It is claimed again and again that in the course of the Macintosh’s development, Apple just resorted to the ideas the research laboratory Xerox PARC had hatched before. Fact or Fiction?

Entrance of Xerox PARC in the eighties

In the Untied States, the brand name “Xerox” denotes photocopying just as “Kleenex” stands for tissues or “Scotch tape” for adhesive film. After all, already in 1950, the Xerox Corp. was the world’s first company to actually transfer the “Xerography” invented by the American law student Chester Carlson into a functional product. Carlson received in 1937 a patent for a process that he called ”electrophotography.” On 22 October 1938 followed the premiere in practice: With the help of a metal plate was coated with sulfur and a lamp Chester the lettering ”10-22-38 Astoria” on a wax paper.

The first photocopy

By the end of the sixties, the Xerox management sensed the threat of Japanese companies catching up on Xerox’s technological advantage. Moreover, the Xerox head worried that the “paperless office” might emerge with the following computer generations, in which the Xerox would no longer have a place. Against this background, the Xerox Palo Alto Research Center (PARC) in California was founded in 1971. John Warnock, former researcher in the Xerox PARC and later one of the two founders of Adobe Systems, remembers: “The atmosphere was electric – there was total intellectual freedom. There was no conventional wisdom; almost every idea was up for challenge and got challenged regularly.” Larry Tessler, who later took part in developing the Macintosh and the Newton PDA at Apple, also enjoyed the liberties the PARC provided in the seventies: “The management said go create the new world. We don’t understand it. Here are people who have a lot of ideas and tremendous talent, [are] young, energetic.” The problem, however, was that the company management at the East Coast of the USA did not [care a straw for] the PARC’s research results unless they were directly involved with photocopiers.

Link:

In his TV documentation “Triumph of the Nerds” Robert Cringley is interviewing researchers at the Xerox PARC Within two years, the researchers at the PARC had designed the Alto, which was something like the first personal computer. The Alto did not feature character-oriented graphics, as did all the other computers of that time, but a bit-oriented version instead. A high quality printer could print exactly what the screen displayed.

Xerox Alto

However, this marvelous machine was not freely available on the market. Approximately 1500 units had been produced, 1000 of which Xerox employed in-house; the rest went to universities and public authorities.

Link: An advertising spot for the Xerox Alto taken from Robert Cringley’s TV documentation “Triumph of the Nerds“.

Jef Raskin, who had been charged initially with the Macintosh project at Apple, kept regular contact to the PARC researchers and tried to convince the Apple management to employ a graphical user interface like the Alto contained in the development of the Lisa. Raskin claimed he wanted to introduce Jobs to the PARC, but due to his personal dislike of Raskin, Jobs simply did not agree to respond to the offer. According to Raskin, it was not until Bill Atkinson supported him that Jobs set out for the PARC. Whatever way the contact was actually accomplished, this visit meant a turning point to the life of Steve Jobs; the three technologies that the 24-year-old encountered there were each revolutionary on their own: the first graphical user interface for computers; networked Alto computers; and object-oriented programming.

They showed me really three things. But I was so blinded by the first one I didn’t even really see the other two. One of the things they showed me was object oriented programming – they showed me that but I didn’t even see that. The other one they showed me was a networked computer system… they had over a hundred Alto computers all networked using email etc., etc., I didn’t even see that. I was so blinded by the first thing they showed me, which was the graphical user interface. I thought it was the best thing I’d ever seen in my life. Now remember it was very flawed, what we saw was incomplete, they’d done a bunch of things wrong. But we didn’t know that at the time but still thought they had the germ of the idea was there and they’d done it very well and within you know ten minutes it was obvious to me that all computers would work like this some day.

Adele Goldberg

Jobs decided to realign Apple’s strategy and fully rely on the “graphical user interface” (GUI) he had seen at the Xerox PARC. Adele Goldberg, who had been a researcher at the PARC at that time, already suspected that Jobs’ visit would entail extensive consequences: “He came back, and I almost said ‘asked’ but the truth is ‘demanded,’ that his entire programming team get a demo of the Smalltalk System, and the then head of the science center asked me to give the demo because Steve specifically asked for me to give the demo, and I said ‘no way.’ I had a big argument with these Xerox executives, telling them that they were about to give away the kitchen sink, and I said that I would only do it if I were ordered to do it, cause then, of course, it would be their responsibility, and that’s what they did.”

Bill Atkinson and Larry Tessler the demo for Apple at Xerox PARC” (taken from: Triumph of the Nerds)

Apple bought access to the PARC by means of a stock deal that seemed lucrative to the Xerox managers on the East Coast: They might buy 100,000 Apple stocks for one million dollars. Holding this admission ticket in the hand, Steve Jobs, Apple’s president Mike Scott, Bill Atkinson, and a number of members of the developing team marched up. “I think mostly … what we got in that hour and a half was inspiration and just sort of basically a bolstering of our convictions that a more graphical way to do things would make this business computer more accessible.”

Larry Tesler, who then took part in the demo as an employee of the PARC, had been fascinated by the visitors: “After an hour looking at demos, they understood our technology and what it meant, more than any Xerox executive understood after years of showing it to them.”

The Macintosh team took up the ideas of the PARC, but it also changed numerous operating modes and added countless new features. Accordingly, the Xerox Alto did not imply, for example, menus flapping down from the upper edge of the screen, but operated with some kind of a pop-up window instead. Moreover, the window did not open automatically by double-clicking on a document, but had to be opened manually. During months of painstaking work, Atkinson had written the QuickDraw routine for the Lisa and the Macintosh, which allowed for overlapping windows to be drawn on the computer screen for the first time.

The screen of the Xerox Star

In contrast to the first Mac, the Alto featured no completed desktop metaphor nor ingenious desktop icons such as the trash can, which made it easier to delete files, and not just for computer novices. The historical accomplishments of the Mac team also included the Macintosh Human Interface Guide, which, for instance, when it detected a document in a Macintosh application, determined that it was to be saved using the command “Apple-S.”

As for Xerox, the bitter aftertaste of having missed an historical opportunity remained, particularly due to the fact that parallel to the Apple developers, Bill Gates and his Microsoft crew also went in and out as they pleased. (By the way, they did so without holding an admission ticket comparable to the one Jobs had procured by means of the stock deal.)

“Basically, they were copier heads that just had no clue about a computer or what it could do. And so they just grabbed defeat from the greatest victory in the computer industry. Xerox could have owned the entire computer industry today,” Steve Jobs said in 1996. “Could have been, you know, a company ten times its size. Could have been IBM – could have been the IBM of the nineties. Could have been the Microsoft of the nineties.”
Besides, in the context of the dispute with Apple about the plagiarism accusations around the first Windows versions, Microsoft had pointed out that Apple and Microsoft had both helped themselves generously at XEROX.

In the early ’80s Steve Jobs needed help from Bill Gates: Apple was developing its first Macintosh. Microsoft, which had supplied IBM with the MS-DOS operating system for its PCs, was invited to be the Mac’s first software developer. Early Mac developer Andy Hertzfeld says that when Jobs recruited Microsoft he feared it “might try to copy our ideas into a PC. Steve made Microsoft promise not to ship any software that used a mouse – until at least one year after the first shipment of the Macintosh”.
In 1983, Microsoft sprang a surprise with a new operating system for PCs using an interface like the Mac’s – Windows. Jobs “went ballistic”, demanding an explanation and saying: “I want him in this room by tomorrow afternoon, or else.”
Gates arrived alone to find himself surrounded by 10 Apple employees. “You’re ripping us off,” Jobs shouted.
But Gates looked him in the eye, and said in his squeaky voice, “Well, Steve, I think there’s more than one way of looking at it. I think it’s more like we both had this rich neighbour named Xerox and I broke into his house to steal the TV set and found out that you had already stolen it.”
This episode is described slightly exaggeratedly in the movie “Pirates in the Silicon Valley”:

Apple sued Microsoft in 1988. Six years later a judge threw the case out.

Christoph Dernbach

****************************************************

Book cover: Revolution in The Valley

James Turner from O’Reilly News interviewed Andy Hertzfeld, one of the original designers of the Macintosh and author of the book, Revolution in the Valley: The Insanely Great Story of How the Mac Was Made, which chronicles the efforts to create the Mac. Andy Hertzfeld currently works at Google as a Software Engineer. In this Interview James Turner asked some questions about Xerox PARC and the development of the Mac:

JT: In your book you allude to Xerox as being, to Bill Gates, the rich uncle that both Apple and Microsoft stole from. What was the relationship like with PARC when you were developing the Mac and how did the Xerox researchers feel about the Mac?

AH: Well, we had no formal relationship with PARC while we were developing the Mac. We got a single demo before the Mac project got off the ground, when the LISA project, that sort of cousin or bigger brother of the Mac, was in development. And so from that one demo we were already pointed in that direction but I would say that Xerox PARC demo galvanized and reinforced our strong opinion that the graphic user-interface was the way to go. And then the influence of PARC was strong in the project, but not through a formal relationship with PARC; more through PARC people getting wind of what we were doing and coming to work at Apple. The very first one was Tom Malloy on the LISA project. He was sort of a disciple of Charles Simonyi–I write about that a little bit in my book. He was one of the original LISA people who came to Apple in 1978. But later, Larry Tessler was a really key figure coming to the LISA team in the summer of 1980 from Xerox PARC and eventually, mostly after the original Mac shipped, there were a dozen or more. Another person I have to mention is Bruce Horn who started working at Xerox PARC when he was 14 years old; he was one of those kids they picked from a Palo Alto High School to teach Smalltalk to and he was one of the four or five key Macintosh developers. And of course he was steeped in all of the PARC values and through Bruce, a lot of them made it into the Macintosh.

JT: Was there any feeling among the Apple engineers that any – guilt is probably too strong a word, but feeling like you know Xerox had these great ideas. I guess Xerox really let them go to waste but–

AH: Oh there was nothing like that; Steve Jobs has a good quote. It’s actually a Picasso quote that he often cites; he cited it at one of our retreats which was sort of good artists copy; great artists steal. And what that means is that when you’re passionate about what you’re doing you’ll take ideas from anywhere and with no guilt. You want to make the best possible thing and that was our mentality.

JT: I have to say I actually worked for Xerox AI Systems in 1986 and it was kind of frustrating because they really had the mentality there that if you couldn’t sell paper and toner for [them] they weren’t interested.

AH: Oh sure. Xerox in a well-documented fashion – they had at least the possibility of having the world at their feet there with the work that Alan Kay and his team did. But yeah; they completely blew it and most of the best PARC people were really frustrated by the Xerox management. There’s no doubt of that; that’s one of the reasons why Steve Jobs is great. You had someone leading the company who could relate to the customers and appreciate things.

Apple Macintosh (1984)

“Insanely great” – Steve Jobs could hardly put into words his enthusiasm by the launch of the Macintosh. On the legendary annual general meeting of January 24th, 1984, in the Flint Center not far from the Apple Campus in Cupertino, the Apple co-founder initially quoted Bob Dylan’s “The Times They Are A-Changin’” in order to then polemicize against an imminent predominance of the young computer industry by IBM.

The early 1980s. 1981 – Apple II has become the world’s most popular computer, and Apple has grown to a 300 million dollar corporation, becoming the fastest growing company in American business history. With over fifty companies vying for a share, IBM enters the personal computer market in November of 1981, with the IBM PC.

1983. Apple and IBM emerge as the industry’s strongest competitors, with each selling approximately one billion dollars worth of personal computers in 1983. The shakeout is in full swing. The first major personal computer firm goes bankrupt, with others teetering on the brink. Total industry losses for 1983 overshadow even the combined profits of Apple and IBM.

It is now 1984. It appears that IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money. Dealers, after initially welcoming IBM with open arms, now fear an IBM dominated and controlled future and are turning back to Apple as the only force who can ensure their future freedom.

IBM wants it all, and is aiming its guns at its last obstacle to industry control, Apple. Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right?

The crowd, among them the complete Macintosh developer’s team, shouted back: “Nooooo!”

There had been only two milestone products so far: the Apple II in 1977 and the IBM PC in 1981, Jobs continued. “Today (…) we are introducing the third industry milestone product, the Macintosh. Many of us have been working on Macintosh for over two years now and it has turned out insanely great.”

Taking a look at the history of the personal computer today, Steve Jobs was on the right track with his historical comparison. However, it would not be IBM that became the great dominator of the computer industry over the years, but rather, the alliance of Microsoft and Intel.

Steve Jobs

Previous to the Macintosh developer team, others had already tried to design a computer with a mouse and a graphical user interface – one year before Apple did, with its own business computer Lisa, which retailed for 10,000 dollars.

Advertising spot for the Apple Lisa

However, the Lisa computer proved to be a huge flop. With a price of 10,000 dollars (exclusive of a hard disk drive), it was far too expensive; the graphical user interface devoured the Lisa’s power so that the computer did not work particularly briskly. It lacked the necessary programs to induce the business world to buy the Lisa in large numbers. Moreover, the newly established distribution team could hardly resort to any experience in the handling of Corporate America.

Contrary to its elitist predecessors, the new Macintosh was not only to delight a few experts in the Californian Silicon Valley, but also to conquer the masses – and set the standard for future computer generations. Computer columnist Bob Ryan immediately caught the Mac’s revolutionary core:

The Macintosh is the best hardware value in the history (short though it may be) of the personal computer industry. It is a machine which will appeal to the masses of people who have neither the time nor the inclination to embark upon the long learning process required to master the intricacies of the present generation of personal computers. Barring unforeseen technical glitches and assuming that a reasonable software library is in place by the end of the year, the Macintosh should establish itself as the next standard in personal computers.

[ see also the articles:

It all began with “Annie” – Initial drafts of a computer for the masses

Steve Jobs discovers the Macintosh Project]

Against Big Brother IBM

Given the innovative Macintosh, Apple believed it had discovered a way to reclaim the leadership of the then still young market for personal computers from computer giant IBM.

In 1981, IBM had introduced its first PC and seized the Apple II’s position of the most successful personal computer within a few months. Within three years, “Big Blue” had sold more than two million IBM PCs. Therefore, Apple’s 15 million dollar advertising campaign on the occasion of the launch of the Macintosh directly aimed at IBM. The enormous sales campaign had eventually also been responsible for Apple raising the Mac’s originally planned launch price by 500 dollars to 2,495 dollars.

Lisa Flop Causes Trouble for Apple

The Lisa’s failure put Apple into a precarious situation in 1983. The hitherto existing cash cow, the Apple II, had been eclipsed by newer technology and found itself exposed to intense competition. Now the Macintosh was to save Apple Computers from ruin. In its first business plan of summer 1981, Apple had assumed that 2.2 million Macs could be sold between 1982 and 1985; that is about 47,000 units per month. However, the Mac was not brought to market until the beginning of 1984. After the community of the computer nerds (at least those who could afford the first Mac) had satisfied its buying frenzy, the sales of the Macintosh dropped dramatically to about 5,000 units per month.

Apple boss John Sculley could not change much about this either. In order to professionalize Apple’s management and marketing, Steve Jobs had enticed Sculley away from Pepsi with the sentence: “Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?“

Despite diverse management methods, Jobs and Sculley initially collaborated harmonically and were celebrated by the public as Apple’s “Dynamic Duo.” However, the Mac’s depressed distribution soon caused serious tensions to arise between Jobs and Sculley.

It didn’t do very much. We had Mac Paint and Mac Write were our only applications and the market started to figure this out, by the end of the year people said well maybe the IBM PC isn’t as easy to use or is not as attractive as the Macintosh but it actually does something which we want to be able to do – spreadsheets, word processing and database and so we started to see the sales of the Mac tail off towards the end of 1984, and that became a problem the following year.
John Sculley

At that time, the Mac simply lacked the applications that dragged the Charlie Chaplin figure across the screen box by box in the IBM’s advertising spot for the PC. Therefore, Guy Kawasaki and other “Software Evangelists” of Apple made an effort to convince the developers of other software companies to write programs for the Mac. The Mac’s ROM, which had been calculated far too tight at 128 kilobytes, did not make this a simple task. The narrow bottleneck was not removed until the launch of the “Fat Mac” with 512 kilobytes, one year after the first Macintosh.

[ see also the article:
Showdown at Apple: John Sculley vs. Steve Jobs]

Success on the Second Attempt

In 1987, Apple sold one million Macs and suddenly played in the IBM league again. More than half of the 2,000 dollars for a Mac constituted profit for Apple, so that Sculley and his colleagues in the Apple management believed that the users would always be willing to pay much more for a better technology. Within these years, Apple missed the gigantic opportunity of establishing the Mac as the general industry standard. At that time, either the prices should have been cut dramatically, or a broad licensing program should have been agreed with other hardware producers. With the introduction of Windows 3.0 in 1990, this “window of opportunity” finally shut.

When Steve Jobs returned to his former company in hard times by the beginning of 1997, first as a counselor and then as a principal, the competition for the industry standard between Apple Computers and Microsoft had long been settled. With new Apple talents such as Jonathan Ive, he not only succeeded in bringing the company back on the course of success, but also in making a mark in the industry.

With the Mac, Jobs also astounded experienced pioneers of the computer industry: Future PCs, Intel co-founder Andy Grove said in 1998 in an interview, wouldn’t be general purpose computers to which networking has been added as an afterthought, but networking machines that also do computing. “The iMac embodies a lot of the things I’m talking about,” Grove said. “Sometimes what Apple does has an electrifying effect on the rest of us.”

Christoph Dernbach

Image gallery: The top 10 standout Macs of the past 25 years.

Mike Markkula (1977)

Raskin had been responsible for Apple’s publications, particularly manuals, and actually was to more intensely oversee the developers writing the applications for the Apple II. “I told him [Markkula] it was a fine project, but I wasn’t terribly interested in a 500 dollar game machine,” Raskin later remembered. “However, there was this thing that I’d been dreaming about – it was [that] it would be designed from a human factors perspective, which at that time was totally incomprehensible.”

In fall 1979, Raskin wrote his article “Computers by the Millions“, in which he drafted his version of a computer for the masses. Markkula insisted on the report to be treated as a confidential internal report. The essay was not published until 1982 in the SIGPC Newsletter, Vol. 5, No. 2.

Raskin had chosen a completely new approach, because until then, the “technically feasible” is what defined a computer’s design. The academic computer scientist, who had kept secret his diploma from the Apple founders at the time of his appointment (as Steve Wozniak and Steve Jobs approached academics extremely distrustfully), wanted to design a computer for the normal person in the street – which of course could not to be unattainable.

The expression of the “Person in the Street” formed by Raskin became a dictum at Apple – abbreviated as PITS. Raskin’s first draft envisioned a closed computer including monitor, keyboard and printer able to work without any external wires – and all that for 500 dollars. In return, the Macintosh should only be equipped with a tiny five inch display, a cheap CPU (6809) and a main memory calculated extremely tight at 64 kilobytes.

Steve Jobs and Jef Raskin

At that time, Steve Jobs had not taken particular interest in the Macintosh project – and due to some dim apprehension, Raskin tried everything to exclude the Apple co-founder. Yet in the summer of 1980, a serious conflict between Jobs and Apple’s president Mike Scott was brewing as Scott intended to edge Jobs out of the concrete development of the new Lisa. With his capricious and at times fairly aggressive management style, Jobs had snubbed many developers. In addition, Scott did not think him capable of a major management role and thus planned to assign him the less important role of a company spokesman and promoter in advance of Apple’s initial public offering on December 12th, 1980.

In 1982, Jef Raskin left Apple and founded the company Information Appliance, Inc. in order to realize his original concept of the Macintosh project. The company brought the “SwyftCard” to market, which is a firmware card for the Apple II. The card featured a program package which was also offered on disk as SwyftWare. With the Swyft, Information Appliance later offered a laptop computer, which, however, experienced only moderate commercial success. Raskin licensed the Swyft design to Canon, which constructed the “Canon Cat” on its basis in 1987.

Jef Raskin with a design model of the Canon Cat

In his book “The Humane Interface”, Raskin later described his vision of a computer interface constructed for the human being and oriented to human needs – rather than to technology.

On February 26th, 2005, Jef Raskin died at the age of 61 years.

However, Steve Jobs knew what he wanted. He had seen the graphical user interface of the Xerox Alto at Xerox PARC. Instead of green letters on a dark background, white document windows with black text appeared – just like a sheet of paper. Several different fonts could be selected. The graphics board controlled individual pixels on the screen freely. By means of a mouse, a pointer could be moved on the screen in order to mark texts or issue commands. Files were represented by icons on a virtual desktop.

The Alto was not available on the market. For this experimental computer, the main memory alone would have cost about 7,000 dollars at the time. Jobs wanted a computer even better than the Alto – and also better than Apple’s Lisa. However, the new marvelous machine should cost only a fraction of the Lisa’s price, which was about 12,000 dollars, inclusive of external hard disk.

Pirate flag above the Mac
developers’ building “Bandley III”

Within Apple, Jobs gathered a small, conniving team – and he did not care for other projects in the company. Andy Hertzfeld, one of the most important software designers in the Macintosh developers team, remembers:

Steve Jobs kind of came bopping by my cubicle saying OK you’re working on the Mac now. And I said well I have to finish up this Apple 2 stuff I’m doing here. No you don’t that stinks that’s not going to amount to anything you gotta start now. And I said well just give me a few days to finish and he said no and what he did was he pulled the plug on my Apple 2 that I was programming just losing, losing the code I’m working on and start taking my computer and walking away with it and what could I do but follow him out to his car cause he had my machine he plopped it down in the trunk and drove me over to this remote building, took the computer out, walked upstairs, plopped it down on a desk, well you’re working on the Mac now. While Jobs pursued his MacMission he needed a more orthodox chief executive to run the company. A respectable face who could sell to corporate America. He chose Pepsi-Cola executive John Sculley. Sculley refused – leave Pepsi for a 4 year old company that had been set up in a garage! Are you serious?! But it was hard saying no to Steve Jobs.

The Macintosh Pirates

Above the roof of “Bandley III”, a pirate flag with the Apple symbol as eye patch was waving – and on deck of the virtual pirate ship, Steve Jobs was standing as a man who wanted to prove it to them all. Jobs’ first victim was Jef Raskin, who had fought against the application of a mouse and instead preferred a pen or a joystick. After Jobs had relieved his opponent of the responsibility for the software, Raskin gave in exasperatedly and left Apple Computers in March 1982. In retrospect, Raskin can claim that he was the first at Apple to have presented the vision of an inexpensive, easy to handle computer for the masses. Yet in order to keep “his” Macintosh below the price limit of 1,500 dollars, Raskin also wanted to make technical compromises which would have put at risk the Mac’s success. Thus, for instance, he insisted on limiting the main memory to a tiny 64 kilobytes. Jobs accomplished 128 kilobytes – and afterwards, even this space was actually far too tight for the system programmers.

Raskin did not particularly support the innovations the Lisa team had picked up in the Xerox PARC and therefore disapproved of the change to the more capable 68000 processor, which was included in the Lisa as well. It is hardly imaginable what would have become of the Mac if Raskin had asserted his extreme parsimony and his resistance to the mouse. After the internal disputes had been settled, the Mac team now fully concentrated on the in-house competition against the far larger Lisa developing team. Beforehand, Jobs had enticed away from the Lisa team ingenious programmers such as Bill Atkinson and Steve Capps.

Love and Hate

As a project manager, Steve Jobs had been highly controversial not only within Apple. “He’s also obnoxious and this comes from his high standards. He has extremely high standards and he has no patience with people who don’t either share those standards or perform to them,“ Bob Metcalfe remembers. He is the inventor of the networking standard Ethernet, who had worked as a researcher in the neighboring research institute Xerox PARC at that time. “He’s also obnoxious and this comes from his high standards. He has extremely high standards and he has no patience with people who don’t either share those standards or perform to them.” However, Metcalfe still thinks a lot of Jobs as he had made the vision created in the Xerox PARC become reality. “Steve Jobs is on my eternal heroes list, there’s nothing he can ever do to get off it.”

The respect for Jobs is also shared by Andy Hertzfeld, who had written the Mac’s kernel in the Macintosh ROM, although he was sometimes afflicted with his boss’s tantrums: – quotation – Kenyon set to work again and shortened the booting process by further three seconds.

In the internal competition at Apple over whether the Lisa or the Macintosh would be finished first, Jobs got the short end of the stick. He lost a personal 5,000 dollar bet against the Lisa team leader John Couch when the Apple business computer was launched in January 1983 – at least one year previous to the Macintosh. However, the Lisa computer soon proved to be a huge flop. With a price of 10,000 dollars (exclusive of hard disk), it was far too expensive;the graphical user interface devoured Lisa’s power such that the computer did not work particularly briskly; and it lacked the necessary programs to induce the business world to buy the Lisa in large numbers. Moreover, the newly established distribution team could hardly resort to any experience in handling Corporate America.

Apple boss John Sculley’s marketing strategy for the launch of the Macintosh was obvious. The former Pepsi manager, who had been brought to Apple by Steve Jobs, intended to arrange a duel between IBM and Apple, black vs. white, with Apple playing the role of the underdog. Sculley wrote in his book Odyssey:

So we needed a campaign that would focus on a two-horse race to leverage off of Apple’s underdog status. Dozens of other computer companies were coming out with products and I was afraid we were going to get lost in the crowd. If we could create a two-horse race between us and IBM, we might be able to convince people that there are really only two computer companies competing in the marketplace. In any large consumer industry, few people remember the third- or fourth-largest competitor.

In the fight against competitors such as Atari, Commodore, Sinclair and Amstrad, the Apple strategy paid off well. But Sculley, as well as Steve Jobs, had completely underestimated that Microsoft, being an ally from the outset, would, with the aid of Apple, develop into a dominant power of the PC industry and even dwarf IBM.

Bill Gates and Paul Allen had founded Microsoft as a small software company in Albuquerque (New Mexico) in 1975 and developed the programming language BASIC for the legendary computer MITS Altair in collaboration with other co-workers. Due to fortunate circumstances, Microsoft landed the order from IBM to deliver not only BASIC, but also the operating system for the first IBM PC in 1980. In the negotiation phase, the then leading operating system manufacturer Digital Research (CP/M) did not want to engage in page-filling adhesion contracts from IBM – and thus lost this gigantic deal.

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Though Microsoft did not have any operating system at that time, this did not prevent Bill Gates and his companion Steve Ballmer from playing for high stakes while facing IBM. From their neighboring software shack Seattle Computers (in the mean time, Microsoft had moved to the northwest of the USA) they bought all rights for QDOS (Quick and Dirty Operating System) for no less than 50,000 dollars in July 1981 and renamed it as MS-DOS. Gates had been clever enough at that time not to have all rights to the system negotiated away by the IBM crew and was therefore able to win clone companies such as Compaq as customers later.

Microsoft then provided their BASIC for the Apple II as well. Therefore, Steve Jobs and Bill Gates constantly ran into each other at that time. “Even before we finished our work on the IBM PC, Steve Jobs came and talked about what he wanted to do, what he thought he could do, sort of a Lisa but cheaper. We said boy, we’d love to help out”, Gates remembers. “The Lisa had all its own applications, but of course they required a lot of memory, ah, and we thought we could do better, and so Steve signed a deal with us to actually provide bundled applications for the first Mac, and so we were big believers in the Mac and what Steve was doing there.”

Apple urgently needed software for the Mac, as there did not yet exist any program for the new system except for their in-house products MacWrite and MacPaint. Gates promised to have the programs Chart and File written for the Mac in addition to the spreadsheet program Excel. Steve Jobs appreciated the risk Microsoft took, but was not content with the first results though. “Most people don’t remember, but until the Mac, Microsoft was not in the applications business… it was dominated by Lotus. And Microsoft took a big gamble to write for the Mac.”

Apple still could have coped well with having given Microsoft’s new application business a leg up. However, Bill Gates had tasted blood in the Macintosh project. Jeff Raikes, who was responsible for the Office business at Microsoft until early 2008, reviews: “And so we got started in early 1982 on our Macintosh software effort and I think at that point in time, you know, it really clicked with Bill that, you know, graphic user interface was going to be the way, the way of the future. But while Bill was having his own GUI revelation, Jobs believed that Apple’s true enemy was IBM.”

However, it was not until November 1985 that Microsoft introduced the first version 1.01 of Windows, which was two years after Gates had announced Windows in his first Comdex keynote at the Fall 1983 Comdex in Las Vegas. The system was based on DOS and was incredibly slow, but it reminded one of the Macintosh GUI in some features. In order to prevent Apple from taking legal action, Gates put the screws on Apple boss Sculley. His message was: As soon as Apple sends out the lawyers, Microsoft will immediately stop the development of Word and Excel for the Mac. Since Apple was depending on the Microsoft applications, Sculley licensed some of the Mac technologies to Microsoft.

As Microsoft went public with the next large version leap of Windows 2.03 at the beginning of 1988, Sculley tried to pull the ripcord and sued Microsoft and Hewlett-Packard for copyright infringement on March 17, 1988. John Sculley had been in a difficult situation, particularly as he had engaged in vague formulations in the contract with Microsoft in 1985, which gave great leeway to Gates and his lot. Moreover, he knew that his chances to win an action against Microsoft had been, purely from a legal viewpoint, not particularly good: “The look and feel, which is how it looks, the experience of using it, was not patentable, but it was copyrightable, but there was no precedent law. This was going to be a precedent setting case.”

Bill Gates recalls also reluctant this time.: “But it was a period of five years where, Microsoft er, our whole strategy would have been ruined because Windows was very important to us. (…) We assumed that the lawyers, the judges would all come to the right conclusion which eventually they did.” Sculley: “And Apple lost. But in that period of about six years that this case was going on it may have lulled us into a bit of complacency thinking that we were going to be insulated, you know, from the Windows attack.”

The introduction of Windows 3.1 in 1992 brought Microsoft the breakthrough in the “GUI war.” The system lacked the elegance and usability of the Macintosh system 7.0, but Windows appeared good enough to most PC users. With the help of Windows 95, which had been introduced with gigantic effort on August 24, 1995, Microsoft caught up closer to the Mac and in some aspects even appeared more progressive than the Mac OS, which had become dated in the meantime.

Steve Jobs, who, as the head of NeXT, had observed the advance of Windows from a distance, did not have any kind words for Bill Gates at the launch of Windows 95:

The only problem with Microsoft is they just have no taste, they have absolutely no taste, and what that means is – I don’t mean that in a small way, I mean that in a big way. In the sense that they don’t think of original ideas and they don’t bring much culture into their product, and you say why is that important – well you know proportionally spaced fonts come from type setting and beautiful books, that’s where one gets the idea – if it weren’t for the Mac, they would never have that in their products and so I guess I am saddened, not by Microsoft’s success – I have no problem with their success, they’ve earned their success for the most part. I have a problem with the fact that they just make really third rate products.

It is claimed that Jobs has apologized to Bill Gates for this remark later.

The relationship between Apple and Microsoft – and thus also the relationship between Steve Jobs and Bill Gates – did not get back to normal before the summer of 1997, when Steve Jobs had returned to Apple and engaged in the support of Microsoft in order to make the troubled company profitable again.

Many faithful Apple fans still remember with horror the moment when Steve Jobs announced the former archrival very pragmatically as the knight in shining armor at the MacWorld Expo 1997 in Boston with Bill Gates appearing on an oversized video screen just like “Big Brother.” Introducing Gates, Jobs said: “”We have to let go of the notion that in order to for Apple to win, Microsoft has to lose. Relationships that are destructive don’t help anybody. The era of setting this up as a competition between Apple and Microsoft is over.”

Microsoft invested 150 million dollars in 150,000 Apple stocks and, according to certain rumors, paid further 100 million dollars for copyright infringement during the past few years. At the same time, Gates obliged himself to continue the development of the Internet Explorer and Microsoft Office for the Mac for the following five years. Gates drew hisses from the audience of Apple faithful. The crowd also groaned when Steve Jobs said Apple would make Microsoft’s Internet Explorer the default browser for viewing the World Wide Web on Macintosh computers. That development was a blow to Netscape Communications Corp., which made a more popular competing browser and lost later on in the famous “browser war” against Microsoft.

Christoph Dernbach

Cover iCon Steve Jobs

Young and Simon provide an in depth and seemingly unbiased thrashing and congratulatory depiction of what Steve Jobs has accomplished. There is a lot about Jobs covered in this book, and those with an interest in the man behind Apple, the I-pod, and Pixar will find this book fascinating.

Among Steve Jobs accomplishments:

• Created the Apple II, making Apple the first computer giant
• Created the first windows platform with the Mac
• Created the mouse (respectively made the mouse popular)
• Funded Pixar against all logic becoming the largest animator in history
• Made more money selling a failed company than he did in the original Apple IPO
• Current largest stockholder in Disney, Pixar, and ABC
• Negotiated the first music store with the music industry in the wake of a long list of heavy failures by major companies to accomplish the same (and paving the way for countless since)
• Beat cancer
• Despite a long list of failures, is back on top
• Created 7 blockbuster movies in a row

Among his failures:

• Pissed off enough co workers/employees to nearly fill a stadium.
• Blew a chance to develop the windows system for the PC – paving the way for Microsoft.
• Wasted more money on failed projects than any computer company in history.

I had written a summary after I read the book that provides a full overview of the entire account. For those already interested in the book, I suggest reading the book instead of finishing my review. For those seeking a summarization of the content of the book, the rest of my review is for you.

—–

Apple Founders Steve Wozniak and Steve Jobs

Apple was selling a lot of basic kits, but nothing of any great magnitude. With Woz being the brains behind the design of the actual computers, Jobs then took it up a notch. He would go to computer fairs all the time and he began to recognize what people were becoming impressed with. Most of the buyers of computers were what he considered computer geeks who had tech knowledge, so they designed the Apple I to suit them. Jobs recognized that these guys liked to get into the circuitry and see what was going on, so he had Woz design all the wiring in very organized straight lines, as opposed to soldering wires haphazardly, which was common at the time. It was the right call, and they sold enough circuit boards to get the Apple name out there. Next they designed the Apple II, based on Jobs view of what it would take to get into homes. For the early 80′s, the Apple II was such a hit that the company went public and Jobs was worth $300 million by age 24.

At this point, Jobs could do no wrong. Things would change however. He was a visionary in one major way; he focused all his energy on what consumers wanted. This led to his products being known for their quality and design…something Apple is still known for to this day. The problem was that this often times took the focus away from budgeting, producing some fairly unrealistic costs. Apple eventually would put out products that were much better than anything out there but were not priced for the market they aimed at, thus becoming failures. This was evident in the next two huge leaps Apple made at Job’s direction. He was so shrewd that he made a deal with Xerox to view what they were doing behind closed doors in exchange for some big discounts on services Apple was working on for Xerox (Xerox was also an investor/owner). What they discovered was a user interface that inspired Jobs to come up with what we now know today as windows and a mouse. This was revolutionary.

Apple Lisa

Apple went ahead with a windows style computer…two of them. The first, the Lisa, was the beginning of problems with Jobs. He was a visionary, but he also was at times a complete disaster when dealing with people. He was so convinced that what he was working on was the future of computers (which in hindsight is interesting) and thus refused to accept anyone else’s opinion about anything. This resulted in two revolutionary computers being developed, and two total flops. The Lisa had a sales price of $10,000 and never sold. The Macintosh, the computer that is still revered as the most revolutionary breakthrough in computers, although a big seller, never sold what it needed to live up to its reputation as a smashing success. Essentially, the computer was viewed by the public as the best thing since sliced bread, but the cost prevented it from outselling more than IBM PC’s.

“1984” – The famous Super Bowl Ad

Job’s had been spot on about what the computer meant to Apple and the computer industry, but as a result had totally blew the cost analysis of what it would take to become profitable. At this point, people in Apple disagreed so vehemently with him that the board was split about what to do to, and he was eventually voted out. This was the same board of course that was 100% against his view on using the Superbowl commercial Jobs liked to much to present the Mac, which is still the most famous SB commercial ever. Again, Jobs was right, but his total inability to give any focus to cost analysis or people skills got him ousted.

Jobs then went on to start Next. At this point, his net worth was about $90 million (because Apple stock had dropped). He cashed out and used it to fund Next and eventually to buy Pixar, a failing computer company trying to sell computers for artistic design. Both companies were trying to create new computers, something Jobs did at Apple. For years he poured money into both companies, with neither ever developing any notable profit. Early on at Next, IBM approached him about using their operating system to run on IBM computers. They had been negotiating and were coming to an agreement, but Jobs was so difficult to deal with that it caused significant delays. Eventually, the exec at IBM that was interested in Next’s system left the company, and IBM chose to look elsewhere. They went with Microsoft, and the rest of that story is history. This was an eye opener for Jobs, a lesson he would not easily forget.

Jobs eventually was finally willing to admit temporary defeat, and that neither company was producing a computer that was going to challenge on the market. Although Next sold hundreds of millions of dollars in revenue, this was nothing compared to what Apple and leading PC retailers were doing, so while considered a success to most, this was a failure for Jobs who was known as a revolutionary. Thus, Jobs stopped all computer sales in both companies and focused on software. This changed everything.

With Next, the company was in the brink of bankruptcy when Jobs decided he would make an effort to sell the software to Apple (the software what Mac OS X today is based on). When he went to Apple, he found them surprising receptive because the software was very good, and one of Job’s biggest strengths was presentation. Jobs identified that Apple was interested and took the negotiation up a notch. He said that if Apple was interested in the software, they would best be served by gaining all the technology and staff of the whole company, essentially they should buy Next. They did, and paid nearly $1 billion which put half a billion in profit right into Job’s pocket. This was remarkable considering the company didn’t have enough revenue to support itself. In terms of sales, this was among the greatest of all time. But it worked out for Apple as well, because that software was the future of the industry.

With Pixar, Jobs was putting up to a million a month into the company to keep it afloat. He was making so many cuts that the only thing left in the company was its division on animation with 3D graphics. Jobs eventually pressed Disney to do a movie for them, at Disney’s cost. This was the beginning of what became the most profitable venture in Job’s life. After creating Toy Story, they went on to develop seven blockbusters in a row, bringing the company public, and making Job’s far richer than Apple or Next ever did. He was finally a billionaire.

Pixar Blockbuster: Toy Story

Back at Apple, they were facing serious issues ever since the failure of the Mac. Nothing had worked out, and they decided to try giving Jobs another shot. They never looked back. He cut so many Apple projects that he made the company profitable in six months. However, they were no longer a dominant in the market, taking a huge backseat to other major players. Job’s sold the Next software to Microsoft to get some profits back and Microsoft went on to use it to design Windows 95. Steve was so focused on quality though, that eventually Apple would regain its reputation. He focused on giving to schools, and got all the kids in the current generation using Macs…what would be a brilliant move for the future. Every school in California was given countless Macs and thus all the kids these days using are Macs…as are the teachers.

The hand held market was taking off in the early 2000′s and Job’s had to decide what direction to go. He made an unprecedented move by totally discontinuing all Apple’s interest in the hand help market. He said he just didn’t see a future in it and decided he wanted to go in the direction of music applications. At this point, there were many companies in music that were announcing failures. The invention of Napster had upset the music community so badly that it was near impossible to create anything profitable. Jobs had a different idea. He assessed what the music industry wanted and decided it was a good point to begin negotiations. The music industry feared losing its ability to make residuals because of theft and duplication. They were proposing some of the most ridiculous software which had chased out weaker negotiators, but not Jobs. The music industry wanted features such as monthly subscriptions but no downloads, or, downloads but only onto a single computer, or, downloads that would expire meaning music you bought disappeared after a while. Essentially, the concept of a music store with this type of guidelines would be a ridiculous venture. Steve took the initiative and went to all the top producers and many major labels and bands and presented his case for being able to offer the store with downloads that would have protection, meaning they could not be copied on to other computers or shared, but could be downloaded onto a single music player. In addition, if there was an attempt to transfer the music, it would automatically delete all music on that computer (a feature long gone). This was what Jobs had to doin order for the music industry to agree, and the only way he could offer this was to develop his own software with all these protections. Counter to what is believed to be manipulative marketing strategy to sell his I-pods, this was the reason I-tunes was designed in the limiting manner.

What would happen next changed the industry. Selling music for 99 cents each created billions for the industry, and the music industry eased up considerably as they saw internet sales as a viable way to sell their music and still make a lot of money on residuals. Essentially, Job’s had negotiated so hard with so many restrictions that initially the success of I-tunes meant that the music industry would lessen their desire to have so many restrictions, setting the table for many other music stores with FAR less restrictions.

The first iPod (2001)

At this point, he has been spot on for many projects in a row. Surprisingly, it was Pixar that made Job’s the most money, but his comeback at Apple making it one of the major players and viable competition for Microsoft’s dominance may end up being the ultimate story.

Text by Todd Arone (Thanks for the kind permission)

iCon Steve Jobs: The Greatest Second Act in the History of Business (Paperback)
by Jeffrey S. Young (Author), William L. Simon (Author)
Paperback: 368 pages
Publisher: Wiley; 1 edition (April 14, 2006)
Language: English
ISBN-10: 0471787841
ISBN-13: 978-0471787846

Amazon-Link USA
Amazon-Link UK
Amazon-Link Germany

At a glance

Apple Macintosh Review Byte

Manufacturer
Apple Computer Inc.
20525 Mariani Ave.
Cupertino, CA 95014
(408) 996-1010

Components
Size: 13.5 by 9.7 by 10.9 inches (main unit)
2.6 by 13.2 by 5.8 inches (keyboard)
Weight: 19.5 pounds
Processor: Motorola 68000 (7,8336 MHz)
Memory: 128K bytes of RAM; 64K bytes of ROM
Display: 9-inch built-in monitor; high-resolution bit-mapped display (512 by 342 pixels); adjustable
Keyboard: 58 keys, detached, standard layout, no function keys, software-mapped
Mouse: single button, mechanical tracking, optical shaft encoding
Mass storage: built-in single-sided 3½-inch Sony drive (400K bytes)
Sound generator: four-voice sound
Interfaces: two RS-422A serial ports (230.4K bps transfer rate); external-disk interface for second (optional) disk drive; mouse interface; synchronous serial keyboard bus

Operating System
Proprietary unnamed

Optional Hardware
Imagewriter dot-matrix printer: $595
Numeric keypad: $99
Carrying case: $99
Modem (300 bps): $225
(300/1200 bps): $495
Security Accessory Kit: $49
Second floppy-disk drive: $495

Optional Software
See text box

Documentation
160-page user’s manual

Price
$2495 ($2990 with Imagewriter)

Apple Macintosh Review Byte - Benchmark 1

Apple Macintosh Review Byte - Benchmark 2

* The Sieve benchmark couldn’t be run on the Mac (see text for details).
** The new Disk Copy program was not available at press time.

A Second Opinion

The Macintosh is advertised as a 128K-byte machine. In reality, the Finder (Macintosh’s operating system) and other systems software take about 40K bytes. Subtract from this another 40K to 70K bytes for any applications programs that may be in memory and the 128K-byte Macintosh becomes an 18K- to 38K-byte machine. For example, when Mac’s Microsoft BASIC package is loaded on top of the resident software, there is only 13K bytes of space for programs and data left. Similarly, MacWrite, Macintosh’s word-processing program, only allows documents with a maximum size of about 24K bytes. This problem seems to be an inherent limitation in the current design of the Macintosh because there is no way to expand the memory capacity of the machine. When 256K-bit memory chips become available the Macintosh will be upgraded to a 512K-byte machine, enough space for the most ambitious application programs. However, at the time of this writing these chips are only in the development stage. This means that they will not be commercially available before 1985.

Disk Swapping

Closely related to the memory limitations is the problem of “disk swapping.” Because the basic Macintosh system has only one disk drive, transferring data from one disk to another requires that the Macintosh read from the input disk, eject the input disk, and prompt the user to insert the output disk. After sending the data to that disk, it is ejected and the user is told to reinsert the input disk. This cycle is repeated until the data transfer is complete. Initially, this shuffling of disks seemed to be tolerable. At least I thought it was until I attempted to back up a disk with 270K bytes of data on it. It took more than 50 disk swaps and 20 minutes to perform this simple operation. This works out to an effective transfer rate of about 5K bytes per swap. The process becomes even more hectic when the Mac has to consult systems software during the transfer. The user must then swap three disks in and out of the internal drive. Unfortunately, this is precisely the kind of design flaw that will prevent the Macintosh from gaining widespread acceptance in a business environment. Disk backups are absolutely essential to business applications. Therefore, the need for a second drive is a hidden and unadvertised cost of owning the machine.

All things considered, the Desk Accessories (accessory programs that can be run at the same time as another program) are an excellent complement to the Finder. These accessories are available to the user at all times, regardless of the application program that may be resident in memory. This means, of course, that users will be able to cut and paste between diverse application programs. Although not as sophisticated as Lisa’s information-passing capability, the Macintosh currently is the only machine in its price range that provides this feature as a system-resident function. However, sometimes the Finder does its job too well. If there are two or three disk icons present on the desktop, each with a copy of the System Folder, calling up a Desk Accessory such as the Alarm Clock will cause the Finder to request that the disk under which the system was initialized be inserted. The Finder then gets the data pertaining to the Desk Accessory from that disk’s System Folder instead of using the System Folder of the disk that was in the internal drive. After the Finder gets that information, the user must then reinsert the disk he or she was originally working with to display the accessory. Although not a major inconvenience, this procedure does become somewhat aggravating when one wants to do a simple thing like set the Alarm Clock.

Programmers Perspective

Nothing much has been said about Macintosh from the programmer’s point of view. Unfortunately, the reason for this is that there is very little to say. The Macintosh is the only machine in recent history to be offered without a programming language. However, Apple has promised assembly language, BASIC, and Pascal for the Mac. As of April 1984 none of these packages was being marketed. The only language currently available, Microsoft BASIC, is extremely disappointing. Programs written with it will essentially look like MBASIC programs written for the IBM PC. Even when Apple’s language packages for the Macintosh are released, users should not expect to be able to produce application programs that utilize Macintosh features like the menu bar, dialogue boxes, and windows. Because any language that is run on Macintosh will be treated like an application program, these routines will be inaccessible to programs created at a lower level than the application program that uses those features. The Macintosh applications that use those features are being done currently in one of two ways. They are either created on a Lisa and downloaded to the Mac, or two Macs are used in tandem (one for writing the program and the other for running it). Developing software in this fashion can be an expensive proposition.

Although Apple has indicated that programmers will be given assistance in developing application programs for Macintosh, in fact this assistance will be available only to a certain chosen few, i.e. established software houses or individuals who have a proven track record of commercial success. Of course, one can always purchase the technical manual for Macintosh, which presumably contains all of the information regarding the highly touted Macintosh toolbox, and attempt to develop Mac applications from scratch. It can be obtained from Apple for $150. Regrettably, it is unlikely that a “cottage industry” will grow up around the Mac in the same way that one grew around the Apple II. But in spite of its shortcomings, the Macintosh is a significant advance in user-friendly computing.

by J. Edward Chor

J. Edward Chor (1307 West Addison St. Chicago, IL 60613) is an attorney. He received his B.A. in psychology from Eastern Illinois University and his J.D. from Southern Illinois University. His hobbies include reading, sports, and fiddling with machines.