History of Apple Computer

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This article is about the History of Apple Computer, a Silicon Valley company based in Cupertino, California, whose core business is computer technologies. To view more general information about the company see the Apple Computer article.

Contents 1 1975-1984: Jobs and Woz 1.1 Pre-foundation 1.2 The Apple I 1.3 The Apple II 1.4 The Apple III 1.5 Xerox PARC and the Lisa 1.6 The release of the Macintosh and the 1984 commercial 1.6.1 Beginning of Windows 1.6.2 1985: Jobs leaves Apple 2 1985-1997: Sculley, Spindler, Amelio 2.1 The Apple II family of the 1980s 2.2 The Mac family 2.3 The early-mid 1990s 2.4 1997: The return of Jobs 2.4.1 CEO 3 1998- 2001: Apple's Renaissance 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 to present 5 Financial history 5.1 Stock 6 The future 7 Apple and "i" Web services 8 iPod and iTunes Music Store 9 See also 10 References 11 External links

[edit] 1975-1984: Jobs and Woz

[edit] Pre-foundation

Before Steve Wozniak co-founded Apple, he was an electronics hacker. By 1975, he was working at Hewlett-Packard and helping his friend Steve Jobs design video games for Atari. Wozniak had been buying computer time on a variety of minicomputers hosted by Call Computer, a time-sharing firm run by Alex Kamradt. The computer terminals available at that time were primarily paper-based; thermal printers like the Texas Instruments Silent 700 were state of the art. Wozniak had seen a 1975 issue of Popular Electronics magazine on how to build your own computer terminal. Using off-the-shelf parts, Wozniak designed the Computer Conversor, a 24-line by 40-column, uppercase-only 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.

On June 12, 2005 at Stanford University's 2005 Commencement Address Jobs said, "When I was young, there was an amazing publication called The Whole Earth Catalog, which was one of the bibles of my generation. It was created by a fellow named Stewart Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This was in the late 1960's, before personal computers and desktop publishing, so it was all made with typewriters, scissors, and polaroid cameras. It was sort of like Google in paperback form, 35 years before Google came along: it was idealistic, and overflowing with neat tools and great notions."^[1]

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 $179 Intel 8080, and the $170 Motorola 6800. 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 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.

[edit] The Apple I

Main article: Apple I

Steve Jobs and Steve Wozniak ("the two Steves") 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 $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 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." With that, 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 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 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), scrounging, white lies (or petty fraud, depending on your point of view), Jobs managed to secure the parts needed while Wozniak and Wayne assembled them. They were delivered in June, and as promised, they were paid on delivery. Eventually 200 of the Apple I's were built.

[edit] The Apple II

Main article: Apple II family

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 textile technician named Mizushima Satoshi 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 cost a lot more money. 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 loan 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 $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.^[2]

With both cash and a new case design in hand, the Apple II was released in 1977 and became the computer generally credited with creating the home computer market (though this is open to debate). Millions were sold well into the 1980s. When Apple went public in 1980, they generated more money than any IPO since Ford Motor Company in 1956, and instantly created more millionaires than any company in history.

A number of different models of the Apple II family were built, including the Apple IIe and Apple IIGS, which can still be found in many schools as late as 2005.

[edit] The Apple III

Main article: Apple III

By the 1980s, Apple faced emerging competition in the personal computing business. Chief among them was IBM, the first "big name" in computing. IBM's PC model, running DOS (short for "disk operating system", and licensed to IBM by Microsoft) was capturing a large share of the emerging desktop computing market in large companies.

Several smaller businesses were using the Apple II, but the company felt it needed a newer, more advanced model to compete in the corporate desktop computing market. Thus, the designers of the Apple III were forced to comply with Jobs' lofty and sometimes impractical goals (a continuing theme throughout Apple's history). Among these was the omission of a cooling fan - it is reported Jobs found them "inelegant." Due to this design flaw and production flaws many of these machines were dead on arrival or succumbed to overheating. Thousands were recalled and replaced with no questions asked. The Apple III was also expensive and, though the company introduced an updated version in 1983, the initial bad press discouraged buyers and left the III largely a failure.

[edit] Xerox PARC and the Lisa

Meanwhile, various groups within Apple were working on a completely new kind of personal computer, with advanced technologies such as a graphical user interface, computer mouse, object-oriented programming and networking capabilities. These people, including Jef Raskin and Bill Atkinson, agitated for Steve Jobs to put the company's focus behind such computers.

It was only when they brought him to see the work being done at Xerox PARC on the Alto in December 1979 that Jobs decided the future was in such graphics-intensive, icon-friendly computers, and supported the competing Apple Lisa (named after Steve Jobs' first daughter) and Apple Macintosh teams. Over the objections of some PARC researchers, many of whom (such as Larry Tesler) ended up working at Apple, Xerox granted Apple engineers 3 days of access to the PARC facilities in return for selling them one million dollars in pre-IPO Apple stock (approximately $18 million net). The Lisa debuted in January 1983 at $10,000. Once again, Apple had introduced a product that was ahead of its time, but far too expensive (the company would continue to follow this pattern for the next few years), and Apple again failed to capture the business market. The Lisa was discontinued with the unceremonious burial of the remaining inventory at a landfill in Logan, Utah in 1986.

[edit] The release of the Macintosh and the 1984 commercial

The Lisa project was removed from Jobs' control midway through development to prevent another Apple III incident and Jobs soon turned his attention to the Macintosh Project. The Macintosh was originally envisioned by Jef Raskin as a truly personal computer with everything the end-user would ever need built right in. It was a research project at the time Jobs came along in the very early development stages. Being somewhat upset about the exile from Lisa he set out to mold the Macintosh into a device that would surpass Lisa. This was a time at Apple where different projects like Lisa and Macintosh were discrete departments which were somewhat self-contained in all aspects; a serious flaw which created hostilities and unrest within the company.

The Apple Macintosh was launched in 1984 with a now famous Super Bowl advertisement based on George Orwell's novel 1984 and directed by Ridley Scott. Steve Jobs' intention with the ad was to equate Big Brother with the IBM PC and a nameless female action hero, portrayed by Anya Major, with the Apple Macintosh. The commercial ended with the following: "On January 24, Apple Computer will introduce Macintosh. And you'll see why 1984 won't be like '1984'" — the implication being that the Mac's new, "user friendly" GUI (with icons designed by graphic designer Susan Kare) would liberate computing and information from the IBM PC.

Macintosh also spawned the concept of Mac evangelism which was pioneered by Apple employee, and later Apple Fellow, Guy Kawasaki.

Despite initial marketing difficulties, such as lack of software, the monochrome-only display and the closed architecture, 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, 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 marketshare and the Macintosh clones achieved limited success before being axed after Steve Jobs returned to Apple Computer in 1997.

[edit] Beginning of Windows

In anticipation of the Macintosh launch, Bill Gates, co-founder, chairman of Microsoft was given several Macintosh prototypes in 1983 for software development for the new computer. In 1985, Microsoft launched Microsoft Windows, its own GUI for IBM PCs using many of the elements of the Macintosh OS. This led to a long legal battle between Apple Computer and Microsoft, ending with an out of court settlement. In this settlement it was stated that Microsoft would be granted access to and allowed unlimited use of the Macintosh GUI. By that point the IBM PC system had been reverse engineered and many companies were also making IBM PC Compatibles, cheaper copies of the PC. Although the first version of Windows was technologically inferior to the Mac, a Windows-equipped PC clone could be purchased for much less.

[edit] 1985: Jobs leaves Apple

After an internal power struggle between Steve Jobs and the new CEO John Sculley in 1985, Apple's board of directors sided with Sculley and Jobs was asked to resign. Jobs bought 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. 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 inital platform for Tim Berners-Lee as he was developing the World Wide Web).

[edit] 1985-1997: Sculley, Spindler, Amelio

[edit] The Apple II family of the 1980s

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.^[3] 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.

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.

[edit] The 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.

[edit] The 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. 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. And the cost of the machines remained higher than a comparable PC.

In 1994, Apple surprised its loyalists by allying with its long-time competitor IBM in the AIM alliance. This was a high-profile bid to create a revolutionary new computing platform, known as PReP, which would use IBM and Motorola hardware and Apple software. PReP's (projected) outstanding performance and software would leave the PC far behind, and would upset Microsoft, which Apple had identified as its real enemy.

As the first step toward the PReP platform, Apple started the Power Macintosh line in 1994, using IBM's PowerPC processor. These processors utilized 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.

In addition to computers, Apple has also produced consumer devices. In the 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 Palm PC.

[edit] 1997: The return of Jobs

In 1996, the struggling company beat out Microsoft and Be, Inc.'s BeOS in its bid to sell its operating system. Apple purchased Steve Jobs' company, NeXT on December 20, 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.

[edit] CEO

On July 9, 1997, Gil Amelio was ousted as CEO of Apple by the board of directors after overseeing a 12 year record low stock price and crippling financial losses. Jobs stepped in as the interim CEO to began a critical restructuring of the company's product line. He would eventually become CEO and is serving in that position to the present day.

[edit] 1998- 2001: Apple's Renaissance

[edit] The iMac, iBook, and Power Mac G4

After 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 as 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.

[edit] Mac OS X

In 2001, Apple introduced Mac OS X, an operating system based on NeXT's NeXTstep. Aimed at consumers and professionals alike, 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 OS 9, the new operating system allowed the use of Mac OS 9 applications through OS X's Classic Environment. Apple's Carbon API also allowed developers to adapt their OS 9 software to use Mac OS X's features.

[edit] Apple retail stores

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.

[edit] The iPod

In late 2001, Apple introduced its first iPod portable digital audio player.

[edit] 2002 to present

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, launched the Power Mac G5, based on IBM's G5 processor. Apple claims this 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 CPU's were pre-dated by the 64-bit DEC 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 $5.2 million (USD) 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.^[4]

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).

Apple computers such as the PowerBook, the iBook, and the iMac are frequently featured as props in films and television series. Occasionally the heroes use Apple computers while the villains are relegated to PC compatibles. In 1996, Apple ran an advertising campaign for the PowerBook tying in with the film Mission: Impossible and in the film Independence Day a Macintosh laptop is used to infect the alien mothership and save the human race.

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 $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 of 2004. More shops for Japan are supposedly in the works. 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), in January 2006 Apple also opened the Brent Cross Apple Store.

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.

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's cores run individually at 2.0 GHz or 2.3 GHz. The Power Mac G5 Quad's cores run individually at 2.5 GHz and all variations have a graphics processor the has 256-bit power or can be expanded to 512-bit for ultimate performance.^[5]

In a keynote address on June 6, 2005, Steve Jobs officially announced that Apple will begin producing Intel-based Macintosh computers beginning in 2006.^[6] 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 will 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 OS X, was also available for Intel's x86 architecture.^[7][8][9]

On January 10, 2006, the first Intel-based machines, the iMac and MacBook Pro, were introduced.^[10][11] They were based on the Intel Core Duo platform. This introduction came with 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.

[edit] Financial history

In 2000, in the third quarter, profit was down at $200 million from $233 million in the second quarter. In the following fourth quarter, Apple reported a lower than expected profit of $170 million. Apple also reported a disappointing first quarter 2001 results based on estimates due to an industry-wide decline in PC sales during that period.

As cash reserves increased significantly in 2006, Apple created Braeburn Capital on April 6, 2006 to manage its assets.^[12]

[edit] Stock

'AAPL' is the stock symbol under which Apple Computer trades on the NASDAQ stock market. Apple originally went public in on December 12, 1980, with an initial public offering at $22.00 per share. Apple does not currently pay dividends on its common stock. Apple paid dividends from June 15, 1987 to December 15, 1995. In 1997, while Gil Amelio was still Apple CEO, AAPL stock hit a 12-year low and the company reported a $708 million loss in the first quarter.

In 2005, Apple stock increased in value and then split; each shareholder of record at the close of business on February 18, 2005 received one additional share for every outstanding share held on the record date, and trading began on a split-adjusted basis on February 28, 2005.

As of January 13, 2006 the last trade was at $85.58 per share, up by 1.54% and Apple currently has a market capitalization of $72.13 billion. 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. On January 13, 2006 Gene Munster maintained an 'outperform' rating on Apple and raised his price target and earnings estimates for the company. Munster raised Apple's price target to US$103 from $80, and raised fiscal 2006 estimates for Apple to $20.22 billion revenue from $17.58 billion. The analyst also said that a two-for-one stock split is likely to be announced soon.^[13]

[edit] The future

The release of Apple's next version of Mac OS X, Mac OS X v10.5 "Leopard", is expected in the Spring of 2007. Leopard will run natively on both Intel and present day PowerPC processors. During his keynote address at the Worldwide Developers Conference 2005, Apple CEO Steve Jobs also projected that the Mac OS X architecture will be the basis of Apple's operating systems for the next two decades.

[edit] 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 cancelled because of lack of success, while iCards and email became integrated into Apple's .Mac subscription based service introduced in 2002. The .Mac service currently costs $99.95 annually in the United States (the iCards service, however, remains free for all).

[edit] iPod and iTunes Music Store

Main articles: iPod; iTunes Music Store

In October 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, introducing a slimmer, more compact design, Windows compatibility (previous iPods only interacted with Macintosh computers), AAC compatibility, storage sizes of up to 80 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 its smallest iPod yet: 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. Unlike other fee-based music services, the iTunes Music Store charges a flat $0.99 per song (or $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). If these services begin to gain traction in the marketplace, it is arguable if Apple will not reshape the iTunes Music Store in some way to stay competitive.

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.^[14] Just under three months later Apple sold its 300 millionth song on March 2, 2005.^[15] On July 17, 2005, the iTunes Music Store sold its 500 millionth song.^{[citation needed]} At that point, songs were selling at an annualized rate of more than 500 million -- and that rate was growing.

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. 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.^[16] In the quarter ending March 26, 2005, Apple earned $290 million, or 34¢ a share, on sales of $3.24 billion. The year before in the same quarter, Apple earned just $46 million, or 6¢ a share, on revenue of $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 pricetag ($199 for 2 gigabytes), 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 5^th generation iPod with video playback capabilities. The device is also 40% thinner than a 4^th generation iPod and has a larger screen.

On February 23, 2006, the iTunes Music Store sold its 1 billionth song.^[17]

[edit] See also

• History of computing hardware (1960s-present)
• Pirates of Silicon Valley - 1999 docudrama about the rise of Apple Computer and Microsoft
• Triumph of the Nerds - 1996 documentary about the rise of the personal computer

[edit] References

[edit] External links

Wikimedia Commons has media related to: Apple Computer

• Apple-History.com
• Apple Computer History Weblog
• MacTracker application
• Apple Computer quotes and history on Google Finance
• Transcripts of Apple Computer's Quarterly Conference Calls
• Apple history tidbits