The Apple II was given a rapturous welcome in the public. In 1977, the company sold more than 4,000 computers, which were priced at $1,300, and grew rapidly.
Programs and data for the Apple II were stored on cassette tapes. But this common way of storage turned out to be quite unreliable and awkward. Mike Markkula saw the future in floppy disks, which had been developed by IBM in the early 1970s, and asked Wozniak to design a disk drive for the Apple II. Woz took the challenge and finished in record time (only one month). His final design was brilliant: he developed a new technique ("self-sync") and created the fastest minifloppy disk drive. It was shipped in June 1978 and proved vital for Apple's further growth. It made possible the development of serious software such as word processors and data base packages,") which increased the practical use of the computer decisively.
In 1979, Daniel Fylstra, a programmer from Boston, released VisiCalc for the Apple II. This spreadsheet was a novelty in computer software. It relieved business calculations considerably and could be used to do financial forecasting. It was the first application that made personal computers a practical tool for people who do not know how to write their own programs. VisiCalc was very successful and contributed to the skyrocketing sales of the Apple II.
The same year, marketing wizard Mike Markkula made another important decision for Apple future growth. His idea was to create a new market in the field of education and schools. The Apple Education Foundation was established, which granted complete Apple systems equipped with learning software to schools. This market should account for a major part of the company's sales in the subsequent years, since Apple II soon became the most popular machine for students.
Turbulences in the early 1980s
The successful stock sale provided Apple with an "extravagant amount of capital ($1 billion)," which could be spent on developing the "company's next computer generation.") This time, however, was quite turbulent for Apple and was marked by crises and inner power struggles.
Designing on Apple III began in 1978. This computer was to be the successor to Wozniak's Apple II, and was finally introduced to the public in 1981. But it was not successful - a "disaster" or "fiasco,") since it had too many faults and did not work properly. Nevertheless, the company was without any financial troubles, since sales of the Apple II continued to increase rapidly.
Concurrently, Steve Jobs became the company's visionary and thought about the next computer generation. Such a visionary is a "person who has both the vision and the willingness to put everything on the line, including his career, to further that vision. Jobs became a perfect visionary and convinced everyone around him with his vision.
In 1979, he and some other Apple employees visited the Xerox PARC (Palo Alto Research Center), which was known for its advanced research in computing. What they saw was revolutionary and had never appeared on any personal computer before. The "environment of the screen was graphically based" with icons (representing files or programs), with a mouse for pointing and moving at them, windows and pull-down menus. Thus, the user could "interact easily with the computer [...] without ever typing a single letter.
Jobs was quite impressed and wanted to transfer this concept on a new PC called Lisa, which was intended for the business world. Steve, however, came up with ever-new ideas for the designers of this project. He "created chaos because he would get an idea, start a project, then change his mind two or three times, until people were doing a kind of random walk, continually scrapping and starting over.")
Markkula and Scott were concerned about the further progress of Lisa. So, in the course of a reorganization of the company, they decided to put John Couch, a former software designer at HP, in a charge of the Lisa project. Jobs was made chairman of the boa rd to represent Apple in the public. However, Steve was shocked that he was taken the chance to fulfill his vision, and relations between him and Scott deteriorated.
In February 1981, Wozniak, the technological brains behind the Apple I and II, crashed his four-seated airplane. He hit his head badly and suffered from a case of temporary amnesia. For some time, he retired from the company and he finished his undergraduate degree at U.C. Berkeley.
The company had grown rapidly to 2,000 employees, and some of them had joined Apple in the hope of a safe job. Setting an example, president Mike Scott laid off 42 people on a day which came to be called "Black Wednesday". Apple was shocked since some of t hose people seemed to have been chosen arbitrarily. Scott's management style became more and more disliked, and finally Mike Markkula decided to fire Scott and took over his position until a new president was found.
The Lisa project
Meanwhile, Steve Jobs had discovered his new project. Soon he had taken control of the Macintosh project, which had been started by Jeff Raskin in 1979 to design a small and handy personal computer. Steve dedicated all his power to the Macintosh, which was to be a smaller and cheaper Lisa and was to revolutionize the way of computing.
The company was now separated into three divisions, Apple II, Lisa and Macintosh, which began competing against each other - particularly between the latter two.
Lisa was developed by a number of experienced engineers and programmers who had been recruited from HP, DEC and Xerox. This project was "the most professional operation ever mounted at Apple") and was in contrast to Steve's bunch of young hackers at Macintosh.
When Lisa was introduced to the public in August 1983, it was "ahead of its time:") Lisa was easy to use because of the mouse, graphical interface and windows, and had additional features such as multitasking. Though is was first welcomed by the press as revolutionary, Lisa failed. One problem was Steve's "lack of self-discipline:") When introducing Lisa he talked about "his" Macintosh which would come out soon and with features like Lisa but cost only a fraction ($2,000 instead of $10,000 for Lisa). The other strategic mistake was the announcement that the two computers were not compatible. So it is no wonder many people waited until the Macintosh would come.
Finally, Lisa, which was intended for the business market at its price of $10,000, lacked the ability to communicate with other computers - a fact which was decisive for this market.
In the meantime, IBM had entered the personal computer market with its first IBM PC in 1981, and already dominated a large part of it. Its first PC "wasn't an earth-shattering machine technically") and was much harder to use than the forthcoming Apple machines. But the fact that it was built by IBM was enough to make it successful, and many software companies wrote applications for it. Apple had bravely run a full-page ad saying "Welcome IBM, Seriously", but it soon seemed to have lost the battle. Nevertheless, IBM's entry brought Apple a lot of publicity as the only real competition to Big Blue.
Thus, Lisa was not very successful and the second failure after the Apple III. Still, Apple's sales increased - only because of the successful Apple II. But the company needed a successor, and all its hopes were now placed in the Macintosh.
The Macintosh revolution
The Macintosh was to fulfill Steve Jobs' vision of "computer to the people". He created a personal computer, which was easy to use and at a low cost. Steve thought of a tool for all people to broaden their mind - a revolution towards the modern way of computing.
His Macintosh team was made up of teenagers and self-taught hackers - "idiot savants, passionate plodders and inspired amateurs" - who "loved to cut code.") They followed his vision and passionately designed this outstanding computer. Jobs continuously drove his team to ever-greater feats. He "kept thinking up crazier things, or more aggressive goals if they were doing good, or if they were achieving their goals he wanted them to do more. He couldn't just stop, he had to push you to the edge.") Steve "gave impossible tasks, never acknowledging that they were impossible,") he "doesn't have any boundaries, [...] because he has always been able to do anything he wanted" due to "his early success.") As a consequence, people usually worked 80 hours a week or more for their project.
Steve's most brilliant hackers were Andy Hertzfeld, Bill Atkinson and Burrell Smith. The Macintosh was equipped with Motorola's 68000 CPU, a 3.5-inch floppy disk drive, a detachable keyboard, and the amount of space it took up from the desk should not be larger then a telephone book (this meant a revolution in size). The computer was meant to be an open system, and software applications were to be programmed by other companies, the work of which was supported by a standard modular toolbox. This box made sure that all applications were easy to use and appeared in a standardized way. As well as other fundamental software the standard toolbox was available from the computer's ROM (Read Only Memory).