable version (the PowerBook) that largely set the standard for the modern laptop computer. By then Apple had acquired a reputation for stylish design and superior ease of use. However, the development of the rather similar Windows operating system by microsoft (see micRosoftWindoWs) as well as constantly dropping prices for IBmcompatible hardware put increasing pressure on Apple and kept its market share limited. (Apple’s legal challenge to microsoft alleging misappropriation of intellectual property proved to be a protracted and costly failure.)

   Apple’s many macintosh variants of the later 1990s proved confusing to consumers, and sales appeared to bog down. The company was accused of trying to rely on an increasingly nonexistent advantage, keeping prices high, and failing to innovate.

   However, in 1997 Steve Jobs, who had been forced out of the company in an earlier dispute, returned to the company and brought with him some new ideas. In hardware there was the imac, a sleek all-in-one system with an unmistakable appearance that restored Apple to profitability in 1998. On the software side, Apple introduced new video-editing software for home users and a thoroughly redesigned UNIx-based operating system (see OS x). In general, the new incarnation of the macintosh was promoted as the ideal companion for a media-hungry generation.

consumer eLectronics

Apple’s biggest splash in the new century, however, came not in personal computing, but in the consumer electronics sector. Introduced in 2001, the Apple iPod has been phenomenally successful, with 100 million units sold by 2006. The portable music player can hold thousands of songs and easily fit into a pocket (see also music and video playeRs, digital). Further, it was accompanied by an easy-touse interface and an online music store (iTunes). (By early 2006, more than a billion songs had been purchased and downloaded from the service.) Although other types of portable mP3 players exist, it is the iPod that defined the genre (see also podcasting). Later versions of the iPod include the ability to play videos.

   In 2005 Apple announced news that startled and perhaps dismayed many long-time users. The company announced that future macintoshes would use the same Intel chips employed by Windows-based (“Wintel”) machines like the IBm PC and its descendants. The more powerful machines would use dual processors (Intel Core Duo). Further, in 2006 Apple released Boot Camp, a software package that allows Intel-based macs to run Windows xP. Jobs’s new strategy seems to be to combine what he believed to be a superior operating system and industrial design with industry-standard processors, offering the best user experience and a very competitive cost. Apple’s earnings continued strong into the second half of 2006.

   In early 2007 Jobs electrified the crowd at the macworld Expo by announcing that Apple was going to “reinvent the phone.” The product, called iPhone, is essentially a combination of a video iPod and a full-featured Internet-enabled cell phone (see smaRtphone). marketed by Apple and AT&T (with the latter providing the phone service), the iPhone costs about twice as much as an iPod but includes a higher-resolution 3.5-in. (diagonal) screen and a 2 megapixel digital camera. The phone can connect to other devices (see bluetooth) and access Internet services such as google maps. The user controls the device with a new interface called multitouch.

   Apple also introduced another new media product, the Apple TV (formerly the iTV), allowing music, photos, and video to be streamed wirelessly from a computer to an existing TV set. Apple reaffirmed its media-centered plans by announcing that the company’s name would be changed from Apple Computer Corporation to simply Apple Corporation.

   In the last quarter of 2006 Apple earned a recordbreaking $1 billion in profit, bolstered mainly by very strong sales of iPods and continuing good sales of macintosh computers.

   Apple had strong macintosh sales performance in the latter part of 2007. The company has suggested that its popular iPods and iPhones may be leading consumers to consider buying a mac for their next personal computer.

  meanwhile, however, Apple has had to deal with questions about its backdating of stock options, a practice by which about 200 companies have, in effect, enabled executives to purchase their stock at an artificially low price. Apple has cleared Jobs of culpability in an internal investigation, and in April 2007 the Securities and Exchange Commission announced that it would not take action against the company.