The advertisement was a hit, but unfortunately the Macintosh saw sluggish sales performance. This strained the relationship between Jobs and Sculley. Sculley favoured introducing IBM compatibility; Jobs was opposed. Jobs and Sculley each went before Apple’s board and lobbied for the other’s removal. Eventually, on 31 May 1985, Apple announced that – following its first-ever quarterly loss and a round of layoffs – Steve Jobs was leaving the company he’d co-founded. He left with a net worth of $150 million and started his next venture, called NeXT.
Time away from Apple
In his famous commencement speech at Stanford University in 2005, Jobs said: “I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me... It freed me to enter one of the most creative periods of my life.” He used his time away from Apple to not only found NeXT but also to buy a fledgling animation studio that would become Pixar.
Apple, on the other hand, racked up more than its share of stumbles with Jobs away. Under several post-Jobs CEOs, the company tried – and repeatedly failed – to release an updated successor to the Macintosh operating system. Taligent was the future. Then Copland – Mac OS 8 – was hyped as the new direction for the OS, only to be abandoned and replaced with an incremental update to the original Mac OS.
“Apple leads when it expresses its vision through its products, exciting you and making you proud to own a Mac,” said Steve Jobs, announcing the first iMac (“Internet-age computer for the rest of us”) in 1998
In 1996, Apple decided to buy one of two companies that owned modern operating systems as the basis for a next-generation Mac OS. Both were run by former Apple executives. One was Be, run by Jean-Louis Gasse, which had a Unix-based OS that could already run on existing Mac hardware. The other was NeXT.
In late 1996, Apple CEO Gil Amelio announced that the company would acquire NeXT for $400 million. That deal brought Steve Jobs back to Apple, initially as Amelio’s advisor. Apple declared “the advanced technical and rapid development environment of their latest OS [that became Mac OS X] will allow developers to create new applications that leapfrog those of other operating systems, such as Windows NT.”
Apple was right – NeXT’s operating system became the basis for Mac OS X – but it’s unlikely that Amelio predicted how the acquisition would play out. In July of 1997, Apple’s board of directors voted to remove Amelio from his post, naming Jobs the company’s interim CEO.
Back at the core
This move kicked off an era of increasing – and unceasing – success for Apple and Jobs. In Jobs’ August 1997 Macworld Expo keynote, Apple announced that it was ending the licensing programme that allowed other companies to sell Mac-compatible ‘clone’ computers and that Microsoft had invested $150 million in the company. Both controversial moves paid off.
A year later, Steve Jobs unveiled the product that single handedly kicked off Apple’s rebound: the iMac. Jobs had asked British designer Jonathan Ive – whom he’d eventually promote to the role of senior vice president of industrial design – to create a colourful, easy-to-set-up, all-in-one computer. The result was a new Mac with a unique look that startled the industry. Its bold colour, lack of a floppy drive, and embrace of the new USB connectivity standard were all considered shockers at the time. Consumers, however, were unanimously delighted.
Jonathan Ive, Apple’s senior VP of industrial design, has been with the company since 1996, where he has won numerous design awards for his succession of excellent products
Apple sold 800,000 iMacs in fewer than five months. The floppy faded into history and USB became a roaring success. The iMac, and the Jobs/Ive partnership, cemented Apple’s stance that its insanely great products needed to look like nothing else on the market to succeed.
In March 2001, Apple released the first iteration of Mac OS X after a beta that began in late 2000. The operating system was based on NextStep, the Unix-based OS devised by Jobs’ team at NeXT. Though it was named as a simple sequel to OS 9, OS X had an entirely new codebase and marked a dramatic new beginning. Jobs had overseen a massive effort at Apple to create native, Unix-based ports of the original Macintosh APIs – programming hooks upon which Mac developers relied, in a system called Carbon. That meant that developers could, with some exceptions, quickly make their software compatible with OS X merely by recompiling it, without needing to rewrite the software from scratch. And applications that weren’t updated for OS X could take advantage of the integrated Classic environment to run OS 9 apps within OS X. It was a towering achievement for both Jobs and Apple.
In 1998, the company’s QuickTime authoring standard was being threatened in the digital video editing space by Microsoft’s Advanced Authoring Format. Avid and Adobe had both moved away from the format, and only Macromedia’s KeyGrip software – which had recently been rebranded as Final Cut – still incorporated it. But Final Cut had been ignored and delayed by Macromedia in favour of development on its Flash software.
The solution, as overseen by Jobs, was to buy Final Cut. The company used it to accelerate development on the QuickTime standard, releasing the first Apple-branded version, Final Cut Pro, at the 1999 National Association of Broadcasters show. Final Cut Pro 1.0 was designed to provide editors interested in the non-linear space with a simpler, low-cost way to get into the business – and to ensure that QuickTime would not go the way of some of Apple’s lost software technologies.
As a direct result of the company’s investment into high-end non-linear editing software, Apple could begin to explore a whole new area – consumer-level editing.
One of the most significant consumer-level Apple products to emerge at this time wasn’t hardware, but software – iLife. The company was ahead of the rest of the industry in realising that digital media – music, videos, and photos – would soon become central to people’s lives.
In 1999, Apple released iMovie (and shipped it with a new iMac DV, for Digital Video), software designed to let even the most novice computer user download video from their video camera and turn it into high-quality movies – complete with transitions, titles, and effects.
That was followed, in 2001, by iTunes (which debuted early in the year, but became much more significant with the autumn debut of the iPod) and iDVD, which let home-video enthusiasts create DVDs of their movies. Then 2002 brought the debut of iPhoto, which made it easy to download and organise photos from digital cameras. By 2003, Apple had improved the integration of iPhoto, iMovie and iDVD with each other and rolled them into a single package – iLife – that shipped with every Mac.
The impact of iLife is often overlooked: It meant that at a time when digital media was ascendant, and Apple was trying to differentiate its hardware from the competition, every Mac included a suite of great, easy-to-use software that let people create and manage that media – something that wasn’t true of any other computer on the market at the time.
Apple’s retail strategy evolved as well. In 2001, the company opened up its first retail stores, at a time when other PC makers were stumbling with brick-and-mortar outlets. A decade later, Apple now operates more than 300 stores around the globe. The stores first turned a profit in 2004; last year, they recorded $9 billion in retail sales with $2.4 billion in retail profit. More significantly, as Apple likes to point out in its quarterly earnings report, 50 per cent of the people buying computers at the Apple Store are first-time Mac customers.
Apple announced that it would be transitioning the Mac CPU from PowerPC processors to Intel processors at WWDC 2005
Four years after the introduction of OS X, Jobs and Apple announced another transition – a move away from the PowerPC architecture to chips built by Intel. It was a big gamble for a company that had relied on PowerPC processors since 1994, but Jobs argued that it was a move Apple had to make to keep its computers ahead of the competition. “As we look ahead, we may have great products right now, and we’ve got some great PowerPC products still to come,” Jobs told the audience at the 2005 Worldwide Developers Conference. “But we can envision some amazing products we want to build for
you and we don’t know how to build them with the future PowerPC road map.”