Steve Jobs was a visionary, a genius, a perfectionist, and sometimes a difficult contemporary. When the Apple co-founder died in 2011 at the age of just 56, even many Apple fans saw a bleak future for the iPhone company. But everything turned out quite differently.
Apple without Steve Jobs was unimaginable. But on October 5, 2011, the inevitable day came: The charismatic Apple co-founder lost his long battle with cancer. Jobs was only 56 years old.
Six weeks earlier, on August 24, 2011, the Apple boss had appointed his confidant Tim Cook as the company’s new CEO. This decision surprised many observers. Cook had made a name for himself as a logistics and production expert. However, he did not show any signs of the charisma with which Jobs had regularly captivated the masses.
Among the skeptics at the time was Larry Ellison, who had been close friends with the Apple co-founder for years. The head of software giant Oracle believed that Apple was doomed without Steve Jobs. In a TV interview, he drew a parallel to 1985, when Apple’s board of directors forced Steve Jobs out of the company. Over the next twelve years, Apple was so run down that the company was on the verge of bankruptcy in 1997, and Jobs was brought back as a savior. „We saw Apple with Steve Jobs, we saw Apple without Steve Jobs. We saw Apple with Steve Jobs. Now we’re going to see Apple without Steve Jobs,“ Ellison said. „I like Tim Cook. I think there are a lot of talented people over there. But Steve is irreplaceable.“
But things turned out very differently after Jobs‘ death than Ellison had feared. Apple is selling more devices and services than ever before. In August 2018, the iPhone maker went down in financial history as the first U.S. company to hit a trillion-dollar valuation on the stock market. Just two years later, it was two trillion. In addition to the stock market boom, experts believe that high customer loyalty was a major factor in the company’s rise. „When a new user starts using an Apple smartphone, they tend to stick with an Apple smartphone,“ explains Jeriel Ong, an equity analyst at Deutsche Bank.
And the rally is not over yet. Since October 2011, the share price has risen from around $13 to an all-time high of just under $150. Cook also regularly treats shareholders to dividends, which Jobs has always refused.
Cook succeeded in constantly capturing new groups of buyers with the iPhone. He also expanded the range of add-on devices such as the Apple Watch computer watch and AirPods earphones and placed subscription services such as iCloud and Apple TV+ on the market. It also managed to charge higher prices for its products, so much so that a large portion of the entire industry’s profits now end up with Apple.
Revenue and Profits, Apple Inc. (Calendar Year)
However, Tim Cook is still not a great presenter on stage. Nevertheless, he has now set the accents that set him apart from his predecessor. One example is the topic of the environment. In 2008, Steve Jobs was still engaged in heated exchanges with representatives of Greenpeace when the environmentalists demanded that he stop using brominated flame retardants in Apple products. These can be toxic, are difficult to break down in the environment, and accumulate in living creatures.
Under Cook’s direction, Apple eliminated not only the controversial flame retardants but also all other environmental toxins in production. He also converted the company completely to renewable energy. This ambitious project is now to be extended to the entire supply chain.
This change has also been registered by Greenpeace. „Since Tim Cook took over at the helm of Apple, he has made environmental protection an important part of the company’s identity,“ the organization stated in 2017 when it published a report on environmental standards at electronics manufacturers. Apple only had to admit defeat to smartphone provider Fairphone in the „Greener Electronics“ ranking because the Dutch company’s devices are easier to repair.
In addition to the environmental issue, Apple under Cook is also trying harder to set itself apart from the competition in the area of data protection. Last April, for example, Apple changed its iPhone software so that providers like Facebook now have to ask users for permission if they want to track their activities across different apps and websites. Jobs had announced this privacy principle back in 2010 at the „D8“ conference but left the implementation to his successor.
Tim Cook
When it comes to protecting privacy, Cook was already able to make his mark in front of a large public in 2016. At that time, the FBI demanded that Apple manipulate the iPhone operating system iOS in such a way that law enforcement officers could search the locked iPhone of the bomber after a terrorist attack in San Bernardino. Cook rejected that claim, saying it would not undermine the products‘ security features.
Cook also faced setbacks on this issue, however. For example, Apple shelved plans to introduce a scanning feature on the iPhone that would prevent child abuse images from being uploaded to the cloud. Previously, there had been an outcry of indignation that Apple was taking the wrong approach in the justified fight against child pornography.
The biggest shortcoming of the Cook era, however, is that Jobs‘ successor has yet to come up with a revolutionary new product. His predecessor regularly pulled a „one more thing“ out of his hat that turned entire industries upside down: the iMac in 1999, the iPod and the iTunes music service in 2001, the revolutionary iPhone in 2007, and the iPad in 2010. Under Cook, there are rumors of revolutionary new products such as an Apple car or glasses for augmented reality applications, but so far Apple fans are waiting in vain.
In this context, Cook critics point to a quote from Steve Jobs written in large letters on the wall of Apple’s old headquarters: „If you do something and it turns out pretty good, then you should go do something else wonderful, not dwell on it for too long. Just figure out what’s next.“
Steve Jobs combined his visions with art and technology in order to bring products to the market that have changed the lives of millions of people. He founded Apple and the computer industry, was fired, and twelve years later saved the company from bankruptcy. Afterwards, he pushed through a series of innovations that were really enough for seven lives. After his early death, not only his fans are wondering how Apple will deal with Steve Jobs’ legacy.
By Christoph Dernbach
Steve Jobs (March 2011) – Photo: Monica M. Davey
Steve Jobs‘ highschool photo
Steve Jobs must already have been charismatic as a twelve year old school boy. Or was it just cockiness with which he would later take his business partners by surprise time and again? As an eighth grade student, he wanted to build a frequency counter for his school project and needed some parts. He contacted non other than Bill Hewlett, who was the legendary co-founder of computer group Hewlett-Packard (HP).
In the 60s, the Silicon-Valley pioneer’s contact information could still be found in the phone book. The lanky boy did not just coax the needed parts free of charge from the group boss. „He answered and chatted with me for twenty minutes. He got me the parts, but he also got me a job in the plant where they made frequency counters,” Jobs told book author Walter Isaacson for his biography.
Steve Jobs worked there the summer after his freshman year at Homestead High. obs worked there the summer after his freshman year at Homestead High. “My dad would drive me in the morning and pick me up in the evening.” He found himself at the right place at the right time. Still, Steve Jobs‘ fate as the most successful entrepreneur of America was not handed to him at birth.
“He was a boy who had no money,” recalls his friend and Apple co-founder Steve Wozniak. “He had nothing except his intellect. But he brought us things that became a challenge for all of us.” Paul Otellini, CEO of chip giant Intel, said: „True genius is measured by the ability to touch every person on the planet. Steve did that, not just once, but many, many times over his amazing life.“ In contrast to industry titans like Bill Gates, Steve Jobs came not from a wealthy home, but from a lower-class background.
Steve Jobs with his father Paul Jobs (1958)
His biological parents, the Syrian student Abdulfattah John Jandali and his American girlfriend Joanne Simpson, gave him up for adoption after his birth. In 1955, the still unmarried couple, both 23, was studying at the University of Wisconsin and found themselves unable to care for the child without a proper income. Actually, his parents insisted on giving him away to an academic family, which could guarantee that he could one day attend university. But the desired family got cold feet and cancelled the adoption in the last minute.
Finally, the child ended up in the house of Paul and Clara Jobs. Steve’s adoptive parents were simple people. His father worked as a car mechanic and his mother as an office employee. When Steve was five years old, his parents moved with him from San Francisco to Mountain View, in the middle of booming Silicon Valley. Author Walter Isaacson relates in his biography of Steve Jobs that in the new neighborhood Jobs told a girl that he was an adopted child. „So does that mean your real parents didn’t want you?” the girl asked. “Lightning bolts went off in my head,” according to Jobs. “I remember running into the house, crying. And my parents said, ‘No, you have to understand. We specifically picked you out.” This key scene described the tension between the terms “abandoned”, “chosen”, and “special” at a very early age for Steve Jobs.
Steve gets it
Who knows where Steve Jobs’ journey through life would have brought him if he had not met electronics enthusiast Steve Wozniak, who was four classes above him in school. Despite the age difference, the two Steves got along very well. “It seemed as if we had a lot in common,” recalled Woz later in his autobiography. “Typically, it was really hard for me to explain to people the kind of design stuff worked on, but Steve got it right away. And I liked him. He was kind of skinny and wiry and full of energy.”
Steve Jobs (circled) at Homestead High School Electronics Club (1969)
Jobs, like Wozniak before him, attended Homestead High School in Cupertino, California, a solidly middle-class school in the suburbs of Silicon Valley. Homestead was progressive, with an innovative electronics program that shaped Wozniak’s life. Jobs and Wozniak had been friends for some time. They met in 1971 when their mutual friend, Bill Fernandez, introduced then 21-year-old Wozniak to 16-year-old Jobs. After hours, the two Steves would often meet at Hewlett-Packard lectures in Palo Alto.
The Apple Macintosh revolutionized the entire computer industry by the year of 1984. Steve Jobs and his ingenious Macintosh team arranged for the computer to be used by the normal “person in the street” – and not only by experts.
Steve Jobs and Bill Atkinson (Photo: Norman Seiff)
“Insanely great” – Steve Jobs could hardly put into words his enthusiasm by the launch of the Macintosh. On the legendary annual general meeting of January 24th, 1984, in the Flint Center not far from the Apple Campus in Cupertino, the Apple co-founder initially quoted Bob Dylan’s “The Times They Are A-Changin’” in order to then polemicize against an imminent predominance of the young computer industry by IBM.
Steve Jobs‘ introduction of the Apple Macintosh:
„The early 1980s. 1981 – Apple II has become the world’s most popular computer, and Apple has grown to a 300 million dollar corporation, becoming the fastest growing company in American business history. With over fifty companies vying for a share, IBM enters the personal computer market in November of 1981, with the IBM PC.
1983. Apple and IBM emerge as the industry’s strongest competitors, with each selling approximately one billion dollars worth of personal computers in 1983. The shakeout is in full swing. The first major personal computer firm goes bankrupt, with others teetering on the brink. Total industry losses for 1983 overshadow even the combined profits of Apple and IBM.
It is now 1984. It appears that IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money. Dealers, after initially welcoming IBM with open arms, now fear an IBM dominated and controlled future and are turning back to Apple as the only force who can ensure their future freedom.
IBM wants it all, and is aiming its guns at its last obstacle to industry control, Apple. Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right?„
The crowd, among them the complete Macintosh developer’s team, shouted back: “Nooooo!”
The introduction of the first Mac on January 24th, 1984; taken from the „Lost 1984 Videos“
There had been only two milestone products so far: the Apple II in 1977 and the IBM PC in 1981, Jobs continued. “Today (…) we are introducing the third industry milestone product, the Macintosh. Many of us have been working on Macintosh for over two years now and it has turned out insanely great.”
Steve Jobs
Taking a look at the history of the personal computer today, Steve Jobs was on the right track with his historical comparison. However, it would not be IBM that became the great dominator of the computer industry over the years, but rather, the alliance of Microsoft and Intel.
Previous to the Macintosh developer team, others had already tried to design a computer with a mouse and a graphical user interface – one year before Apple did, with its own business computer Lisa, which retailed for 10,000 dollars.
Microsoft and Apple have been business partners and tough competitors for many years. Back in the seventies, Steve Jobs and Bill Gates worked close together. In 1997 the Windows-manufacturer helped Steve Jobs saving Apple.
In the early seventies there was no such thing as a personal computer. I took geniuses and visionary like Steve Wozniak and Bill Gates to invent this new industry. The early computer geeks were energized by the arrival of the January 1975 issue of Popular Mechanics, which had on its cover the first personal computer kit, the Altair. The Altair wasn’t a real computer —more a $495 pile of parts that had to be soldered to a board that would then do little—but for hobbyists and hackers it heralded the dawn of a new era. Bill Gates and Paul Allen read the magazine and started working on a version of BASIC, an easy-to-use programming language, for the Altair. It also caught the attention of Jobs and Wozniak.
Later Steve Jobs had to ask for the Microsoft BASIC because his friend Wozniak didn’t finish his own version of NASIC for the Apple II. “He was very childlike,“ said Jobs later to the author of hi biography, Walter Isaacson, abou „Woz“. „He did a great version of BASIC, but then never could buckle down and write the floating-point BASIC we needed, so we ended up later having to make a deal with Microsoft. He was just too unfocused.“
With the rise of the Apple II in the late seventies Microsoft became more and more successful – even before the IBM PC was invented. When Apple developed the Macintosh Bill Gates and his team were the most important software partner – despited the fact that Microsoft was also the driving force behind the IBM PC and the PC clones. And Steve Jobs even invited Bill Gates for the preview of the Mac: The high point of the October 1983 Apple sales conference in Hawaii was a skit based on a TV show called The Dating Game. Jobs played emcee, and his three contestants, whom he had convinced to fly to Hawaii, were Bill Gates and two other software executives, Mitch Kapor and Fred Gibbons. As the show’s jingly theme song played, the three took their stools.
Gates, looking like a high school sophomore, got wild applause from the 750 Apple salesmen when he said, “During 1984, Microsoft expects to get half of its revenues from software for the Macintosh.” Jobs, clean-shaven and bouncy, gave a toothy smile and asked if he thought that the Macintosh’s new operating system would become one of the industry’s new standards. Gates answered, “To create a new standard takes not just making something that’s a little bit different, it takes something that’s really new and captures people’s imagination. And the Macintosh, of all the machines I’ve ever seen, is the only one that meets that standard.”
Title of BusinessWeek (October 3rd, 1983)
But even as Gates was speaking, Microsoft was edging away from being primarily a collaborator with Apple to being more of a competitor. It would continue to make application software, like Microsoft Word, for Apple, but a rapidly increasing share of its revenue would come from the operating system it had written for the IBM personal computer. The year before, 279,000 Apple IIs were sold, compared to 240,000 IBM PCs and its clones. But the figures for 1983 were coming in starkly different: 420,000 Apple IIs versus 1.3 million IBMs and its clones. And both the Apple III and the Lisa were dead in the water.
Just when the Apple sales force was arriving in Hawaii, this shift was hammered home on the cover of Business Week. Its headline: “Personal Computers: And the Winner Is . . . IBM.” The story inside detailed the rise of the IBM PC. “The battle for market supremacy is already over,” the magazine declared. “In a stunning blitz, IBM has taken more than 26% of the market in two years, and is expected to account for half the world market by 1985. An additional 25% of the market will be turning out IBM-compatible machines. (Walter Isaacson, p. 159-160)
Apple boss John Sculley’s marketing strategy for the launch of the Macintosh was obvious. The former Pepsi manager, who had been brought to Apple by Steve Jobs, intended to arrange a duel between IBM and Apple, black vs. white, with Apple playing the role of the underdog. Sculley wrote in his book Odyssey:
So we needed a campaign that would focus on a two-horse race to leverage off of Apple’s underdog status. Dozens of other computer companies were coming out with products and I was afraid we were going to get lost in the crowd. If we could create a two-horse race between us and IBM, we might be able to convince people that there are really only two computer companies competing in the marketplace. In any large consumer industry, few people remember the third- or fourth-largest competitor.
In the fight against competitors such as Atari, Commodore, Sinclair and Amstrad, the Apple strategy paid off well. But Sculley, as well as Steve Jobs, had completely underestimated that Microsoft, being an ally from the outset, would, with the aid of Apple, develop into a dominant power of the PC industry and even dwarf IBM.
Bill Gates und Paul Allen (1981)
Bill Gates and Paul Allen had founded Microsoft as a small software company in Albuquerque (New Mexico) in 1975 and developed the programming language BASIC for the legendary computer MITS Altair in collaboration with other co-workers. Due to fortunate circumstances, Microsoft landed the order from IBM to deliver not only BASIC, but also the operating system for the first IBM PC in 1980. In the negotiation phase, the then leading operating system manufacturer Digital Research (CP/M) did not want to engage in page-filling adhesion contracts from IBM – and thus lost this gigantic deal.
Though Microsoft did not have any operating system at that time, this did not prevent Bill Gates and his companion Steve Ballmer from playing for high stakes while facing IBM. From their neighboring software shack Seattle Computers (in the mean time, Microsoft had moved to the northwest of the USA) they bought all rights for QDOS (Quick and Dirty Operating System) for no less than 50,000 dollars in July 1981 and renamed it as MS-DOS. Gates had been clever enough at that time not to have all rights to the system negotiated away by the IBM crew and was therefore able to win clone companies such as Compaq as customers later.
When Microsoft provided their BASIC for the Apple II, Steve Jobs and Bill Gates constantly ran into each other at that time. “Even before we finished our work on the IBM PC, Steve Jobs came and talked about what he wanted to do, what he thought he could do, sort of a Lisa but cheaper. We said boy, we’d love to help out”, Gates remembers. “The Lisa had all its own applications, but of course they required a lot of memory, ah, and we thought we could do better, and so Steve signed a deal with us to actually provide bundled applications for the first Mac, and so we were big believers in the Mac and what Steve was doing there.”
Apple urgently needed software for the Mac, as there did not yet exist any program for the new system except for their in-house products MacWrite and MacPaint. Gates promised to have the programs Chart and File written for the Mac in addition to the spreadsheet program Excel. Steve Jobs appreciated the risk Microsoft took, but was not content with the first results though. “Most people don’t remember, but until the Mac, Microsoft was not in the applications business… it was dominated by Lotus. And Microsoft took a big gamble to write for the Mac.”
Apple still could have coped well with having given Microsoft’s new application business a leg up. However, Bill Gates had tasted blood in the Macintosh project. Jeff Raikes, who was responsible for the Office business at Microsoft until early 2008, reviews: “And so we got started in early 1982 on our Macintosh software effort and I think at that point in time, you know, it really clicked with Bill that, you know, graphic user interface was going to be the way, the way of the future. But while Bill was having his own GUI revelation, Jobs believed that Apple’s true enemy was IBM.”
Quote of the movie: „Pirates of Silicon Valley“ – Microsoft steals from Apple
In June of 1985, Bill Gates sent a remarkable memo to both the then-CEO of Apple, John Sculley, and then-head of Macintosh development, Jean Louis Gassée, and urged them to spread their wings by licensing their hardware and operating system to other companies.
Apple must make Macintosh a standard. But no personal computer company, not even IBM, can create a standard without independent support. Even though Apple realized this, they have not been able to gain the independent support required to be perceived as a standard.
Apple ignored his advice.
Five months after he sent the memo, Windows 1.0 was released. Microsoft’s decision to do exactly as Gates had recommended to Apple resulted in market domination. Had Apple taken Gates‘ advice, things could have been so very different.
Apple co-founder Steve Wozniak has since said:
„The computer was never the problem. The company’s strategy was. Apple saw itself as a hardware company; in order to protect our hardware profits, we didn’t license our operating system. We had the most beautiful operating system, but to get it you had to buy our hardware at twice the price. That was a mistake. What we should have done was calculate an appropriate price to license the operating system. We were also naive to think that the best technology would prevail. It often doesn’t.“
Windows 1.01 was based on DOS and was incredibly slow, but it reminded one of the Macintosh GUI in some features. In order to prevent Apple from taking legal action, Gates put the screws on Apple boss Sculley. His message was: As soon as Apple sends out the lawyers, Microsoft will immediately stop the development of Word and Excel for the Mac. Since Apple was depending on the Microsoft applications, Sculley licensed some of the Mac technologies to Microsoft.
As Microsoft went public with the next large version leap of Windows 2.03 at the beginning of 1988, Sculley tried to pull the ripcord and sued Microsoft and Hewlett-Packard for copyright infringement on March 17, 1988. John Sculley had been in a difficult situation, particularly as he had engaged in vague formulations in the contract with Microsoft in 1985, which gave great leeway to Gates and his lot. Moreover, he knew that his chances to win an action against Microsoft had been, purely from a legal viewpoint, not particularly good: “The look and feel, which is how it looks, the experience of using it, was not patentable, but it was copyrightable, but there was no precedent law. This was going to be a precedent setting case.”
Parody of an advertising spot for Windows featuring Steve BallmerBill Gates recalls also reluctant this time.: „But it was a period of five years where, Microsoft er, our whole strategy would have been ruined because Windows was very important to us. (…) We assumed that the lawyers, the judges would all come to the right conclusion which eventually they did.“ Sculley: „And Apple lost. But in that period of about six years that this case was going on it may have lulled us into a bit of complacency thinking that we were going to be insulated, you know, from the Windows attack.“
The introduction of Windows 3.1 in 1992 brought Microsoft the breakthrough in the “GUI war”. The system lacked the elegance and usability of the Macintosh system 7.0, but Windows appeared good enough to most PC users. With the help of Windows 95, which had been introduced with gigantic effort on August 24, 1995, Microsoft caught up closer to the Mac and in some aspects even appeared more progressive than the Mac OS, which had become dated in the meantime.
Steve Jobs, who, as the head of NeXT, had observed the advance of Windows from a distance, did not have any kind words for Bill Gates at the launch of Windows 95:
The only problem with Microsoft is they just have no taste, they have absolutely no taste, and what that means is – I don’t mean that in a small way, I mean that in a big way. In the sense that they don’t think of original ideas and they don’t bring much culture into their product, and you say why is that important – well you know proportionally spaced fonts come from type setting and beautiful books, that’s where one gets the idea – if it weren’t for the Mac, they would never have that in their products and so I guess I am saddened, not by Microsoft’s success – I have no problem with their success, they’ve earned their success for the most part. I have a problem with the fact that they just make really third rate products.
It is claimed that Jobs has apologized to Bill Gates for this remark later.
Steve Jobs about Microsoft (1995)
The relationship between Apple and Microsoft – and thus also the relationship between Steve Jobs and Bill Gates – did not get back to normal before the summer of 1997, when Steve Jobs had returned to Apple and engaged in the support of Microsoft in order to make the troubled company profitable again.
Bill Gates on the video screen at the MacWorld Expo 1997 in Boston
Many faithful Apple fans still remember with horror the moment when Steve Jobs announced the former archrival very pragmatically as the knight in shining armor at the MacWorld Expo 1997 in Boston with Bill Gates appearing on an oversized video screen just like “Big Brother.” Introducing Gates, Jobs said: ““We have to let go of the notion that in order to for Apple to win, Microsoft has to lose. Relationships that are destructive don’t help anybody. The era of setting this up as a competition between Apple and Microsoft is over.”
Microsoft invested 150 million dollars in 150,000 Apple stocks and, according to certain rumors, paid further 100 million dollars for copyright infringement during the past few years. At the same time, Gates obliged himself to continue the development of the Internet Explorer and Microsoft Office for the Mac for the following five years. Gates drew hisses from the audience of Apple faithful. The crowd also groaned when Steve Jobs said Apple would make Microsoft’s Internet Explorer the default browser for viewing the World Wide Web on Macintosh computers. That development was a blow to Netscape Communications Corp., which made a more popular competing browser and lost later on in the famous „browser war“ against Microsoft.
In October 2015 Steve Ballmer appeared on Bloomberg TV where the former executive briefly touched on Microsoft’s monumental 1997 investment in Apple.
At the time, Microsoft’s deal with Apple not only helped rescue the company from the brink of bankruptcy, it gave Apple a much-needed lifeline, affording the company room and time to innovate. And as we all know, the deal ultimately helped set Apple up for the most astounding tech resurgence in history.
https://www.facebook.com/watch/?v=970956106278806
In 2010 – after a stunnishing comeback – Apple Inc. overtook Microsoft Corp. to become the most valuable technology company on optimism it can keep adding customers for its iPhone, Macintosh computer and iPad. On May 26th by 4 p.m. New York time in Nasdaq Stock Market trading, Apple’s market value was at $222.1 billion, higher than Microsoft’s $219.2 billion. That made Apple the most valuable technology firm in the world.
In an interviews with Kara Swisher and Walt Mossberg from the Wall Street Journal Apple CEO Steve Jobs downplayed the significance of Apple’s passing Microsoft in market value. „For those of us who have been in the industry a long time, it’s surreal,“ Jobs said. „But it doesn’t matter very much, it’s not what’s important.
„It’s not why any of our customers buy our products. So I think it’s good for us to keep that in mind.“
„They just don’t get it.“ That’s how Steve Jobs described his digital rivals Microsoft and Google in an interview with his biographer Walter Isaacson.
For his biography, „Steve Jobs,“ Isaacson conducted more than 40 taped interviews with the Apple co-founder and CEO – all of them done while Apple was on its ascent with one great product after another, but Jobs was on his decline, ill with a form of pancreatic cancer that would end his life at age 56.
Update:
JOBS AND GATES TOGETHER The boy wonders of computing, now thirtysomething, argue over where innovation comes from and where PCs will go.
By Steven P. Jobs, William H. Gates III, Brenton R. Schlender
August 26, 1991
(FORTUNE Magazine) – The two college dropouts most responsible for unleashing the PC revolution rarely see each other anymore, though they say that they’re still friends. At FORTUNE’s invitation, Bill Gates and Steve Jobs met for a Sunday evening in late July to discuss the prospects for the tumultuous industry they shaped. Gates, 35, left Harvard in 1975 to co-found Microsoft. His big break came in 1980, when IBM asked him to provide the operating system — the program that manages a computer’s inner workings — for its now famous PC.
Jobs, 36, who left Reed College to sojourn in India, is best known for co-founding Apple Computer. He led the development of the Macintosh, a computer much easier to use than IBM’s somewhat nerdy PC. Gates has imitated many features of the Mac’s software with a popular PC program called Windows.
Since the mid-1980s the men have taken dramatically different paths. Gates, who owns more than $4 billion of Microsoft stock, remains a workaholic bachelor and an omnivorous reader — he has read several biographies of Napoleon. He has built Microsoft into the world’s largest and most profitable PC software company. It hasn’t all been rosy. Microsoft’s relationship with IBM soured this year, mainly because the two couldn’t agree on an operating- system strategy for future PCs. And the Federal Trade Commission recently began investigating Microsoft’s practices.
Jobs has been less visible but just as busy. In 1985 he started Next, aiming to build the personal computer of the 1990s. Next’s first machine appeared two years ago. Its basic software, NextStep, makes the machine unusually easy to customize; IBM was so impressed it licensed NextStep for its own computers. Despite the dazzling technology, the going has been slow at Next. For one thing, IBM never put NextStep on the market. But lately business has picked up — 10,000 systems rolled out of Next’s automated plant during the second quarter. Jobs has other reasons to smile. He and wife Laurene, who married earlier this year, are expecting their first child in September.
FORTUNE associate editor Brenton R. Schlender put the questions at the meeting. Beneath the conviviality, Jobs and Gates each had a business objective. Jobs lobbied for Gates to develop software for the Next computer. And Gates, whose company is being sued by Apple for allegedly pirating Macintosh software features, was hoping to learn more about the product’s origin.
Schlender: What did you think when the PC appeared ten years ago?
Jobs: When IBM entered the market, we did not take it seriously enough. It was a pretty heady time at Apple. We were shipping tens of thousands of machines a month — more computers than IBM was total. Even so, a lot of people think IBM invented the personal computer, which of course isn’t true.
Gates: A lot of people think Apple did, and that isn’t true either. Our first program was for the Altair ((a mail-order kit sold in 1975)).
Schlender: Does Microsoft’s control of PC operating systems stifle competition in the industry?
Gates: There’s not one element of the industry that’s not competitive. There are people who are cloning Intel’s chips; there are people who are cloning my operating system; there are many, many people who make PCs; and for every software application there are lots of people competing. There is no competitive imperfection.
Jobs: How come nobody has successfully competed with you? I’m not accusing you or Microsoft of anything. I’m not even saying it’s necessarily bad. I’m just saying it’s an interesting contrast. When I zoom back and look at this, there are hundreds of people making PCs, and hundreds of people writing applications programs for them.
Gates: Right.
Jobs: But they all have to travel through this very small orifice called Microsoft to get to one another.
Gates: It’s a very large orifice! ((Laughs.))
Jobs: But it’s only one company.
Gates: Are you saying there’s something wrong with our popularity? My approach to the PC market has been the same from the very beginning. The goal of Microsoft is to create the standard for the industry. Nothing has changed.
Schlender: What does the future hold for IBM and Apple? What do you think of their decision to collaborate on PC software?
Gates: It’s surprising to me.
Jobs: Yes, we are confused about that.
Gates: ((Apple President)) Mike Spindler has said they want to turn Apple into more of a software company. If that’s your goal, you don’t go and give the half of the company that is the future of Apple software to a joint venture. What is Apple getting in return? Here’s the part I don’t understand: What is the contribution from IBM? The IBM name? Did Apple feel so bad about their own work that they had to have that?
Jobs: I truly believe the challenge for IBM is that they can’t survive by selling the same thing you can buy from somebody else for 30% less money. Their cost structure doesn’t allow them to compete with companies that don’t do massive amounts of R&D, that don’t have twice as many employees as they need, et cetera, et cetera. So IBM has to do one of two things: One, suffer continuous erosion of its market share until eventually it goes out of business, which I hope doesn’t happen. Or two, come up with some way to add value. In my opinion the way to make your machines unique is with unique software.
Gates: I said that back in the Seventies! ((Laughs.)) There’s something else I don’t understand. If IBM already held a license to your NextStep software, why did they get all this going with Apple rather than just come to you and expand their license?
Jobs: I really want to answer this question, but I’ve got to be careful what I say. It’s not my purpose to alienate anyone at IBM.
Gates: We share this interest. ((Both laugh.))
Jobs: Somebody at IBM a few years ago saw our NextStep operating system as a potential diamond to solve their biggest and most profound problem, that of adding value to their computers with unique software. Unfortunately, as I learned, IBM is not a monolith. It is a very large place with lots of faces, and they all play musical chairs. Somewhere along the line this diamond got dropped in the mud, and now it’s sitting on somebody’s desk who thinks it’s a dirt clod. Inside that dirt clod is still a diamond, but they don’t see it.
Schlender: Is the PC industry, which until now has been dominated by American companies, liable to get overrun by the Japanese?
Jobs: Computer companies fall on a spectrum of enthusiasm for manufacturing. On the left end are companies that look at manufacturing as a necessary evil, who wish they didn’t have to do it. And at the far right you have people who look at manufacturing as a competitive advantage. Clearly a lot of the Japanese companies look at themselves that way. Unfortunately a lot of American companies look at manufacturing as a necessary evil. You can say the same thing about the way they see software. My opinion is that the only two computer companies that are software-driven are Apple and Next, and I wonder about Apple. Most computer companies would rather that software didn’t even exist.
Gates: Good!
Jobs: It’s good for Microsoft today. But unfortunately all those companies could give way to Japanese companies a few years down the road.
Gates: I think you give up too easily on Americans. You pick one dimension . . .
Jobs: I focus on manufacturing because I care about it. I’ve seen IBM’s. I built Apple’s and Next’s, and I know what Sun does. Ultimately, I believe that most of the PCs will come from offshore. We’re just not good enough at manufacturing.Where will the key innovations come from? Established giants like Microsoft or upstarts like Next?
Gates: I contend technology breakthroughs can happen by extending what we already have. Let’s take handwriting computers. The hardware is coming from PC-compatible makers like Dell Computer ((of Austin, Texas)) and NCR and some Japanese companies. The software will come either from Microsoft or from a U.S. competitor named Go Corp. ((of Foster City, California)). That’s going to be a major breakthrough, and who do you give credit to?
Jobs: I think everybody gives credit to Go, but Go will be crushed.
Gates: That’s one of the nastiest comments I’ve ever heard. I’ve been working on handwriting since long before there ever was a Go Corp.
Jobs: Really? I didn’t know that. Most people would say that Go is the company that first tried to commercialize that technology.,
Gates: Well, Go hasn’t shipped anything yet, and I’ll ship my stuff before they ship theirs.
Jobs: My experience has been that creating a compelling new technology is so much harder than you think it will be that you’re almost dead when you get to the other shore. That’s why, when you take big leaps, like the Mac, or object- oriented programming, or handwriting recognition, you have to leave old technology behind. When Lindbergh was going to fly from New York to Paris, he had to decide what to take with him. There were a lot of demands. They fell into two categories — things that would make his journey safer or more comfortable, and things that would increase his chances of making it to Paris. Weight was a real problem. He could take more gas, which would increase his safety, or he could take a compass, which would increase his chances of getting to Paris. Every time he came down on the side of increasing his chances of getting to Paris at the sacrifice of safety or comfort. That’s why he made it.
Gates: Smart people like Steve ought to try to build things from scratch. That’s a worthy thing. But every time it should be a test. Right now there’s a test in handwriting PCs, in object-oriented operating systems, in multimedia computers. Those are the big questions for personal computing in the 1990s, and I’m the one who has to prove the validity of the evolutionary approach.
Jobs: It’s true, your evolutionary approach with Windows is bringing to PCs great new technologies that Apple and others pioneered. But in the meantime — and it’s been seven years since the Macintosh was introduced — I still think that tens of millions of PC owners needlessly use a computer that is far less good than it should be.
The two main Apple founders – Steve Jobs and Steve Wozniak – both came from humble backgrounds and were not endowed with commercial success. In order to afford the first pieces of the Apple I in 1976, they almost literally sold the shirts off their backs. Jobs invested the proceeds from the sale of his VW bus ($1,500 dollars). “Woz” parted with his beloved programmable calculator Hewlett-Packard 65 and deposited 250 dollars in the company’s treasury.
Ronald Wayne (Photo courtesy of Owen Linzmayer)
Ronald Gerald Wayne, the “third founder” of Apple Computer, was with the company for only a short time. He illustrated the first Apple logo and wrote the Apple I manual. While at Apple, he also wrote their partnership agreement. Wayne worked with Jobs at Atari before co-founding Apple Computer on April 1, 1976. He was given a 10% stake in Apple, but relinquished his stock for 800 dollars only two weeks later because legally, all members of a partnership are personally responsible for any debts incurred by any of the other partners.
After Apple’s IPO, Wayne’s stake could have been worth as much as US$ 1.5 billion. He claimed that he didn’t regret selling the stock as he had made “the best decision available at that time.” According to CNET, as of 1997 Wayne was working as an engineer for a defense contractor in Salinas, California.
The foundations for the commercial success were laid in 1977 by venture capitalist Arthur Rock as well as by the ex-Intel manager Mike Markkula, who invested 92,000 dollars in Apple and secured a bank loan of 250,000 dollars. Markkula was lured out of retirement by Steve Jobs, who was referred to him by Regis McKenna and venture capitalist Don Valentine.
Valentine—who after meeting the young, unkempt Jobs asked McKenna, „Why did you send me this renegade from the human race?“—was not interested in funding Apple, but mentioned Jobs‘ new company to Markkula. Jobs visited him and convinced Markkula of the market for the Apple II and personal computers in general. Later Valentine asked Markkula if he could also invest in Apple.
Mike Markkula at the Apple offices April 1, 1977
In 1977, Markkula brought his business expertise along with US$250,000 ($80,000 as an equity investment in the company and $170,000 as a loan) and became employee number 3. The investment would pay off for Markkula. Before Apple went public in 1980, he owned a third of the company.
Markkula also brought in Apple’s first CEO, Michael Scott, then took the job himself from 1981 to 1983. Markkula served as chairman from 1985 until 1997, when a new board was formed after Jobs returned to the company. Wozniak, who virtually single-handedly created the first two Apple computers, credits Markkula for the success of Apple more than himself. „Steve and I get a lot of credit, but Mike Markkula was probably more responsible for our early success, and you never hear about him,“ told Wozniak the Failure Magazine in July 2000.
With the initial public offering on December 12, 1980, Jobs and Wozniak became multimillionaires, as Apple Computer was now valued at 1.8 billion dollars. Jobs possessed 7.5 million stocks (217 million dollars); “Woz” was assigned four million stocks (116 million dollars). Markkula’s share of seven million stocks was worth 203 million.
“I was worth about over a million dollars when I was twenty-three and over ten million dollars when I was twenty-four, and over a hundred million dollars when I was twenty-five,” Jobs said in an interview with Robert Cringley (”Triumph of the Nerds“) in 1996. “And it wasn’t that important because I never did it for the money.”
Read next page: Steve Jobs: It’s not about the money
Steve Jobs at WWDC 2008. Photo: Christoph Dernbach
Steve Jobs has been the most influential inventor and manager in the technology industry. On August 24, 2011, he announced his resignation from his role as Apple’s CEO. Time to look back at the most important marks in his life:
1955: Jobs is born on Feb. 24, in San Francisco and was adopted by Paul and Clara Jobs (née Hagopian) of Mountain View, California, who named him Steven Paul.
1972: Jobs graduated from Homestead High School in Cupertino, California, and enrolled in Reed College in Portland, Oregon. Although he dropped out after only one semester, he continued auditing classes at Reed, such as one in calligraphy.
1974: Jobs returned to California and began attending meetings of the Homebrew Computer Club with Steve Wozniak, a high school friend who was a few years older. He works for video game maker Atari.
1976: Building „Blue Boxes“
1976: Apple Computer is formed on April Fools‘ Day, shortly after Wozniak and Jobs create a new computer circuit board in a Silicon Valley garage. The third founder, Ronald Wayne, was serving as the venture’s „adult supervision“. He drew the first Apple logo, wrote the three men’s original partnership agreement, and wrote the Apple I manual. He soon gave up his share of the new company for a total of $2,300 becaus he was afraid of the financial risk. The Apple I computer went on sale by the summer for $666.66.
1977: Apple is incorporated January 3, 1977 by its founders and a group of venture capitalists (Mike Markkula et al.). The company unveils Apple II, the first personal computer to generate color graphics. Sales soar to the rate of $1 million a year.
1978: Jobs‘ daughter Lisa is born to girlfriend Chrisann Brennan. She briefly raised their daughter on welfare when Jobs denied paternity, claiming that he was sterile; he later acknowledged paternity. In 1983 he named the „Apple Lisa“ after his first daughter.
1979: Jobs and several Apple employees including Jef Raskin visited Xerox PARC in December 1979 to see the Xerox Alto. Xerox granted Apple engineers three days of access to the PARC facilities in return for the option to buy 100,000 shares (800,000 split-adjusted shares) of Apple at the pre-IPO price of $10 a share. Jobs was immediately convinced that all future computers would use a graphical user interface (GUI), and development of a GUI began for the Apple Lisa.
John Carmack was the lead programmer of the id video games Commander Keen, Wolfenstein 3D, Doom, Quake, Rage and their sequels. Carmack is best known for his innovations in 3D graphics, such as his Carmack’s Reverse algorithm for shadow volumes. In August 2013, Carmack took the position of CTO at Oculus VR. His first meeting with Steve Jobs was quite interesting.
On October 5th, 2015, Apple CEO Tim Cook sent out an internal email to staff, in remembrance of the fourth anniversary of the passing of the company’s co-founder Steve Jobs. In the text, he encouraged employees to learn about what he was like to work with.
“If you never knew Steve, you probably work with someone who did or who was here when he led Apple,” Cook wrote. “Please stop one of us today and ask what he was really like.”
Cook’s comments come after a report from the Wall Street Journal detailing criticism of an upcoming Aaron Sorkin biopic of Jobs that’s based on a biography penned by Walter Isaacson. Among the film’s critics was Jobs’ wife, Laurene Powell Jobs, who tried to kill the film several times during its development. The film, “Steve Jobs,” is set to release October 9th, 2015.
Remembering Steve for who he was and what he stood for. We honor him by continuing the work he loved so much. pic.twitter.com/6UiXBjYe3l
Today marks four years since Steve passed away. On that day, the world lost a visionary. We at Apple lost a leader, a mentor, and many of us lost a dear friend.
Steve was a brilliant person, and his priorities were very simple. He loved his family above all, he loved Apple, and he loved the people with whom he worked so closely and achieved so much.
Each year since his passing, I have reminded everyone in the Apple community that we share the privilege and responsibility of continuing the work Steve loved so much.
What is his legacy? I see it all around us: An incredible team that embodies his spirit of innovation and creativity. The greatest products on earth, beloved by customers and empowering hundreds of millions of people around the world. Soaring achievements in technology and architecture. Experiences of surprise and delight. A company that only he could have built. A company with an intense determination to change the world for the better. And, of course, the joy he brought his loved ones.
He told me several times in his final years that he hoped to live long enough to see some of the milestones in his children’s lives. I was in his office over the summer with Laurene and their youngest daughter. Messages and drawings from his kids to their father are still there on Steve’s whiteboard.
If you never knew Steve, you probably work with someone who did or who was here when he led Apple. Please stop one of us today and ask what he was really like. Several of us have posted our personal remembrances on AppleWeb, and I encourage you to read them.
Thank you for honoring Steve by continuing the work he started, and for remembering both who he was and what he stood for.
Steve Jobs and John Sculley on the Cover of Business Week (Nov. 1984)
Rhiannon Williams, writing for The Telegraph, had the chance to interview John Sculley, the man who was instrumental in ousting Steve Jobs from Apple back in 1985.
When asked if he ever feels frustrated at how Jobs is presented, or misrepresented, in popular culture, Sculley pauses. “Misrepresented in what way?” he asks, tersely. People tend to draw on the more tyrannical aspects of his personality, I venture.
“I don’t think that’s fair. I think…” He pauses again. “People exaggerate, it’s simple to summarise and exaggerate. I found Steve, remember – at the time we were friends, we were incredibly close friends, and… he was someone who even then, showed compassion, and caring about people. “Didn’t mean he couldn’t be tough in a meeting and make decisions, and sometimes they seemed, y’know, overly harsh. But the reality was, the Steve Jobs I knew was still a very decent person, with very decent values. So I think he was misrepresented in popular culture.”
And:
The pair worked in harmony together on Apple’s 1984 Ridley Scott-directed Super Bowl television advert, but cracks began to appear when Sculley disagreed with Jobs’ plans to drop the price of the Macintosh and direct a large proportion of the marketing budget from Apple II to the Mac in the wake of the poorly-received Macintosh Office network, which later became Desktop Publishing.
“I said ‘Steve, the only cash for the company is coming from the Apple II, and we can’t do that,’” Sculley recalls sadly.
The working relationship between the two descended into a desperate struggle for power. The increasingly-erratic Jobs tried to lead an unsuccessful rebellion against Sculley in May 1985 with the goal of replacing him with Jean-Louis Gassée, then Apple’s director of European Operations. Gassée informed Sculley of the coup, who confronted Jobs at an executive committee meeting and demanded those present choose between the two men as to who they thought best to run the company. They backed Sculley, and Jobs fled the room.
In this vintage nine-minute video, cofounders Steve Jobs and Steve Wozniak looked back at some of it, dating all the way back to 1976’s Apple I.
The speaker at the start of the video is Paul Terrell, who founded one of the world’s first computer stores, the Byte Shop, in Mountain View, California, in 1975. The next year, he played a significant role in Apple history by placing an order for 50 of Wozniak and Jobs’s Apple I computers—on the contingency that they supply them fully assembled, rather than as a solder-it-yourself kit.
