Apple

Type:	Public
Industry:	Internet
Founded:	April 1, 1976
Founder(s):	Steve Paul Jobs Stephen Gary Wozniak Ronald Gerald Wayne
Headquarters:	Apple Campus 1 Infinite Loop Cupertino, California,
Country:	USA
Products:	Mac,iPod, iPhone, iPad Apple TV, Mac OS X, iLife, iWork and iOS
Employees:	49, 400 as of 2010 Form 10-K
Revenue:	$ 65.23 billion as of 2010 Form 10-K
Website:	www.apple.com
Key People
Tim Cook, CEO

Apple Inc. is an American company engaged in designing, manufacturing and selling computers, digital electronic products, mobile communications and media devices, software, networking solutions as well as third party digital contents and applications. Apple is recognized as the most valuable technology company and the world's largest publicly traded company with $ 222.12 billion market capitalization; it surpassed Microsoft in 2010. The company's headquarters is located in Cupertino, California.

The Apple Story

The Early Days of Apple & its Founders

Steven Jobs, Stephen Wozniac and Ronald Wayne founded Apple on April 1, 1976. Jobs and Wozniac started developing Apple 1, a computer circuit board without sound, case, keyboard or graphics in Job's bedroom at Los Altos and later moved to the garage when the space became crowded. During that time, Jobs was working for Atari where he met Wayne who was working as a draftsman in the company. Jobs encouraged Wayne to join Apple as a partner and offered him 10% interest in the company. Jobs thought that having Wayne as a partner in the company would be helpful in case a conflict were to between him and Woz in the future. Wayne's vote could serve as a deciding factor. Wayne worked at nights documenting the Apple 1 computer while Jobs focused on finding clients. Jay Terrel, owner of Byte Shop, ordered 50 fully assembled computers at $500 each, cash on delivery after Jobs demonstrated the capabilities of the Apple 1 computer during a Homebrew Computer Club meeting. The partners did not have enough money to buy the parts for the 50 computers but Jobs was persistent and was able to borrow $5,000 from Wozniac's co-workers at Hewlett-Packard. Suppliers also agreed to a 30 days extension to pay the $15,000 credit. Meanwhile, Wayne wasn't so sure if he was willing to take another financial risk because of his prior failure with his own engineering firm. Wayne opted to give up his 10% stake in the partnership and accepted a one time payment of $800 to get out of the agreement. Jobs delivered the 50 computers to Terrel and made $8000 from the transaction. After that, orders for the Apple 1 computer increased and Jobs needed more capital to expand their business.

Apple Computer's Original Investors

Mike Markkula, a former Executive from Intel and Fairchild Semiconductor, helped Jobs develop a long-term business plan for Apple Computer. He invested $92,000 and secured a credit line of $250,000 to provide sufficient funds to operate the business. Arthur Rock also invested in the company. On January 3, 1997, Apple Computer was incorporated. By that time, the corporation had $600,000 capital and hired Michael Scott to serve as President of the company.

The corporation bought the original partnership of Jobs, Wozniac and Wayne for $5,308.96 to avoid legal problems in the future. Wayne was given 1/3 of the amount although he voluntarily relinquished his rights in the partnership agreement.

The Apple II

In 1977, Apple Computer launched Apple II, the first complete, pre-assembled personal computer with casing, standard keyboad, power supply and color graphics capability. Its price was $1, 295 a piece. In that year alone, the corporation recorded $2.7 million in sales. It was considered one of the most user-friendly, mass marketed personal computers during that decade with a built-in BASIC programming language and an eight slot expansion capability. The success of the product was due to its spreadsheet program VisiCalc, which made Apple II a significant machine for business owners. The corporation released series of Apple II computers and sold more than 6 million units until the mid 80s.

Initial Public Offering

Apple Computer's Initial Public Offering (IPO) was held on December 12, 1980. The corporation originally filed to sell its stocks at $14 per share but the stock opened at $22. Apple Computer sold 46 million shares and the stock price closed at $29 per share on its first day of trading. The company recorded a $1.778 billion market valuation. At that time, the Apple Computer IPO was the largest in the United States Corporate History since Ford Motor Co.

The Management Shake UP

In 1981, Mike Scott, CEO of the company, fired 40 employees in one day due to problems related to Apple III; the event became known as "Black Wednesday". A management reorganization followed wherein Scott was replaced by Mike Markkula as CEO. Steve Jobs became Chairman of the company. Scott left Apple Computer in July of 1981.

The $1 Billion Milestone

In 1982, Steve Jobs was featured in the Time Magazine cover story about "America's Risk Takers" wherein the magazine emphasized the rapid success of the company, which recorded $2.7 million sales in 1977 and a staggering $200 million in 1980. The article still stated that Jobs needed to prove his capability as head of the company; “…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 December of that year, Apple Computer became the first personal computer to reach $1 billion in annual sales.

Wozniac & Jobs Resigned

In February, 1985, Wozniac left Apple Computer and started CL9, a company that manufactured remote controls for audio and video electronics. By September, Jobs resigned from Apple after a power struggle between him and John Sculley and created NEXT Computer. During that year, Apple suffered a $40 million loss in sales and laid off 1,200 employees. The company also sued Jobs for allegedly violating his duties as Chairman and misappropriating the company's proprietary information.

Prior to Wozniac's and Jobs' resignations from Apple, they received the National Medal of Technology from President Ronald Reagan.

Jobs Returns to Apple

In 1996, then Apple CEO Gil Amelio negotiated the acquisition of Next Computer and the NEXT STEP Operating System with Jobs. The plan was to use NEXT STEP the new operating system for a new Mac computer. On January, 7, 1997, Apple and NEXT officially merged. By March of 1997, the majority of Apples' top executives left after the company experienced a quarterly sales loss of $700 million, its worst yet. By July, Amelio resigned as CEO of the company. Jobs was named interim CEO and regained full control of the company he co-founded. In 1998, Apple introduced its new slogan, "Think Different" and released the iMAC, which became the best selling computer. The success of the iMAC made Jobs the permanent CEO of Apple.

After Jobs became Apple's CEO, the company started to recover by launching innovative products such as the launching of its first retail store in Virginia, and the iPod in 2001, which sold 4.4 million units by 2004, followed by iTUnes Music store in 2003, iPhone in 2007 and iPad in 2010. By 2010, the company had a total of 317 retail stores both in the United States and internationally. Apple's total revenue for 2010 was $65.2 billion.

Market Failures

Apple III

On May 19, 1980, Apple Computer unveiled the successor of Apple II during the National Computer Conference at Anaheim, California. The Apple III had 128 K RAM with a built-in floppy drive and 4 internal expansion slots compatible with Apple II cards. The Apple III had a silent-type support built in using the Port A. During the development of Apple III, Jobs instructed the project development team to create a computer with smaller dimension without a cooling fan to make the product look elegant and to reduce noise when operating the machine. As instructed, the development team fit in all the components of the computer in a small dimension minus the cooling fun. Consumers who bought the machine complained of the motherboard overheating, chips coming out of their sockets, and that the real time clock did not work. Apple III was recalled. On April 24, 1984, Apple Computer introduced Apple III plus, an improved version of the Apple III. It had a standard 256 KB RAM, built-in clock, and video capability. The product did not click with consumers and it was pulled from the market after four months. In short, the Apple III project was a complete failure. The company ony sold a total of 65,000 units.

LISA Computers

The Local Integrated Software Architecture (LISA) was was the first powerful computer with a Graphical User Interface (GUI) developed by Apple Computer specifically designed for businesses. The LISA Project started in 1979 after a stock deal between Apple and Xerox. During that time Xerox was developing three new technologies; the graphic user interface, object oriented programming (OOP) and ethernet networking. Part of the stock deal is to allow Steve Jobs to observe the new technologies being worked in at the Xerox Palo Alto Research Center (PARC). Apple Computer developed LISA based on the Xerox Star System and it took the corporation four years and spent $50 million to complete the project. LISA was launched in 1983 with with 1MB RAM, 2MB ROM, 5MB hard drive with a mouse, a device used to point and click an icon on the screen instead of typing a command on the keyboard and two internal non-standard 871K 5-1/4$ inch "Twiggy" floppy drives. Its’ operating system known as Lisa Office Sytem (LOS) was composed of seven applications: LisaWrite, LisaCalc, LisaList, LisaProject, LisaDraw, LisaPaint, and LisaTerminal. The computer’s price was $9995. The floppy drives of the computer turned out weak. After selling around 6,500 units, the company decided to offered consumers to upgrade their twiggy drives for free with a more reliable single 400K 3-1/2 inch Sony floppy drive. After one year, Apple Computer released LISA 2 , a newer version with the Macintosh Operating System which was renamed in 1985 as LISA the Macintosh XL. The company discontinued the LISA product line after selling 100,000 units. The LISA computers failed despite its innovations because of it was expensive for consumers.

Leadership

Jobs Steps Down as CEO

On August 2011, Jobs resigned as CEO of Apple. In his resignation letter Jobs wrote, "I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come. I hereby resign as CEO of Apple. I would like to serve, if the Board sees fit, as Chairman of the Board, director and Apple employee. As far as my successor goes, I strongly recommend that we execute our succession plan and name Tim Cook as CEO of Apple." As per Jobs recommendation, Cook was named CEO of the company. Jobs continued to serve as Chairman of the Board.

Jobs Death

Two months after stepping down from his position as CEO of Apple, Steve Jobs passed away on October 5, 2011 at the age of 56. The statement released by the company board of directors reads: "We are deeply saddened to announce that Steve Jobs passed away today. Steve’s brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve. His greatest love was for his wife, Laurene, and his family. Our hearts go out to them and to all who were touched by his extraordinary gifts." According to the death certificate released by the Santa Clara Health Department, Jobs died due to respiratory arrest. Prior to his death, Jobs has been suffering from metastatic pancreas neuroendocrine tumor since 2004. He also received a liver a transplant in 2009.

Current Leadership

The current leadership of Apple include:

Executives

• Tim Cook, CEO
• Eddy Cue, SVP Internet Software and Services
• Scott Forstall, SVP iOS Software
• Jonathan Ive, SVP Industrial Design
• Bon Johnson, SVP Retail
• Bob Mansfield, SVP MAC Hardware Engineering
• Peter Oppenheimer, SVP CFO
• Philip W. Schiller, SVP Worldwide Product Marketing
• Bruce Sewell, SVP Geeral Counsel
• Jeff Williams, SVP Operations

Board of Directors

• William V. Campbell, Chairman and Intuit, Inc.
• Tim Cook, CEO Apple
• Millard Drexler, Chairman and CEO J. Crew
• Albert Gore Jr., Former Vice President of the United States
• Andrea Jung, Chairman and CEO Avon Products
• Arthur D. Levinson, Chairman Genentech
• Ronald D. Sugar, Ph. D.Former Chairman and CEO Northrop Grumman