1976 “The Two Steves” founded as a partnership on April Fools day.

2. 1976 “The Two Steves” founded as a partnership on April Fools day. Stephen Gary Wozniak Steven Paul Jobs 25 Yrs. old 21 Yrs. old

3. Started in Jobs’ parent’s house – first the bedroom then to the garage

4. First order: 50 computers / $500 each. Only catch to the $25, 000 order was that the computers had to be fully assembled.

5. Apple I

6. Actually, there was a third founder. His name was Ronald Gerald Wayne, 41 years of age.

7. Get this… • Two weeks after Apple was founded Wayne renounced his 10% interest in the company for a one time payout of $800. • In March 1977 the corporation purchased the partnership for $5,309. Wayne was sent 1/3 of that amount to make certain he would have no future claim against the company. Wayne was thrilled to receive the unexpected windfall. • But when the company’s stock went public in 1980 Wayne’s 10% would have equaled more than 1.6 million shares. Following a 2 for 1 stock split on May 15, 1987 such a holding would have been worth $244 million (not including dividends) when the stock peaked at $73.25 on April 12, 1991.

8. Rich at a young age… Jobs net worth at 23 years old: over 1 million at 24 years old: over 10 million at 25 years old: over 100 million

9. Jobs stiffed his best friend, Daniel Kottke • No shares were allotted to Kottke even though he was one of the original employees of Apple. • Wozniak felt bad and gave Kottke some of his own shares as well as approximately 200 other employees.

10. Competition In 1981 Apple got some competition when IBM introduced it’s $1595 personal computer. A few different computers, Apple I, Apple II, Apple II Plus. Jobs helped botch the Apple III so he began meddling in the other new project, the “Lisa”.Apple’s president, Michael Scott believed that Jobs was an extremely combative manager who lacked technical expertise. The Lisa project floundered because of some of Jobs’ design mandates.

11. Code Names • Lisa, was it “Local integrated software architecture” or “Lets invent some acronym”? • Jobs involves himself in the Macintosh project, “the dumbest thing on earth”. • March 1981, Mike Markkula took over as president. Jobs took Markkula’s place as Chairman of the Board of Directors. • Markkula was not interested in that role. Active search results in April 8, 1993 appointment of John Sculley.

12. TH E DYNAMIC DUO • Scully and Jobs inseparable during the good times of 1983 and 1984. The “Dynamic Duo”. • Following the successful introduction of the Macintosh in January 1984 Apple was feeling confident. Jobs and Scully went for broke then built up a massive inventory for the Christmas season. • The demand never materialized and Apple found itself sitting on a pile of unsold computers. • Apple II unable to carry the company. First quarterly loss ever. Forced to layoff 1/5 of their employees.

13. Jobs’ Problems • The tough minded executives at Apple realized that Jobs was more of a liability than an asset. • April 10, 1985 Sculley convinced the board to remove Jobs as executive V.P. and General Manager of the Macintosh division. • May 31 Sculley signed the paperwork that stripped Jobs of all operational responsibilities. • Fearing the board was going to fire him Jobs officially resigned on September 17, 1985.

14. Sculley the Hammerhead • 1990 Sculley anointed himself Apple’s Chief Technology Officer, despite his lack of a formal technological background. • Many of Apples engineers scoffed at the notion considering this the supreme act of arrogance. • Another project, the Newton, had handwriting recognition software trouble resulting in problems with the launch date. • This was blamed on Sculley. • Apple was about to face it’s largest quarterly loss ever, $188.3 million for the 3rd quarter of 1993. • On June 18, the board forced Sculley to step down as CEO and replaced him with Michael Spindler.

15. Spindler • Spindler got down to business by laying off 2,500 employees (16% of the work force), canned many blue-sky projects and cut costs by more than $100 million per year. • The company turned in 4 quarters of strong growth and the stock doubled to more than $40 per share. Attractive merger candidate? • October 1994, IBM offered Spindler and Markkula $40 per share when the stock was trading at $35. Spindler wanted $60 and golden parachutes. IBM walked out.

16. Spindler cont’d • Another huge miscalculation that September, during the planning meeting for fiscal 1995 he grossly underestimated sales growth. • During the 1994 holiday season Apple could not meet demand for its machines because of parts supply problems. • Apple was overwhelmed when actual demand grew at almost twice the predicted rate.

17. Spindler cont’d • As a result the company took an $80 million inventory write-off • The end of 1995 the situation at Apple was deteriorating rapidly. • Spindler embarrassing and demoralizing appearance at the company shareholder meeting. Replaced by Gilbert Amelio on February 5, 1996.

18. Newton Project • Almost 11 years after the Newton project was initiated, and after spending an estimated ½ billion dollars on its development and marketing, Apple had managed to sell only 150K to 300K Newton devices during its 4 ½ years on the market. • The profitless project was a lightening rod for criticism, pushed one engineer to suicide, and proved the undoing of a high profile CEO and numerous vice presidents.

19. Strategic Mistakes • May have been its refusal to license the Macintosh hardware and operation system until it was too late. • Observers reason that when the Mac was introduced in 1984 it was so far superior to anything the competition offered. • The only thing that held Apple back from domination of the personal computer industry was the stubborn policy of going it alone.

20. Woz’s Take “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 naïve to think that the best technology would prevail. It often doesn’t.”

21. Licensing • The idea of licensing the Mac to others began in April 1984. • But Jobs and Sculley were totally against the idea. • One of the strongest supporters of the licensing effort was Microsoft CEO Bill Gates. • December 16, 1994 Apple finally agrees to license the Mac operating system. • All was well at Apple.

22. Jobs is back • Spring of 1997 Apple had just purchased NeXT software to shore up its operating system plans. • As part of the deal Apple got the advisory services of founder Steve Jobs. • Apple paid $427 million for NeXT but it was hard to put a price on the public relations value of Jobs return to the company. • Jobs was no fan of cloning. • 1997 Amelio’s July 9 surprise resignation throws everything into doubt with Jobs assuming the role as strategic advisor.

23. Jobs is really back • Shortly after Amelio’s resignation Jobs became interim CEO of Apple. • Back at the helm of the company he started some 20 years prior. • Tuesday, November 12, 2002 the closing stock price for Apple computer was $15.61 per share.