The appeal of Apple

GUARDIANUK By: Bobbie Johnson April 1, 2006

It is not quite the birthday present that Apple Computer would have wished for. A courtroom battle between the maker of the iPod and the Beatles’ Apple Corps record label is threatening to take the shine off the US technology firm’s 30th anniversary celebrations today.

The high court heard yesterday that Apple Computer denied any breach of an agreement made 15 years ago that the Californian computer company would not use its apple trademark “in connection with musical content”.

Anthony Grabiner, defending Apple Computer, said the iTunes Music Store did not breach the 1991 agreement as it was merely sending digital files. “Data transmission is within our field of use,” he said, adding that it was not allowed to sell Beatles tracks through iTunes.

It is unlikely that a legal battle with the world’s most famous musicians was on the minds of Steve Jobs and Steve Wozniak when they started Apple on April Fool’s Day 1976. With their friend Ronald Wayne, they set up the firm from a Californian garage as wide-eyed, technology-obsessed twenty-somethings. And while Apple’s fortunes have endured a rollercoaster ride over the years, their vision of affordable, user-friendly home computers has revolutionised how we live and work.

“I think that Apple is one of the greatest business stories ever told,” says Owen Linzmayer, author of Apple Confidential 2.0, a history of the firm. “It’s a company founded by two college dropouts in a garage who went on to have tremendous success; it is basically a version of the American dream.”

Three decades on and Apple is riding high on the success of the iPod. Since the little white digital music player was launched five years ago, the company has sold more than 40m of them around the globe – cranking up its cool factor and changing the music industry in the process. Those sales have brought the company unheard-of success: last year was the most profitable in its history, and analysts say this latest boom is unlikely to fade for some time.

Longevity
But insiders say that nobody expected such longevity. Guy Kawasaki, an entrepreneur and Apple employee in the 1980s and 1990s, believes few realised what they were building. “It’s kind of shocking to look back and think Apple’s 30 years old,” he says. “In fact, it’s a company that refused to grow up.”

Through a mixture of luck and judgment, Apple has kept going, though it has often been touch and go. During the 1990s, as Bill Gates made Microsoft the dominant force in computing, Apple was close to going bust. A refusal to recognise new trends in the PC industry, combined with a long and complex court case against Microsoft stymied development. It was as if, after finding the door to success, Apple politely ushered everyone else through. “Their finest hour was popularising the notion that computers can and should be easy to use,” says Linzmayer. “Their greatest mistake was failing to capitalise on that.”

But the boomerang career of the charismatic founder Jobs, who returned to the company in 1997 after a dozen years in the wilderness, has heralded a resurgence in the company’s fortunes. Focusing on fashionable music devices and home computers, the company has rebuilt its brand, products and interests.

As Apple enters middle age, it is eyeing up a new target: your living room. Last month Jobs unveiled a new iPod-compatible hi-fi and is bullish about a role in home entertainment. “We’ve put a lot of work into making iPod a part of on-the-go living,” he told reporters. “Now our second focus is the home.”

With new computers designed to be linked to a TV, and the ability to buy music, TV shows and films in the near future, possibilities are opening up all the time. Apple is extending its influence into areas traditionally controlled by the likes of Sony. Equally, a change in design means Apple computers can run Microsoft Windows, which has observers buzzing with anticipation.

“I don’t think they have any interest in taking on Microsoft directly,” says John Gruber, an Apple pundit. “I don’t think there’s any chance that Apple has its sights set on becoming another Sony. They’re evolving into a type of company for which there are no existing moulds.”

Experts say there is no reason why Apple won’t survive another 30 years. “Apple’s really the only company from the early days of personal computing that’s still around in the same form,” says Linzmayer. “Having survived this long, it’s likely to continue – they’ve got a great brand and some very loyal consumers.”

How we fell in love with the brand

Timeline

1976 Steve Wozniak, Steve Jobs, below, and Ronald Wayne club together and launch Apple Computer. Wayne leaves soon afterwards, selling his 10% stake for $800.

1977 Apple II personal computer is introduced and is an immediate success.

1980 Stock market flotation makes the founders multimillionaires.

1984 After launching the ill-fated Apple III and Lisa computers, the Macintosh is unveiled. It replaces text control with an innovative graphics interface but does not enjoy wide commercial success.

1985 Microsoft unveils its Windows operating system, closely modelled on the Macintosh. Wozniak leaves the firm to go back to college, while Jobs is forced out in a boardroom shake-up.

1988 Apple files a lawsuit against Microsoft and Hewlett-Packard for infringing operating system copyright. The case is finally rejected on appeal by the US supreme court in 1994.

1991 Company launches Powerbook laptop, setting a new standard for portable computers. Trademark row with Apple Corps ends in 15m payout to Beatles and agreement not to enter the music sphere.

1993 A palmtop computer – the Newton – is introduced to replace desktop machines but is a flop. John Sculley, who ousted Jobs, quits.

1996 The new chief executive, Michael Spindler, is replaced as Apple’s stock falls to an all-time low.

1997 Apple buys NeXT, the ailing computer firm founded by Jobs after he left, and he takes over as chief executive.

1998 Colourful iMac desktop computer launched and proves a hit.

2001 iPod digital music player, right, launched. Sales are slow at first but it lifts the Apple brand to mainstream acclaim.

2006 Global sales of iPods reach 40m, with more than 1bn tracks sold through the iTunes Music Store.