In the beginning, it was easy to laugh things off. When we started Apple, it seemed as though nothing could go wrong. Our first computers were born not out of greed or ego but in the revolutionary spirit of helping common people rise above the most powerful institutions. Apple culture began with products that had a huge technological lead over the competition. They were the first low-cost computers ever with built-in color, graphics, sound and programming languages. And they were usable out of the box. Our vision was that people would find computers useful at home, for “people things” like balancing checkbooks, keeping address lists and typing letters.
Apple was so successful in this pursuit that an entire industry arose to support it. Thousands of tiny companies sprang up, created not by businessmen but by poor, young techies. It was not unlike the current explosion of interest in the Internet.
But after a while, Apple lost touch with its core market. We decided to go after small business owners who could use a spreadsheet, and designed a computer especially for them, the Apple III. With IBM nipping at our heels, every project and ad for three years was for the Apple III and not for the largest-selling computer worldwide, the Apple II. Somehow, we prospered and went public anyway, thanks to thousands of small outside companies.
It was the Macintosh, though, that became our flagship machine and spoke to the masses. It carried a message that you didn’t have to think linearly and you didn’t have to keep computer gibberish in your head. The Mac was the first personal computer with a mouse and menus and windows, not to mention n networking and LaserWriters. Files could even be named as humans would name them. We revived the dream of people mastering technology.
The computer was never the problem. The company’s strategy was. Apple saw itself as a hardware company; in order to protect our hardware profits, we didn’t license our operating system. We had the most beautiful operating system, but to get it you had to buy our hardware at twice the price. That was a mistake. What we should have done was calculate an appropriate price to license the operating system.
We were also naive to think that the best technology would prevail. it often doesn’t. Consider the tale of the 50-year-old Dvorak keyboard and the conventional typewriter. The conventional English typewriter was designed to be slow, to prevent key jams. The Dvorak, which arranges the letters in the most logical way, can improve typing speed by 10 to 30 percent and is much easier to learn. But it never took off, because people had already learned the standard keyboard. Like the Dvorak keyboard, Apple’s superior operating system lost the market-share war.
Reporters and others have been asking me what I think about the problems at Apple. With such huge losses ($69 million in the most recent quarter), they figured I would be devastated. But I’m not. Apple is very much alive despite the serious mistakes and poor luck. What happened to Apple happens in corporations every day: losses lead to reorganizations, and finally recovery. Apple’s troubles are just another example of how bad news can become a self-fulfilling prophecy: I read the papers to find out who I am, so I can be it. I read the papers to find out how ill Apple is so I’ll know when to give up my Mac. I suppose I should have just told my partners to forget about starting the company. Who would ever think that the day would come when we’d sell 4.5 million computers in a year and be declared a company whose time has passed?
