Jobs, Steven

views updated

JOBS, STEVEN

As the founder and CEO of Apple Computer Co., the prolific Steve Jobs was at the very heart of the computer revolution. The early Apple computers played an integral part in opening the personal computer market. Through the years, as Jobs shifted his focus to his myriad side projects, Apple's market strength dissipated. By the 2000s, however, Jobs was back in command at Apple, and was busily positioning the company to regain its position atop the personal computer market.

EARLY LIFE, 1955-1975

Steven Paul Jobs was born on February 24, 1955, in San Francisco and raised by adoptive parents, Paul and Clara Jobs. The Jobs family moved in 1961 to Mountain View, California, the heart of what would become Silicon Valley. Jobs reportedly saw his first computer when he was about 12 years old. After graduating from high school, Jobs briefly attended Reed College in Oregon. He soon dropped out of college and led an alternative lifestyle, working for a time as a video game designer at Atari to finance a trip to India.

PROFESSIONAL LIFE BEGAN IN 1975

Jobs returned to California and the family home in Los Altos in 1975. He began attending meetings of the Homebrew Computer Club with other computer professionals and hobbyists, including his friend Steve Wozniak. In 1976 Jobs and Wozniak founded Apple Computer Co. Jobs handled most of the business aspects of the company, including marketing and sales, while Wozniak was responsible for computer and software design. They built computers in Jobs' parents' garage. Jobs and Wozniak began selling their first computer, the Apple I, in 1976. Like other computers of the time, it was too complex to be used by anyone but computer professionals.

It was the Apple II, introduced in 1977, that began the personal computer revolution. The Apple II was the first fully programmable, fully assembleddesktop computer. Designed for computer novices and general users, it was smaller than other computers and included color graphics and a built-in keyboard, speaker, power supply, and case.

In 1984 Apple introduced the Macintosh, which featured a new operating system with a graphical user interface (GUI) instead of an operating system based strictly on text and text-based commands. The GUI used icons as well as text for commands and allowed users to point and click with a mouse. The first GUI was developed by Xerox Corp., but Apple was the first to apply it to a personal computer. The Macintosh was so easy to use that it came to be regarded as the first personal computer for the average person with no special computer training or knowledge.

JOBS SEPARATES FROM APPLE, 1985-1995

Jobs and Wozniak both left Apple in 1985 after Jobs hired John Sculley from PepsiCo to run the company. Jobs immediately started a new computer company, NeXT Computer Inc. At first NeXT built computers for colleges and universities. After the computers failed to become big sellers, the company turned to creating software. It developed an operating system, NextStep, which was soon overshadowed by Microsoft's Windows.

While continuing to run NeXT, Jobs became involved in another business. In 1986 he bought the special effects division of George Lucas's LucasFilm Ltd. for $10 million and renamed it Pixar. Under Jobs Pixar made workstations and software to enhance digital images. One of its notable software products was called RenderMan. It enabled computer graphic artists to add textures and color onto three-dimensional objects. One of the applications of RenderMan was to create the realistic skin and teeth on the dinosaurs in the 1993 film, Jurassic Park.

Another division of Pixar was involved in making short animated films. Although these films were designed to showcase Pixar's software, they began winning awards. The films were made under the direction of John Lasseter, who joined Pixar when it was a division of LucasFilm. In the early 1990's Lasseter and his colleagues teamed up with Walt Disney Co. to work on full-length animated feature films. Pixar developed a new way to create three-dimensional animation for use in film sequences, videos, CD-ROM games, and other applications.

Following the release of its first animated feature, Toy Story, in 1995, Pixar became financially successful. The company went public and followed up with two more hits, A Bug's Life in 1998 and Toy Story 2 in 1999. Following these successes, Jobs' share of the company was worth more than $1 billion.

JOBS RETURNED TO APPLE, 1996-2001

As Windows became the dominant operating system in the 1990s, Apple was struggling with dwindling sales and market share. In December 1996 Jobs sold NeXT to Apple for $400 million and returned to the company as a consultant. After then-CEO Gilbert Amelio was forced out by Apple's board of directors, Jobs assumed an expanded role as a key advisor to the company. Morale at the company returned to a higher level because of Jobs' new role, and the company's loyal customers looked forward to new developments.

In September 1997 Jobs was named interim CEO of Apple. At the time Apple had only about 10 percent of the personal computer market, compared to 85 percent for Windows. As interim CEO Jobs took steps to refocus the company and cut costs. He eliminated Apple's licensing program so that other manufacturers could not make computers based on the Macintosh operating system. He refocused the company's product lines to better serve the education, home, and desktop publishing segments. He cut costs by outsourcing manufacturing, cutting the number of distributors, and reducing the amount of inventory on hand.

Jobs and Microsoft head Bill Gates were able to reach an agreement whereby Microsoft agreed to settle Apple's long-standing patent-infringement lawsuit and invest $150 million in Apple. Microsoft announced that it would develop software to run on the Macintosh platform, thus giving Mac users more choices in software.

In August 1998 Apple introduced a new line of computers, the iMac, that came in different colors and featured a new, rounded shape. A bold advertising campaign featuring the slogan, "Think Different" launched the iMac and helped it become an immediate sensation. Following the introduction of the iMac, Apple's financial performance improved. As the company posted solid gains in earnings its stock rose on Wall Street, reaching an all-time high of $118 in December 1999.

In January 2000 Jobs dropped "interim" from his title and became CEO of Apple, but 2000 would prove to be a difficult year for the company. Its stock fell to a low of $13, and its new Power Mac G4 Cube was not well received and was subsequently discontinued.

RETOOLING APPLE, 2001 AND BEYOND

In January 2001 Apple announced its first quarterly loss since Jobs returned to the company. For the quarter ending December 30, 2000, Apple reported a $247 million loss from operations, due largely to the poor performance of the G4 Cube. It was the end of a disappointing year for Apple. Critics noted that Apple had anticipated strong demand for video, building DVD drives into its computers and installing its critically acclaimed video editing software. Instead, 2000 was the year in which consumers, downloading digital music files and burning their own audio CDs, wanted more audio from their computers. Apple failed to anticipate that demand and, in fact, none of its computers came with installed read/write CD drives.

Apple computers were also equipped with slower processors than Intel-powered PCs. At the end of 2000 the fastest processor in an Apple computer was the 500-megahertz G4 chip in Macs for the professional market. By contrast, Intel-based chips were up to 1.5 gigahertz, three times the size of Apple's largest processor.

To retool the company and focus on innovation, Jobs directed several initiatives at Apple in the first half of 2001. He announced plans to open up to 25 retail stores by the end of the year, starting with outlets in Glendale, California, and Tysons Corner, Virginia. To lead Apple's retail team, Jobs recruited former Target Corp. merchandising executive Ron Johnson, who designed a 4,500-foot open space divided into subsections that focused more on what people do with their computers than the computers themselves. Apple expected the stores to become profitable by fiscal 2002.

Apple also introduced version 10.1 of its OS X operating system and updated versions of the iBook notebook computer and the Titanium PowerBook G4. Strong sales of the PowerBook in 2000 helped offset the Cube's poor sales. The new G4 PowerBook would come with a choice of three processors: a 733 MHz, 867 MHz, or a high-end version with dual 800 MHz processors.

Jobs was also determined to recapture lost market share in the education market, where Apple held more than 50 percent of the market in 1997. Through its low-priced PC program, Dell Computer Corp. had captured 34.3 percent of the U.S. education market, compared to Apple's 19 percent, by 2001.

Judging by a 25 percent increase in attendance at the mid-2001 Macworld Expo, consumer interest remained strong in Apple's innovative products. A major concern among consumers and professionals who managed networks of Macintosh computers for businesses and educational institutions was a lack of new software for Apple's new Unix-based OS X operating system. To address those concerns, Jobs displayed demo products from 10 software makers, including Adobe and Microsoft, that would be available later in the year for OS X, at the 2001 Macworld Expo.

Jobs, known as a charismatic leader and adept marketer, appeared committed to transforming Apple into a high-performance company. Even though Apple only had a 5 or 6 percent share of the personal computer market, Jobs told Business Week, "We only have to convince another 6 percent of PC buyers to buy from us and we can double the size of our company. That's exciting."