Apple Inc History
History Apple computer was founded on April 1st, 1976 by Steven Jobs, Steven Wozniak, and Ronald Wayne. Prior to the Apple’s beginnings,Jobs had worked at Hewlett-Packard and the video game company Atari Inc. Wozniak also worked at HP where the two first met in 1972. It was Jobs who told his future partner about his idea of personal computers. The two began their journey in 1975 while working on the Apple I in Job’s bedroom. Wozniak later admitted that the project was more of a hobby than a business venture at first.
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In Apple Confidential; The Definite History of the World’s Most Colorful Company he said “it never crossed my mind to sell computers. It was Steve who said, ‘Let’s hold them in the air and sell a few. ‘”Along the way they had help with their ideas from members of the Homebrew Computer Club, a computer hobbyist group. Their first product the Apple I, a circuit board, was completed in early 1976. Originally Jobs and Wozniak each tried to pitch the product to their respective employers at Atari and HP, but both were turned down. Before they could begin selling it Wozniak had to be released from HP to legally produce computers.
Around the same time Ron Wayne joined Jobs and Wozniak in exchange for 10 percent of the company. Wayne designed the original Apple logo showing Isaac Newton sitting underneath an apple tree. The trio’s first contract came from Paul Jay Terrell owner of the Byte Shop, possibly the first computer retail store in the country. Terrell agreed to buy 50 computers for $500 each. There was one problem with the deal. They originally planned to simply make circuit boards and sell them by themselves. They had no intentions of fully equipping a computer, nor the funds.
This didn’t stop Jobs who immediately obtained a three month $5,000 loan, as well as convincing suppliers for credit on $15,000 worth of parts. In the midst of this deal Wayne’s partnership with Apple was cut short as he resigned from Apple in 1976, the same year he joined, citing a too great financial risk. Shortly after Wayne left Apple theyhired their first ad agency and gave birth to one of the most recognizable logo’s in the computer industry, the striped apple. Jobs and Wozniak finished building the computers with one day to spare and paid off their loans just in time. The Apple II was released in 1977.
Selling for $1298, it was the first personal computer fully equipped with its own standard keyboard, power supply and color graphics capability. The Apple II’s main competitor at the time was a company that had turned down a chance to purchase Apple, Commodore Business Machines. They’re Commodore sold for a mere $795 but lacked many things including good memory, high-resolution graphics, and a nice keyboard. After upgrading the Apple II several times, Apple began to look into new projects. They were the Apple III, the Lisa, and the Macintosh. In the coming years these three projects absorbed most of the company’s resources.
Production started on the “Lisa”, a business computer in 1979. The Lisa project was extremely important because Jobs felt it was the future of computers. What separated Lisa from Apple I and II was the use of a graphical user interface or GUI. They learned about GUI through a three day study of Xerox PARC’s technology including their Xerox Alto computer. The study was granted in exchange for $1,000,000 in an pre IPO stock in Apple. A GUI was different from other OS’s in that it used visual icons for people navigate through the system. Other system’s like MS-DOS required text based commands.
Many felt that Xerox didn’t realize the value of their own work because today GUI is used in more personal computer’s OS’s like Microsoft Windows and Mac OS X, than any other formatting. The Lisa was completed in 1982 and officially released in 1983 selling for nearly $10,000. The project cost 200 person-years of work and $50 million. The main reason for the high price was because the Lisa was incompatible with nearly every other product on the market. Therefore Apple had to include all the applications themselves, including a spreadsheet, drawing program, and word processor.
The project was hard to sell because of its ridiculous price, slow speed, and formidable competition in IBM and Xerox. “No! No! It’ll never work” were the words from Steve Jobs mouth about the Macintosh. At the onset of production of the Mac, Jobs was completely against it and its leader Jef Raskin. He wasn’t only alone, the board at Apple nearly scrapped the project in 1980 to focus on completion of the Apple III and rising costs of the Lisa project. Jobs finally got on board with the project in 1981. As soon as he got on board he clashed with Raskin on nearly everything about that Mac including the costs.
Raskin wanted Apple to sell the Mac for $500, extremely cheap at the time. Jobs on the other hand was constantly trying to improve the computers speed but increased cost. There were constant trade-offs between price and speed. Raskin finally had enough of jobs, which led to his resignation in 1982. Apple began getting worried about the project because of IBM’s release of their own personal computer. But finally after 78 million in development costs and two years behind schedule, the Macintosh was released in January 1984 selling for $2,500 five times the amount Raskin originally thought he could sell the Mac for.
After a successful initial distribution of the product, sales fell dramatically selling only 20,000 a month while they were building nearly 100,000 during some months. Prior to the release of the Macintosh in January was another landmark in Apple’s history but did not have anything to do with releasing of new computers. Instead was the airing of their legendary 1984 commercial during the third quarter of Super Bowl XVIII on January 22nd. The commercial was meant to mirror George Orwell’s novel Nineteen Eighty-Four. The commercial shows rows of citizens in uniforms all sitting in front of a massive projection scream.
On the projection screen is a character similar to Orwell’s Big Brother, who was the dictator of dystopian society. A female character dressed in track shorts and a tank top with a Macintosh computer on it then hurls a hammer through the projection TV. There is mixed thoughts behind the purpose of the commercial. Adelia Cellini, an author for MacWorld. com states “Apple wanted to symbolize the idea of empowerment… showcasing the Mac as a tool for combating conformity and asserting originality. ” But prior to a preview of the commercial Steve Jobs questioned “Will Big Blue(IBM) dominate the entire computer industry. Clearly at the time Apple was feeling the pressure from IBM in the personal computer industry and this commercial was a statement towards them. Apple went public in 1980. Their stock value increased by 1700 percent in one year. At the time things were looking very good for the young company. The same year they went public a problem which would lead to the resigning of Steve Jobs began. In 1985 Steve Wozniak left Apple. At this time a rift between Steve Jobs and the current president and CEO John Sculley arose. Iniitially Jobs and Sculley were great friends.
They were even sometimes called the “Dynamic Duo” of Apple. But Apple had begun losing large sums of money on the Lisa and Apple III. Because of the Jobs and Sculley started blaming each other. On April 10, 1985 Sculley convinced the board to remove Jobs as executive VP and all his operational duties. Although the board approved Sculley didn’t remove him immediately which was a mistake for him. A month later he had a trip planned to China. The night he was expected to leave he got a tip from a member of the boar that while he was gone Jobs planned to overthrow him. Sculley immediately canceled his rip and in an emergency meeting of board members officially removed Jobs as executive VP. Although he had no role in operations Jobs remained chairman until September 1985 when he officially resigned. He announced that he planned to start a new company and was bringing several employees from Apple with him which prompted a lawsuit from Apple. 1986 was Job’s first year out on his own. The ambitious Job’s achieved a lot in that single year. First he founded NeXT Inc. in late 1985. The company aimed to develop computer workstations for business and education institutions.
Eventually in 1993 Jobs decided to cut the hardware production at NeXT because it was losing them a significant amount of money. The company then began to focus on software from 1993-1996 when it was acquired by Apple on December 20th 1996 for $429 million. One of Job’s other biggest projects was the legendary animation company. This small company, known as Pixar, eventually boomed into the most successful computer animated film making company ever. It was Apple-like in its ascent to the top. The company began in a garage in the 1970’s by Edwin E. Catmull and Alvy Ray Smith.
The two got together to form a branch at Lucas Film Inc. where Job’s eventually purchased it for $10 million in 1985. The companies first full feature length film Toy Story was a huge success generating $192 million in domestic sales and $358 million worldwide. They’ve also produced hits like Toy Story 2, The Incredibles, Monsters Inc. , and Cars. Many of these projects were just partnered with Disney but it was purchased by Disney in 2006 for $7. 4 billion. Under the leadership of John Sculley, the new CEO and former president of Pepsi Co. , Apple flourished from 1983-1993.
Net sales at Apple increased from $600 million to a unprecedented $8 billion. During his reign Sculley helped release the Mac Portable as well as release some less than stellar marketing ads including the infamous Lemmings commercial in 1985 during the Super Bowl. He was replaced by Michael H. Spindler in 1993. Apple was involved in two major lawsuits in the late 1980’s. The first was Microsoft and HP taking place shortly after Microsoft’s release of Windows 2. 0. 3(a GUI based OS) Apple claimed they had violated Apple’s copyrighted software on the Macintosh. The case was eventually thrown out in court.
In 1989 Apple Corp. the record company for the Beatles sued Apple Inc. because of their new computers that were capable of creating music. Apple Inc. eventually had to pay Apple Corp. $26 million in 1993. READ IN THE BOOK ABOUT THE RISE AND FALL FROM LATE 80’S TO EARLY 90’s. http://findarticles. com/p/articles/mi_hb197/is_200401/ai_n5556112 -Macworld Article http://www. theapplemuseum. com/index. php? id=57 – History timeline Pages from text used, 10, 12, 13. Mission and Vision People sometimes confuse vision and mission statements. But they are undeniably two separate aspects of a company’s strategic plan.
The vision statement should answer the question “what do we want to become? ” It should only be one sentence and is the vision of where a company wishes to be in the long term future. It should be created before the mission statement because it provides the building blocks for creating the mission statement. In order to determine “what our business is? ” which is what a mission statement does, a company needs to understand where they want to be first. Apples vision statement is “To make a contribution to the world by making tools for the mind that advance mankind. This is a perfect vision statement for Apple because it outlines how they want to help people by building any products that advance mankind. As it stands, they have succeeded so far by branching into areas aside from personal computers like phones, software, and digital media. Generally the larger a company the more important a mission statement becomes. According to Fred R. David, “BusinessWeek reported that firms using mission statements have a 30 percent higher return on certain financial measures than those with out. ” Mission statements are extremely important to the success of any company for many reasons.
David writes they help ensure purpose within the organization, establish a general tone, facilitate the translation of objectives, provide a basis for allocating resources, help individuals identity with the company, and assign the organization with a purpose which are turned into objectives that can be measured by level of success. It should answer the question “what is our business” which is crucial when determining objectives and strategy to achieve them. One of the problems managers face when building a mission statement is reaching the balance between specificity and generality.
The statement needs to be broad enough to allow them adapt to a constantly changing environment but specific enough to now allow a company drift too far away from its goal industry. George Steiner says “Mission statements are not designed to express concrete ends… once an aim is cast in concrete, it creates rigidity in an organization and resists change. ” From Apples Investor Relations Page, their mission statement writes : Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh.
Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone. In his text David lists nine components that a mission statement should include. They are 1. Customers 2. Products or services 3. Markets 4. Technology 5.
Concern for survival, growth and profitability 6. Philosophy 7. Self- Concept 8. Concern for public image 9. Concern for employees. Below is the Apple mission statement with highlights of each component that in contains based on its number. Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation(4) with its award-winning computers(7), OS X operating system and iLife and professional applications(2).
Apple is also spearheading the digital media revolution(1,5) with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone(2). It is missing four components, markets,, concern for public image, and concern for employees. Obviously this can be improved upon. Aside from missing the components the message is simply too short. While mission statements should not be long(David says less than 250 words), this is a mere 70 words. And the entire first sentence has very little to do with the mission but is more about the history of the company.
The biggest problem with the statement is that it does not inspire anything from its own employees. There should be something that forms an “emotional bond” with its employees. http://www. apple. com/investor/ – mission statement http://www. ulv. edu/lead/resources/mission_and_vision_statements. pdf – vision statement Environmental Scanning Environmental scanning, also known as a industry analysis or external audit, is a method of identifying and evaluating aspects outside of any one companies control. The external audit provides a glimpse of the opportunities and threats aspect of the SWOT analysis.
This helps managers anticipate trends and be proactive rather than reactive to future events. During an external audit managers have to gather to create a list of opportunities for them to gain an advantage or threats they can avoid. Of course no one can truly predict the future of everything so this list needs to focus on the key variables that can affect their organization. There are two views in the business world about viewing the internal and external forces behind a company. The internal view is called the Resourced-Based View(RBV).
The external side is the Industrial Organization View (I/O). The I/O theorists believe that external factors are more important than internal in order to achieve a competitive advantage. They also feel that a firm should base its decision on entering a market on the industry as a whole. If an industry looks promising, they should enter; if it looks to be failing, they should avoid it. Some other key aspects on deciding which market to enter are economies of scale, barriers to market entry, product differentiation, and level of competition.
The process of an external audit begins with the collection of competitive intelligence and information about the five key external forces (1) economic; (2) social, cultural, demographic, and environmental; (3) political, governmental, and legal; (4) technological; (5) and competitive. This can be done by individuals through magazines and newspapers. The benefit there is that there is a constant stream of up to date information. The internet has become a major source of information for companies. After the information is collected managers need to go through meetings in order to process everything.
During these meetings they need to decide the most important key factors and rank them in order of their significance. Generally the most important factors are related to suppliers and distributors. York Freund states the factors should be important to achieving long term and annual objectives, measurable, applicable to all competing firms, and hierarchical. Economic Forces The $700 billion dollar bailout plan from the government has not done much to help the market. After vetoing the plan the first time around the Dow Jones had its work single day loss ever, losing 778 points or %7.
On the year the Dow Jones is down nearly 25%. The New York Times stated the 7% lost after the failed bail out plan was roughly equal to $1. 2 trillion dollars. On the year that 25% is a loss of somewhere around $6-7 trillion dollars in the economy. On the year thetechnology sector is down 35%, a truly staggering number. Apple itself is down 64 points on the yea on the NASDAQ for a loss of 41%. Unemployment in the US has steadily decreased since a peak of 6. 1% in 2003 after a mild recession. The rate stood at 4. 6% at the end of 2007. As it stands today unemployment has jumped to 6. 1% in the first 2/3 of 2008.
From 2004 to the first quarter of 2008 GDP has risen at an annual rate of 2. 4% as reported by the Bureau of Economic Analysis. Lately there has been a large amount of talk about a coming recession. The accepted figure for a recession is two consecutive quarters of negative GDP growth. As of right now the GDP is not showing signs of a recession. As of right the federal reserve has elected to pause at their last three meetings leaving the rate at 2. 00%. For the most part all of these numbers are a great threat to Apple. The US economy is simply not doing well and that never boasts well for a technology company.
One way to possibly avoid the threat of a slump in sales has been a rumored cheaper product line. Apple customers right now pay a premium for desktops and laptops. A new cheaper line of computers may help them avoid losing big numbers in the future. http://www. realtor. org/wps/wcm/connect/ – Housing prices http://www. fdic. gov/bank/individual/failed/banklist. html – failed FDIC banks http://www. ofm. wa. gov/trends/tables/fig105. asp – unemployment rate trend http://www. bls. gov/news. release/empsit. nr0. htm – unemployment 2008 rate http://www. bea. gov/scb/pdf/2008/08%20August/0808_nipa_annrev. df – GDP rates http://www. the-privateer. com/rates. html – fed funds rate Social, Cultural, Demographic, and Environmental Forces Phones have been going through a social/environmental change in the last few years. As the hardware becomes more and more advanced, so will the software. In the last two years dozens of start up companies have risen all targeting mobile phones. Mig33, winner ofWinner of Silicon Valley/San Jose Business Journal’s 2007 Emerging Technologies Awards in the category of Social Networking believes “”The next wave of Internet growth is mobile.
The number of mobile devices worldwide has exceeded three billion, and the next billion subscribers will have their first Internet experience using a mobile phone. ” Companies are springing up everyday that are going to want to support everything Apple will do to help its smart phone succeed because if it fails, so will the software starts up. Age is also a big force behind sales for Apple. Much of their innovative technology is foreign to older demographics. Many of them don’t want to have to deal with learning a completely new product whether is a IMac or iphone.
The truth is that many of them who are on the verge of retiring don’t have to. In his book David shows a graph of the five oldest and youngest states. Apple would probably be best with less focus on the five oldest states Maine, Vermont, West Virginia, Florida, and Pennsylvania. Young college graduates need to stay up to date with current technology just to be competitive in the work force. A recent online survey from InformationWeek revealed that the most likely buyer of Apple’s new iphone was a 31 year old college graduate with a household income of $75,000.
One of the most interesting parts of the survey werethat 43% of the potential buyers lived in either California or New York. Apple’s major advertising campaign should hit all of the major US cities like New York City, Miami, and Los Angeles. Right now Apple clearly markets their products to a much younger demographic and rightfully so. They’ve achieved their goal of earning the loyalty of teenagers. BusinessWeek says of teens about Apple “they had a passion for the company – and people don’t tend to worship businesses and business leaders. Apple had a unique cultural asset. They should continue to view teenagers as an opportunity for their business. While teenagers are the focus right now many retiring workers have gone ignored. If Apple could develop a new product which meets the needs of retiring baby boomers, they can have another major opportunity. Another major shift in the social forces of the US is a recent concern over the environment. Inflation and high prices remain at the top of the list of concerns across the worlds population at 41%. But environmental pollution concern is up 3% to 25% from last years mark. The growing concern can even be seen in Hollywood.
In 2006, Vice President Al Gore, released the documentary An Inconvenient Truth about the global warming problem. It earned %49 million worldwide at the box-office which is the 4th highest grossing documentary of all-time. http://www. informationweek. com/news/telecom/showArticle. jhtml? articleID=199902242 – 31-year old average iphone buyer http://www. census. gov/prod/2007pubs/p60-233. pdf – US census Bureau income projections http://www. businessweek. com/technology/content/aug2007/tc20070815_636359. htm – Apple on marketing to teenagers. http://www. cnn. com/2008/TECH/04/23/digitalbiz. mobilesns/index. html? iref=newss