Apple Marks 30 Years of Innovation

Friday Mar 31st 2006 by Sharon Gaudin
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On Saturday, April 1, Apple Computer will mark a nostalgic milestone -- the 30th anniversary of the company that has been a pioneer in the personal computer revolution and is still evolving today.

Before personal computers dotted corporate desktops, speeding business transactions, communications and sales... Before laptops and desktops helped people file their taxes, date and trade stocks...

Before the revolution, there was Apple Computer.

The Cupertino, Calif.-based company was a pioneer in the advancements of the personal computer back in the 1970s, changed the way the world used computers with the Macintosh in the 1980s, and is driving a music revolution with the iPod and iTunes today. For three decades, Apple has unleashed a string of innovative, usable and cool tools, creating a legion of Mac zealots who follow the company with a religious fervor.

And Saturday, April 1, Apple hits a nostalgic milestone, marking its 30th anniversary in an industry where many companies are gobbled up by bigger players or close their doors before the first product can even hit the streets.

''I think anybody who's been in the industry for a while would echo that everybody has a soft spot in their heart for Apple,'' says Julie Craig, a senior analyst with Boulder, Colo.-based Enterprise Management Associates. ''The company has seen the industry through from the very beginning... It wasn't the very first desktop but it was near the beginning. There was Atari. There was Commodore and there was Apple. The fact that they're still going 30 years later, under their own name and evolving to offer products like the iPod shows the creativity behind this company.''

Pioneer. Innovative. Tough. This is how users and industry analysts often describe Apple. It's not that the company hasn't had its share of missteps, poor quarterly earnings reports and missed opportunities. It's definitely gone through some tough times -- losing marketshare and mindshare to early rival Microsoft Corp., losing hold of the enterprise, going through a string of executive leaders, and struggling through a dry spell of fresh ideas.

But Apple came back, reinventing itself and offering up new business ideas, new products and new ways to drive customers to the Mac.

''If you go through 30 years, whether you're a person or a company, everything isn't always going to be easy,'' says Craig. ''But the fact that they've been able to reinvent themselves in the handheld market says a lot about their staying power.''

Mark Margevicius, research director of Gartner, Inc., an industry analyst firm based in Stamford, Conn., says much of Apple's staying power is based on staying true to its initial philosophies.

''Apple is in tune with its roots,'' says Margevicius. ''If you think back to the original days, Apple was about individuality to the extreme. It was about the computing experience for the person and not so much about corporate clients or PCs as part of the network. Apple hasn't lost that. It's about style and fit and finish and the computing experience for the individual. That's their mantra. They're trying to do something unique and different that has some sizzle to it -- something that leaves customers wanting more. And that's a recipe for success for that company.''

And that drive to create a computer that was uniquely user friendly at the time made the early Macintosh a big hit with people who wouldn't have otherwise thought of themselves as 'computer types' or geeks. People weren't asked to type in lines of code. They could drag and drop. They started to leave their typewriters behind and join the computer age.

''There was a logic to it,'' says John Welch, a unix/ppen systems administrator for Kansas City Life Insurance and a Datamation columnist who writes about Apple in the enterprise. ''My first experience was with the Lisa. It came out in the early '80s. My whole reaction to it was, 'Duh. This is how it needs to work.' At the time, I owned an Atari 800... but when this came out, there were things about it that worked pretty much like my brain does.''

Steve Jobs, chief executive officer of Apple and one of the three founders of the company, gets much of the credit for the system's intuitive nature, according to Welch, who bought his first Apple computer in 1991 when he got a 2Ci. ''He's got an eye for what people want to use and he knows how people use stuff in the real world. I think he spends time watching people and observing people. Things had to work right and it had to look good. How things worked had to be obvious.''

Apple Gets Started

Jobs was right there from the very beginning. Thought of as the marketing guy, Jobs teamed up with his friend Steve Wozniak -- the engineering guy. (Ron Wayne, another friend, was in on it with them, but left after two weeks.) On April 1, 1976, they filed partnership papers.

That year, they unveiled the Apple I at the Homebrew Computer Club. A year later, came the Apple II, which was the first PC with color graphics. For $1,298, consumers got 4K of memory, game paddles and a demo cassette. Not the first personal computer, the Apple II, though, quickly became a hit outside the typical engineering crowd, drawing in home users. Some analysts credit the Apple II as the seed of the personal computer revolution.

Later in 1983 -- one year after reaching $1 billion in annual sales -- Apple came out with the Lisa, an investment at $9,995. The Lisa offered users a mouse-based Graphical User Interface (GUI), replacing text-based systems. The price, though, kept Lisa from being a huge commercial success and many users turned to rival IBM Corp. for cheaper solutions.

Slow sales of the Lisa didn't slow Apple down much, though. The company joined the ranks of the Fortune 500 that year.

In 1984, Apple released the Macintosh. It heralded the desktop publishing age, allowing users to create printed materials, articles and newsletters.

Read on to find out about Apple's struggles and the innovative way the company worked its way back...

But darker times were soon to come with Steve Jobs leaving the company after a reported internal power struggle. Jobs went on to form a new computer company, Next, and later he invested heavily in movie-maker Pixar Animation Studios, Inc.

While Jobs worked on his new projects, Apple lost some of its steam during his 10-year absence from the company, say industry watchers. There were missteps, such as the Newton, a handheld computer that failed to catch on.

''The beginning of it was when Steve Jobs left,'' says Welch. ''He wanted the Mac to sell for $1,400 and [company president John] Sculley jumped that up by about $1,000. Sculley was the reason you had $10,000 Macintoshes. They could do it because they were the only game in town with a GUI for a long time. And then Windows got more than good enough. Sculley left and then the next two guys they brought in were salesmen really. They were just trying to sell cheap, beige boxes. They lost track of their customers and what they wanted.''

Margevicius says these were Apple's dark ages.

''A lot of the creative minds, creative forces became disenfranchised with the company and left,'' he says. ''There was a series of so-what products and Apple-doesn't-matter products... Apple wasn't inferior. They just weren't aggressive.''

Without Jobs at the helm, Apple faltered while Microsoft surged ahead with Windows building marketshare and taking a dominant position in the enterprise and consumer space.

''There was a lot of competition and as Microsoft grew, it became the de facto standard, especially for industry,'' says Craig. ''Apple kind of went by the wayside. It's kind of a natural evolution toward standards. Creativity and change can be a good thing but you have to draw your line in the sand and have a standard and stick to it. The Windows standard, for better or worse, gained popularity... For so long, Apple was focused on going their own way and they didn't tow the windows line, and they lost market share because of it.''

Apple Reinvents Itself

Jobs' return in 1997 heralded a revitalization for Apple.

A year later, the company shipped the first iMac, which reignited consumers' devotion. And Apple again turned its attention to design, delivering the iMac in a myriad of shades -- indigo, sage, ruby... and even Blue Dalmation.

In 2001, came the OS X, a powerful player in the server market. Then in 2003, Apple dove into the music world with the iTunes Music Store, an online music service where consumers can legally download songs for 99 cents each. They also brought out the iPod, a portable music player that holds songs downloaded from iTunes. The iPod has caught fire, becoming a cultural, as well as a marketing, phenomenon.

''They've really reinvented themselves in the last five years,'' says Craig. ''It's one of their unique abilities... Steve Jobs definitely seems like he's a creative force. There's a personality there. He's a good marketing person and a creative genius. It looks like his coming back and being active in the company again helped with the advent of the iPod.

''The personal device side is going to be a huge growth area for them,'' she adds. ''They've come out with the video iPod that's going to be enormous.''

Michael Disabato, a service director for the Burton Group, a Salt Lake City, Utah-based analyst firm, sees Apple moving forward with Jobs firmly guiding the company's course.

''A lot of it comes from Jobs,'' he says. ''I don't think you can do much at Apple without him getting involved with it. Some would call that micromanaging... Look at iPod sales. I rest my case. It works.''

Disabato also says there's talk of Apple coming out with another handheld, taking its first stab at the market since the Newton. There's also talk about Apple coming out with its own cell phone, and doing more with the movie market.

Whatever the company comes out with, it ultimately will be focused on driving attention and sales to the Mac, says Welch. The press, the hype and the advertising is all about the iPod. But he says for Apple, it's still all about the Mac.

''The Macintosh is never going to go away for Apple,'' says Welch. ''It's the center of that company. They may sell a ton more iPods but they make more off the Mac. Their 80 percent marketshare in the music area is going to go down at some point. The purpose of the iPod is as an extension of the Mac. It's another way to use your Mac. Everything they do is centered around it.''

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