Apple Inc. (NASDAQ: AAPL, LSE: ACP, FWB: APC) (formerly Apple Computer, Inc.) is an American multinational corporation with a focus on designing and manufacturing consumer electronics and closely related software products. Headquartered in Cupertino, California, Apple develops, sells, and supports a series of personal computers, portable media players, computer software, and computer hardware accessories; Apple is also currently involved in the creation of new technology concepts, such as the iPhone, Apple TV, and many features of its new, upcoming operating system, Mac OS X "Leopard". Apple also operates an online store for hardware and software purchases, as well as the iTunes Store, a comprehensive offering of digital downloadable music, audiobooks, games, music videos, TV shows, and movies. The company's best-known hardware products include the Macintosh line of personal computers and related peripherals, the iPod line of portable media players, and the iPhone. Apple's best-known software products include the Mac OS operating system and the iLife software suite, a bundle of integrated amateur creative software products. (Both Mac OS and iLife are included on all Macs sold.) Additionally, Apple is also a major provider of professional (as well as "prosumer") audio- and film-industry software products. Apple's professional and "prosumer" applications, which run primarily on Mac computers, include Final Cut Pro, Logic Pro, Final Cut Studio, and related industry tools.
Apple had worldwide annual sales in its fiscal year 2006 (ending September 30, 2006) of US$19.3 billion.[1]
The company, incorporated January 3, 1977,[3] was known as "Apple Computer, Inc." for its first 30 years. On January 9, 2007, the company dropped "Computer" from its corporate name to reflect that Apple, once best known for its computer products, now offers a broader array of consumer electronics products.[4] The name change followed Apple's announcement of its new iPhone smartphone and Apple TV digital video system and is representative of the company's ongoing expansion into the consumer electronics market in addition to its traditional focus on personal computers.[5]
Apple also operates 183 (as of June 2007) retail stores in the United States, the United Kingdom, Japan, Canada, and Italy.[6] The stores carry most of Apple's products as well as many third-party products and offer on-site support and repair for Apple hardware and software. Apple employs over 20,000 permanent and temporary workers worldwide.[7]
For a variety of reasons, ranging from its philosophy of comprehensive aesthetic design to its countercultural, even indie roots, as well as their advertising campaigns, Apple has engendered a distinct reputation in the consumer electronics industry and has cultivated a customer base that is unusually devoted to the company and its brand.[8]
History
The company introduced the Apple II microcomputer in 1977. A few years later, in 1983, it introduced the Lisa, the first commercial personal computer to employ a graphical user interface (GUI), which was influenced in part by the Xerox Alto. Lisa was also the first personal computer to have the mouse. In 1984, the Macintosh was introduced, which arguably advanced the concept of a new user-friendly graphical user interface. Apple's success with the Macintosh became a major influence in the development of graphical interfaces elsewhere, with major computer operating systems, such as the Commodore Amiga, and Atari ST, appearing on the market within two years of the introduction of the Macintosh.
In 1991, Apple introduced the PowerBook line of portable computers. The 1990s also saw Apple's market share fall as competition from Microsoft Windows and the comparatively inexpensive IBM PC compatible computers that would eventually dominate the market. In the 2000s, Apple expanded its focus on software to include professional and prosumer video, music, and photo production solutions, with a view to promoting their products as a "digital hub". It also introduced the iPod, the most popular digital music player in the world.[9]
1976 to 1980: The early years
Apple was founded on April 1, 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne[10] (and later incorporated January 3, 1977[3] without Wayne, who sold his share of the company back to Jobs and Wozniak) to sell the Apple I personal computer kit. They were hand-built by Steve Wozniak[11][12] in the living room of Jobs' parents' home, and the Apple I was first shown to the public at the Homebrew Computer Club.[13] Eventually 200 computers were built. The Apple I was sold as a motherboard (with CPU, RAM, and basic textual-video chips) — not what is today considered a complete personal computer.[14] The user was required to provide two different AC input voltages (the manual recommended specific transformers), wire an ASCII keyboard (not provided with the computer) to a DIP connector (providing logic inverter and alpha lock chips in some cases), and to wire the video output pins to a monitor or to an RF modulator if a TV set was used.
Jobs approached a local computer store, The Byte Shop, which ordered fifty units and paid US$500 for each unit after much persuasion from Jobs. He then ordered components from Cramer Electronics, a national electronic parts distributor. Using a variety of methods, including borrowing space from friends and family and selling various items including a Volkswagen Type 2 bus, Jobs managed to secure the parts needed while Wozniak and Ronald Wayne assembled the Apple I.[15]
The Apple II was introduced on April 16, 1977 at the first West Coast Computer Faire. It differed from its major rivals, the TRS-80 and Commodore PET, because it came with color graphics and an open architecture. While early models used ordinary cassette tapes as storage devices, this was quickly superseded by the introduction of a 5 1/4 inch floppy disk drive and interface, the Disk II.
Another key to business for Apple was software. The Apple II was chosen by programmers Dan Bricklin and Bob Frankston to be the desktop platform for the first "killer app" of the business world—the VisiCalc spreadsheet program.[16] VisiCalc created a business market for the Apple II, and the corporate market attracted many more software and hardware developers to the machine, as well as giving home users an additional reason to buy one—compatibility with the office.[16] (See the timeline for dates of Apple II family model releases—the 1977 Apple II and its younger siblings the II+, IIe, IIc, and IIGS.)
According to Brian Bagnall's book, "On the Edge" (pg. 109-112), Apple exaggerated their sales figures and that Apple was a distant 3rd place until VisiCalc came along. VisiCalc was first released on Apple II because Commodore and Tandy computers were tied up in VisiCalc's software development office due to their popularity. VisiCalc's association with Apple was thus pure happenstance, not a technical decision. And even after VisiCalc, Apple II didn't surpass the Tandy TRS-80, whose sales were helped by the large number of Radio Shack stores. However, VisiCalc did put Apple ahead of Commodore's PET, at least in the US. (Commodore later regained the lead for a while with the Commodore 64 in the mid 80s, the best selling specific model of computer to date.)[17]
By the end of the 1970s, Jobs and his partners had a staff of computer designers and a production line. The Apple II was succeeded by the Apple III in May 1980 as the company struggled to compete against IBM and Microsoft in the lucrative business and corporate computing market. The designers of the Apple III were forced to comply with Jobs' request to omit the cooling fan, and this ultimately resulted in thousands of recalled units due to overheating.[18] An updated version, the Apple III+, was introduced in 1983, but it was also a failure due to bad press and wary buyers.
In the early 1980s, IBM and Microsoft continued to gain market share at Apple's expense in the personal computer industry. A fundamentally different business model evolved, once cloners forced-open the IBM PC hardware standard against IBM's will. The IBM compatible hardware market became highly competitive, with clones running a bundled Microsoft MS-DOS OS, or running a competing IBM-style DOS such as DR DOS.
Apple's sustained growth during the early 1980s was partly due to its leadership in the education sector, attributed to their adaptation of the programming language LOGO, used in many schools with the Apple II. The drive into education was accentuated in California with the donation of one Apple II and one Apple LOGO software package to each public school in the state. The deal concluded between Steve Jobs and Jim Baroux of LCSI, and having required the support of Sacramento, established a strong and pervasive presence for Apple in all schools throughout California. The initial conquest of education environments was critical to Apple's acceptance in the home where the earliest purchases of computers by parents was in support of children's continued learning experience.
1981 to 1989: Lisa and Macintosh
Jobs and several other Apple employees including Jef Raskin visited Xerox PARC in December 1979 to see the Alto computer. Xerox granted Apple engineers three days of access to the PARC facilities in return for selling them US$1 million in pre-IPO Apple stock (approximately US$18 million net).
It is said that Jobs was immediately convinced that all future computers would use a GUI, and decided to take over design of Apple's first project, the Apple Lisa, to produce such a device. The Lisa was named after Jobs' daughter (however, a backronym,[19] Local Integrated Software Architecture, was coined). He was eventually pushed from the group due to infighting, and instead took over Jef Raskin's low-cost computer project, the Macintosh. Branding the new effort as the product that would "save Apple", an intense turf war broke out between the Lisa's "corporate shirts" and Jobs' Macintosh "pirates", both teams claiming they would ship first and be more successful. In 1983 the Lisa team won the race and Apple introduced the first personal computer to be sold to the public with a GUI. However, the Lisa was a commercial failure as a result of its high price tag (US$9,995) and limited software titles.[19]
In 1984, drawing upon its experience with the Lisa, Apple next launched the Macintosh. Its debut was announced by a single national broadcast of the now famous US$1.5 million television commercial, "1984", based on George Orwell's novel Nineteen Eighty-Four. The commercial was directed by Ridley Scott and aired during Super Bowl XVIII on January 22, 1984. Jobs' intention with the ad was to represent the IBM PC as Big Brother, and the Macintosh as a nameless female action hero portrayed by Anya Major. While the Macintosh initially sold well, follow-up sales were not particularly strong.[20] The machine's fortunes changed with the introduction of the LaserWriter, the first laser printer to be offered at a reasonable price point, and PageMaker, an early desktop publishing (DTP) package. The Mac was particularly powerful in this market due to its advanced graphics capabilities, which were already necessarily built-in to create the Macintosh GUI. It has been suggested that the combination of these three products was responsible for the creation of the DTP market.[21] As DTP became widespread, Apple's sales reached a series of new highs.
In anticipation of the Macintosh launch, Bill Gates, co-founder and chairman of Microsoft, was given several Macintosh prototypes in 1983 to develop software. While the company was indeed ready with its BASIC and the MultiPlan spreadsheet at the Macintosh's launch,[20] in 1985 Microsoft launched Windows, its own GUI for IBM PCs. Although sales started slow, by the mid 1990s it became the most commonly-used desktop operating system, cutting deeply into the Macintosh's sales.
An internal power struggle developed between Jobs and new CEO John Sculley in 1985.[22] Apple's board of directors sided with Sculley and Jobs was removed from his managerial duties.[20] Jobs later resigned from Apple and founded NeXT Inc., a computer company that built machines with futuristic designs and ran the UNIX-derived NeXTStep operating system. Although powerful, NeXT computers never caught on with buyers, due in part to their high purchase price.
1989 to 1991: The Golden Age
Having learned several painful lessons after introducing the bulky Macintosh Portable in 1989, Apple turned to industrial designers and adopted a product strategy based in three portable devices. One portable was built by Sony, which had a strong reputation for designing small, durable and functional electronics devices. Sony took the specs of the Mac Portable, put in a smaller two-hour battery, a much smaller (physically) 20 MB hard drive and a smaller nine-inch passive matrix screen.[23]
Called the PowerBook 100, this landmark product was introduced in 1991 and established the modern form and ergonomic layout of the laptop computer.[23] This solidified Apple's reputation as a quality manufacturer, both of desktop and now portable machines.[24] The same year, Apple introduced a massive upgrade to the Mac OS, in the form of System 7. Although resource-hungry (for the era), System 7 dramatically improved the Macintosh experience, adding color to the interface, simplifying common operations, and introducing a number of powerful new networking capabilities. System 7 would be the basis for the Mac OS until 2001.
The success of the PowerBook and several other Apple products during this period led to increasing revenue.[22] The computer press listened to Apple press releases with rapt attention and speculation was rife about what projects from Apple's famed Advanced Technology Group would next come to market. Apple merely had to mention a technology, Taligent for instance, for people to christen it the "new standard".[25] For some time, it appeared that Apple could do no wrong, introducing fresh new products and generating increasing profits in the process. The magazine MacAddict named the period between 1989 to 1991 the "first golden age" of the Macintosh.
The continuing development of Microsoft Windows had given birth to an interface that was competitive with Apple's. Combined with a huge base of low-cost computers and peripherals and an improving software suite, an increasing number of potential customers turned to the "Wintel" standard.
Apple, relying on high profit margins to maintain their massive R&D budget, never developed a clear response. Instead they sued Microsoft for theft of intellectual property.[26] The lawsuit dragged on for years before finally being thrown out of court. Worse, the lawsuit distracted management while a deep rot developed within the engineering ranks, which became increasingly unmanageable. At first there was little outward sign of the problem, but a series of major product flops and missed deadlines destroyed Apple's reputation of invincibility.
At about the same time, Apple branched out into consumer electronics. One example of this product diversification was the Apple QuickTake digital camera, one of the first digital cameras brought to the consumer market. A more famous example was the Newton, termed a "Personal digital assistant" or "PDA" by Sculley, that was introduced in 1993. Though it failed commercially, it defined and launched a new category of computing and was a forerunner of devices such as Palm Pilot, PocketPC, and eventually the iPhone.
During the 1990s, Apple greatly expanded its computer lineup. It offered a multitude of models ("Quadra 840av", "Performa 6116"), but many felt Apple failed to adequately differentiate one model from another and the cost of supporting so many products adversely affected profitability. Apple lost market share to Microsoft Windows, particularly Windows 95 — a major turning point in the history of the rival Windows operating system.
1994 to 1997: Attempts at reinvention
By the mid-90s, Apple realized that it had to reinvent the Macintosh in order to stay competitive in the market. The needs of both computer users and computer programs were becoming, for a variety of technical reasons, harder for the existing hardware and operating system to address.
In 1994 Apple surprised its loyalists by allying with its long-time competitor IBM and CPU maker Motorola in the so-called AIM alliance. This was a bid to create a new computing platform (the PowerPC Reference Platform or PReP), which would use IBM and Motorola hardware coupled with Apple's software. The AIM alliance hoped that PReP's performance and Apple's software would leave the PC far behind, thus countering Microsoft, which had become Apple's chief competitor.
As the first step toward launching the PReP platform, Apple started the Power Macintosh line in 1994, using IBM's PowerPC processor. This processor utilized a RISC architecture, which differed substantially from the Motorola 68k series that had been used by all previous Macs. Apple's OS was rewritten so that most software for the older Macs could run on the PowerPC series (in emulation).
Throughout the mid to late 1990s, Apple tried to improve its operating system's multitasking and memory management. After first attempting to modify its existing code, Apple realized that it would be better to start with an entirely new operating system and then modify it to fit the Macintosh interface. Apple did some preliminary work with IBM towards this goal with the Taligent project, but that project never produced a replacement operating system. A new internal effort, Copland, ran afoul of Apple's now uncontrollable engineering and became a massive failure. A fresh attempt was made with the Gershwin operating system.
In 1995 Apple made a break into the gaming industry with the Apple Pippin. Despite the success of competing game consoles like Sony PlayStation, Nintendo 64, and Sega Saturn, Pippin experienced very limited success and as little as 5000 units were sold worldwide[27] and there was a very small variety of games available for those who did own a console. Overall this was a failure for Apple; its scope was more general in purpose than serious gaming, leaving the console expensive and underpowered compared with its rivals.
Next, the company considered its options for an operating system, investigating Be Inc.'s BeOS, NeXT's NeXTSTEP OS, and also Microsoft's Windows NT. NeXTSTEP was chosen, and this supplied the platform for the modern Mac OS X. On February 7, 1997, Apple completed its purchase of NeXT and its NeXTSTEP operating system, in the process bringing Steve Jobs back to Apple.[28] 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 and began a critical restructuring of the company's product line.
At the 1997 Macworld Expo, Steve Jobs announced that Apple would be entering into partnership with Microsoft. Settlement discussions regarding Apple's "Look and Feel" lawsuit and the "QuickTime piracy" lawsuit resulted in a five-year commitment from Microsoft to release Microsoft Office for Macintosh as well as a US$150 million investment in non-voting Apple stock. (This event is often inaccurately described as a "bailout" of Apple by Microsoft. At the time Apple had a little over US$1 billion in cash and cash equivalents according to their 10-Q statement.[29] Microsoft later sold its shares for a tidy profit.) Jobs also announced that Internet Explorer would be shipped as the default browser on the Macintosh. Microsoft chairman Bill Gates appeared at the expo on the large screen, explaining Microsoft's plans for the software they were developing for the Macintosh, and saying that he was very excited to be helping Apple. This was met with a less than positive response from the audience. Steve Jobs said:
If we want to move forward and see Apple healthy and prospering again, we have to let go of a few things here. We have to let go of this notion that for Apple to win, Microsoft has to lose. We have to embrace a notion that for Apple to win, Apple needs to do a really good job. And if others are going to help us that's great, because we need all the help we can get, and if we screw up and don't do a good job, it's not somebody else's fault, it's our fault. So I think that is a very important perspective. If we want Microsoft Office on the Mac, we should treat the company that puts it out with a little bit of gratitude; we like their software.
So, the era of setting this thing up as a competition between Apple and Microsoft is over as far as I'm concerned. This is about getting Apple healthy, this is about Apple being able to make incredibly great contributions to the industry and to get healthy and prosper again.[30]
On November 10, 1997, Apple announced a new online retail store, based upon the WebObjects application server the company had acquired in its purchase of NeXT. The new direct sales outlet was also tied to a new build-to-order manufacturing strategy and announced at the same time as new machines using the G3 PowerPC processor.
1998 to 2005: New beginnings
On August 15, 1998, Apple introduced a new all-in-one Mac computer reminiscent of the original Macintosh 128K: the iMac. The iMac design team was led by Jonathan Ive, who would come later to design the iPod and the iPhone.[31][32] While not groundbreaking from a technological standpoint, the iMac featured an innovative new translucent plastic exterior, originally in Bondi Blue, but later many other colors. The iMac proved phenomenally successful, selling close to 800,000 units in its first five months and significantly boosting the company's revenue and profitability. Thanks in part to the iMac; fiscal 1998 was Apple's first profitable year since 1993. Some consider the iMac an industrial design icon of the late 90s, and its designer, Jonathan Ive, has won awards for its innovation.[33]
At the National Association of Broadcasters convention, Apple purchased the Final Cut software from Macromedia, beginning its entry into the digital video editing market, and signaling a return to application development after a decade long policy of delegating non-system software to its Claris subsidiary. iMovie was released in 1999 for consumers, and Final Cut Pro was released for professionals in the same year. Final Cut Pro has gone on to be a significant video-editing program. Similarly, in 2000 Apple bought Astarte's DVDirector software, which morphed into iDVD (for consumers) and DVD Studio Pro (for professionals) at the Macworld Conference and Expo of 2001.
In 2001, Apple introduced Mac OS X, the operating system based on NeXT's OPENSTEP and BSD Unix. Aimed at consumers and professionals alike, Mac OS X aimed to marry the stability, reliability and security of the Unix operating system with the ease of use afforded by a completely overhauled user interface. To aid users in moving their applications from Mac OS 9, the new operating system allowed the use of OS 9 applications through Mac 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 often with a simple recompile.
On May 19, 2001, after much speculation, Apple announced the opening of the first official Apple Retail Stores, to be located in major U.S. consumer locations. These stores were designed for two purposes: to stem the tide of Apple's declining share of the computer market and to counter a poor record of marketing Apple products by third-party retail outlets. The company faced challenges to balance the deployment of its own retail stores with its dependence on, and the demands of, its existing channel partners and dealers. Apple slowly built up the number of stores in the U.S., (now totaling 183 as of June 2007)[6][34] later opening stores in Canada, Japan, United Kingdom, and recently Italy. These efforts in retail succeeded and proved to be very profitable, averaging annual returns of US$4,032 per square foot of every store, the most in retail. These returns bested retail favorites such as Best Buy and Tiffany's.[35]
On October 23, 2001 Apple introduced its first iPod portable digital audio player and released it on November 10 of that year. The product has proven phenomenally successful; over 100 million units have been sold.[36] Apple's iTunes Store was introduced soon after, offering online music downloads for US 99¢ a song and integration with the iPod. The service quickly became the market leader in online music services, with over 3 billion downloads by August 2007.[37]
In 2002 Apple purchased Nothing Real and their advanced digital compositing application Shake, raising Apple's professional commitment even higher. In the same year they also acquired Emagic, and with it, obtained their professional-quality music productivity application Logic, which led to the development of their consumer-level GarageBand application. With iPhoto's release in 2002, this completed Apple's collection of consumer and professional level creativity software, with the consumer-level applications being collected together into the iLife suite.
Apple progressively abandoned flashy colors in favor of white polycarbonate for consumer lines such as the iMac and iBook, as well as the educational eMac, and metal enclosures for the professional lines. This began with the 2001 release of the titanium PowerBook and was followed by the 2001 white iBook, the 2002 flat-panel iMac, the 2003 Power Mac G5, and the 2004 Apple Cinema Displays. Divergent to this consumer/professional identity, the low-cost Mac mini has an aluminum case while featuring the distinctive white polycarbonate top.
2005 to present: The Intel partnership
In the Worldwide Developers Conference (WWDC) keynote address on June 6, 2005, Steve Jobs officially announced that Apple would begin producing Intel-based Mac computers beginning in 2006.[38] 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 for the previous five years and that the transition to Intel processor systems would last until the end of 2008.[39]
On January 10, 2006, Apple released its first Intel chip computers, a new notebook computer known as the MacBook Pro (with a 15.4" screen) and a new (though cosmetically identical) iMac with purportedly two to three times faster performance compared with its predecessor. Both used Intel's Core Duo chip technology. Later in February, Apple introduced the new Intel-based Mac mini, running up to four times faster and also featuring Front Row, available with a Core Duo or Core Solo (single core) processor. The Apple online store sold out of 17" iMac G5 computers in February 2006, Apple ended the life of its 15" PowerBook G4 on February 22, 2006, and the G4 Mac mini was removed from the Apple online store on February 28, 2006 and replaced with the Intel Core Mac mini. On March 10, 2006 Apple retired the iMac G5 and on May 16, 2006, replaced the iBook G4 and the 12" PowerBook G4 with the MacBook. On August 7, 2006, the PowerMac was replaced with the Mac Pro, completing the transition of all Mac computers, well in advance of their original prediction. On September 6, 2006, Apple updated its iMac line to include new Intel Core 2 Duo processors, and adding a model with a 24" screen to the line-up, as well as quietly bumping the speeds of their Mac mini. The Xserve was transitioned in mid-November 2006. On October 24, 2006 the MacBook Pros were fitted with Intel Core 2 Duo processors as well, running up to 39% faster than the original Intel Core Duo MacBook Pros. The MacBooks were fitted with the Core 2 Duo processors on November 8, and run up to 25% faster than the Core Duo ones according to Apple's tests.[40]
Apple's current operating system, Mac OS X v10.4 "Tiger", runs natively on the new Intel machines, as do the Darwin open source underpinnings. Many applications, such as iLife '06, also run natively on Intel chips. Other applications (including Microsoft Office) which have not been updated to run on the Intel architecture, run using a technology known as Rosetta. Because Rosetta is a translation software that allows PowerPC programs to run on Intel processors, these PowerPC programs run slower than native applications. Programs compiled only for the PowerPC must be recompiled to run at full speed on the new Intel machines. Programs that have been designed to run on both PowerPC and Intel chips can be certified by Apple as "Universal".[41] The Intel-based machines also do not support Classic, which allows Mac OS X to run applications written for OS 9 and earlier, so applications that require this environment will not run on these machines. Apple currently has no plans to bring Classic support to the Intel platform.
The Intel chip also allows the new machines to run the Windows operating system. On March 16, 2006 a bootloader CD image and a how-to for getting XP on your MacBook Pro, iMac, or mini was released to the Internet as an entry into a US$13,000 contest. Many hackers attempted over three months to win the prize by becoming the first to run Windows natively on a new Intel Mac. The Intel-based Macs are now the only computers officially capable of running both Mac OS X and Windows without emulation (a pre-release version of Mac OS X for Intel was patched to run on non-Apple PCs through the OSx86 community; however such procedure is not permitted by the Apple EULA). Further, on April 5, 2006, Apple announced a new piece of software called Boot Camp that helps users install Windows XP on their Intel Mac alongside Mac OS X. Apple has said that Boot Camp will be included, as standard, in Apple's next OS release (10.5, “Leopard”).
The Apple/Intel partnership coined several catch phrases among Apple fans and technology reporters. Some of the most widespread ones include "Mactel" and "Macintel", a response to the phrase "Wintel", which is an informal moniker that describes all Intel-powered systems running the Microsoft Windows operating system. Another is "ICBM", for "Intel-chip-based Mac." Apple itself has not publicly used these terms.
Apple's success during this period, beginning in 1997 (the first year the company turned a profit after losses through 1995 and 1996),[42] but accelerating between 2003 to 2005, was evident in its skyrocketing stock. Between early 2003 and January 2006, the price of a share of Apple's stock increased more than tenfold, from a little more than US$6 per share (split-adjusted) to more than US$80 per share. On January 13, 2006, Apple's market cap surpassed that of Dell.[43] Nearly ten years prior, in 1997, Dell's CEO, Michael Dell, had asserted that if he ran Apple he would "shut it down and give the money back to the shareholders."[44]
Delivering his keynote at Macworld 2007 (January 9, 2007), Steve Jobs announced a change of name: Apple Computer Inc. would from that point be known as Apple Inc. The event also saw the announcement of the iPhone, and the Apple TV. The following day, Apple shares hit US$97.80, then an all-time high. In May 2007, Apple's share price passed the US$100 mark.[45]
On February 7, 2007, Apple indicated that it would be willing to sell music on the iTunes store without Digital Rights Management (DRM) protection (allowing tracks to be played on any compatible player) if major record labels would agree to drop that anti-piracy technology.[46] On April 2, 2007, Apple and record label EMI jointly-announced the removal of anti-piracy technology from EMI's catalog in the iTunes Store, effective in May.[47]
Current products
Hardware
- See also: Timeline of Apple Macintosh models, List of Macintosh models grouped by CPU type, and List of Apple Macintosh models by case type
Apple introduced the Apple Macintosh family in 1984 and today makes consumer, professional, and educational computers. The Mac mini is the company's consumer sub-desktop computer, introduced in January 2005 and designed to motivate Windows users to switch to the Mac computer platform. The iMac is a consumer desktop computer that was first introduced by Apple in 1998, and its popularity helped save the company. The iMac is similar in concept to the original Macintosh in that the monitor and computer are housed in a single unit. It is now in its third major design iteration, and has been upgraded many times (including a switch to Intel processors) using the same design. The Power Mac brand was replaced in 2006 with the Mac Pro, featuring two 64-bit dual-core Xeon "Woodcrest" processors, available in speeds of 2, 2.66, and 3 GHz. The Mac Pro is capable of supporting up to four 750 GB hard drives for a total of 3 TB of internal hard disk space and has 8 DIMM slots for up to 16 GB of RAM. On its promotional website, Apple says that the "Mac Pro not only completes the Mac transition to Intel processors but delivers advanced performance, workstation graphics, and up to 4.9 million possible configurations." Apple's server range includes the Xserve, a dual core, dual processor 1U server, and the Xserve RAID for server storage options.
Apple introduced the iBook consumer portable computer as a companion to the iMac; it is Apple's lowest-cost portable computer. The iBook brand was replaced on May 16, 2006 with the MacBook featuring the Intel Core Duo processor, 13 inch widescreen, and available black color on the high-end model. The MacBook Pro is the professional portable computer alternative to the MacBook. The MacBook Pro is marketed as being intended for professional and creative users and replaced the PowerBook models, which were introduced in 1991.
In 2001, Apple introduced the iPod digital music player and currently sells the iPod (with video), available in 30 and 80 GB models; the iPod nano, available in 2, 4, and 8 GB models; and the iPod shuffle, available in a 1 GB model. Apple also re-released the U2 Special Edition iPod in a 30 GB capacity on June 6, 2006 with a distinctive all black enclosure, a red clickwheel, and engraved band members autographs on the back. On July 13, 2006, Apple partnered with Nike to introduce the Nike+iPod Sports Kit enabling runners to sync and monitor their runs with iTunes and the Nike+ website. The 100 millionth iPod was sold on April 9, 2007.[48]
At the Macworld Conference & Expo in January 2007, Steve Jobs revealed the long anticipated iPhone, a convergence of an Internet-enabled smartphone and video iPod. The iPhone combines a 2.5G quad band GSM and EDGE cellular phone with features found in hand held devices, running a scaled-down versions of Apple's Mac OS X, with various applications such as Safari web browser, e-mail, and navigation. The iPhone features a 3.5 inch touch screen display, Bluetooth, WiFi (both "b" and "g"), and comes in 4 and 8 GB models. The iPhone first became available on June 29, 2007.
Additionally at the conference, Jobs demonstrated the Apple TV, (previously known as the iTV), a set-top video device intended to bridge the sale of content from iTunes with high-definition televisions. The device links up to a user's TV and syncs, either via WiFi or a wired network, with one computer's iTunes library and streams from an additional four. The Apple TV incorporates a 40 GB hard drive for storage, includes outputs for HDMI and component video, and plays video at a maximum resolution of 720p. It was later updated to include a 160 GB drive for even more space for media.
Apple sells a variety of computer accessories for Mac computers including the AirPort wireless networking products, Apple Cinema HD Display and Apple Displays computer displays, Mighty Mouse and Apple Wireless Mouse computer mice, the Apple Wireless Keyboard computer keyboard, and the Apple USB Modem. The Apple wireless mouse was replaced by the wireless Mighty Mouse.
Environmental issues
Since 2004, Greenpeace has attacked Apple for not setting a timeline to remove PVC, which still exists in recent products such as the iPod nano and MacBook; and for not promoting a global end-of-life take back plan for Apple hardware (although it does within Europe and Japan where it is required by law); as well as for not having reusable components.[49] As of December 2006, Greenpeace ranked Apple last out of ten electronics companies in dealing with toxic substances in their products, mostly due to a lack of relevant documentation and timelines.[50] On May 2, 2007, Steve Jobs released an open letter named A Greener Apple,[51] responding to some of the allegations. In his letter, Jobs stated:
In one environmental group’s recent scorecard, Dell, HP and Lenovo all scored higher than Apple because of their plans (or “plans for releasing plans” in the case of HP). In reality, Apple is ahead of all of these companies in eliminating toxic chemicals from its products. [51]
A study in January 2006 by the United States Environmental Protection Agency found that Apple's hardware compares favorably with that of its major competitors on environmental friendliness.[52]
On June 5, 2007, Apple updated their MacBook Pro product line. This hardware update is environmentally notable because LEDs fully replaced cold cathode lamps in the 15-inch MacBook Pro's display backlighting,[53] a first for Apple laptops (the iPod has had LED backlighting since its creation in 2001). This ameliorates Apple's environmental stance, as cold cathode lamps do contain mercury, whereas LEDs do not.
Apple has also been given very low ratings on their commitment to fighting global warming. In an ongoing study being conducted by a group called "Climate Counts," companies are rated on 22 separate criteria[54] to determine whether or not they have (1) measured their climate footprint, (2) reduced their impact on global warming, (3) supported progressive climate legislation, and (4) disclosed their cilmate actions clearly and comprehensively to the public. On a scale from 1 to 100, Apple scored 2, placing it at the very bottom of a list of twelve top technology firms.[55] The organization gave the reason for its low score as "Climate Counts found no public information."
Former Vice President of the United States and environmentalist Al Gore is a member of Apple's board of directors.
Software
- See also: List of Macintosh software
Apple develops its own operating system to run on Macs, Mac OS X. Apple also independently develops computer software titles for its Mac OS X operating system. Much of the software Apple develops is bundled with its computers. An example of this is the consumer-oriented iLife software package which bundles iDVD, iMovie HD, iPhoto, iTunes, GarageBand, and iWeb. For presentation and page layout, iWork is available, which includes Keynote and Pages. iTunes, QuickTime media player, and Safari web browser are available as free downloads for both Mac OS X and Windows.
Apple also offers a range of professional software titles. Their range of server software includes the operating system Mac OS X Server; Apple Remote Desktop, a remote systems management application; WebObjects, Java Web application server; and Xsan, a Storage Area Network file system. For the professional creative market, there is Aperture for professional RAW-format photo processing; Final Cut Studio, a video production suite; Logic, a comprehensive music toolkit and Shake, an advanced effects composition program.
Apple also offers online services with .Mac which bundles .Mac HomePage, .Mac Mail, .Mac Groups social network service, .Mac iDisk, .Mac Backup, .Mac Sync, and Learning Center online tutorials.
Corporate affairs
Critics of Apple commonly point to their vertically-integrated business model, where all the hardware and operating system software comes from one company. Although the Apple II was very open, the Macintosh was originally closed and proprietary, and during the Mac's early history Apple generally refused to adopt prevailing industry standards for hardware, instead creating and implementing their own (for example, ADB and NuBus).
This trend was largely reversed in the late 1990s beginning with Apple's adoption of the PCI bus in the 7500/8500/9500 Power Macs. Apple has since adopted USB, AGP, HyperTransport, Wi-Fi, and other industry standards in its computers and was in some cases a leader in the adoption of such standards. FireWire is an Apple-originated standard which has seen widespread industry adoption after it was standardized as IEEE 1394.
However, the iPod remains a mostly closed and vertically-integrated platform. Although Apple provides documented interfaces for hardware accessories, developers have no supported way to add features to the software (such as decoding of additional formats). Although the iPod supports the mainstream MP3 and AAC formats, there is not support for other proprietary formats, like Windows Media (this can be converted to AAC with iTunes on Windows), RealAudio and the open Ogg Vorbis format. Apple has refused to license its FairPlay DRM system to other online music vendors.[46] The company added Windows PC support with their second generation iPod series.
Ever since the first Apple store opened, Apple has wanted third parties to sell their products and software inside their stores. This allows, for instance, Nikon and Canon to sell their Mac-compatible digital cameras and camcorders inside the store. Adobe, the largest Apple software partner, also sells its Mac-compatible software, as does Microsoft, who sells Microsoft Office for the Mac. A notable exception are books published by John Wiley & Sons. The publisher's line of books were banned from Apple Stores in 2005 because Steve Jobs disagreed with their editorial policy.[56]
Mission Statement
"Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and internet offerings."
- Modified Mission Statement
"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 this year with its revolutionary iPhone."[57]
Headquarters
Apple Inc.'s world corporate headquarters are located in the middle of Silicon Valley, at 1 Infinite Loop, Cupertino, California (coordinates: ). This Apple campus has six buildings which total 850,000 sq ft. and was built in 1993 by Sobrato Development Cos.[58]
In 2006, Apple announced its intention to build a second campus on 50 acres assembled from various contiguous plots. The new campus, also in Cupertino, will be about one mile east of the current campus.[59]
CEOs
- 1977–1981: Michael "Scotty" Scott
- 1981–1983: A. C. "Mike" Markkula
- 1983–1993: John Sculley
- 1993–1996: Michael Spindler
- 1996–1997: Gil Amelio
- 1997–present: Steve Jobs (interim CEO 1997-2000)
Current board of directors
- Bill Campbell, chairman of Intuit Inc.
- Millard Drexler, chairman and CEO of J.Crew
- Al Gore, former Vice President of the United States
- Steve Jobs, CEO and co-founder of Apple; also a director of The Walt Disney Company
- Arthur D. Levinson, chairman and CEO of Genentech
- Eric E. Schmidt, chairman and CEO of Google
- Jerry York, chairman, president and CEO of Harwinton Capital
Current executives
- Steve Jobs, chief executive officer
- Timothy D. Cook, chief operating officer
- Peter Oppenheimer, chief financial officer
- Philip W. Schiller, senior vice president of worldwide product marketing
- Tony Fadell, senior vice president of iPod division
- Jonathan Ive, senior vice president of industrial design
- Bertrand Serlet, senior vice president of software engineering
- Ron Johnson, senior vice president of retail
- Sina Tamaddon, senior vice president of applications
- Scott Forstall, vice president of platform experience
- Donald Rosenberg, senior vice president, general counsel and secretary
Advertising
Since the introduction of the Macintosh in 1984 with the 1984 Super Bowl commercial to the more modern 'Get a Mac' adverts, Apple has been recognized for its efforts towards effective advertising and marketing for its products, though it has been criticized for the content of more recent campaigns.
Logos
- See also: U+F8FF or , seen as the Apple logo in some fonts.
Apple’s first logo, designed by Jobs and Wayne, depicts Sir Isaac Newton sitting under an apple tree. Almost immediately, though, this was replaced by Rob Janoff’s “rainbow Apple,” the now-familiar rainbow-colored silhouette of an apple with a bite taken out of it, possibly as a tribute to Isaac Newton's discoveries of the gravity (the apple), and the separation of light by prisms (the colors). This was one of several designs Janoff presented to Jobs in 1976.[60]
While it is generally accepted to have been in reference to Isaac Newton, some believe it is a homage to the father of modern computing, Alan Turing. In 1954, Turing committed suicide by ingesting an apple laced with cyanide after being prosecuted for being homosexual, thus giving the symbolism for the bite, and the rainbow coloring. [61]
In 1999, Apple began enforcing the use of a strictly monochrome logo—supposedly at the insistence of a newly re-inaugurated Jobs—nearly identical in shape to its previous rainbow incarnation. However, no specific color is prescribed; for example, it is grey on the Power Mac G5, Mac Mini, and iMac, blue (by default) in Mac OS X, chrome on the 'About this Mac' panel and the boot screen in Mac OS X 10.3 and 10.4, red on many software packages, and white on the iBook, PowerBook G4, PowerBook G3 (late models), MacBook, and MacBook Pro. The logo's shape is one of the most recognized brand symbols in the world, identifies all Apple products and retail stores (the name "Apple" is usually not even present), and notably included as stickers in nearly all Macintosh and iPod packages through the years.
Slogans
Apple's first slogan, "Byte into an Apple", was coined in the late 1970s. Once Apple started selling more than just computers, slogans were created for each individual product, rather than for the company itself. For example, the slogan "iThink, therefore iMac", was used in 1998 to promote the iMac. Several company-directed slogans are marketed today; however Apple tends to focus mainly on marketing its products individually.
Litigation
Apple's earliest court action dates to 1978 when Apple Records, The Beatles-founded record label, filed suit against Apple Computer for trademark infringement. The suit settled in 1981 with an amount of US$80,000 being paid to Apple Corps. As a condition of the settlement, Apple Computer agreed to stay out of the music business. The case arose in 1989 again when Apple Corps sued over the Apple IIGS, which included a professional synthesizer chip, claiming violation of the 1981 settlement agreement. In 1991 another settlement of around US$26.5 million was reached.[62] In September 2003 Apple Computer was sued by Apple Corps again, this time for introducing the iTunes Music Store and the iPod, which Apple Corps believed was a violation of the previous agreement by Apple Computer not to distribute music.[63] The trial in the UK ended on May 8, 2006 with victory for Apple Computer. The judge ruled the company's iTunes Music Store did not infringe on the trademark of Apple Corps and ordered Apple Corps to pay the legal costs.[64] A new settlement was announced on February 5, 2007 giving Apple, Inc. control over the Apple mark with Apple Corps licensed to use it. Portions of the settlement are confidential, but each side will pay its own legal costs. As the Beatles' songs are not available for download from any legal music download sites, including the iTunes Music Store, Jobs' highly public nod to the Beatles (playing "Lovely Rita" on the iPhone) during his January 9, 2007 Macworld keynote fueled widespread speculation about a deal to sell Beatles songs on iTunes. A spokewoman for Apple Corps said the settlement had no bearing on any such matter.[65]
Of the matter, Steve Jobs said "We love the Beatles, and it has been painful being at odds with them over these trademarks. It feels great to resolve this in a positive manner, and in a way that should remove the potential of further disagreements in the future."[66]
In a more recent previously unrelated lawsuit, Apple entered into a class action settlement,[67] upheld on December 20, 2005 following an appeal, regarding the battery life of iPod music players sold prior to May 2004. Eligible members of the class are entitled to extended warranties, store credit, cash compensation, or battery replacement.
Creative also recently filed a patent dispute alleging that Apple infringed on one of Creative's patents for their Zen player with the iPod and iPod nano.[68] On August 23, 2006, Apple and Creative settled their patent disputes by paying Creative US$100 million.
On January 10, 2007, Cisco sued Apple for the iPhone, since Cisco has held the trademark on the name "iPhone" since 2000. Cisco had refused rights to use the name "iPhone" on multiple occasions. Apple and Cisco had been in talks for a while about use of the name, though Apple had been denied the use of the name on several occasions leading up through January 9. Cisco alleged that Apple created a front company to attempt to acquire the name through other means, but failed also. During the 2007 Macworld Expo, Apple used Cisco's "iPhone" name anyway.[69] On February 22, 2007 Cisco and Apple announced an agreement under which both companies would be allowed to use the iPhone name worldwide.[70]
In July 2007, Colorado-based photographer Louis Psihoyos filed suit against Apple for allegedly ripping his "wall of videos" imagery to advertise for Apple TV. According to Psihoyos, Apple had been negotiating with Psihoyos for rights to the imagery, but backed out and promptly used the imagery anyway. [71]
Stock option backdating investigation
On June 29, 2006, Apple announced that an internal investigation "discovered irregularities related to the issuance of certain stock option grants made between 1997 and 2001."[72] A Special Committee reported the findings of the stock backdating investigation three months later on October 4, 2006, stating "the investigation found no misconduct by any member of Apple's current management team", … "the most recent evidence of irregularities relates to a January 2002 grant", and "stock option grants made on 15 dates between 1997 and 2002 appear to have grant dates that precede the approval of those grants". The Special Committee also reported that "in a few instances, Apple CEO Steve Jobs was aware that favorable grant dates had been selected, but he did not receive or otherwise benefit from these grants and was unaware of the accounting implications."[73] Documents were subsequently faked to indicate a special board meeting had occurred and that the options had been granted on that day.[74] The backdating gave Jobs a potential net gain of more than US$20 million had he exercised his options.[75]
On April 24, 2007, the SEC announced it had filed charges against former Apple chief financial officer Fred D. Anderson and former Apple general counsel Nancy R. Heinen for their alleged roles in backdating Apple options.[76] Anderson immediately settled the charges for a payment of a civil penalty of US$150,000 and disgorgement of "ill-gotten gains" of approximately US$3.49 million.[76] Heinen was charged with, among other things, violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, lying to Apple's auditors, and violating prohibitions on circumventing internal controls, based on the options awarded to Steve Jobs (dated October 19, 2001 but allegedly granted in December 2001) and also option grants awarded to top company executives, including Heinen (dated January 17, 2001, but allegedly granted in February 2001.[76] The SEC is seeking injunctive relief, disgorgement, and money penalties against Heinen, in addition to an order barring her from serving as an officer or director of a public company.[76] The charges against Heinen remain pending.[76]
In late April 2007, the SEC announced that it would not bring action against Apple due to its "swift, extensive, and extraordinary cooperation in the Commission's investigation." Most analysts took this statement to mean that Apple was in the clear, and Steve Jobs personally read the statement to concerned shareholders at a meeting.
Culture
Apple has a long tradition of emphasizing the user experience, rather than the technology involved in delivering that experience. This attitude is reflected in the casual manner the company switches the Mac from architecture to architecture every decade or so, presenting this to users and developers alike as an affair that changes not at all the essential character of the Mac, while industry observers and trade magazines become highly concerned over what they perceive as an enormous change in direction.[citation needed]
Apple was one of several highly successful companies founded in the 1970s that bucked the traditional notions of what a corporate culture should look like in terms of organizational hierarchy (flat versus tall, casual versus formal attire, et cetera). Other highly successful firms with similar cultural aspects from the same time period include Southwest Airlines and Microsoft, and the relative success of these firms (whether a result of their cultural differences or not) resulted in the widespread adoption of informal corporate culture within the technology industry.[citation needed] Originally, the company stood in opposition to staid competitors like IBM more or less by default, thanks to the influence of its founders; Steve Jobs often walked around the office barefoot even after Apple was a Fortune 500 company. By the time of the "1984" TV ad, this trait had become a key way the company differentiated itself from its competitors.[77]
Apple Fellows
As the company has grown and been led by a series of chief executives, each with his own idea of what Apple should be, some of its original character has arguably been lost, but Apple still has a reputation for fostering individuality and excellence that reliably draws talented people into its employ, especially after Jobs' return. To recognize the best of its employees, Apple created the Apple Fellows program. Apple Fellows are those who have made extraordinary technical or leadership contributions to personal computing while at the company. The Apple Fellowship has so far been awarded to a few individuals including Bill Atkinson,[78] Steve Capps,[79] Rod Holt,[78] Alan Kay,[80][81] Guy Kawasaki,[80][82] Don Norman,[80] Rich Page,[78] and Steve Wozniak.[78]
Users
- See also: Cult of Mac
According to surveys by J. D. Power, Apple has the highest brand and repurchase loyalty of any computer manufacturer. While this brand loyalty is considered unusual for any product, Apple appears not to have gone out of its way to create it. At one time, Apple evangelists were actively engaged by the company, but this was after the phenomenon was already firmly established. Apple evangelist Guy Kawasaki has called the brand fanaticism "something that was stumbled upon".[83] Apple has, however, supported the continuing existence of a network of Mac User Groups in most major and many minor centers of population where Mac computers are available.
Mac users meet at the European Apple Expo and the San Francisco Macworld Conference & Expo trade shows where Apple introduces new products each year to the industry and public. Mac developers in turn gather at the annual Apple Worldwide Developers Conference.
Apple Store openings can draw crowds of thousands, with some waiting in line as much as a day before the opening or flying in from other countries for the event.[84] The New York City Fifth Avenue "Cube" store had a line as long as half a mile; a few Mac fans took the opportunity of the setting to propose marriage.[85] The Ginza opening in Tokyo was estimated in the thousands with a line exceeding eight city blocks.[86]
John Sculley told The Guardian newspaper in 1997: "People talk about technology, but Apple was a marketing company. It was the marketing company of the decade."[87]
Market research indicates that Apple draws its customer base from an unusually artistic, creative, and well-educated population, which may explain the platform’s visibility within certain youthful, avant-garde subcultures.[88]
Criticism
Apple Inc. received criticism from present and past Microsoft employees, for blaming Microsoft for some video iPods released with a Windows virus. An article published in PC World/Infoworld stated:[89]
"... The number of affected iPods is small--less than 1 percent of all video iPods available for purchase after September 12, 2006, the company said in its statement, adding "as you might imagine, we are upset at Windows for not being more hardy against such viruses, and even more upset with ourselves for not catching it." That statement drew criticism from security experts, including Jonathan Poon, the man in charge of scanning Microsoft products for viruses before they ship."
"That Apple would blame Microsoft demonstrates a lack of understanding of remedial security and manufacturing processes. Virus was [sic] only a symptom of the problem. Apple didn't know what they were shipping,"
Apple has also been criticized for allegedly having a relaxed attitude towards security issues, and in particular for promoting the idea that Macs are not vulnerable to security problems. In February 2007, Kevin Finisterre, an independent researcher, was interviewed by the BBC:[90]
Apple recently plugged holes in Mac software such as iChat and Finder and a flaw in the user notification process that could potentially grant system privileges to malicious users.
Finisterre said: "Try calling any Apple store and ask any sales rep what you would do with regard to security, ask if there is anything you should have to worry about? They will happily reinforce the feeling of 'Security on a Mac? What? Me worry?'." He said the Month of Apple Bugs (MOAB) project had succeeded in its original aim of raising the level of awareness around Mac security. "I would really hope that people got the point that there are most definitely some things under the OSX hood that need a closer look," he said. He (also) said that Apple had in the past not been open to dialogue about security matters, but things were changing for the better... Mac experts have pointed out that none of the exploits have ever successfully been used to hijack an Apple computer.
Apple has also received criticism for not notifying users of system vulnerabilities until a fix is released,[91] and has been accused of pressuring journalists to release their sources, with regards to leaked information about new Apple products.[92]
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