Apple Computer Inc 1998

APPLE COMPUTER, INC.

by Richard D. Freedman and Jill Vohr

New York University

Leonard N. Stern School of Business

Revised April 1998

Apple Computer was formed in 1976 by Steven Jobs and Stephen Wozniak, who visualized a

personal computer that could be used easily by anyone. Together, they created the Apple I.

Setting up shop in Jobs’ garage, they soon experienced sales beyond the garage’s capacity. In the

same year, A.C. Markkula was recruited as the company’s first professional manager. With

financing from Markkula and a group of venture capitalists, Apple Computer was incorporated

on January 3, 1977.

As cofounder of Apple, Jobs’ focus was on creating new and different products. He was the

visionary responsible for Apple’s reputation for innovation. Apple’s mission was to change the

world by bringing computers to the masses. Jobs’ notion of “one person--one computer” became

a central tenet of the Apple belief system.

In its first six years of business, Apple’s earnings grew explosively from $793,000 to

$76,714,000.2 By 1983, Apple Computer had annual net sales of almost $1 billion and 4,645

employees.3

The Microcomputer Industry

Apple Computer primarily produced microcomputers. This infant industry was characterized by

the manufacture and sale of small desktop computers with microprocessors as central processing

units. Apple’s main competitors in this industry included IBM, Commodore, and Atari.

Competition was increasing. Both Hewlett-Packard and AT&T launched a personal computer,

and Commodore was planning to introduce a more advanced personal computer into the market.

IBM’s machines were the industry standard. Most PC makers made machines that were

compatible with IBM. Apple did not. Its goal was to provide a machine “for the rest of us.”4 The

differences between the Apple II and the IBM PC confused dealers and consumers who had to

decide which one to buy, and software developers had to make software for two standards.