Apple Inc. Business Analysis

Topics: Apple Inc., Steve Jobs, Personal computer Pages: 8 (3002 words) Published: July 26, 2010
Business Analysis of Apple Inc.
On April 1, 1976 Steve Jobs, Steve Wozniak, and Ronald Wayne joined together to form Apple Computer Incorporated. The concept behind their company was the creation of an inexpensive, simple to use personal computer kit. Working out of Jobs’ garage in Cupertino, California the trio designed and manufactured their first product in three months. They named this product the Apple I and it went on sale in July 1976 for $666.66. Six months after the release of the Apple I, Ronald Wayne opted to sell his share of the company back to Jobs and Wozniak for a meager $800. Soon thereafter multimillionaire Mike Markkula joined Apple and on January 3, 1977 the company was incorporated. Apple continued to gain momentum and was one of the fastest growing companies by the end of 1978. With the introduction of the Apple II plus, the company enjoyed a 400 percent increase in sales in 1979. In December of 1980 the company went public and within minutes the 4.6 million shares sold out at a price of $22 per share. An additional 2.6 million shares was also sold out by May 1981. However, the firm suffered its first major fallback with the release of the Apple III in September of 1980. The newest version had not undergone necessary testing due to time constraints and pressure from upper management. This proved to be extremely costly mistake and by 1984 the Apple III was discontinued. Below is a timeline with some of Apple’s key dates from the company’s short history. 1976: With $1,300, Steve Jobs and Steve Wozniak found Apple Computer, Inc. 1980: Apple converts to public ownership.

1982: Apple becomes the first personal computer company to reach $1 billion in annual sales. 1985: John Sculley assumes the helm after a management shakeup that causes the departure of Jobs and several other Apple executives. 1991: PowerBook line of notebook computers is released.

1994: Power Macintosh line is released.
1996: Acquisition of NeXT brings Steve Jobs back to Apple as a special advisor. 1997: Steve Jobs is named interim chief executive officer.
1998: The all-in-one iMac is released.
2000: Jobs, now firmly in command as CEO, oversees a leaner, more tightly focused Apple.

The company underwent some major changes in leadership in 1985. Despite being recruited by Jobs himself in 1983, John Sculley takes over as president of Apple and Steve Jobs leaves the company and builds another computer company called NeXT Incorporated. However, it was not until the 1990’s that the company’s poor management became a major problem. In 1993 John Sculley was forced out of presidency by the company’s board of directors. Sculley was replaced by Michael Spindler. It was not long before Spindler made his first major mistake. Spindler’s first major oversight was the new Power Macintosh line in 1994. Consumer demand for the new Macintosh line was much higher than the company anticipated and by 1995 Apple had an estimated $1 billion worth of unfilled orders (International Directory of Company Histories, 2001). This massive underestimation caused Apple’s stock to drop 15% over a two-day period and ultimately spelled the end of Spindler’s run as leader of Apple. In February of 1996 Apple introduced Gil Amelio as the new chief executive officer. With mounting financial losses throughout Amelio’s 17 month reign as chief executive, the firm once again decided to go in another direction with their leadership. However, before Amelio’s dismissal in July of 1997, Apple paid $377 million for a small company called NeXT. This happened to be the same company that was started by Steve Jobs twelve years ago in 1985. Jobs was immediately named interim chief executive officer following Amelio’s dismissal and the company’s return to profitability began. Jobs’ first major decision was to put an end to the licensing agreement that former chief executive Michael Spindler had initiated. The next smart decision Jobs made was to...

Bibliography: Apple Computer, Inc., International Directory of Company Histories, Vol. 36, St. James Press, 2001
Apple Inc., 2002 US Census Bureau, July 2010.
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