From a garage in California to a billion downloads worldwide: Apple at thirty

Now that the iconic brand is a Goliath and not a David, anti-trust concerns may begin to creep in
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The Independent Online

After Eve's lunch in the garden of Eden around 4,000BC and Sir Isaac Newton's seventeenth century bump on the head, 1 April 1976 is the third date on which an apple revolutionised human development.

This is the date on which Steve Jobs, Steve Wozniak and Ron Wayne founded Apple Computer in 21-year-old Jobs's bedroom at his parents' California home. Expect a lot of hyperbole as the company approaches its 30th birthday.

Apple is preparing to launch a slew of new and improved products and is sure to remind us all how the company changed the modern world not just once, but twice. Its early products were hailed as computers "for the rest of us", so easy to use you didn't need to be a geek to get it. They popularised personal computing in the same way that Apple's iPod - 50 million shipped and counting - has turned digital downloading into a mass market phenomenon.

The iPod family now embraces portable video players, and Apple is threatening to change the way we watch television, with consequences for the media industry that are difficult to predict but certain to be huge.

The music industry was quick to latch on to Apple's iTunes and the opportunity it gave finally to make some money out of music downloading, which was proliferating on illegal websites. They took the view that 99c or 79p per song was better than nothing. Now, though, the dominance of the store - accounting for about 80 per cent of all digital music sales - is causing headaches, since it has reduced the power of the record labels to set selling prices.

The broadcasters and programme makers are already shifting uncomfortably. Bob Iger, the chief executive of Disney, predicts digital downloading of TV shows will be "very, very big" within three years and his company is already selling Desperate Housewives episodes via iTunes. He told investors earlier this year that the revolution would break down geographical boundaries.

The trouble is that Disney and others make less from direct selling of programmes than they can from commercial breaks on their channels and - importantly - from overseas syndication of the shows. Already actors' unions are agitating for a greater slice of this meagre income pie from digital downloading.

Apple's iTunes is not the only force for change - AOL, part of the Time Warner media empire, launched its own TV download website this week - but it has been the company whose innovation and marketing is accelerating the phenomenon most effectively. And as a result Steve Jobs, who was holding down a second job as head of the Pixar film studio until its purchase by Disney, has emerged as one of the most powerful figures not just in computing but in the media world. Not bad, considering he was ousted from his job as early as 1985. Then, the company was struggling to professionalise. Only when a struggling Apple bought Mr Jobs' second company, NeXT, in 1996 did he return and work his way back to the top.

The tale of Apple's two Steves - Jobs the dreamer and marketing whirlwind, Wozniak the technical genius, college drop-outs both - is one of the more familiar in US corporate history. Ron Wayne, a mutual friend, cashed out his 10 per cent of the partnership for just $2,500 within the first year, uncertain the venture would succeed. It was the right decision at the time, he maintains.

When Jobs secured an order for 50 Apple I computers within days of setting up the company, they had to beg and borrow the cash to build them. This first crop of Apples were just printed circuit boards, with users expected to assemble a keyboard and monitor, but it was the Apple II which added these and was generating sales of $117m by the time the company went public in 1980. The Apple II was the first commercial product to use a "graphical user interface", so users didn't have to learn a complicated computer language to work it.

And then the Macintosh, launched in 1984 with a mouse and a screen that said hello to you, became one of the most successful product launches in computing history.

The Ridley Scott-directed television commercial launching the Apple Macintosh (depicting the disruption of a rally from an Orwellian nightmare, and promising to show "why 1984 won't be like 1984") is always on lists of the most significant moments in product advertising. But it would be wrong to dismiss Apple as a triumph of marketing over technical spec, according to Owen Linzmayer, the author of Apple Confidential 2.0.

"Apple knows how to market in ways that many other tech companies have not figured out, even after 30 years," said Mr Linzmayer. "That said, it is easier to market excellent products. Because of its simplicity, its what-you-see-is-what-you-get system, Macintosh changed the way the world computes."

Indeed, Microsoft's Windows, now the dominant operating system, looks a lot like that of the Mac.

As Apple turns 30, with its share price at an unprecedented valuation and its financial health ruder than ever, it is easy to forget that the fruits of the Macintosh revolution went mainly to others.

The Mac looked lovely but it was the operating system inside that turned out to be the most important selling point. Not licensing that system for use by other manufacturers turned out to be Apple's biggest mistake.

The company had a troubled adolescence, showing a listlessness in its teenage years that stood in stark contrast to the growth spurt put on by Microsoft. As Microsoft's Windows operating system swept the business world, Apple was pushed into niche areas in publishing and design. Its share of the personal computer market also slumped and the company's losses spiralled to $736m in one quarter. What looks like a short pause on today's share price graph, looked in the Nineties like it might be terminal.

The fortunes of the company's hardware division were restored in 1998 by the launch of the iMac, whose sleek design captured the zeitgeist in a way the company had not achieved for more than a decade. Its laptops also became objects of desire.

But it was the design of the iPod that was the biggest triumph for a resurgent Apple, simply the simplest, sleekest MP3 player around, with demand fuelled by strong marketing and Apple's hipster reputation. "Apple has always been about the little guy versus the big guy," says Linzmayer. "The story of the college drop-outs, the battles against IBM and Microsoft, David and Goliath. That sort of thing resonates."

The issue is whether it is something that can prevail now that Apple is the Goliath, and as anti-trust questions begin to be raised over the dominance of iTunes software and its superior inter-operability with the iPod hardware. Might its apparently unassailable position crumble as it did after the shooting-star success of the early Macintosh? The difference this time is that everyone inside Apple - from Steve Jobs down - is aware of and determined to learn from the failures of the past.

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