The Week - UK (2020-09-12)

Briefing NEWS 13

12 September 2020 THE WEEK

Whatwerethecompany’sorigins?

In 1975 ,SteveWozniak,agiftedyoung

electronicsengineer,startedattending

meetingsoftheHomebrewComputer

Club,agroupofhobbyistsinPaloAlto,

California,devotedtotheearliestper-

sonalcomputers.Inspired,Wozniak

designedandhand-builtadeviceofhis

own:thefirstdesktopcomputerwitha

typewriter-likekeyboardandtheability

tousearegularTVasascreen.Wozniak

triedandfailedtoselltheconcepttohis

employerHewlettPackard,buthisfriend,

SteveJobs,recogniseditspotential.In

April 1976 ,thetwofriendslaunchedthe

AppleComputerCompany–thename

wasinspiredbyJobs’stimeonanOregon

appleorchard–andbegansellingthe

AppleIfromJobs’sparents’garage.

Theysold 175 units.(Athirdco-founder,

RonaldWayne,soldhis 1 0%stakeforbetween$300and$800,

just 12 days afterthecompanyformed.Today, thestockwould

be worthsomethingintheregionof$100bn.)

How did Apple grow from there?

Thefollowingyear,the AppleIIcomputerlaunched.Itwas,

again, arevolutionaryproduct:the first PCwithcolourgraphics,

butit wasalso designedtoappealnotjust toelectronics

hobbyists: itcame “readyto run”,encasedin sleek moulded

plastic,notawood andsteelbox;it also sawthedebutofthe

distinctivelogo.TheAppleIIseries soldsix million units intotal,

propellingAppletothepinnacleofthe newindustry ofhome

computing.When the companyfloatedin 1980,it wasthelargest

initial public offering sinceFordMotors in^1 956.Aged25,Jobs

wasalreadyworth$250m.In 1983,Jobs lured PepsiCopresident

John SculleytojoinAppleasCEO–deployingthenow-famous

line: “Doyouwanttosell sugaredwaterfortherestofyourlife?

Or doyou want tocomewith meandchangetheworld?”

How did Jobs try to change the world?

With theApple Macintosh,released in1984. Assoofteninthe

company’shistory,ittookcutting-edgetechnologyand made it

attractive tothewider public:in thiscase, thegraphicaluserinter-

faceandmouse (meaninguserscould

clickiconsand openappsinsteadof

using complex textcommands).Most

expertsagreed withJobsthatit was

“insanelygreat”andwould

revolutionisepersonalcomputing –

as predictedinRidley Scott’s famous

1984 -themed advert. However, faced

with competition from cheaperIBM-

compatible PCs, itsold poorly.This

sparkedabitter powerstruggle

between Jobs and Sculley,who forced

him outofApple in 1985. Jobs sold

allbut one ofhissharesandwalked

away with $100m.“Hedestroyed

everythingI’d spentten years working

for,”hesaid of Sculley.

How did Jobs return?

Appleproducts became very popular

in some markets–notably design and

publishing–but it lost outtoPCs

running Microsoft’sWindows(an

operating system greatlyinfluencedby

Apple’s). By 1997,the company was

losing$1bnayear.Jobs–whohadspent

theinterimyearsfoundingNeXT,ahigh-

endcomputercompanyaimedatthe

highereducationandbusinessmarkets

–wasbroughtbackinasCEO,and

Apple’simperialperiodbegan.

Whywashesosuccessful?

JobsscrappedotherAppleprojectsand

focusedresourcesinsteadonitsflagship

personalcomputer,theiMac.Withina

fewmonthsofitslaunchin1 99 8,the

iMac–withitstranslucent,coloured

backlargelydesignedbyBritonJony

Ive–hadbecomethebiggest-selling

computerinAmerica.Arunofgenuinely

revolutionaryproductsfollowed:the

iPod(2001);theiPhone(2007);theiPad

(2010).Applewasnotthefirsttomarket

withaportabledigitalmusicplayer,a

smartphoneoratablet,butagainitsdesign,qualityandsimplicity

of use broughtthese novel productstothe mainstream.TheiPod

kickedoffafive-fold increasein itsshare priceoverthe five years

from 200 1, andacted asagateway drug,winningWindowsusers

overtothe Macsystem.ItalsoheraldedApple ’stransformation

fromacomputercompanytoaconsumerelectronicsfirm.

How important was that change?

Very.In 200 3, itlaunchedthe iTunesStore after strikingadeal

with music executives; the iPod effectively upendedthemusic

industry.Oth erswouldfollow.In 2007 – on thesameda yit

changed its namefromAppleComputerto Apple Inc –it also

launchedthefirstiPhone. Itwas,saidJobs,threeproductsin

one:a“widescreeniPod”,“a revolutionarymobile phoneand

abreakthrough internetcommunicationsdevice”.Ayearlater,

anarguably evengreaterinnovationwaslaunched: theAppStore.

The first iPhonehadno non-Appleapplications. Today,2.

million are availablefrom third-party developers.“Suddenly, the

iPhonewasagamesconsoleand animageeditor,and amusical

instrumentandatorch,”said AlexHerninTheGuardian.

WhyisApple still growing?

Itstillmakes very desirable products(thoughiPhone saleshave

fallenrecently).But today,Apple

“hassuchafirmgripover

howpeoplecommunicate, entertain

themselvesandshop thatit nolonger

reliesongroundbreakinginventions

to keep thebusinesshumming”, said

The NewYorkTimes.With the App

Store,itplaceditself at the centre of a

new “appeconomy”, andwitheach

sale it takesahefty 30%commission.

In 2018,under Jobs’s successor,Tim

Cook–who as chief operating officer

builtastate-of-the artglobal supply

chainusing Asian contract manu-

facturers–Apple became the first

trillion-dollarpublic company.

Only two years after that, it added a

secondtrillionto its value(iPadsales

spiked duringthe pandemic).Now

Appleemploys 137,000 people and

generates revenuesfar exceeding

many nations’ economic outputs.

Inevitably,with such powerhave

come concerns about its dominance

andanti-competitivebehaviour.

How Apple conquered the world

Fewcompaniestransformwholeindustries;fewerstilldoitseveraltimes.HowdidApplegrowintoa$2trncompany?

SteveJobsin1981:genuinelyrevolutionary

ThecultofJobs
As ayoung man, Steve Jobs loved technology and
developed considerable expertise in electronics –
enough to getajob asatechnician at Atari. But he
wasn’t an electrical engineering and coding genius
like Steve Wozniak. Born in 1955 and brought up in
Silicon Valley, Jobs dropped out of Reed College,
the expensive liberal arts college in Portland to which
he had demanded that his adoptive parents,acar
mechanic andabookkeeper, send him. Instead, he
travelled to India in 1974, joined an ashram and a
commune and experimented with psychedelic drugs.
He later claimed that taking LSD was “one of the two
or three most important thingsIhave done in my life”.
Yet asabusinessman, Jobs wasadictatorial, ruth-
less taskmaster who asked for perfection from those
around him. He was known for his mesmerising,
Rasputin-like stare, and for screaming at under-
performing colleagues. Still, his range of gifts –
technical nous, commercial instincts, design aptitude,
attention to detail,aflair for salesmanship–made
him unique in his field. “He wasn’t an inventor, he
wasn’tacode writer, he wasn’tadesigner, he
wasn’tabusinessman, really,” says Stephen Fry.
“He wasavisionary. He just saw things.”
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OLARIS/EYEVINE