In January 2007 Apple CEO Steve Jobs announced that his company would no longer be called Apple Computer Inc. Smoothing the way for the name change, Apple and Apple Corps resolved their differences and ended their ongoing trademark dispute on 5 February. The new name of Apple Inc set the precedent for a year in which Apple would transform itself from a computer and software manufacturer into a consumer electronics company.
The iPhone was at the forefront of this transformation. When Apple CEO Steve Jobs announced the iPhone at Macworld San Francisco on January 9 2007. The announcement happened a full six months before the phone’s US launch and the pent up excitement caused quite a stir. The eventual US launch of the iPhone on Friday 29 June saw queues across America and 270,000 iPhones were sold in the first 30 hours.
Despite the excitement, there was some disappointment about the iPhone’s inability to run third party applications. At WWDC Jobs announced that developers could create Web 2.0 apps for the iPhone, but developers were not satisfied. Later in the year Jobs promised that an SDK would be made available in February 2008.
Sales may not have been as good as hoped, however. On 5 September Apple reduced the price of the iPhone in the US from by $200 to $399, and discontinued the 4GB version. Amid complaints that the price drop disadvantaged those who had already bought an iPhone, Jobs offered a $100 voucher to iPhone owners who had bought their phone at the higher price.
Just two weeks later on September 18 Apple announced a partnership with 02 to bring the iPhone to the UK. Speaking at the London Apple Store, Jobs also promised to play a "cat and mouse game" with hackers, referring to the fact that Apple believes a quarter of a million iPhones had been sold to users who planned to unlock them.
The iPhone launched in the UK on Friday 9 November, and according to O2 CEO Peter Erskine, it was the fastest selling device his mobile network has ever seen. Reports indicated that 70,000 iPhones were sold in the UK launch weekend.
The launch the iPhone in Germany and France was marked by court rulings that forced Apple to offer an unlocked version of the iPhone.
The other major story of the year was the launch of Leopard. The new operating system had been scheduled for launch in the first half of the year, but delays caused by Apple having to move developers onto the iPhone project meant that the new iteration of OS X wasn’t ready for launch until October. Reports indicate that two million copies were sold in the first weekend.
Of course Leopard wasn’t the only new operating system to grace the IT world. Microsoft launched the much-delayed Vista in January 2007. While Microsoft’s new operating system had its share of flaws, Mac users willing to install it had a new option when VMWare launched Fusion, it’s answer to already popular Parallels virtualisation software and Apple’s Boot Camp.
The other big third party software release was Adobe’s launch of Creative Suite 3 – including news that it was bringing Premiere Pro back to the Mac.
Apple didn’t invest all its software development time in Leopard. Apple also launched new versions of Final Cut Studio, Final Cut Express, iLife '08 and iWork '08.
It was a quiet year for hardware updates although the whole range of Macs saw speed boosts and processor changes. However, Apple made an impact with the launch of a completely redesigned new Aluminium-encased iMac on 7 August.
Apple also shipped its first n-equipped Airport Extreme. Unfortunately the device faced limitations in the UK due to the limitations in the 5MHz frequency, this means that Apple’s claim that is 5x faster than previous models doesn’t hold in the UK and much of Europe.
The other big hardware addition of the year was the Apple TV, which shipped on March 21. The device struggled in the UK since little content is available for it here. By the end of August Apple had added some TV content to the UK iTunes Store, but it remains to be seen if it can compete with the TV on Demand services being offered by the likes of Channel 4.
Music took much of the limelight that wasn’t already shining on the iPhone. Apple was the target of pressure to remove the DRM from iTunes Store tracks. In response Jobs published an open letter stating that he would welcome DRM-free online music but claiming his hands were tied by the record companies. Just weeks later on April 2 he took to the stage with EMI’s Eric Nicoli to announce that all EMI tracks would be sold DRM-free via an iTunes Plus service. The service launched on 30 May and months later the price of these tracks was dropped from 99p to 79p, the standard price of all iTunes tracks.
Jobs also answered complaints made in an EU anti trust case that Apple was disadvantaging shoppers in Europe by forcing them to by tracks from a country-specific store. Jobs’ response was that Apple had "always wanted to operate a single, pan-European store".
Regardless of any complaints about the iTunes Store, it continued to sell music. In July Apple announced that three billion songs have been sold since the store opened for business.
In April Apple announced that it had sold its 100 millionth iPod. To ensure the continued success of the music device in the run up to Christmas, Apple launched the iPhone-like iPod touch, redesigned the iPod nano adding video functionality, and grew the storage space of the iPod classic to 160GB.
2007 was the year where Jobs found his voice on the web. Jobs posted open letters on the Apple website regarding issues such as the need for DRM, and regarding third party development for the iPhone. Jobs other open letter included a statement regarding Apple's environmental effort and claimed that greener products are on the way. The testimony was in response to Greenpeace campaigning against Apple, which was languishing at the bottom of its league of IT companies. Apple board member Al Gore won a noble prize for his work regarding climate change, proving someone on the board at Apple has the environment in mind.
Apple’s retail expansion in the UK continued with Apple Stores opening in Kingston-upon-Thames, Southampton, Solihull, Lakeside, Brighton, Glasgow, Exeter and a second in Manchester.
Financially it was a record-breaking year for Apple. The company celebrated outstanding results for each financial quarter and saw its best ever financial year. The company's market cap hit $161.84bn, more than IBM and Intel, and it became the third largest PC supplier in the US, with 6.3 per cent of the market, according to IDC.