Steven Jobs
1955 -
 

Computer designer and corporate executive Steven Jobs is cofounder of Apple Computers. With his vision of affordable personal computers, he launched one of the largest industries of the past decades while still in his early twenties and remains one of the most inventive and energetic minds in American technology.
 

Born in 1955, Steven Jobs was adopted shortly thereafter by a California couple, Paul and Clara Jobs. Jobs showed an early interest in electronics and gadgetry. As a high school student, he boldly asked William Hewlett, co-founder and president of the Hewlett-Packard computer firm, for some parts he needed to complete a class project. Hewlett was impressed enough to give Jobs the parts and offer him a summer internship at Hewlett-Packard.


Dropped Out of College

After graduating from high school in 1972, Jobs attended Reed College in Portland, Oregon, for two years before dropping out, partly to ease his family's financial burden and partly to find himself. He hoped to visit India and study eastern spiritualism, but lacking necessary funds, went to work part-time for Atari Computers. He was able to save enough money to finance a trip to India in the summer of 1974. While there, he practiced meditation, studied eastern culture and religion, and even shaved his head. But by the fall, he became ill with dysentery and was forced to return to the United States.

For a short time, Jobs lived in a California commune but soon became disenchanted with the lifestyle. In 1975, he began associating with a group of computer aficionados known as the Homebrew Computer Club. One member, a technical whiz named Steve Wosniak, whom Jobs had first met at Hewlett-Packard, was trying to build a small computer. Jobs became fascinated with the marketing potential of such a computer, and in 1976 he and Wosniak formed their own company. The team was content to sell circuit boards designed by Wosniak until the computer prototype was complete. That same year, Wosniak succeeded in designing a small computer, and using Jobs's parents' garage, the two men worked to refine and market the product.


Cofounded Apple Computer Co

Jobs saw a huge gap in the existing computer market, as no product was targeted for home use. Wosniak improved his initial computer while Jobs lined up investors and bank financing. Marketing manager A. C. Markkula eventually invested $250,000 and became an equal partner in the Apple Computer Company. With new capital, Jobs and Wosniak refined the prototype. The redesigned computer - christened the "Apple II" - hit the market in 1977, with impressive first year sales of $2.7 million. In one of the most phenomenal cases of corporate growth in U.S. history, the company's sales grew to $200 million within three years. Jobs and Wosniak had opened an entirely new market, that of personal computers, bringing the computational speed of business systems into people's homes and beginning a new era in information processing.

By 1980, the personal computer era was well underway. Apple was forced to continually improve its products to remain ahead in a growing marketplace. Competitors such as Radio Shack, Commodore, and IBM were gaining sales from Apple's market. In 1980, Apple introduced the Apple III computer, and improved version of the Apple II, but the new model suffered technical and marketing problems. It was withdrawn from the market, but was later reworked and reintroduced.

Jobs continued to be the marketing force behind Apple. He admitted that mistakes were made with the Apple III, but looked for innovative ways to meet new and existing consumer needs. Early in 1983, Jobs unveiled Lisa, another new computer, aimed this time at business executives. Lisa was designed for people possessing minimal computer experience. The model did not sell well, however, because of its high price and increased competition from IBM personal computers. By 1983, it was estimated that Apple lost half of its market share to IBM.


Macintosh falls, Jobs resigns

Faced with a declining market share, Apple introduced the Macintosh in 1984. In designing the model, Jobs apparently paid more attention to appearances than function. Although the Macintosh had "user-friendly" software and on-screen displays, Jobs failed to equip it with either a letter-quality printer or a hard disk drive. Lacking these features, the Macintosh did not sell well to businesses. The failure of the Macintosh signalled the beginning of Jobs's downfall at Apple Computer Company. In 1985, following a highly publicized showdown at Apple, Jobs resigned from the company he had founded, though he retained his title as chairman of its board of directors.

It was not long before Steve Jobs resurfaced, however. Soon after leaving Apple, he hired some of his former employees to begin a new computer company. The company was called NeXT, and Jobs invested $7 million of his own money to get it started. For three years, Jobs and his employees worked to produce the first NeXT computer, which was aimed at the educational market. Late in 1988, the NeXT computer was introduced at a large gala event in San Francisco. Initial reactions were generally good; the product was user-friendly, with very fast processing speed, excellent graphics displays, and an outstanding sound system. Other innovations included an optical disk drive instead of floppy disks, and a special sound chip to provide the fidelity of a compact disc. Judging from initial reactions, many critics were convinced that Steve Jobs had brought another revolutionary product to American consumers.

Despite the warm reception, however, the NeXT machine never caught on. It was too costly, had a black-and-white screen, and couldn't be linked to other computers or run common software, Joseph Nocera wrote in a biting profile of Jobs in Gentleman's Quarterly. Nocera argued that Jobs's charisma and persuasive charm duped his employees, the press, and Jobs himself into believing he could not fail - despite strong evidence to the contrary. "Jobs started NeXT with an unshakable faith in his own press clips, in which his mistakes were always overlooked while his supposed triumphs were always wildly oversold," Nocera wrote.

Nocera said he also fell victim to the Jobs myth when he visited NeXT in 1986. He witnessed Jobs brutalize employees who worshipped him, obsess over mindless details, and indulge his expensive tastes - yet Nocera reported none of the contradictions. "The point is," he wrote in 1993, "my willingness to be seduced by Steve Jobs caused me to miss what I was seeing with my own eyes. Even in 1986, the evidence strongly suggested that lightning was not going to strike twice. The incongruities were too severe, the dreams too farfetched…. You'd ask the people at NeXT how, exactly, their computer was going to change the world and they would lapse into gobbledygook; they really had no idea what they were trying to accomplish with this new machine."


Bought Pixar, Made Toy Story

NeXT was not, however, the end of Steve Jobs. Lightning, indeed, struck a second time. In 1986, Jobs paid filmmaker George Lucas $10 million for a small firm called Pixar that specialized in computer animation. "Over the next six years Jobs poured another $40 million of his own money into the company … as it set out to make the first-ever computer-animated feature film," Time magazine reported in February 1996. That film was Toy Story, a huge box office hit. Pixar's initial public stock offering was an enormous success. The share price climbed dramatically, and Jobs's 80 percent stake in Pixar suddenly was worth $1 billion.

"Jobs makes the point that Pixar, like other (initial public offering) overnight successes, was really anything but an overnight success," said the Time article. "-The things I've done in my life have required a lot of years of work before they took off,' he says. He and Wosniak started work on Apple in 1975. -So it was really six years of work before we went public. And Pixar has been 10 years…. The thing that drives me and my colleagues … is that you see something very compelling to you, and you don't quite know how to get it, but you know, sometimes intuitively, it's within your grasp. And it's worth putting in years of your life to make it come into existence."'

In December of 1996, Apple announced that it was purchasing Next Software for over $400 million. Jobs returned to Apple as a part-time consultant to CEO Gilbert Amelio. The following year, in August, Apple entered into a partnership with archrival Microsoft, in which the two companies, according to the New York Times, "agreed to cooperate on several sales and technology fronts." The alliance was an unprecedented one for the industry, but analysts predicted that Microsoft's support will ultimately save Apple, a company that had in the late 1990s come to serve a much more niche market than Microsoft. "We want to let go of this notion that for Apple to win, Microsoft has to lose," Jobs said. In September of 1997, Jobs was named interim CEO of Apple while a replacement for the ousted Amelio was sought.
 

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Steven Paul (Steve) Jobs was responsible for building Apple Computer twice, as well as for rescuing Pixar Animation Studios and turning it into one of the world's most successful motion picture studios. He also built NeXT, a good idea that did not catch on. He was a hands-on manager, who studied even the minutest details of his products, with the heart and eye of an artist. His insistence on high-quality, good-looking products struck a chord with many people who appreciated the beauty of Apple products, resulting in such fabulous successes as the Macintosh computer and the iPod portable music system. These successes often reshaped how consumers viewed technology and also reshaped the technology itself. Steve Jobs and Microsoft's Bill Gates are the two people most often credited with the development of the mass-market personal computer, perhaps decades before it might otherwise have evolved.


Rough Beginning

Jobs was adopted in February 1955 by Paul and Clara Jobs, who were indulgent parents. They were so focused on their son's needs that they even moved from Mountain View, California, to Los Altos, California, in 1968, to put Jobs in a new school because he said that he could not get along with the children in his old school. (One account says that he told his parents that he was not learning anything at his old school.) He was an odd student, out of step with both classmates and teachers, with a mind that looked at science from unusual angles. He preferred to spend his time with older students rather than ones his own age, including Stephen Wozniak, an electronics genius four years older than Jobs.

Jobs worked during the summers, spending one summer in an apple orchard; he was so happy there that he later named his first legitimate business "Apple." Even in grade school he had shown a great aptitude for electronics, and he had been fortunate to have an engineer for a neighbor, who answered his many questions about how electronic devices worked. While he was in high school, he built electronic devices. Once, he wanted for his projects some rare parts made by Hewlett-Packard; he wrote to William Hewlett, cofounder of Hewlett-Packard, and asked for the parts to be sent to him. Hewlett responded by giving Jobs a summer job in a Hewlett-Packard factory. Wozniak already worked there as an up-and-coming engineer.

In 1972 Jobs attended Reed College, in Portland, Oregon, dropping out after one semester. He hung around the school for about a year longer, before submitting a résumé that greatly inflated his electronics experience to Atari, a pioneer in video gaming. For part of 1974 he worked as a game designer, helping create Breakout. After saving up enough money to pay his way, he left Atari and journeyed with friends to India to search for enlightenment. He shaved his head and walked through what he saw to be appalling poverty. He soon left India believing that Thomas Edison had done more for the betterment of humanity than all the gurus in the world. Jobs lived briefly in a farm commune and then returned to his parents' home. In 1975 he joined the Homebrew computer club, which included Wozniak among its members. Wozniak had discovered that a toy in Cap'n Crunch cereal boxes made the same tones that telephone companies used for long-distance switching. Soon, with Jobs's help, he was making small blue boxes that could be used with telephones to circumvent the safeguards of telephone companies and make free long-distance calls. It was Jobs who turned this into a business venture by selling the boxes to college students.


Apple II

Wozniak was an electronics enthusiast. He enjoyed making gadgets and then sharing his inventions with anyone who was interested, without concern for patents or profit. It was Jobs who soon saw the potential marketability of Wozniak's circuit board combined with the microprocessor chips. In 1975 he and Wozniak became partners, and Jobs gave their enterprise the name "Apple." They designed their simple computer in Jobs's bedroom. When more space was needed, Jobs's father cleared out his home's garage, where Jobs and Wozniak cobbled together their combination of a circuit board, a microprocessor, a video screen, and Jobs's most important contribution, a typewriter-style keyboard. The inventors called it the Apple I.

Jobs had already discovered a local electronics store owner who wanted 50 personal computers to sell to college students, who were the bulk of electronics enthusiasts. Jobs and Wozniak gave the Apple I the whimsical price of $666.66 and ended up selling more than 600 of them, making $774,000. The Apple I was a hobbyist's machine, a clumsy-looking beast of wires and boards that invited tinkering. The partners wanted to build something more sophisticated and easier to use—making technology easier to use would become essential to Jobs's views for building his companies. In 1977 the former Intel executive Mike Markkula, a venture capitalist, invested in Apple, becoming its chairman of the board and bringing in outsiders to help govern the company. Jobs persuaded a successful publicist, Regis McKenna, to join Apple. That year the Apple II was introduced. It took only about four hours for a purchaser to set it up and have it running, and it could run some business programs, reducing to minutes from hours certain accounting tasks. With a canny sales campaign created by McKenna, and Jobs's own magnetic personality helping persuade corporate buyers, the Apple II became the first successful mass-market personal computer.

Jobs had to have been a concern for McKenna: Jobs had long hair and a scruffy beard, and he usually wore jeans when meeting the conservatively dressed businessmen who had the power to order dozens of Apple IIs at a time. But Jobs was charismatic. When he spoke of what his machines could do and of the future the machines would shape, he created what came to be known as his "reality distortion field." His power to persuade was remarkable, and he often had potential customers vying for his attention. He was soon perceived to be a visionary genius who foresaw how to marry high-technology electronics and everyday business.


Changing the World

The Xerox Palo Alto Research Center, known as PARC, attracted some of the best engineers in the world. It was a secretive place, but after years of trying, in 1979 Jobs was allowed to visit PARC with a few of his Apple colleagues. Legend has it that he saw Xerox's graphical interface, featuring drop-down menus and pictures that could be clicked on with arrows to start programs, and he was gripped by the potential marketability to which Xerox's employees seemed oblivious. The truth is more complex: The interface at Xerox was one of several that various computer developers had been toying with for several years, and Jobs was already very familiar with them. What he may have picked up from PARC was the utility of a little handheld device called a "mouse."

In December 1980 Apple had its initial public offering of stock, becoming Apple Computer. Shares opened at $22 but rose to $29, making Apple's value $1.2 billion. Jobs was the company's leading shareholder, with 15 percent of the stock. His shares were soon worth $239 million. In 1980 the Apple III was introduced, but the first 14,000 units were recalled be cause of defects. The Apple II remained the machine preferred by customers. In 1981 IBM introduced a personal computer. Whereas Apple made all of its machines proprietary, not allowing anyone to even license the technology, IBM made its machine an open architecture, meaning that outsiders were welcome to write programs for it and to build their own variations of it.

Jobs set about waging war for personal computer supremacy. A striking feature of his work over the next five years was that he had no official corporate authority; he ruled by force of personality, making numerous enemies with his ridiculing of the ideas of others, his unwillingness to hear views contrary to his own, and his outbursts of bad temper. In 1982 he hired the executive John Sculley away from PepsiCo to become CEO of Apple. In 1982 Apple for the first time grossed $1 billion.

In 1983 the Lisa computer was introduced. It had a 32-bit microprocessor as well as an inexpensive mouse. Jobs had worked on Lisa obsessively, demanding that it be easy to use, attractive to look at, and more powerful than any other personal computer. In the process, he pushed Lisa's costs too high; the machine was too expensive and flopped. Still, Jobs and Sculley already had put Apple to work developing a machine that would be called the Macintosh. It would use much of Lisa's internal architecture, but it would be simpler. In 1984 the machine debuted with a spectacular television commercial during the Super Bowl, showing a gallant woman athlete defying a monolithic, oppressive government by hurling her hammer into a screen that represented, without actually saying so, IBM. The first Macintosh was small and beige, featuring the style of graphical interface that would become the world's standard. It sold for $2,495 and was a hit.

Jobs was great recruiter of talent, but he tended to belittle and mock employees after he recruited them; Sculley, for one, had had enough of Jobs's bizarre behavior. He persuaded the board of directors to make Jobs chairman of the board but without any authority over anything. Too many of his colleagues avoided him, and Jobs found himself with no work to do. In 1985 he quit Apple and sold all but one share of his Apple stock, losing about $500 million by selling shares when the stock was low but still leaving with about $250 million.


Next

In 1986 Jobs founded NeXT in Redwood City, California, investing $15 million of his own money to start the company. He discovered that he was held in high regard by most of the high-technology businesses in California's Silicon Valley, and his charisma was still magical. After seeing Jobs in a PBS documentary, the billionaire H. Ross Perot offered to help fund NeXT. Major businesses soon followed. In a couple of years, Jobs had raised over $250 million, mostly on his word alone.

Also in 1986 Jobs bought a computer animation studio from the motion picture magnate George Lucas, saving it from dissolution. Named Pixar Animation Studios, the newly independent company found in Jobs a CEO and chairman of the board who understood the creative process very well and who could combine his artistic nature with a sound understanding of computers. Further, Jobs financed the company himself and gave his new employees freedom to explore what they could do. It was part of Jobs's evolving vision of computers: he became an advocate of the technology as enhancing creativity, telling people that computers were not important but that what could be done with them was important. By 1988 Pixar had done well enough to win an Oscar for its computeranimated short film Tin Toy.

In October 1989 the NeXT computer was introduced. It was beautiful, with careful attention paid to the looks of every detail inside and out. To meet FCC rules on electronic interference, Jobs had the entire case made of magnesium poured into a single mold and then carefully sanded to remove sharp edges. The magnesium was good at containing electronic emissions and was strong, but it was hard to work with and drove manufacturing costs up. Repeatedly, Jobs had made workers redo work, trying to incorporate great power into NeXT while making it easy to use. It cost $9,950, too much for the mass market that might have appreciated it best. From 1989 to 1992 only 50,000 were sold.

In 1989 Jobs gave a lecture at Stanford University. While there, he met Laurene Powell, an MBA student. In 1991 they married, and they would have three children over the next dozen years. In May 1991 Jobs negotiated a contract with Walt Disney Pictures, under the terms of which Disney would pay for half the production costs of three computer-animated feature films and would receive half the income plus distribution fees for each motion picture. Pixar began work on Toy Story.

By 1993 NeXT was doing badly. Jobs was harshly criticized for supposedly wasting money and for bad management, even though those who worked for NeXT still believed that he knew what he was doing. He had spent much of his career defying criticism and insisting that he knew better than anyone else which choices were the best, but in February 1993, he closed NeXT's Fremont factory, laid off half of NeXT's employees, and stopped making computers, focusing instead on software. NeXT's computer had dazzled with its programming, and Jobs put the company's future in the open programming of Unix and the object- based programming of NeXT, which made programming simple enough that consumers could write their own programs to work with NeXT. In 1994 Digital Equipment Corporation, Hewlett-Packard, and Sun Microsystems contracted with NeXT to put NeXT operating software in their workstations.


Triumphant Return

Meanwhile, Apple was ailing. In 1993 Apple's share of the personal computer market was 8 percent; it had fallen to the status of an also-ran, becoming almost irrelevant to the future of computers. Sculley was fired and replaced by Michael Spindler as CEO. In 1995 Spindler left Apple and was replaced by Gilbert F. Amelio, who also became chairman of the board. Amelio found a company in disarray; the corporate culture was one of indifference and depression. When he would call meetings, people would not show up; his orders were ignored; and employees refused to cooperate with each other. Apple's share of the market had fallen to 5.3 percent. It may have been desperation or exasperation that led Amelio to ask Jobs to join the board of directors and become a consultant to management.

The year 1995 was good for Jobs. For the first time, NeXT turned a profit. He and his antagonist Bill Gates contracted for NeXT and Microsoft to collaborate on the designing of object-oriented software for Windows NT. On November 22, 1995, Toy Story was released to acclaim; by then Jobs had invested $60 million in Pixar. In its first release, Toy Story grossed $360 million worldwide. On November 29, 1995, Pixar had its initial public offering. Shares were offered at $22 but rose to $39. Jobs owned 80 million shares and had become a billionaire. In December 1995 Apple bought NeXT for $400 million.

By 1996 Apple's sales were in free fall. That year it shipped 3.7 million computers, for a 5.2 percent market share; in 1997 it was 2.6 million units for a 3.2 percent share. In 1997 Jobs was named "interim" CEO, at a salary of $1 per year, and Amelio left Apple. Jobs dropped the NeXT operating system that Apple had purchased. On August 6, 1997, Apple and Microsoft announced that Microsoft would invest $150 million for a minority stake in Apple. Many in the audience at the MacWorld convention in Boston booed the announcement. Although he was still certain that his vision for Apple was the only right one, Jobs's management style had radically changed from what it had been in 1985; he seemed more relaxed and open to ideas. In fact, he seemed to relish other people's ideas; perhaps his work at Pixar had improved his ability to work with the creative people at Apple. He wisely surrounded himself with top-notch executives in all the key corporate positions, and he held on to them rather than driving them away. Almost by willing it, he transformed the corporate culture into one in which employees wanted to come to work and where they saw themselves as part of a great company that had a mission to change the world for the better. Moreover, Jobs, the hobbyist of old, brought the fun back into tinkering with electronics.

In August 1998 one of Jobs's big risks, the iMac was released. It was sleek, with elegant lines, and the "i" was for "Internet"—that is, it was designed to work well with the Internet. Selling 278,000 units in its first six weeks, the iMac at first did not seem to be enough to pull Apple out of the doldrums, but then it took off, selling six million units and making Apple an important player in computers again. In 1999 Jobs had the iMac released in a choice of several colors, which proved popular. In January 2000 he was made CEO without the "interim" addition to the title. In March 2000 Apple shares peaked at $75 each. Apple grossed $7.98 billion and netted $786 million for fiscal 2000.

In 2001 Jobs began opening a chain of Apple retail stores, where customers could try out the computers, making multimedia shows and playing with the software, with unobtrusive salespeople ready to help, if asked. It was a big risk, but the idea was that if people had the opportunity to use Apple's goods, they would find them worth a higher price than competing brands. In 2003 the stores began turning a profit. Another event in 2001 launched Apple into a broader world of consumer electronics: in October, Apple introduced the iPod. So shiny and attractive that owners delighted in showing it off, it downloaded and played thousands of MP3 files, at first only from Apple computers but, in a year, from IBM compatibles as well. The iPod was pricey at $399 and a risk, but Apple had a cash reserve of $4.1 billion to fall back on, up from $280 million at the time Jobs had returned to the company. Even so, Apple shares dropped to about $25 for 2001.

In what may have been the most brilliant salesmanship of his career, Jobs persuaded every major record company to sell Apple the rights to market their songs on the Internet, even though the companies were suspicious of the Internet, viewing it as a haven for thieves of their music. In April 2003 Apple opened the online store iTunes, at first only for Macintoshes but soon for Windows operating system computers as well. At 99 cents per song, with 65 cents going to the music companies, 25 cents to overhead, and only 10 cents to Apple, iTunes seemed fated to lose money. But as Jobs pointed out, the idea was to sell iPods, which could download music from iTunes. By 2004 iPod was the world's dominant portable music player, with iTunes owning 70 percent of the market of downloaded music.

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