The successful stock sale provided Apple with an "extravagant amount of capital ($1 billion)," which could be spent on developing the "company's next computer generation."⁾ This time, however, was quite turbulent for Apple and was marked by crises and inner power struggles.

Designing on Apple III began in 1978. This computer was to be the successor to Wozniak's Apple II, and was finally introduced to the public in 1981. But it was not successful - a "disaster" or "fiasco,"⁾ since it had too many faults and did not work properly. Nevertheless, the company was without any financial troubles, since sales of the Apple II continued to increase rapidly.

Concurrently, Steve Jobs became the company's visionary and thought about the next computer generation. Such a visionary is a "person who has both the vision and the willingness to put everything on the line, including his career, to further that vision. Jobs became a perfect visionary and convinced everyone around him with his vision.

In 1979, he and some other Apple employees visited the Xerox PARC (Palo Alto Research Center), which was known for its advanced research in computing. What they saw was revolutionary and had never appeared on any personal computer before. The "environment of the screen was graphically based" with icons (representing files or programs), with a mouse for pointing and moving at them, windows and pull-down menus. Thus, the user could "interact easily with the computer [...] without ever typing a single letter.

Jobs was quite impressed and wanted to transfer this concept on a new PC called Lisa, which was intended for the business world. Steve, however, came up with ever-new ideas for the designers of this project. He "created chaos because he would get an idea, start a project, then change his mind two or three times, until people were doing a kind of random walk, continually scrapping and starting over."⁾

Markkula and Scott were concerned about the further progress of Lisa. So, in the course of a reorganization of the company, they decided to put John Couch, a former software designer at HP, in a charge of the Lisa project. Jobs was made chairman of the boa rd to represent Apple in the public. However, Steve was shocked that he was taken the chance to fulfill his vision, and relations between him and Scott deteriorated.

In February 1981, Wozniak, the technological brains behind the Apple I and II, crashed his four-seated airplane. He hit his head badly and suffered from a case of temporary amnesia. For some time, he retired from the company and he finished his undergraduate degree at U.C. Berkeley.

The company had grown rapidly to 2,000 employees, and some of them had joined Apple in the hope of a safe job. Setting an example, president Mike Scott laid off 42 people on a day which came to be called "Black Wednesday". Apple was shocked since some of t hose people seemed to have been chosen arbitrarily. Scott's management style became more and more disliked, and finally Mike Markkula decided to fire Scott and took over his position until a new president was found.

The Lisa project

Meanwhile, Steve Jobs had discovered his new project. Soon he had taken control of the Macintosh project, which had been started by Jeff Raskin in 1979 to design a small and handy personal computer. Steve dedicated all his power to the Macintosh, which was to be a smaller and cheaper Lisa and was to revolutionize the way of computing.

The company was now separated into three divisions, Apple II, Lisa and Macintosh, which began competing against each other - particularly between the latter two.

Lisa was developed by a number of experienced engineers and programmers who had been recruited from HP, DEC and Xerox. This project was "the most professional operation ever mounted at Apple"⁾ and was in contrast to Steve's bunch of young hackers at Macintosh.

When Lisa was introduced to the public in August 1983, it was "ahead of its time:"⁾ Lisa was easy to use because of the mouse, graphical interface and windows, and had additional features such as multitasking. Though is was first welcomed by the press as revolutionary, Lisa failed. One problem was Steve's "lack of self-discipline:"⁾ When introducing Lisa he talked about "his" Macintosh which would come out soon and with features like Lisa but cost only a fraction ($2,000 instead of $10,000 for Lisa). The other strategic mistake was the announcement that the two computers were not compatible. So it is no wonder many people waited until the Macintosh would come.

Finally, Lisa, which was intended for the business market at its price of $10,000, lacked the ability to communicate with other computers - a fact which was decisive for this market.

In the meantime, IBM had entered the personal computer market with its first IBM PC in 1981, and already dominated a large part of it. Its first PC "wasn't an earth-shattering machine technically"⁾ and was much harder to use than the forthcoming Apple machines. But the fact that it was built by IBM was enough to make it successful, and many software companies wrote applications for it. Apple had bravely run a full-page ad saying "Welcome IBM, Seriously", but it soon seemed to have lost the battle. Nevertheless, IBM's entry brought Apple a lot of publicity as the only real competition to Big Blue.

Thus, Lisa was not very successful and the second failure after the Apple III. Still, Apple's sales increased - only because of the successful Apple II. But the company needed a successor, and all its hopes were now placed in the Macintosh.

The Macintosh revolution

The Macintosh was to fulfill Steve Jobs' vision of "computer to the people". He created a personal computer, which was easy to use and at a low cost. Steve thought of a tool for all people to broaden their mind - a revolution towards the modern way of computing.

His Macintosh team was made up of teenagers and self-taught hackers - "idiot savants, passionate plodders and inspired amateurs" - who "loved to cut code."⁾ They followed his vision and passionately designed this outstanding computer. Jobs continuously drove his team to ever-greater feats. He "kept thinking up crazier things, or more aggressive goals if they were doing good, or if they were achieving their goals he wanted them to do more. He couldn't just stop, he had to push you to the edge."⁾ Steve "gave impossible tasks, never acknowledging that they were impossible,"⁾ he "doesn't have any boundaries, [...] because he has always been able to do anything he wanted" due to "his early success."⁾ As a consequence, people usually worked 80 hours a week or more for their project.

Steve's most brilliant hackers were Andy Hertzfeld, Bill Atkinson and Burrell Smith. The Macintosh was equipped with Motorola's 68000 CPU, a 3.5-inch floppy disk drive, a detachable keyboard, and the amount of space it took up from the desk should not be larger then a telephone book (this meant a revolution in size). The computer was meant to be an open system, and software applications were to be programmed by other companies, the work of which was supported by a standard modular toolbox. This box made sure that all applications were easy to use and appeared in a standardized way. As well as other fundamental software the standard toolbox was available from the computer's ROM (Read Only Memory).

Influenced by robotics assembly lines in Japan, Steve decided to "build the most advanced assembly plant in the world"⁾ for the production of the Macintosh. It was fully automated and the labor component accounted for only one percent of the total cost.

Simultaneously to feverish efforts to finish the Macintosh, Apple succeeded in finding a new president. Thanks to Steve's visionary powers of persuasion, John Sculley, top manager at PepsiCo, finally agreed to join Apple in April 1983.

The introduction of the Macintosh, which was Steve's revolutionary machine to change the world, was dated to January 1984 and was to be accompanied by a massive ad campaign in the media. Chiat/Day agency was asked to create a commercial referring to the fact that 1984 was the year of Orwell's famous novel. They produced the sixty-second ad, which was really exceptional, and proposed running it only once - during the Super Bowl, the most watched television event of the year.

It would be a million dollar minute, which was to capture public attention. Macintosh was presented as a milestone product that would revolutionize the way of computing, breaking IBM's, the "Big Brother's" dominance and conformity it was about to establish by its IBM PCs.

When the commercial was broadcast, it reached 46.4 percent of America's households. People were stunned about this outrageous ad, which was "unlike anything they had seen before."⁾ Suddenly, millions of people knew something called Macintosh. The "commercial sparked widespread controversy"⁾, and won the highest advertising awards (more than 30).

The Macintosh (priced at $2,495) was a success from the start. Steve Jobs, the visionary, compared it to Graham Bell's invention of the telephone a hundred years ago. It was the "most approachable"⁾ and sophisticated personal computer of the time, which ushered in a new era of easy computing with a graphical interface and mouse. This feature would be taken over by many software companies in the subsequent years, particularly by big Microsoft, which developed Windows. This graphical user interface, which ha s been established as the industry standard today, is quite similar to Macintosh’s and makes possible the easy use of IBM PCs.

In the first 100 days, an industry record of more than 70,000 Macintosh computers were shipped - a number that went up to the total of 250,000 sold units by the end of the year.

John Sculley and Steve Jobs

Despite the astonishing figures of sold Macintosh computers and a boost in sales to more than $1.5 billion in 1984 (up 55% from 1983),⁾ Apple soon fell into its most severe crisis, which would only be overcome by Sculley's hard measures and led to the firing of its visionary Steve Jobs.

John Sculley had been vice-president at PepsiCo where he had successfully made Pepsi the number one brand in the Cola Wars. Actually, there was no reason for him, one of America's top managers with a secure and highly paid position at PepsiCo, to join a bunch of young computer nerds at the West coast. The reason why he finally agreed yet is Steve Jobs who impressed him by his visionary ideas and asked him a question to which he did have no answer: "Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?"⁾ This question told him that his "entire life was at a critical crossroads."⁾

Sculley and Jobs became close friends. They could "complete each other's sentences" because they "were on the same wavelength."⁾ The "dynamic duo", as they were called in an issue of Business Week in October 1983, was esteemed highly in the press and contributed significantly to Apple's good reputation in the public at the time.

The downfall came soon, however, when their largely overestimated expectations of the Macintosh sales could not be met. In their euphoria about the revolutionary Mac, they thought they would ship 80,000 units by the end of 1984, and had produced them in advance. When the reality brought "merely" 20,000 with a falling tendency, the crisis was evident. Reasons for that decline were that the Macintosh was not as "perfect" as expected - with its 128 KByte RAM (they were then mounted to 512 KB) it was not powerful enough, and there were hardly any software applications available yet. Moreover, at the 1985 annual meeting, Jobs and Sculley neglected the fact that 70 percent of the company's sales were still due to the Apple II, whereas the Macintosh accounted for only 30 percent. Many sophisticated Apple II designers were annoyed and left the company.

Steve Jobs became more and more angry and aggressive because of the continuing drop in Macintosh sales (merely 2,500 units in March 1985).⁾ He blamed everyone for it, except for himself. Steve just did not see that the "problem was with him."⁾ In the end, he blamed even Sculley for the crisis and wanted to lead the company himself. But this seemed impossible to everyone else: "Steve was a big thinker, an inspirational motivator, but not a day-to-day manager. What was sad was that he could not see it."⁾

When Sculley was informed that Jobs intended to remove him insidiously from the company, he was quite concerned, but then decided to choose the company's welfare over his friendship to its visionary co-founder. Supported by Markkula and the other members of the board, in May 1985, he dismissed Steve from his positions as the vice-president and as the leader of the Macintosh division; Jobs did not have any managerial power anymore.

Steve Jobs was quite depressed and made trips to Europe and the Soviet Union. Finally, he decided to leave Apple in December 1985, and sold all his Apple shares. He took along some of the best employees to start his new venture - NeXT. He intended to design a workstation for the university sector. In February 1987, billionaire Ross Perot invested $20 million for 16 percent of NeXT. The new computer was introduced to the public in October 1988, priced at $6,000.

At Apple, John Sculley took several measures to save the company, which had become chaotic. In the course of a major reorganization he dismissed 1,200 employees (20% of the total workforce) and put the broken parts of the company together to form one unified Apple. His restructuring saved a lot of costs and consolidated the company.

1986 was Apple's worst year with a decline in net sales from $1.92 (1985) to $1.90 billion. Gradually, Sculley could persuade software companies, which had turned away from Apple, to write applications for the Macintosh.

Apple found its new market in desktop publishing (DTP), for which the Macintosh was predestined. By the time, the Macintosh became a serious tool for the business market and its sales increased again.

Until today, Apple has grown steadily and now reaches net sales of more than $7 billion. Although the Macintosh lost the battle against Big Blue, today it is a successful product and was sold over 2.5 million times worldwide in 1992. Apple remains the second-biggest personal computer manufacturer after IBM and has released innovative products such as QuickTime, an easy to use multimedia software combining sound, video and animation. Its latest development is Newton, a personal digital assistant (PDA), which serves as an electronic notepad and "integrates advanced hand-writing recognition, communication and data-management technologies."⁾

Apple today.

CUPERTINO, California—December 5, 2000—Apple® today announced that it has experienced significantly slower than expected sales during October and November, which will result in revenues and earnings for its quarter ending December 30, 2000 being substantially below expectations.

The company expects to report revenue of about $1 billion and a net loss, excluding investment gains, of between $225 and $250 million.

The $600 million revenue shortfall from previous expectations is due to lower than expected channel sell-through across all geographies and unplanned sales promotions and pricing actions. The net loss is the result of the revenue shortfall and cancellation charges related to decreases in forecasted component purchases for current products.

“The swift industry-wide decline in PC sales will result in Apple’s first non-profitable quarter in three years,” said Apple’s CEO Steve Jobs. “We’re not happy about it, and plan to return to sustained profitability next quarter. We are committed to reducing our channel inventories to normal levels by the end of this quarter, and remain very excited about the new products and programs Apple will be rolling out in 2001.”

“In light of the lower results anticipated for the December quarter, we now expect revenues for fiscal 2001 to be in the $6 to $6.5 billion range,” said Apple’s CFO Fred Anderson.