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Apple Inc., is an American consumer electronics corporation with worldwide annual sales in its fiscal year 2006 (ending September 30 2006) of US$19.3 billion. Headquartered in Cupertino, California, Apple develops, sells, and supports a series of personal computers, portable media players, computer software, and computer hardware accessories. The company's best-known products include the Mac line of personal computers, its Mac OS X operating system, and the iPod line of portable media players. For the iPod and its related iTunes software, Apple sells audiobooks, games, music, music videos, TV shows, and movies in its online iTunes Store.

The company was known as Apple Computer, Inc. for its first 30 years of existence, but dropped "Computer" from its corporate name on January 9 2007. The name change, which followed Apple's announcement of its new iPhone smartphone and Apple TV digital video system, is representative of the company's ongoing expansion into the consumer electronics market in addition to its traditional focus on personal computers.

Apple also operates over 170 retail stores in the United States, Japan, the United Kingdom, Canada, and Italy. 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.

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.


[edit] History

The Apple II microcomputer, introduced in 1977, was a hit with home users. In 1983, Apple 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, furthering the concept of a 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 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.

[edit] 1975 to 1980: The early years

The Apple I, Apple's first product. Sold as an assembled circuit board, it lacked basic features such as a keyboard, monitor and case. The owner of this unit added a keyboard and a wooden case. Apple was founded on April 1 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne and later incorporated January 3 1977 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 in a garage of Jobs' parents, and the Apple I was first shown to the public at the Homebrew Computer Club. 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. 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. Jobs 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.

The Apple II was introduced on April 16 1977 at the first West Coast Computer Faire. Despite a price higher than competitors, it quickly pulled away from its two main rivals, the TRS-80 and Commodore PET, to become the market leader (and the symbol of the personal computing phenomenon) in the late 70s due to its color graphics, high build quality, and 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 success 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. 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.

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 due to the fact that Commodore and Tandy computers were tied up at the moment 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 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 80's, the best selling specific model of computer to date.)

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. An updated version was introduced in 1983, but it was also a failure due to bad press and wary buyers. Nevertheless, the principals of the company persevered with further innovations and marketing.

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 because of their adaption of the programming language LOGO, which was 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.

[edit] 1981 to 1989: Lisa and Macintosh

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, 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.

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 Orwel]'s novel. 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. 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, a side-effect of the GUI, and it can be said that the combination of these three products are responsible for the creation of the DTP market. 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, 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 strongly into Macintosh's sales.

An internal power struggle developed between Jobs and new CEO John Sculley in 1985. Apple's board of directors sided with Sculley and Jobs was removed from his managerial duties. 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.

[edit] 1989 to 1991: The Golden Age

The Macintosh Portable was Apple's first "portable" Macintosh computer, released in 1989. 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.

Called the PowerBook 100, this landmark product was introduced in 1991 and established the modern form and ergonomic layout of the laptop computer. This solidified Apple's reputation as a quality manufacturer, both of desktop and now portable machines. 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. 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". For some time, it appeared that Apple could do no wrong, introducing new products that were the best on the market, 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 eventually resulted in 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 instead.

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. 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, coined a PDA by Sculley, that was introduced in 1993. Though it failed commercially, it defined and launched the new category of computing and was a forerunner and inspiration of devices such as Palm Pilot and PocketPC.

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.

[edit] 1994 to 1997: Attempts at reinvention

The Apple Newton was Apple's first foray into the PDA markets, as well as one of the first in the industry. A financial flop, it helped pave way for the Palm Pilot and Apple's own iPhone in the future.]] 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 new attempt was made with the Gershwin operating system.

In 1995 Apple in their attempt of reinvention tried to break into the Gaming Industry with the Apple Pippin. Despite the success of competiting game consoles like Sony Playstation, Nintendo 64, and Sega Saturn, Pippin experienced very limited success and as little as 5000 units were sold worldwide 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 purpose than hardcore gaming which resulted in the console being expensive and underpowered compared to its rivals.

They then investigated using 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, thus bringing Steve Jobs back into Apple. 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. Microsoft later sold its shares for a tidy profit.) It was also announced that Internet Explorer would be shipped as the default browser on the Macintosh. Microsoft chairman Bill Gates appeared at the expo on a large screen, further explaining Microsoft's plans for the software they were developing for the Macintosh and stating that he was very excited to be helping Apple. After this, Steve Jobs said:{{cquote|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.

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.

[edit] 1998 to 2005: New beginnings

Steve Jobs introducing the original iMac computer in 1998.On August 15 1998, Apple introduced a new all-in-one Macintosh reminiscent of the original Macintosh 128K: the iMac. The iMac design team was led by Jonathan Ive, who later designed the iPod and the iPhone. While technically unimpressive, it 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. The iMac is now considered an industrial design icon of the late 90s.

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 sought 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 October 23 2001 Apple introduced its first iPod portable digital audio player and released it on November 10 of that year, a product that has proven phenomenally successful. Over 100 million units have been sold even though it was not originally perceived to be a successful product. 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 2 billion downloads by January 2007.

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.

[edit] 2005 to present: The Intel partnership

In a keynote address on June 6 2005, Steve Jobs officially announced that Apple would begin producing Intel-based Macintosh computers beginning in 2006. 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 2006.

On January 10 2006, Apple released its first Intel chip computers, a new notebook computer known as the MacBook Pro (a 15.4 inch laptop which is purportedly up to 4 times faster than the PowerBook models it replaced) and a new (though cosmetically identical) iMac with again purportedly two to three times faster performance. 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 inch iMac G5 computers in February 2006, Apple ended the life of its 15 inch 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 in late May, replaced the iBook and the 12-inch PowerBook G4 with the MacBook. On August 7 2006, the PowerMac was replaced with the Mac Pro, completing the transition of all Macintosh products, 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, 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.

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, such as Microsoft Office has not been updated to run on the Intel architecture, run translated 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". 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 Macintoshes 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. Boot Camp will be included, as standard, in Apple's next OS release (10.5, “Leopard”).

On January 9 2007, Steve Jobs announced at Macworld 2007 that Apple Computer Inc. would be known as Apple Inc. This Macworld also served as the venue to launch the new iPhone which will be available through Cingular in June of 2007 and the new Apple TV product which began shipping in March of 2007. The new iPhone had been a subject of speculation for some time in various media outlets. The next day, Apple shares hit US$97.80, an all time high.

On February 7 2007, Apple Inc. indicated that it would open its iTunes store to other portable players besides its ubiquitous iPod if the world's major record labels abandoned the anti-piracy technology that serves as the industry's security blanket.

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