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THE AMAZING STORY OF HOW STEVE JOBS TOOK APPLE FROM NEAR BANKRUPTCY TO BILLIONS
IN 13 YEARS

Alyson Shontell
2011-01-19T14:10:00Z
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Note: This article was originally published on October 27, 2010, but with Jobs'
newly announced leave of absence, we thought it was appropriate to revisit what
he's helped Apple accomplish.

Just 13 years ago, Apple was on the verge of bankruptcy.



But then – worried that it would be viewed as a monopoly without competition
from Apple – Microsoft came to Apple's rescue with a $150 million investment.

Had that not happened the world may never have seen iPods, iPads, iPhones or
iMacs.

But that was just the start of Apple's return to glory, the greatest corporate
comeback story of all time, led by Steve Jobs.


1997 - PARTNERING WITH THE ENEMY, MICROSOFT



When Apple co-founder Steve Jobs returned to the company in July of 1997, it
marked the beginning of Apple's resurrection.

After 12 years of financial loss, Gil Amelio was ousted from the CEO position. 
Jobs took the interim position and was tasked with major restructuring, out of
which a partnership with Microsoft was formed. One of his first decisions was to
nix the Newton, a project that sucked $100 million out of the dying company,
even though it was a product ahead of its time.

The Apple-Microsoft deal was revealed at the ’97 Macworld Expo.  Gates and Jobs
announced a five-year contract that would release an updated Mac version of
Microsoft Office and Microsoft's $150 million investment in Apple.

Jobs humbly explained to the audience: “If we want to move forward and see Apple
healthy and prospering again, we have to let go of a few things here. We have to
let go of this notion that for Apple to win, Microsoft has to lose.

"So, the era of setting this up as a competition between Apple and Microsoft is
over as far as I'm concerned. This is about getting Apple healthy, this is about
Apple being able to make incredibly great contributions to the industry and to
get healthy and prosper again.”

As he spoke these words, Jobs was both booed and cheered. 

The Lesson: Jobs had a daunting task ahead of him, but he wasn't afraid to make
difficult decisions to get the company back on track.  Cutting costly projects
like Newton and aligning with known-competitor Microsoft were controversial
decisions that showed Jobs' authority, confidence, and smarts.

View the keynote below.







1998 - INTRODUCING THE IMAC



Apple was still struggling, and they needed a good product to turn things
around.

The iMac, introduced in 1998, was the solution. The unique design, which
resembled the Macintosh 128K, was created by Jonathan Ive, designer of now
iconic Apple technology, the iPod and the iPhone.  Ive reinvented the 'boring
beige box" and for the first time, you could actually see a computer's guts. 
The all-in-one iMac sold nearly 800,000 units within its first five months.

Apple returned to the software space that year with an acquisition of
Macromedia’s Final Cut product.

For the first time since 1995, Apple returned to profitability. According to
FundingUniverse.com, the company turned a profit of $309 million in 1998.

The Lesson: Steve Jobs reportedly called a meeting at Apple, sat everyone down
and said, "You know what's wrong with this company? The products SUCK -- there's
no sex in them." Jobs' decision to throw resources into a new, futuristic
computer model drew people's attention to Apple, and it paid off.

Check out the 1998 MacWorld Expo clip below.







1999 - APPLE STOCK REACHES $99 PER SHARE, PROFITS INCREASE 94%


http://lowendmac.com/coventry/06/1013.html

Apple continued its resurgence, seeing healthier profits and thus healthier
stock prices.  In 1999, their sales grew 3.2%, and profits doubled to $601MM, a
94% increase from the year prior.

The Lesson: Apple began expanding its products beyond just computers with the
release of Final Cut Pro. They also noted what worked with the iMac, and built
out new products based on proven success. Each success showed Jobs was turning
the company around, and the public grew more confident in Apple's stability.

See the first appearance of the iBook in the 1999 MacWorld Expo clip below.







2000 - JOBS BECOMES PERMANENT CEO OF APPLE, BUT APPLE HAS ITS MOST UNPROFITABLE
QUARTER IN THREE YEARS


Photograph: Peter Morgan/Reuters

Apple announced a new strategy for tackling the Internet at the 2000 Macworld
Expo.  They unveiled iTools, Mac-only internet applications.  They also
announced Earthlink as their recommended ISP. Having successfully gotten Apple
back on track, Jobs was able to drop "interim" from his CEO title and earned
himself a permanent position.

Jobs also announced that the previous quarter, 1,350,000 Macs were sold - that's
one product sold every six seconds.

Later that year, Apple released new machines including The G4 Cube, a risky move
that was an ultimate failure.  Apple-History.com writes, "The Cube was Apple's
answer to those who wanted an iMac without a monitor, as well as challenge to
the computing industry to continue to minimize the size of computers while
increasing their visual appeal. The Cube was the biggest gamble Jobs had made
since the release of the iMac. It would turn out to be a resounding failure."

This release marked the beginning of a tough few months for the rebounding
company. Their third quarter was its first unprofitable one since Jobs' return. 
While the tech industry was seeing an overall downturn, some poor decisions by
Apple aided their unprofitable quarter.  The first problem was the G4 Cube was a
bust. Another factor was their decision to have DVD-ROM drives in their
computers instead of CD-RWs, which prevented users from being able to burn CDs.

In an attempt to right their wrongs, Apple cut prices on their PowerMac
products. 

The Lesson: Under the reign of Steve Jobs, Apple proved they weren't afraid to
take risks and fail. They also showed that when something wasn't working, they
could adjust quickly, pulling plugs and changing strategy as necessary. Jobs has
said, "We're gambling on our vision, and we'd rather do that than make 'me-too'
products."

Steve Jobs presents the G4 Cube in the keynote below.







2001 - THE IPOD, ITUNES AND THE APPLE STORE ARE BORN


Macworld photo by Rick LePage

On May 15, 2001, Jobs unveiled the first Apple Store.  They were such a hit that
he later remarked, "We had 26 million visitors during the holiday quarter in
retail stores. I mean think about it, this is more people than live in any state
in our union besides California."

A few months later, Jobs announced their next big hit, the iPod. The portable
music player went from concept to market in about 8 months.  The iPod
undoubtedly changed the music industry, but iTunes, which was also introduced
this year, was Apple's true genius.

iTunes broke music industry standards and helped the major labels including
Universal and Warner, fight piracy.  "We said: These [music subscriptions]
services that are out there now are going to fail...People don't want to buy
their music that way," Jobs tells Rolling Stone. 

"They're going to want to buy downloads. People want to own their music.  You
don't want to rent your music -- and then, one day, if you stop paying, all your
music goes away...It's cheaper to buy and that's what they're gonna want to do.

"80% of the people stealing music online don't really want to be thieves.  But
[it's so] compelling -- it's instant gratification.  We don't see how you
convince people to stop being thieves, unless you can offer them a carrot, not
just a stick."

The Lesson: With multiple product hits, Apple's comeback was in full swing. 
Each product launch became  highly-anticipated events by media and the public
alike.  The company proved with the iPod that they could execute ideas quickly,
and successfully dominate other hardware besides computers.

The Apple Store was a brilliant solution to a problem Apple was having - other
retailers weren't giving Apple products proper shelf-life and space. Apple was
able to create a real consumer experience in their stores, and give their
products the displays they deserved. Gigaom writes, "When you enter the Apple
Retail Store, you find a well-lit place that is inviting and aesthetically
appealing...More importantly, the company lets you play with its devices as much
as you want. Nothing makes the sale as effectively as the iPhone or the iPod
touch itself. You like what you see, then you buy."

Take a tour of the first Apple Store in Tyson's Corner Mall in Virginia, below.







2002 - THE SWIVEL-NECK IMAC GETS JOBS ON THE COVER OF TIME



At the January MacWorld Expo, Apple released a redesigned iMac with a swivel
neck, which would be discontinued two years later. That same year, they released
the Xserve 1U rack mounted server. This was Apple's effort to enter the
enterprise computer market with a cheaper version.

Apple sleeked up its overall look, replacing the 'happy mac" icon with the gray
logo when Jaguar was released.

Still, the company saw financial struggles in late 2002 thanks to poor
macroeconomic conditions and weak PowerBook and PowerMac sales. They announced a
quarterly loss of $45 million, despite the release of one of their most
successful ad campaigns ever, "Switchers." 

The lesson: Jobs kept the company new and fresh by coming up with out-of-the-box
concepts. He did this in all aspects of Apple, in new products, and even in
hiring decisions, drawing inspiration from everywhere. "Part of what made the
Macintosh great was that the people working on it were musicians, and poets, and
artists, and zoologists, and historians who also happened to be the best
computer scientists in the world," Jobs has said.

For the 2002 MacWorld Expo, see below.







2003 - THE ITUNES MUSIC STORE IS RELEASED



January 2003 marked the end of the Classic Mac OS era.  The first PowerBooks
were released in 2003 and were the first to use the aluminum exterior.

Next the third generation iPod was introduced with a dock connector in the
bottom, which would lead to USB support.

The same day the iPod was released, iLife and the iTunes Music Store were
announced.  The online music marketplace was fully integrated into iTunes for
Macs, and shortly after it was released for Windows.

The store was an instant success, selling one million songs in its first week. 

This year, Apple also placed its first store in Japan.

The lesson: Think ahead, and connect the dots.  Apple released products that
were innovative in and of themselves, but they also connected with other
products.  The integration of iPods, iTunes and the iTunes Music Store prove how
a sum can be greater than all of its parts.

Check out the iTunes for Windows demo, below.







2004 - ITUNES LEADS TO 70% MARKET SHARE, IPOD MINI RELEASED



Apple's market share in the computer industry continued to decline, hitting a
low of 3% in 2004. But with the iTunes/iPod integration, Apple positioned itself
to take the music industry by storm.  

Also that year, Apple released the hit iPod Mini, and by the end of iTunes'
first year, Apple had 70% market share of legal downloaded music.  More than 100
million songs were downloaded by July, 2004.

Keeping with the mini trend, Apple opened a series of mini stories, about half
the size of their other retail locations, in hopes of expanding to smaller
markets with less demand.

The lesson: Simplicity is bliss.  iTunes made downloading songs easy and legal.
The iPod Mini was sleek and simple, without any bells and whistles. Apple's
designer Jonathan Ives confirms their strategy: "We are absolutely consumed by
trying to develop a solution that is very simple, because as physical beings we
understand clarity."







2005 - RELEASE OF THE IPOD SHUFFLE, MAC MINI, AND TRANSITION TO INTEL-BASED MACS
BEGINS



Apple began its transition to Intel-based Macintoshes in 2005. They made the
announcement at a June keynote, confirming rumors.

Continuing to push their lead in the music sector, Apple released the video iPod
in 2005.  This pushed iPod sales over 30 million.  This year, the Mac Mini and
the iPod Shuffle were also released.

The lesson: Keep innovating and improving.  Apple presents multiple forms of the
same devices with entirely different looks and packaging (the Nano versus the
Mini). Even if improvements are slight, each product has a new identity that
gets people excited.

See its release in the clip from MacWorld Expo 2005, below.







2006 - APPLE PASSES DELL'S MARKET CAP, AND ITS INTEL-BASED COMPUTERS ARE
SIGNIFICANTLY FASTER THAN EVER



Apple put the Intel deal into action with the release of its 2006 MacBook Pro
and iMac, both using Intel's Core Duo chip technology which made the systems
significantly faster.

Apple's increasing improvement was evident in the stock prices. At roughly $80
per share, Apple's stocks had increased ten fold in ten years, up from $6 in
1997.  In January 2006, Apple surpassed Dell's market cap . Just ten years
prior, Michael Dell had said that if Apple were under his control, he'd "shut it
down and give the money back to shareholders."

The Lesson: Sell dreams, not products. Customers first and foremost care about
themselves, and if you help them find out what it is they want, they will latch
onto your brand. Jobs doesn't use focus groups or wait for people to make
demands. Instead, he releases must-have products before people even know they
will want it.







2007 - THE IPHONE REVOLUTIONIZES THE MOBILE INDUSTRY, APPLE TV IS ANNOUNCED



In 2007, Jobs announced a company name change.  Apple Computers Inc. would now
be known as Apple Inc, a sign that the company was planning to define itself by
much more than its original goal.

The iPhone and Apple TV were announced at that year's Macworld Expo, and by May
2007, Apple's shares broke $100, an all-time company high.

The iPhone was Apple's first mobile attempt, and it immediately revolutionized
the industry, essentially turning a video iPod into a personal device like no
company had done before.

The Lesson: Steve Jobs is a relentless innovator, and Apple always seems to find
a new way to produce products that improve our lives. Thinking differently has
been a key component to Apple's second coming.

Check out the iPhone's intro at the 2007 Macworld Expo, below.







2008 - THE APP STORE IS UNVEILED, ALONG WITH TRACKPADS WITH MULTI-TOUCH
TECHNOLOGY



Apple brought touch capabilities to their computers and iPhone with the release
of trackpad in 2008. The multi-touch technology was designed exclusively for
Apple and can interpret many three-finger strokes.

They also released the App store in 2008 for the iPhone and iPod Touch.  The App
Store was another instant hit, bringing in 60 million app sales and generating
$1 million for Apple daily just one month after its launch.  Jobs has said that
the App store alone could be a billion-dollar invention for the company. 

Later that year, it was evident just how popular the iPhone was when Apple
became the third-largest mobile-handset supplier in the world.

The Lesson: Apple is great at connecting separate products to one another.  The
App Store, for example, was made to enhance both the iPhone and iPad.  According
to Jobs, "Creativity is just connecting things."

The MacBook Air was also released this year. See it being released at the 2008
Macworld Expo, below.







2009 - STEVE GETS SICK


TechDigest

For the first time in 20 years, it was announced that Jobs would not attend
Macworld Expo.  In January 2009, an internal memo to Apple employees was made
public and rumors were verified that Steve Jobs' health was waning.  Later that
month, Jobs announced a six-month medical leave of absence to recover from his
illness.

Despite his absence and the recession , Apple continued to surge, reporting its
best non-holiday quarter ever in Q1 2009 with $8.16 billion in revenue and a
profit of $1.21 billion.  Jobs returned to the company in June after having a
liver transplant.

The lesson: Trust your team.  A company may only seem as great as one person,
but if you hire smart people, they're perfectly capable of stepping up to the
plate.

See Phil Schiler give the 2009 Macworld Expo keynote in place of Jobs, below.







2010 - THE YEAR OF THE IPAD



2010 is the year of the iPad, Apple's solution to Amazon's kindle, creating a
mobile-laptop hybrid device.  The iPad uses the iPhone's touch technology and
apps.  500,000 units were sold during its first-week debut.

The iPhone 4 was released with new features such as Skype-like Face Time video
calling.  In October, Apple's stock reached an all-time high of more than $300
per share.

The lesson:  Innovation doesn't require focus groups. Steve Jobs doesn't believe
in asking customers their opinions. You can develop products people will want
before they even know they want it. Sometimes, you can know customers better
than they know themselves.





THE KEY TAKEAWAYS:


Associated Press

In 2010, for the first time since 1989, Apple's market cap exceeded
Microsoft's.  This feat would have seemed impossible back when Gates poured
money into the nearly bankrupted company.

By creating great products enhanced by brilliant packaging, and by changing
their computer-only mission, Apple became a technology titan. Almost every
product released is a guaranteed, instant hit, and every keynote Jobs gives is a
media frenzy.

From $6 per share to $300, the company has never been stronger and there seems
to be no limits to what the company can achieve.

So what's to be learned from their story?

 * Think simple - The iPad is so simple 2-year-olds can use it.

 * Be different - Like the iMac.

 * Be a risk taker and make tough decisions - Jobs partnered with Microsoft and
   nixed the Newton.

 * Make great products, and package them even better - Show customers what they
   want, like the iPhone did.

 * Create an experience - Apple did this with their stores. And hype, like
   Macworld does for the media.

 * Be confident - don't hold focus groups and ask people what they think.

 * Be passionate - Steve Jobs said in his Stanford commencement speech: "Have
   the courage to follow your heart and your intuition. They somehow already
   know what you truly want to become."




NOW READ THE STORY OF HOW STEVE HIT ROCK BOTTOM...


Bloomberg TV


HOW STEVE JOBS BUILT AN EMPIRE AND THEN LOST IT OVERNIGHT >


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