They weren’t the only computer inventors at the time, certainly, but Jobs and Wozniak helped set off a technological transformation that would reach into all kinds of industries, setting the tone and tenor for much economic growth and popular culture to come. Business, education, entertainment — and a lot more — would never be quite the same again. Their story, and that of early Apple, Inc., is one worth revisiting, especially as the personal technology revolution continues to spawn new developments almost daily. The “early Apple” story marks one of those pivot points in history that reminds us how far our modern world has come in recent years — and how fast things have changed and continue to change.
Steve Wozniak was born in 1950; Steve Jobs in 1955. They both attended Homestead High School of Los Altos, California, though at different times, and would later become fast friends. Wozniak had gone off to University of California at Berkeley but later dropped out and took a job at Hewlett-Packard as an engineer.
Jobs and Wozniak first met at Hewlett-Packard in 1971 through a mutual friend when Jobs was 16 and Wozniak 21. While in high school, Jobs had also attended lectures at Hewlett-Packard and had a summer job there once as well. He and “Woz,” as Wozniak was called, built and sold a device called a “blue box” that could hack AT&T’s long-distance network so that phone calls could be made for free. After high school, Jobs went off to Oregon’s Reed College in 1972, but when his family faced financial difficulty in 1974, he quit college and took a job designing video games at Atari. He took the job at Atari primarily to save money for a trip to India where he went for spiritual enlightenment.In the fall of 1974, after Jobs returned from India, Wozniak invited him to join the ‘Homebrew Computer Club’ in Palo Alto, a group of electronics-enthusiasts who met at the Stanford Linear Accelerator Center. This group shared knowledge and helped each other with their ongoing projects. Jobs had also returned to his previous job at Atari, where he was given the task of creating a circuit board for a new game — and challenged to do so with the least number of chips possible. Jobs was no whiz with circuit board design and decided to enlist the help of Wozniak in the task, who demonstrated his genius by reducing the number of needed chips by 50, a significant accomplishment — and a talent not lost on Jobs. It was about that time that Jobs and Wozniak agreed to begin working on a personal computer together. Jobs was no whiz with circuit board design and decided to enlist the help of Wozniak, who soon demonstrated his genius… In 1975, they began work on what would become Apple I computer — essentially a circuit board — in Jobs’ bedroom. Along the way, they made little bits of technological history. In June of that year, for example, Wozniak typed a character on a keyboard and it appeared on a TV screen — believed to be the first time this happened. They also continued to present their work and designs at the Homebrew Computer Club. During the design process Jobs made suggestions that helped shape the final product, such as the use of the newer dynamic random access memory (RAM) chips instead of older, more expensive and static versions. By 1976, chiefly by Wozniak’s hand, they had a small, easy-to-use computer — smaller than a portable typewriter. In technical terms, this was the first single-board, microprocessor-based microcomputer. It included a central processing unit (CPU), RAM, and basic textual-video chips. Wozniak’s compact little circuit board could do the feats of much larger computers and it was first shown at the Homebrew Computer Club. Jobs and Wozniak then took their new computer to the companies they were familiar with — Hewlett-Packard and Atari — but neither saw much demand for a “personal” computer. Sitting in Jobs’ bedroom in Los Altos, California, Jobs proposed that he and Wozniak start their own company to sell the devices. They agreed to go for it and set up shop in the Jobs’ family garage. By April 1976, Jobs and Wozniak had their first order for the “Apple I” computer — a fully assembled circuit board containing about 30 chips. This computer lacked certain basic finished features such as a keyboard, monitor, and case, but they could all be added. The core technology, however, was the important part. A local computer store, the ‘Byte Shop,’ ordered 50 of the new Apple-I creations. By then, Apple had a third partner, named Ronald Wayne. Facing a cash flow problem to pay for enough parts to build the units to meet their first order — each costing about $100 to build — Jobs arranged a 30-day credit deal with a local supplier and the three Apple partners then assembled the 50 units at night in Jobs’ garage. They filled their first order in ten days. Two weeks later, their new partner Ronald Wayne, wasn’t so sure about what he’d gotten himself into, and decided to pull out of the venture. He was given $800 for his 10 percent stake in the company. Now it was just the “two Steves” at Apple.
The Apple I, meanwhile, continued to be sold through several small retailers. It included the main circuit board with a tape-interface sold separately. It could use a TV as the display system, then showing only text. Many machines at that time had no display at all. With the Apple I, text appeared on screen then a fairly slow rate — 60 characters per second — but still faster than the teletypes of that era. The Apple I could also start up faster than other machines at that time, and had a cassette interface for loading and saving programs. Although simple, the machine was a masterpiece of design, using fewer parts than anything around, earning Wozniak high praise as a designer. An early print advertisement for the Apple I sings its praises in great detail with the punch line, “Byte into an Apple…” for $666.66.
In the fall of 1976, Steve Wozniak was working on a newer version of their computer, which would become the Apple II. Jobs and Woz believed they were onto something that could become a major success, but they lacked the funds to produce it in quantity. They offered it to Commodore Computer Co., a leading tech company at the time, and one which had just bought the chip technology that Jobs and Woz were using in their Apples. But Commodore turned them down.
By November 1976, the two young entrepreneurs received some help from a chip industry veteran and ex-Intel manager named Mike Markkula, who helped Jobs write a business plan. Markkula’s plan predicted sales of $500 million for the new company in ten years. In 1977, Apple was incorporated and hired its first ad agency with Rob Janov then designing a new Apple logo (as shown above). A venture capitalist named Arthur Rock was also brought in, and Mike Markkula invested $92,000 in Apple for about a third ownership in the company. A bank loan of $250,000 was also obtained. About that time, Michael Scott was hired to become Apple’s first president, bringing professional management to the new company. With the help of Mike Markkula, Apple had secured $600,000 in venture funding.
Meanwhile, the Apple II computer was unveiled in April 1977 and began selling to the general public in June for $1,295. The Apple II was the first pre-assembled personal computer designed for the general market. It offered an attractive plastic case and came complete with standard keyboard, power supply, and color graphics capability. The Apple II allowed a wider range of people to begin using computers, focusing more on software applications and less on development of the processor hardware.
The Apple II would become the first mass-marketed personal computer, and it took Apple to a new level of success. Programmers began creating applications for the Apple II at Jobs’ urging; soon there were more than 15,000 applications available for the machine. In 1977, Apple sales surged to $2.7 million.The Apple II was mostly the product of Wozniak’s technical skills. But it was Jobs who made it a marketing success. He decided to create a fully-assembled PC board and encase it in an attractive plastic housing. They also wrote clear, concise instruction manuals that made the machine easy for consumers to use. Jobs also sought public relations help, and spent money on advertising to pitch the “personal computer.” Apple, in fact, was the first computer company to advertise in consumer magazines. The company’s early ads were rich with information and instruction on how to use the new technology. Apple, in many ways, served as one the first public “computer educators,” using its ads, brochures, and manuals to demystify computers and teach people how to use them. The 1977 magazine ad at left, for example, first explained that the Apple II was not a “kit,” as many early computers then were, aimed at tech-savvy hobbyists. The Apple II was “ready to use,” and could be linked to existing television sets or cassette players. It also had built-in features and the BASIC computer language to make life easier for the new user. The Apple II also had built-in memory and array of video graphics. But as Apple put it: “you don’t even need to know a RAM from a ROM to use and enjoy Apple II.” The ad also explained that users of the Apple II could store and retrieve their own data, could use it as a educational device to help tutor their children, or use it to play a video game called PONG, and with time, even invent their own games. “As you experiment you’ll acquire new programming skills which will open up new ways to use your Apple II,” said the ad. “You’ll learn to ‘paint’ dazzling color displays using the unique color graphics commands in Apple BASIC, and write programs to create beautiful kaleidoscopic designs. As you master Apple BASIC, you’ll be able to organize, index, and store data on household finance, income tax, recipes, and record collections….” And for technical-minded, the ad also included a sidebar with all the Apple II’s specifications.
The Apple II — or more accurately, the Apple II series of computers — would prove to be a huge success for the young company, selling nearly six million units over the next 15 years. From the late 1970s through the mid-1980s, Apple II computers, with various new improvements and peripheral devices, were released nearly every year or two. But the Apple story, technically and commercially, had a couple of key developments in the late 1970s that figured prominently in the company’s success and its future. One of these came in 1979 when a company named Software Arts, Inc., released VisiCalc, the first commercial spreadsheet program for personal computers. VisiCalc made desktop calculators and manual retabulation obsolete. Whole rows and columns of data could now be recalculated with the touch of a button. VisiCalc first ran exclusively on the Apple II, helping to send Apple computer sales through the roof. Also that year came the first commercially successful word-processing program for personal computers, called Word Star. But perhaps the biggest development for Apple in the late 1970s — though not bearing commercial fruit until the mid-1980s — was the deal it struck with Xerox.
Visit to Xerox
In the early 1970s, Xerox engineers at the Palo Alto Research Center in California — also known as Xerox PARC — had developed a computer they called the “Alto.” This computer used a pointing device called a “mouse” and also employed icons on a screen to represent documents — a combination that became known as “graphical user interface,” or GUI. This system would dramatically change personal computing, but not immediately. In fact, at Xerox in the 1970s it had gone nowhere as a commercial product. But that would soon change thanks to Apple. Steve Jobs and software engineer Bill Atkinson visited the Xerox PARC lab in November 1979, and about that time Apple made a deal with Xerox. In return for a “look see” at Xerox’s GUI system, Apple agreed to give Xerox a $1 million slice of its company. As part of the deal, Apple engineers then spent three days at the Xerox research center in December 1979 learning about GUI — which Apple would later refine in R&D and commercialize with great success in the 1980s in its Macintosh computers. But Apple wasn’t there yet, as this was still in the late 1970s. In fact, after Apple made its deal with Xerox, there would be years of research and development ahead. Apple had already begun two major computer research projects — the Lisa and the Macintosh — projects that would exploit the GUI approach to computing and revolutionize the PC business. But this would not happen for several years — and not fully until the mid-1980s.
Meanwhile, out in the business world of the late 1970s, Apple was now approaching a $200-million-a-year company. Its Apple II computers were going great guns, supplying the backbone of the new company’s success. But for Apple, there was also new competition on the horizon. Office machine giant IBM had hired a young company named Microsoft, and was hatching a plan to enter the personal computer business. In May 1980, Apple launched another new computer for sale, the Apple III. This model offered twice the memory of Apple IIs and could run more powerful version of VisiCalc. Apple had begun to court the office market by this time; the company had noticed back in 1977 and 1978 that a large number of Apple IIs were going into offices. With the office market, profit margins were fatter and “word-of-mouth” spread about the technology was also better. As Jobs would later say: “I figured that we could sell five or ten times as many computers in the office if they were easy to use.” But generally, despite what had already transpired at Apple and other computer companies, the personal computer for most Americans was still pretty much a foreign concept. In fact, one magazine advertisement in 1980 ran the bold headline, “What’s a Personal Computer?”
Advert “Education”Apple, for its part, continued to use its marketing and advertising to educate the public and the business community about personal computers. The full-page magazine ad at right, for example, ran in May 1980. It was pitched in part to the business office market. It featured an inquisitive Benjamin Franklin staring into a computer screen and asked: “What kind of man owns his own computer?” Apple, answering its own question in the body of the ad, explained:
“Rather revolutionary, the whole idea of owning a personal computer? Not if you’re a diplomat, printer, scientist, inventor….or a kite designer. Today, there’s Apple Computer. It’s designed to be a personal computer. To uncomplicate your life and make you more effective.
It’s a Wise Man Who Owns an Apple
“If your time means money, Apple can help you make more of it. In an age of specialists, the most successful specialist stay away from uncreative drudgery. That’s where Apple comes in.
“Apple is a real computer, right to the core. So just like big computers, it managers data, crunches numbers, keep records, processes your information and prints reports. You concentrate on what you do best. And let Apple do the rest….
Apple, the Computer Worth Not Waiting For.
“Time waiting for access to your company’s big mainframe is time wastes. What you need in your own department — on your own desk — is a computer that answers only to you… Apple Computer. It’s less expensive that timesharing. More dependable than distributed processing. Far more flexible that centralized EDP. And at less that $2,500 (as shown), downright affordable….”
Steve & Lisa
Back at Apple, meanwhile, inside the company, Steve Jobs tried to take control of the Lisa research project, but was turned down by Apple president, Michael Scott, who knew that Jobs didn’t have the technical expertise to do the job. The Apple III computer — Jobs’ last project — had fared poorly and had some major technical flaws. A number of the Apple IIIs had to be recalled and retooled. Still, inside the company at about this time there was also a forward-looking optimism about the future of the PC business, and some Apple executives insisted their company lead the way. Apple president, Michael Scott, issued a kind of “practice-what-we-preach” memo to Apple’s staff — an ultimatum of sorts to demonstrate the utility of Apple computers and the future:
“Effective Immediately!! No more typewriters are to be purchased, leased, etc., etc….Apple is an innovative company. We must believe and lead in all areas. If word processing is so neat, then let’s all use it! Goal: by 1-1-81, NO typewriters at Apple!…We believe the typewriter is obsolete. Let’s prove it inside before we try to convince our customers.”
Apple the corporate entity, meanwhile, was about to begin a new chapter in its business history.
Apple Goes Public
By late 1980, Apple Computer had been a private company for three years. Apple’s partners decided to take their company to Wall Street and put Apple on the stock market, making it a publicly-held company. At the company’s Initial Public Offering (IPO) on December 12, 1980, Apple shares were offered to the general public at a price of $14 each. At the opening bell, the stock was priced $22 and sold all 4.6 million shares within minutes. Apple’s stock offering had generated more capital than Ford Motor’s had in 1956 and instantly created about 300 millionaires — more than any company in history up to that point. In its first day of trading Apple closed at $29, giving the company a market valuation of $1.778 billion. Apple’s stock offering had generated more capital than any IPO since Ford Motor Co. in 1956 and instantly created about 300 millionaires at Apple — more than any company in history at the time. Several venture capitalists who had backed Apple early on, cashed out as well, reaping tens of millions. Of Apple’s 1,000 employees then, more than 40 became millionaires because of their stock options. Steve Jobs, holding 7.5 million shares, was worth about $217 million dollars. Steve Wozniak was assigned four million shares making his worth about $116 million dollars. Mike Markkula’s seven million shares of Apple were then valued at about $203 million. And those values would continue to rise with the company’s rising stock price, at least on paper. Within a year of the public offering, Apple’s value would rise by 1,700 percent ! Jobs would later summarize his early wealth in and interview for the PBS program, Triumph of the Nerds (1996) as follows: “I was worth over a million dollars when I was twenty-three, and over ten million dollars when I was twenty-four, and over a hundred million dollars when I was twenty-five… And it wasn’t that important because I never did it for the money.”Inside Apple, meanwhile, things were changing. At the company’s first shareholder’s meeting in January 1981, there was some rough going for Jobs who had been interrupted in his speech, and according to some accounts, delivered a long, emotionally charged talk about betrayal and lack of respect. In February 1981, Steve Wozniak crashed a small plane he owned while taking off in Santa Cruz, California, suffered amnesia, and did not return to Apple for a time during his recovery. Wozniak also married during this period and finished his undergraduate degree at UC Berkeley. Back inside the company, Steve Jobs took over the Macintosh project, while the rest of company focused on the Lisa computer. By July 1981 a staff shakeup had occurred with 40 employees let go. Mike Markkula then became president and Steve Jobs, chairman. Apple’s marketing and advertising, meanwhile, began reaching into new territory.
Dick Cavett HiredApple continued its print advertising in 1981 along the lines of ads similar to the Ben Franklin piece shown above. The Apple ads enlisted other historic figures to tell the Apple story and highlight features of its Apple II and III computer models. Some used themes around Henry Ford and the Model T, the inventiveness of Thomas Edison (ad at right), statesman and thinker Thomas Jefferson, and first-in-flight pioneer Orville Wright. Other Apple print ads used more contem- porary themes, many quite creative. (See “Apple Advertising and Brochure Gallery” at MacMother- ship.com in “sources” below for a full selection of Apple ads). But by the early 1980s, the first wave of TV commercials for computers had also begun, and Apple was among the first to hire a famous celebrity to pitch its wares. Dick Cavett was then a hip and popular talk show host who Apple hired in July 1981 to become the company’s on-screen spokesman. Apple struck a three-year contract with Cavett whose main role was largely one of allaying public fears about computers, simply by serving as a familiar and safe spokesperson. Some of the Cavett pieces featured his distinct brand of humor as well. A few critics, however, scored Cavett as associated with elite, intellectual, upper-middle-class America who did not have mass-market appeal. Some techies viewed Apple’s choice of Cavett as a shift away from hobbyists to business professionals. One of the Cavett ads in 1981 showed the talk show host seated at a desk with an Apple II computer and a “typical” housewife. In the ad, Cavett and his guest exchange some banter back and forth as he attempts to cast her as the “average American homemaker” who might use a computer to do household budgeting or storing recipes. But Cavett’s guest surprises him by saying she’s actually “working in gold futures” and uses her computer to generate trend analyses and bar graphs. She also tells Cavett, by the way, that she “also owns a small steel mill.” Cavett, in comic form, appears somewhat chagrined by all of this, but has also pitched the Apple computer as “the appliance for the 80s.”
Apple and Cavett, however, were not alone in TV computer advertising. Celebrity pitchmen for other PC makers were also involved — Bill Cosby for Texas Instruments, Alan Alda for Atari, William Shatner for Commodore, and others. Apple’s main competitor then was Commodore, an established computer maker whose models were then outselling Apple’s. However, the entire PC business was soon headed for major change, as the long-established maker of business mainframe computers, IBM, began its bid to enter the PC market.
IBM Weighs In
In August 1981, IBM introduced its first personal computer to the marketplace priced at $1,565. IBM had a formidable product launch, including a sophisticated TV ad campaign that used a Charlie Chaplin-esque figure who became the mascot for IBM PCs. Apple, for its part, publicly welcomed IBM into the fray, running a full-page ad in the Wall Street Journal with a headline that read, “Welcome IBM. Seriously.” The ad was a classic Apple move, tongue-in-cheek as if to say, “Well where have you been, IBM?” Still, all of the computer world was then abuzz over IBM’s big debut. Lost in the blitz, however, was the fact that Apple had a more impressive technical product. The IBM-PC was slower than the Apple II and, in effect, outdated at its introduction. But IBM’s machine would sell briskly and eventually catch and surpass Apple.
Still, at year end 1981 Apple had garnered 23 percent of the $2.2 billion worldwide market in personal computers. It was then neck and neck with Tandy Corp.’s Radio Shack, a company that had the advantage of 8,400 retail outlets. Xerox also had a new PC entry that year as well. But by late 1981, Steve Jobs and Apple were getting a share of favorable national notice.
In October 1981, it was Steve Jobs who made the cover of Inc. magazine, then a two-year old business publication for those who ran growing companies. Jobs was shown on the cover standing over an Apple II computer with a feature story tag line that read: “This Man Has Changed Business Forever,” meaning Apple’s move to bring personal computers to the business world.
Inside the magazine, a story by Steve Ditlea was titled, “An Apple on Every Desk” — the goal Jobs had set out for his company in the office market. The 26 year-old Jobs — who then held 7.5 million shares of Apple worth about $163 million — was still the educator, explaining how personal computers in the office would increase productivity.
Jobs pointed out that in the last 15 years, there had only been a few major changes in office productivity — the IBM Selectric typewriter, the Xerox copier, and more advanced phone systems. The personal computer, by comparison he explained, offered the individual office worker a new kid of synergy and productivity — combining typing and calculating, offering data storage, phone-line date transmission, and other capabilities.By February 1982 Apple’s growing pains were easing and sales of the retooled Apple III computers were improving, along with a less expensive Apple II-Plus. The two machines were selling at a rate of about 15,000 a month. In mid-February 1982, Steve Jobs appeared on the cover of Time magazine in a story about “America’s Risk Takers.” It marked the first time the mainstream national media had told the “two-guys-in-a-garage” story about Apple — and how the company’s sales had surged from $2.7 million in 1977 to $200 million in 1980, with an expected $600 million by the end of 1982. The Time story provided a big lift to Apple, but it also offered some cautions. “Apple will have to prove that it has the management talents needed in a firm that this year will join the ranks of the Fortune 500,” wrote Time. “…Jobs, who had the vision to build one of America’s foremost companies from a hobbyist’s toy, must show that he has the foresight and ability to guide a major corporation.”
By early September 1982, the development of the Lisa computer was officially completed. A launch date was set for January 1983. Jobs had been working on the Lisa project since the late 1970s, but in 1982 he was pushed off that project due to some corporate infighting. He then moved over to the Macintosh project. Inside the company there was something of battle going on — described in one account as a fight between Lisa’s “corporate shirts” and Jobs’ “pirates” — to determine which product would be first to market and establish Apple’s reputation. A company named Microsoft, meanwhile, was also developing mouse-based software applications — some for Apple’s Mac project, but also working on its own GUI system for the IBM PC, later known as Windows.
By year’s end 1982, Apple Computers were still going out the door at a fairly brisk pace. For the month of December 1982, Apple IIs were moving at 45,000 a month and Apple IIIs at about 5,000 a month. However, at this point Steve Jobs and Apple needed a more orthodox chief executive to run the company — “adult supervision,” some called it. A more mainstream and respected business executive could help sell Apple to the investment community and corporate America. And Jobs had someone in mind to run Apple: John Sculley, then head of Pepsi-Cola. In December 1982, Jobs and Mike Markkula met with Sculley, discussing the possibility of him heading up Apple. Sculley said he wasn’t interested. But that would not be the end of it.In January 1983, Apple unveiled its Lisa computer, with shipments scheduled for that spring. Lisa was the first computer to use the GUI “point-and-click” system, with mouse and on-screen icons — a major stride in simplifying computers for everyday users. In early February 1983, Fortune magazine, picking up on the launch of the Lisa and the challenges ahead for Steve Jobs and his company, did a cover story headlined, “Apple’s Bid To Stay in the Big Time.” The Fortune piece explored the years of research behind the Lisa, from the days when Jobs and others saw the possibilities of graphical user interface at Xerox PARC, to the labors involved in coming up with graphical representations for items such a “trash,” “folders” and other functions — items today taken for granted, but then were totally new concepts in computing, taking numerous months of work to fashion, code, and have work smoothly. The Lisa, in fact, was the first step at internalizing a lot of computer difficulty into the computer’s memory so average users wouldn’t have to deal with it. “The Lisa is not as simple to use as a toaster or a telephone,” wrote Fortune reporter George M. Taber who tested the computer. “But for anyone who has gone through the sometimes painful process of learning how to work a personal computer, Lisa is a dream.” On word processing, however, Lisa was noted as somewhat “slow and clumsy.” But overall, Fortune gave it good grades. Apple had a key business goal for Lisa, which was aimed squarely at the business office market, and especially larger companies. A lot was riding on the new computer. Apple had lost ground to IBM in the PC wars when the Apple III ran into troubles, giving IBM the running room it needed to take market share away from Apple. In the fourth quarter of 1982, Apple still led IBM in PC sales, but IBM was rapidly closing the gap selling PCs at a rate of about 20,000 per month. In the end, the Lisa did not become the world beater that Apple hoped it would. Lisa’s steep price and a limited number of software titles contributed to a mediocre showing. While Lisa received much praise for its more simplified use and its graphics abilities, the computer was richly priced at nearly $10,000 each, which was then more than twice that of a normally equipped IBM PC.
Back at company headquarters, Steve Jobs had succeeded in wooing former Pepsi president John Sculley to come to Apple. Jobs at one point had goaded Sculley, saying to him: “Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?” In April 1983, Sculley became CEO of Apple. Steve Wozniak also returned to Apple in June 1983, but resumed work there in a somewhat lower profile.
“Apple’s E-Mail Ad”
…[O]ne of the things that can make an Apple Personal Computer meaningful to you, personally …is called “electron- ic mail.”
Which, simply stated, is a quick and easy way to send any information, anywhere, anytime…
…This new technology enables your Apple to send or receive any correspondence to any compatible computer over standard phone lines. The same ones your voice has been using for years.
So there’s no costly hook up expense. All you need is an Apple and a device called a modem, that translates the computer’s electronic codes into fleet phone signals.
Which in turn, can actually move messages at about the speed of light. Versus the speed of the U.S. Mail.
And not just letters. But memos, charts and graphs, stock reports, Visicalc reports, weather reports or whatever.
To one address. Or, just as easily, to a hundred….
The ad offered three sample computer screens to show the kind of information that could be sent as electronic mail, and also explored other things the Apple Computers could do with this power to access electronic data — obtain stock quotes, make travel arrangements, scan the New York Times, or tap into an electronic encyclopedia….”. In signing off, the ad said: “But electronic mail is just one of the marvelous things you can do on an Apple. One of thousands. So let your Apple dealer tell you all about it…”
Elsewhere in the computer world of 1983, Microsoft introduced its word processing software, Word. Another maker of a rival word processing program called Word Perfect, introduced Word Perfect 3. Also at that time, Radio Shack offered one of the first popular laptop computers, the TRS-80 Model 100, while the Lotus 1-2-3 spreadsheet program provided a boost to IBM PC sales. By late 1983, Apple and IBM had emerged as the personal computer industry’s strongest competitors, each selling approximately one billion dollars worth of computers that year. Apple was also continuing to accommodate new software and other options to its computers. In early December 1983, for example, Electronic Arts introduced the Julius Erving & Larry Bird Go One-On-One basketball game for the Apple II computer. Another Apple computer — the Apple III+ model at $2,995 — was released for sale in December as well. IBM, for its part, would sell one million of its PCs by the end of 1983. Apple, however, had something big in the works; a major step in its future — the launch of the Macintosh computer.“1984” & The Mac
In late January 1984, Apple launched its Macintosh computer with a somewhat unusual television ad that was aired on Sunday, January 22, 1984 during the third quarter of the 1984 Superbowl XVIII championship football game. The ad, known as “1984,” was cast in a Orwellian future — George Orwell being the author of 1984, the famous novel of a dystopian /totalitarian future. Apple’s “1984” TV ad — running 60 seconds at a cost of $1.5 million — had been produced by film director Ridley Scott. It featured a female athlete clad in track running clothes, carrying a heavy sledge hammer. She runs into room filled with seated throng of drone-like workers watching a huge television screen. On the screen is a giant face of a “Big Brother” figure who is dispensing propaganda to the workers. His words are heard in the ad, but not clearly enough to be made out by most viewers. Big Brother is actually giving a spiel from Orwell’s book:
“…My friends, each of you is a single cell in the great body of the State. And today, that great body has purged itself of parasites. We have triumphed over the unprincipled dissemination of facts. The thugs and wreckers have been cast out. And the poisonous weeds of disinformation have been consigned to the dustbin of history. Let each and every cell rejoice! For today we celebrate the first, glorious anniversary of the Information Purification Directive! We have created, for the first time in all history, a garden of pure ideology. Where each worker may bloom secure from the pests purveying contradictory truths. Our Unification of Thoughts is more powerful a weapon than any fleet or army on earth. We are one people, with one will, one resolve, one cause. Our enemies shall talk themselves to death and we will bury them with their own confusion. We shall prevail!The running female track figure, now pursued by storm-trooper security, begins a wind-up with her hammer, and in good spinning form, lets the sledge fly, sending it dead-center TV screen. A bright, white light from the resulting explosion then washes over the audience, “symbolically freeing and enlightening them,” according to one interpretation. The commercial concludes with text which reads: “On January 24th, Apple Computer will introduce Macintosh. And you’ll see why 1984 won’t be like 1984.”
Apple’s aim with the ad, according to various interpretations, was to free and empower people, combat conformity, and allow originality in the computer market. Big Brother in the ad symbolized rival computer manufacturer, IBM, also known by a nickname, Big Blue. The Macintosh Computer, of course, is cast as the liberator; the first computer to make personal computing accessible to average users.
…Come writers and critics
Two days after the 1984 ad aired, the Macintosh computer went on sale. At Apple’s annual shareholders meeting that same day, an emotional Steve Jobs introduced the Macintosh. In his introduction of the Mac, with some 2,500 people in the audience, Jobs first quoted the 2nd verse of Bob Dylan’s “The Times They Are a Changin’.” Jobs then moved into his main set up on IBM and George Orwell prior to showing the TV ad to the audience. It was an effective and emotional mini history lesson that Jobs had used a few times earlier to good effect. One of Jobs’ Apple colleagues, Andy Herztfeld, recounts below how Jobs made effective use of the speech at the annual meeting, using both hype and purposeful pauses, to get his audience in the right frame of mind:
….Steve reappeared on the left side of the stage as the lights dimmed again. “It is 1958,” he began, speaking slowly and dramatically. “IBM passes up a chance to buy a young fledgling company that has invented a new technology called xerography. Two years later, Xerox was born, and IBM has been kicking themselves ever since.” The crowd laughs, as Steve pauses.
… “It is ten years later, the late sixties…. Digital Equipment Corporation and others invent the mini-computer. IBM dismisses the mini-computer as too small to do serious computing, and therefore unimportant to their business. DEC grows to be a multi-hundred million dollar company before IBM enters the mini-computer market.” Steve pauses again.
“It is now ten years later, the late seventies. In 1977, Apple Computer, a young fledgling company, on the West Coast, introduces the Apple II, the first personal computer as we know it today. IBM dismisses the personal computer as too small to do serious computing, and therefore unimportant to their business,” Steve intoned sarcastically, as the crowd applauds.
“The early 1980s. 1981. Apple II has become the world’s most popular computer, and Apple has grown to a 300 million dollar corporation, becoming the fastest growing company in American business history. With over fifty companies vying for a share, IBM enters the personal computer market in November of 1981, with the IBM PC.” Steve is speaking very quickly now, picking up momentum.“…IBM wants it all, and is aiming its guns at its last obstacle to industry con- trol, Apple. Will Big Blue dominate the entire indus- try? …Was George Orwell right?”
– Steve Jobs, Jan. 1984
Apple Annual Meeting
“1983. Apple and IBM emerge as the industry’s strongest competitors, with each selling approximately one billion dollars worth of personal computers in 1983. The shakeout is in full swing. The first major personal computer firm goes bankrupt, with others teetering on the brink. Total industry losses for 1983 overshadow even the combined profits of Apple and IBM.” He slows down, speaking emphatically.
“It is now 1984. It appears that IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money. Dealers, after initially welcoming IBM with open arms, now fear an IBM dominated and controlled future and are turning back to Apple as the only force who can ensure their future freedom.”
Steve pauses even longer, as the crowd’s cheering swells. He has them on the edge of their seats. “IBM wants it all, and is aiming its guns at its last obstacle to industry control, Apple. Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right?”
The crowd is in a frenzy now, as the already famous 1984 commercial…fills the screen…. By the time the commercial is finished, everyone in the auditorium is standing and cheering.Jobs then did an on-stage demonstration of the Mac featuring some of the computer’s features, even having the computer “speak for itself” at one point. The reception for Jobs and the Mac in the hall was wildly enthusiastic, bordering on “pandemonium,” according to some of those attending. After the initial hype for the Mac died down a bit, there came the reviews for the computer by technology writers for the mainstream press and computer publications. Larry Magid, of the Los Angeles Times, writing in a January 29, 1984 piece, said: “I rarely get excited over a new computer. But Apple’s Macintosh, officially introduced last Tuesday, has started a fever in Silicon Valley that’s hard not to catch….By the time I got my hands on the little computer and its omni-present mouse, I was hooked. Apple has a winner….” The January 30, 1984 issue of Newsweek ran a four-page story about the Macintosh, which included photos of Macintosh team members Burrell Smith and Andy Hertzfeld, and was also generally favorable toward the new computer. Byte magazine, then influential in the personal computer industry, put the Macintosh on its February 1984 cover. Billed as “the computer for the rest of us,” the Macintosh would become the first commercially successful small computer with “point-and-click” usability. The Mac’s system of on-screen icons responsive to the hand-guided “mouse” made it a breakthrough in personal computing, especially for non-techies. More than 100,000 Macs were sold in about six months. The first units shipped with 128K of memory and a price tag of $2,495. The Mac was regarded by many as a technological milestone; not unlike the telephone’s arrival in the era of the telegraph, or the onset of easy-to-use cameras that brought photography to the masses. For many users, the Mac would make computing truly personal, and for some, become the object of a near cult following.
By the fall of 1984 Apple published an extensive advertising insert on the Macintosh in Newsweek magazine, with foldout, accounting for about 20 pages. For many consumers, this was the first “up-close” experience with a Macintosh — detailing all the various features of the new computer. But the Macintosh was not without its shortcomings, some of which would later begin to slow sales. Still, at the outset of its offering, the Mac was a genuinely new thing that would change personal computing.
The famous Apple “1984” TV ad almost did not become famous at all — and was almost cancelled prior to the Super Bowl. The ad, in fact, had traveled a pretty rocky road to its debut. The idea was first hatched for a print ad in late 1982, when advertising agency Chiat-Day began working on it, trying to sell a Wall Street Journal type ad around the idea “why 1984 won’t be like 1984.” They had pitched the idea initially to other computer companies as well as Apple for its Apple II computers, but had no takers. So the idea was shelved.However, by the spring of 1983, the ad was reconsidered at Apple for the Macintosh, which was then being scheduled for its January 1984 launch. Steve Jobs wanted something inspiring to help launch the Mac; something that was as revolutionary as the product itself. When the 1984 Orwellian storyline was presented at Apple, he loved it, and encouraged Chiat-Day to go for it. Chiat-Day then developed a story board, building a mini science fiction story set in a totalitarian, Big Brother-type world. CEO John Sculley was a bit apprehensive about the ad, noting that the Macintosh itself was hardly mentioned. Still, Sculley approved the $750,000 needed to produce the one-minute commercial. Film director Ridley Scott, fresh off the success of Blade Runner (1982), was hired to film the ad, which was shot in London. Steve Jobs joined a Chiat-Day team attending the week of filming in London. A cast of almost 200 extras was used to film the ad, a number of whom were $125/day British skinheads who appeared in the baldheaded workers scene. An accomplished discus thrower named Anya Major was retained to do the key hammer-throw scene.
A rough cut of the ad was shown to Apple staff a few weeks later, and in October 1983 it was shown at Apple’s annual sales conference in Honolulu, Hawaii. At this showing, Steve Jobs used the IBM historical set up described earlier, positioning Apple as the industry’s best alternative (see “Sources” below for a You Tube clip of this). The crowd loved it. Based partly on the response in Honolulu, Apple then booked two ad slots for the Super Bowl XVIII at cost of over a million dollars — one for sixty seconds and another for thirty seconds. But then came the cold water.In December 1983, the finished verison of the ad was shown to Apple’s board of directors. However, unlike the younger crowd in Honolulu, Apple’s board members — especially its outside members — were not enraptured by it, and in fact, were quite negative. “Everyone thought it was the worst commercial they had ever seen,” John Sculley later recalled. Sculley then asked Chiat-Day to sell back both Super Bowl time slots. Chiat-Day, however, sold off only the thirty-second slot, telling Apple they could not renege on the longer spot at so late a date. Apple considered using a more conventional commercial in that slot, but in the end decided to take a chance on “1984.”
The ad was shown in the third quarter of the Super Bowl game, which featured the Los Angeles Raiders vs. the Washington Redskins. The ad had a potential viewing audience of nearly 100 million that day. But during the broadcast it was hard to tell how the ad was received. After the successful Mac launch and rave reviews for the ‘1984’ TV ad, the Apple board gave the Mac team a standing ovation. After the game, however — which the Raiders won 38 to 9 — many TV stations covered the ad as “news,” some offering repeat showings of ad in its entirety. Spill-over coverage of the ad continued in the media the following day, all of which created a “bonus effect” of free media coverage for the ad worth millions.
After the ad aired, Apple, Jobs, and Chiat-Day went on to receive much praise. In fact, when the Apple Board held its January meeting following the Mac launch, the entire Macintosh executive staff was invited to attend. When this group entered the room, according to Andy Hertzfeld, “everyone on the board rose and gave them a standing ovation, acknowledging that they were wrong about the commercial and congratulating the team for pulling off a fantastic launch.”
Apple’s Macintosh computer initially did quite well in the market, but sales dropped off pretty sharply in later 1984, especially due to some of the computer’s shortcomings. Part of the Mac’s problems were the result of a limited 128K memory, which served to hamstring software developers. This would be remedied shortly by another version of the Mac, nicknamed “Fat Mac,” which had a bigger memory at 512 kilobytes. Fat Mac was released in September 1984 at a price of $3,195. Apple II computers, meanwhile, were selling quite well. In late fall 1984, Apple sought to give the company and its computers more visibility with a $2.5 million advertising push. But amid and an industry-wide sales slump, reviving Apple’s fortunes, and the Mac’s future, would take more than that. Eventually, two other corollary technologies would help revive Macintosh sales and Apple’s fortunes — a reasonably-priced printer and PageMaker, an early desktop publishing package. In fact, all three parts together — the Mac, the printer, and Pagemaker (and particularly the Mac with its advanced graphics) — would become the powerful combination that drove the desktop publishing revolution that began in the mid-1980s. In fact, with time, the Macintosh became the favored computer by those in the arts and arts industries — film, music, photography, journalism, and other fields. But in 1984-85, Apple and the Mac would have their difficulties.
In November 1984, a cover story appeared in Business Week with a happy photo of Steve Jobs and John Sculley and the headline, “Apple’s Dynamic Duo.” The story covered Apple’s “bold plan to take on IBM in the office.” But back at Apple, behind the scenes, things weren’t so happy. Macs were not selling as well as they had. Christmas sales were poor and the computers were piling up in storage. Apple had to publish its first quarterly loss in history. On top of that, about 20 percent of the staff was let go. But part of the problems at Apple had to do with its changing from a small company with decentralized divisions to more of a mainstream corporation — and Steve Jobs, John Sculley, and the Apple board of directors all became involved in that transformation. The result was not a pretty picture, as a power struggle ensued between Jobs and Sculley with the Board siding with Sculley. At first, it appeared Jobs would remain as chairman of the company, though in more of an ambassadorial role. On May 31, 1985, Jobs was stripped of his divisional and operational responsibilities when he became chairman.
Steve Jobs Out
In early August 1985, Jobs appeared the cover of Fortune magazine in a story titled: “The Fall of Steve Jobs: Behind the Scenes at Apple Computer,”which offered a detailed blow-by-blow account of his rift with Sculley and his demise at Apple. That story appeared before the final departure of Jobs, which came somewhat later, in September 1985. Jobs was not happy at his departure. “I feel like somebody just punched me in the stomach and knocked all my wind out,” he wrote Apple board member and long-time business colleague, Mike Markkula. “I’m only 30 years old and I want to have a chance to continue creating things. I know I’ve got at least one more great computer in me. And Apple is not going to give me a chance to do that.” Jobs left the company, along with a few other Apple employees who would later help him found another company, NEXT Computer.
In the aftermath of Job’s demise at Apple, there were a number of stories in the mainstream and business press, such as the Newsweek cover story shown below that appeared on September 30, 1985 — “A Whiz Kid’s Fall: How Apple Computer Dumped It’s Chairman.” But this was not the end of Steve Jobs — or Steve Jobs at Apple — by any means. This was but one part — and an important part — of the Steve Jobs / Apple story. But there was much more to come — NEXT, Pixar, the iPod, iTunes, the iPhone, the iPad, all still ahead. Steve Jobs and Apple were just getting started.In less than a decade, Apple had risen from the “two-guys in a garage” stage to become a Fortune 500 company and the world’s leading personal computer manufacturer. Apple had changed business and culture in dramatic ways, and had set the stage for more change to come. Steve Jobs had been at the center of that change — helped initially and significantly by Steve Wozniak’s considerable genius. And while Jobs may have lacked all the needed skills of a successful corporate manager as Apple grew to Fortune 500 stature, he was the visionary soul and power force at Apple who pushed personal computer technology into common and uncommon usage by making it easier and more attractive for masses of people to use.
See also at this website: “The iPod Silhouettes,” a story about Apple’s very successful iPod and iTunes advertising campaign; “Google & Gaga,” a story about Google advertising and the entertainment industry; “Start Me Up,” a story about Microsoft and Windows 95; and “Ted Turner and CNN,” a story about the founder and creation of the Cable News Network. Thanks for visiting — and if you like what you find here, please make a donation to help support the research and writing at this website. Thank you. — Jack Doyle
Date Posted: 10 May 2010
Last Update: 5 July 2016
Comments to: email@example.com
Jack Doyle, “Apple, Rising:1976-1985,”
PopHistoryDig.com, May 10, 2010.
Sources, Links & Additional Information
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