Garage start-up Apple Inc. had its genesis in the lifelong dream of Stephen G. Wozniak to build his own computer—a dream that was made suddenly feasible with the arrival in 1975 of the first commercially successful microcomputer, the Altair 8800, which came as a kit and used the recently invented microprocessor chip. Encouraged by his friends at the Homebrew Computer Club, a San Francisco Bay area group centred around the Altair, Wozniak quickly came up with a plan for his own microcomputer. In 1976, when the Hewlett-Packard Company, where Wozniak was an engineering intern, expressed no interest in his design, Wozniak, then 26 years old, together with a former high-school classmate, 21-year-old Steven P. Jobs, moved production operations to the Jobs family garage—and the Silicon Valley garage start-up company legend was born. Jobs and Wozniak named their company Apple. For working capital, Jobs sold his Volkswagen minibus and Wozniak his programmable calculator. Their first model was simply a working circuit board, but at Jobs’s insistence the 1977 version was a stand-alone machine in a custom-molded plastic case, in contrast to the forbidding steel boxes of other early machines. This Apple II also offered a colour display and other features that made Wozniak’s creation the first microcomputer that appealed to the average person. Wozniak, Steve; Jobs, Steve Steve Wozniak (left) and Steve Jobs holding an Apple I circuit board, c. 1976. Courtesy of Apple Computer, Inc.

The first Apple computer. Courtesy of Apple Computer, Inc.

The Apple II Courtesy of Apple Computer, Inc.

Commercial success Though he was a brash business novice whose appearance still bore traces of his hippie past, Jobs understood that in order for the company to grow, it would require professional management and substantial funding. He convinced Regis McKenna, a well-known public relations specialist for the semiconductor industry, to represent the company; he also secured an investment from Michael Markkula, a wealthy veteran of the Intel Corporation who became Apple’s largest shareholder and an influential member of Apple’s board of directors. The company became an instant success, particularly after Wozniak invented a disk controller that allowed the addition of a low-cost floppy disk drive that made information storage and retrieval fast and reliable. With room to store and manipulate data, the Apple II became the computer of choice for legions of amateur programmers. Most notably, in 1979 two Bostonians—Dan Bricklin and Bob Frankston—introduced the first personal computer spreadsheet, VisiCalc, creating what would later be known as a “killer app” (application): a software program so useful that it propels hardware sales. While VisiCalc opened up the small-business and consumer market for the Apple II, another important early market was primary educational institutions. By a combination of aggressive discounts and donations (and an absence of any early competition), Apple established a commanding presence among educational institutions, contributing to its platform’s dominance of primary-school software well into the 1990s. Get exclusive access to content from our 1768 First Edition with your subscription. Subscribe today

Competition from IBM Apple’s profits and size grew at a historic rate: by 1980 the company netted over $100 million and had more than 1,000 employees. Its public offering in December was the biggest since 1956, when the Ford Motor Company had gone public. (Indeed, by the end of 1980, Apple’s valuation of nearly $2 billion was greater than Ford’s.) However, Apple would soon face competition from the computer industry’s leading player, International Business Machines Corporation. IBM had waited for the personal computer market to grow before introducing its own line of personal computers, the IBM PC, in 1981. IBM broke with its tradition of using only proprietary hardware components and software and built a machine from readily available components, including the Intel microprocessor, and used DOS (disk operating system) from the Microsoft Corporation. Because other manufacturers could use the same hardware components that IBM used, as well as license DOS from Microsoft, new software developers could count on a wide IBM PC-compatible market for their software. Soon the new system had its own killer app: the Lotus 1-2-3 spreadsheet, which won an instant constituency in the business community—a market that the Apple II had failed to penetrate.