Steve Jobs – A Success Story
In 1976, Steve Jobs and Steve Wozniak created the first Apple, Inc. (Nasdaq: AAPL) computer, the Apple I. Just as importantly, their company had received seed capital from early investors. The next year, they were ready to unveil their newest creation, the Apple II, their first mass-produced computer.
They debuted the home computer at that year’s West Coast Computer Faire, and it went on to become one of the first successful mass-produced desktop computers. Jobs’ close attention to the machine’s appearance was already evident based on the time he spent designing its beige plastic case. Steve Wozniak was primarily responsible for the technology of the Apple II.
The computer’s success made Jobs a millionaire by the time he was 23, in 1978. That same year, with the company growing, Jobs and Wozniak hired Mike Scott from National Semiconductor to serve as CEO. By late 1980, Apple was ready to hold an initial public offering (IPO), a sale that generated more capital than any IPO since the 1956 Ford Motor Company’s (NYSE: F) offering, and created roughly 300 millionaires instantly, more than any IPO in history.
By 1981, Apple was one of the three top producers of personal computers in the United States, and possibly the biggest. But other, bigger competitors were getting into the market, most notably International Business Machines Corp. (NYSE: IBM), whose most popular model surpassed the Apple II as the best-selling PC by 1983. The next year, the computing colossus also boasted $4 billion in annual PC revenue, more than doubling Apple’s revenues.
But Apple was on the verge of a breakthrough that would redefine personal computing. The breakthrough had its roots in 1979, when Jobs first saw the Xerox Alto. The Alto was, essentially, the first mouse-driven computer. Until then, operating a computer was a matter of learning the computer’s language and typing in commands. The visual interface of the Alto changed all that, and Jobs immediately saw the potential.
Apple unleashed the mouse-driven user interface to the public in a computer it called the Macintosh. When Jobs introduced it at a shareholders’ meeting in early 1984, the crowd went wild.
But the Macintosh was expensive, roughly $2,500 apiece, and sales disappointed. But the tech industry perked up and took more than just notes. Microsoft quickly began to develop its own mouse-driven user interface. And much cheaper PCs running the Microsoft software popped up overnight.
In 1983, Apple had hired PepsiCo, Inc. (NYSE: PEP) executive John Sculley as its CEO. By 1985, he and Jobs were battling over the future of Apple. Sculley wanted to focus on less-contested niches such as education, small business, and home markets. But Jobs wanted to take on the IBM PC in all markets with what he believed was superior hardware and software. Those tensions came to a head in 1985, when Jobs resigned, taking a handful of Apple employees with him to create a new company, called NeXT, Inc.
Jobs seeded the new company with $7 million of his own money, which the company burned through in its first year. Billionaire Ross Perot stepped in as an investor, and the company released its first product, the NeXT Computer, in 1990. It was state-of-the-art, but, at $9,999, too expensive for most, especially its target customer—the education sector. By 1993, the company had only sold 50,000 machines, and decided to switch to software development. The move led to its first profit, when it netted $1 million in 1994.
At the same time, however, Jobs became involved with a venture that would go a long way toward cementing his reputation and his fortune, when he bought Lucasfilm’s computer graphics division for $10 million. The standalone company would be renamed Pixar and create a generation of iconic children’s movies, including Toy Story, Monsters, Inc., Finding Nemo, The Incredibles and WALL-E. In 2006, The Walt Disney Company (NYSE: DIS) acquired Pixar for $7.4 billion in stock, making Jobs the biggest single shareholder of The Walt Disney Company.
While Pixar was working on its first feature film, Jobs’ NeXT continued to struggle. After shifting its focus to become a software-only company in 1993, it laid off 300 of its 540 employees. But it had managed to create an impressive and original operating system, called NeXTSTEP. In 1996, Jobs began to speak to Apple again. And by the end of the year, Apple agreed to pay $429 million in cash for NeXT, along with 1.5 million shares of Apple, the latter of which went directly to Jobs, who came along with NeXT, initially as a consultant.
Just seven months after the deal was finalized, Jobs was named Apple’s interim CEO. To turn the company toward profitability, he quickly slashed a number of beloved projects and acquired a reputation for firing people on the spot. He also modified the company’s software licensing business, making it too costly for other companies to continue to make machines that ran Macintosh software.
More importantly, the cutting-edge technology developed by NeXT over the previous 12 years began to filter into Apple products. NeXTSTEP, its coveted operating system, became Mac OS X, while visually attractive and consumer-friendly products such as the iMacboosted sales. By 2000, the Apple board was ready to make Jobs the company’s official CEO.
As CEO, Jobs began to look beyond the PC again, first with the groundbreaking iPod digital music player, which changed the way people listen to music. Prior to the iPod’s launch in 2001, very few people listened to music on portable digital players. By 2012, more than 350 million devices had been sold worldwide.
The iPod’s sleek design and easy user interface paved the way for the company’s 2007 release of the iPhone, which revolutionized cellular phone design. In 2014 alone, Apple sold roughly 170 million iPhones worldwide.
Not content to forever alter the way people used mobile phones and listened to music, Jobs launched the iPad in 2010. The very first version of the compact tablet computer with few buttons and a touch screen sold more than 250 million units. It has been credited with singlehandedly revitalizing the previously moribund market for tablet computers.
Jobs famously micro-managed every detail of the devices’ design, functionality and user-interface. The success of all three devices was profound. By 2011, Apple surpassed Exxon Mobil Corp (XOM) as the largest corporation in the United States, with a market capitalization of roughly $355 billion. At the beginning of Jobs’ second reign, in 1997, Apple’s market cap was approximately $3 billion.
In 2011, with Apple at the summit of not just the tech industry, but of all of American business, Jobs resigned as Apple’s CEO. He was suffering from pancreatic cancer, and knew he would soon die. Even after his resignation, he stayed on as chairman of the board, continuing to work for Apple until the day before his death.