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Appendix 1 Apple history

Steven Wozniak and Steven Jobs had been friends in high school. They
had both been interested in electronics, and both had been perceived as
outsiders. They kept in touch after graduation, and both ended up
dropping out of school and getting jobs working for companies in Silicon
Valley. (Woz for Hewlett-Packard, Jobs for Atari)
Wozniak had been dabbling in computer-design for some time when, in
1976, he designed what would become the Apple I. Jobs, who had an eye
for the future, insisted that he and Wozniak try to sell the machine, and
on April 1, 1976, Apple Computer was born.
Hobbyists did not take the Apple I very seriously, and Apple did not
begin to take off until 1977, when the Apple II debuted at a local
computer trade show. The first personal computer to come in a plastic
case and include color graphics, the Apple II was an impressive machine.
Orders for Apple machines were multiplied by several times after its
introduction. And with the introduction in early '78 of the Apple Disk II,
the most inexpensive, easy to use floppy drive ever (at the time), Apple
sales further increased.
With the increase in sales, however, came an increase in company size,
and by 1980, when the Apple III was released, Apple had several
thousand employees, and was beginning to sell computers abroad. Apple
had taken on a number of more experienced mid-level managers and,
more importantly, several new investors, who opted to take seats on the
board of directors. Older, more conservative men, the new directors made
sure that Apple became a "real company," much to the dismay of many of
its original employees.
In 1981, things got a bit more difficult. A saturated market made it more
difficult to sell computers, and in February. Apple was forced to lay off
40 employees. Wozniak was injured in a plane crash. He took a leave of
absence and returned only briefly. Jobs became chairman of Apple
computer in March.
Following the historic visit to Xerox PARC in 1979, Jobs and several
other engineers began to develop the Lisa, which would redefine personal
computing. Jobs, however, proved to be a poor project manager, and was
taken off the Lisa by Mike Markkula, then president of Apple, and one of
the major stockholders. Jobs, who owned only 11% of Apple, decided to
take over someone else's project, and began working with the Macintosh-
-which had started as a $500 personal computer. Jobs made sure it was
much more.
On January 22nd, 1984, during the third quarter of the Super Bowl, Apple
aired its infamous 60 second commercial introducing the Macintosh.
Directed by Ridley Scott, the Orwellian scene depicted the IBM world
being shattered by a new machine.
It was around the beginning of 1985 that Jobs and Sculley began to argue.
Sculley believed Jobs was dangerous and out of control; Jobs believed
that Sculley knew nothing about the computer industry, and was making
a poor effort to learn. In May of 1985 Jobs decided to make a play for
control of the company. He enticed Sculley to schedule a meeting in
China, and planned to stage a boardroom coup while Sculley was gone.
At the last minute someone leaked the information to Sculley, and he
decided to confront Jobs. After a heated argument between the two, the
board took a vote, and sided unanimously with Sculley. Jobs resigned that
day, leaving Sculley as the head of Apple.

In late 1991, Apple released its first generation of PowerBooks, which
were an instant success. Work was being done on a new type of
computer, the Personal Digital Assistant (PDA), which Apple called the
Newton. Sculley took an immediate interest in the Newton, and drove the
Newton to completion in August 1993. The first generation of Newtons
had extremely poor hand-writing recognition and did not sell particularly
well.
In 1994 Apple announced the PowerMac family, the first Macs to be
based on the PowerPC chip, an extremely fast processor co-developed
with IBM and Motorola. The PowerPC processor allowed Macs to
compete with, and in many cases surpass, the speed of Intel's newer
processors.
Spindler also decided to license the Mac OS to several companies,
including Power Computing, one of the more successful Mac-clone
makers. But many believe the Apple was too restrictive in its licensing
agreements, and only a handful of companies ever licensed the Mac OS.
Apple's worst problem wasn't selling computers--it was building them.
By June 1995 Apple had $1 billion dollars in backorders--and did not
have the parts to build them. Apple's problems were added to by the late-
summer release of Windows '95, which mimicked the Mac GUI better
than ever.
Apple took its worst plunge ever in the winter of 1995-96. Misjudging the
market, Apple pushed low-cost Performas over mid-range PowerMacs,
and failed to make a profit at all. Apple posted a $68 million loss for that
quarter. In January 1996, Spindler was asked to resign as CEO and was
replaced by Gil Amelio, the former president of National Semiconductor.
In late december 1996, Apple made an industry-shattering announcement
that it would be acquiring NeXT, and that Steven Jobs would be returning
to the fold. The merger was brought about in order to acquire NeXTstep,
which was to become the basis for Apple's next-generation OS,
Rhapsody, which was slated for a 1998 release.
Jobs' presence was known almost as quickly as NeXT was acquired. The
degree of Jobs' "expanded role" soon became quite clear. With no CEO
and Apple Stock lower than it had been in 5 years, there were many
decisions to be made, and not much time to make them. Jobs began to
make striking changes in the structure of Apple, including the canceling
of the Newton spin-off. (The Newton was discontinued several months
later.) The time and place for the most ground breaking announcements,
however, would be MacWorld Boston in August 1997.
Jobs, who by now was being referred to as "interim CEO," made the
keynote speech, and spoke of the company's upcoming aggressive
advertising campaign, upcoming new Macs, and Rhapsody. He also
announced an almost entirely new Board of Directors, including Larry
Ellison, CEO of Oracle. But he saved the best for last. In a ground
breaking decision, Jobs announced an alliance with Microsoft. In
exchange for $150 million in Apple Stock, Microsoft and Apple would
have a 5-year patent cross-license and, more importantly, a final
settlement in the ongoing GUI argument. Microsoft agreed to pay an
unreleased sum of additional funds to quiet the allegations that it had
stolen Apple's intellectual property in designing its Windows OS.
Microsoft also announced that Office '98, its popular office package,
would be available for the Mac by years end.
These announcements gave Apple new life, but Jobs was not finished.
There was one more big obstacle to tackle: Clones. Jobs felt that Clone
Vendors such as Power Computing were cutting into Apple's high-end
market, where they traditionally made the most profit. Clones had failed
to effectively expand the MacOS market, instead taking customers away
from Apple. Jobs remedied this apparent failure of the Clone experiment
by all but pulling its plug. In early Fall 1997, Apple announced its
intention to buy out Power Computing's MacOS license, and much of its
engineering staff. Power went out of business several months later, with
Apple taking over its product support. Apple also bought out its MacOS
licences from Motorola and IBM. Umax was allowed to stay in the game,
but with the tacit understanding that it would fill the low-end market,
with machines selling for under $1000. Umax sold its remaining
inventory of Macs, and is now selling "Wintel" boxes.
On November 10, 1997, Apple held another press conference, in which
Jobs announced further changes to Apple's corporate strategy. Apple
would now sell computers direct, both over the web and the phone, as
Power Computing had done so well in the past. Jobs also announced two
new Apple machines: the PowerMac G3and the PowerBook G3.
The Apple Store was a runaway success, and within a week was the third-
largest eCommerce site on the web. At MacWorld San Francisco in
January, Jobs announced that Apple had, for the first time in more than a
year, had a profitable First Quarter--to the tune of $44 Million. This far
eclipsed analysts' projections, and sent Apple's stock back into the 20s. In
April 1998, Jobs announced another profitable quarter ($57 Million),
which came as a big surprise to nearly everyone. Jobs kept momentum
moving, and in early May announced a new PowerBook G3, an
Educational Apple Store, and an entirely new Mac designthe iMac.
The iMac would be Apple's answer to the low-end consumer question,
with more than enough computing power for most people, at an
affordable price. Later that month, in his keynote at the WWDC, Jobs
announced a dramatic shift in Apple's OS direction. Mac OS X would
merge OS 8 and Rhapsody--Apple's upcoming version of NeXTStep--
into one robust OS, with all the features of a modern OS and backward
compatibility with most OS 8 applications.
In July 1998, Jobs announced that Apple had profited for the 3rd
consecutive quarter--to the tune of $101 million. This helped to push
Apple's stock to several 52-week highs in just a few days. The iMac was
the best-selling computer in the nation for most of the fall, and it drove
Apple sales well beyond most predictions. In the fall, Jobs announced
another profitable quarter, making a full year of profitability. In January
1999, Jobs announced a 5th consecutive profitable quarter, with year-
over-year growth, and a sleek new PowerMac G3
In July 1999, Steve Jobs filled the final quadrant in the "Apple Product
Matrix"--The consumer portable--when he introduced the iBook. Based
on the same principles that had made iMac such a hot sell a year earlier,
the iBook brought style to the low-end portable market. Several months
later, Jobs announced the PowerMac G4, a significant new professional
desktop machine. Apple's stock had risen all summer, and by mid-
September was trading at an all-time high, in the high 70s.
In a dramatic Keynote at MacWorld Expo SF in January 2000, Jobs
unveiled Apple's new Internet strategy: a suite of mac-only internet-based
applications called "iTools" and an exclusive partnership with Earthlink
as Apple's recommended ISP. Jobs also announced that he would be
dropping the "interim" from his title, becoming the permanent CEO of
Apple. Apple's sales continued to rise, as did the stock price, which had
climbed to 130 by early March.
In July 2000, Apple announced a slew of new machines, including the
PowerMac G4 Cube, which added a fifth category to Apple's four-corner
product strategy. The Cube was Apple's answer to those who wanted an
iMac without a monitor, as well as challenge to the computing industry to
continue to minimize the size of computers while increasing their visual
appeal. The Cube was the biggest gamble Jobs had made since the release
of the iMac. It would turn out to be a resounding failure.
In late October, Apple announced its first non-computer product in
several years, the iPod. The iPod was a small hard-drive-based digital
music player, and represented Apple's first hardware addition to its
"digital hub" strategy. At $399, the iPod faced a similar challenge to the
woeful G4 Cube: it favored style and form-factor over price. Apple was
taking another gamble by charging a premium for the iPod's superior
design and small size.
In January 2002, Apple reinvented the consumer desktop, again, when it
released its flat panel iMac. It also announced iPhoto, a new software
package aimed at improving the digital camera user experience. Apple
rolled through the first half of 2002, showing profits through the first two
quarters.
Meanwhile, the iPod was beginning to take off. In April of 2003, Apple
unveiled the iTunes Music Store, which would sell individual songs
through the iTunes application, for 99 cents each. These songs could be
played only on Macs or iPods, but Apple felt that by offering an easy to
use, no-nonsense music service, it could make significant inroads to the
digital music market. Apple did their homework: when announced, the
iTunes Music Store already had the backing of the five major record
labels, and a catalog of more than 200,000 songs.
In October 2003, Apple released iTunes for Windows. While the iPod
had been available for Windows for some time, it had used third-party
software which failed to provide the unique user experience that
iTunes/iPod integration allowed. With the release of a stable, user-
friendly Windows version of iTunes, which included both iPod and
Music Store integration, Apple was poised to take the digital music
industry by storm. Apple cemented its position with the January 2004
release of the iPod mini, which while smaller in capacity than the original
iPod, was smaller than many cellphones.
In the first year alone, the iTunes Music Store sold more than 70 million
songs, and by July this number had increased to more than 100 million.
The iTunes Music Store had a 70% market share among all legal online
music download services. iPods had moved from expensive toys to must-
have Christmas presents, and Apple found itself in the position of having
a monopoly for the first time in several decades.
At the Worldwide Developers Conference keynote address on June 6,
2005, Steve Jobs announced that Apple would begin producing Intel-
based Mac computers in 2006. On January 10, 2006, the new MacBook
Pro and iMac became the first Apple computers to use Intel's Core Duo
CPU. By August 7, 2006 Apple had transitioned the entire Mac product
line to Intel chips, over one year sooner than announced. The Power Mac,
iBook, and PowerBook brands were retired during the transition; the Mac
Pro, MacBook, and MacBook Pro became their respective successors. On
April 29, 2009, The Wall Street Journal reported that Apple was building
its own team of engineers to design microchips.
Apple also introduced Boot Camp to help users install Windows XP or
Windows Vista on their Intel Macs alongside Mac OS X.
Apple's success during this period was evident in its stock price. Between
early 2003 and 2006, the price of Apple's stock increased more than
tenfold, from around $6 per share (split-adjusted) to over $80. In January
2006, Apple's market cap surpassed that of Dell. Nine years prior, Dell's
CEO Michael Dell said that if he ran Apple he would "shut it down and
give the money back to the shareholders."
Although Apple's market share in computers had grown, it remained far
behind competitors using Microsoft Windows, with only about 8% of
desktops and laptops in the U.S.
Delivering his keynote speech at the Macworld Expo on January 9, 2007,
Jobs announced that Apple Computer, Inc. would from that point on be
known as Apple Inc., because computers were no longer the main focus
of the company, which had shifted its emphasis to mobile electronic
devices. The event also saw the announcement of the iPhone and the
Apple TV.[86] The following day, Apple shares hit $97.80, an all-time
high at that point. In May, Apple's share price passed the $100 mark.
In an article posted on Apple's website on February 6, 2007, Steve Jobs
wrote that Apple would be willing to sell music on the iTunes Store
without DRM (which would allow tracks to be played on third-party
players) if record labels would agree to drop the technology. On April 2,
2007, Apple and EMI jointly announced the removal of DRM technology
from EMI's catalog in the iTunes Store, effective in May. Other record
labels followed later that year.
In July of the following year, Apple launched the App Store to sell third-
party applications for the iPhone and iPod Touch. Within a month, the
store sold 60 million applications and brought in $1 million daily on
average, with Jobs speculating that the App Store could become a billion-
dollar business for Apple. Three months later, it was announced that
Apple had become the third-largest mobile handset supplier in the world
due to the popularity of the iPhone.
On December 16, 2008, Apple announced that after over 20 years of
attending Macworld, 2009 would be the last year Apple would be
attending the Macworld Expo, and that Phil Schiller would deliver the
2009 keynote in lieu of the expected Jobs. Almost exactly one month
later, on January 14, 2009, an internal Apple memo from Jobs announced
that he would be taking a six-month leave of absence, until the end of
June 2009, to allow him to better focus on his health and to allow the
company to better focus on its products without having the rampant
media speculating about his health. Despite Jobs' absence, Apple
recorded its best non-holiday quarter (Q1 FY 2009) during the recession
with a revenue of $8.16 billion and a profit of $1.21 billion.
After years of speculation and multiple rumored "leaks" Apple
announced a large screen, tablet-like media device known as the iPad on
January 27, 2010. The iPad runs the same touch based operating system
that the iPhone uses and many of the same iPhone apps are compatible
with the iPad. This gave the iPad a large app catalog on launch even with
very little development time before the release. Later that year on April 3,
2010, the iPad was launched in the US and sold more than 300,000 units
on that day and reaching 500,000 by the end of the first week. In May of
the same year, Apple's market cap exceeded that of competitor Microsoft
for the first time since 1989.
Apple released the fourth generation iPhone, which introduced video
calling, multitasking, and a new uninsulated stainless steel design, which
acts as the phone's antenna. Because of this antenna implementation,
some iPhone 4 users reported a reduction in signal strength when the
phone is held in specific ways. After a large amount of media coverage
including mainstream news organizations, Apple held a press conference
where they offered buyers a free rubber 'bumper' case, which had been
proven to eliminate the signal reduction issue. Later that year Apple again
refreshed its iPod line of MP3 players which introduced a multi-touch
iPod Nano, iPod Touch with FaceTime, and iPod Shuffle with buttons
which brought back the buttons of earlier generations.
In October 2010, Apple shares hit an all-time high, eclipsing $300.
Additionally, on October 20, Apple updated their MacBook Air laptop,
iLife suite of applications, and unveiled Mac OS X Lion, the latest
installment in their Mac OS X operating system. On January 6, 2011, the
company opened their Mac App Store, a digital software distribution
platform, similar to the existing iOS App Store. Apple was featured in the
documentary Something Ventured which premiered in 2011.
On January 17, 2011, Jobs announced in an internal Apple memo that he
would take another medical leave of absence, for an indefinite period, to
allow him to focus on his health. Chief operating officer Tim Cook took
up Jobs' day-to-day operations at Apple, although Jobs would still remain
"involved in major strategic decisions for the company." Apple became
the most valuable consumer-facing brand in the world. In June 2011,
Steve Jobs surprisingly took the stage and unveiled iCloud. iCloud is an
online storage and syncing service for music, photos, files and software
which replaced MobileMe, Apple's previous attempt at content syncing.
This would be the last product launch Jobs would attend before his death.
It has been argued that Apple has achieved such efficiency in its supply
chain that the company operates as a monopsony (one buyer, many
sellers), in that it can dictate terms to its suppliers. Briefly in July 2011,
due to the debt-ceiling crisis, Apple's financial reserves were greater than
those of the US Government. On August 24, 2011, Jobs resigned his
position as CEO of Apple. He was replaced by Tim Cook and Jobs
became Apple's chairman. Prior to this, Apple did not have a chairman
and instead had two co-lead directors, Andrea Jung and Arthur D.
Levinson, who continued with those titles until Levinson became
Chairman of the Board in November.
On October 4, 2011, Apple announced the iPhone 4S, which includes an
improved camera with 1080p video recording, a dual core A5 chip
capable of 7 times faster graphics than the A4, an "intelligent software
assistant" named Siri, and cloud-sourced data with iCloud. One day later,
on October 5, 2011, Apple announced that Jobs had died, marking the
end of an era for Apple Inc. The iPhone 4S was officially released on
October 14, 2011. On October 29, 2011, Apple purchased C3
Technologies, a mapping company, for $240 million. C3 is the third
mapping company Apple has purchased so far. On January 10, 2012,
Apple acquired Anobit, an Israeli hardware company that developed and
supplies a proprietary memory signal processing technology that
improves the performance of flash-memory used in iPhones and iPads for
$390 million.
On January 19, 2012, Apple's Phil Schiller introduced iBooks Textbooks
for iOS and iBook Author for Mac OS X in New York. This was the first
major announcement by Apple since the passing of Steve Jobs, who
stated in his biography that he wanted to reinvent the textbook and
education.

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