The world is divided into two distinct groups: those who think Steve Jobs is a visionary genius who walks on water, and those who see him as a crazed egotist forever in blue jeans. The facts show that, love him or hate him, Steve Jobs is the pied piper of the computer industry: he brought computers to the masses with the legendary Apple II; he was first with a windows-driven, intuitive environment; he introduced icons to desktops; and over the last three years he has changed the face of the music industry by revolutionising the way in which music is delivered to consumers through Apple's iPod digital music player and the iTunes Music Store. And he still found time to come up with Pixar Studios, the animation studio that transformed the movie industry with digitally created box office hits like Toy Story, Finding Nemo and The Incredibles.
By most accounts Steve Jobs is impossible to work with, tending towards autocracy, and disregarding the opinions of others. The fire in his belly, the very instinct that took him from his workshop in his parents' garage in Mountain View to the pound seats in Silicon Valley, is still with him and he still trusts it more than anything anybody else might say. Impulsive and moody, infuriatingly independent of the goodwill of others, Steve Jobs knows what his users want and is determined to give it to them, in the colour of their choice, regardless of the angst it might cause 'The Suits.'
Apple owners are different from PC owners. They have a very personal relationship with their computers, which extends beyond hurling expletives at it when the thing hangs – primarily because, unlike PCs, Apples don't hang! Extremely brand conscious and loyal, they are every manufacturer's dream. Their computers have an identity that the owners themselves have bought into – creative, fast, functional, cutting edge, young and trendy.
This is possibly reinforced by the fact that hardware and software are both proprietary to Apple, while independent software, like Microsoft and Adobe, are customized for Apple computers. Obviously the PC environment works differently, but for some reason Microsoft seems to work flawlessly on an Apple! Could the reason for this be that Bill Gates bought into Apple to the tune of a cool 100 million dollars? Or is it because the Bill himself has his own love affair with his Apple Powerbook? Be that as it may, Apple fanaticism goes further than that – Apple owners belong to a cult and Steve Jobs is the maverick messiah, saving us all from the mediocrity of grey, unreliable computers. Like blondes, Apple owners seem to have more fun. A lot more fun!
A long time ago in 1976, Steve Jobs sold his van to finance the founding of Apple Computer Company. After building the company up and taking it public at the introductory price of $22 per share in 1980, Jobs recruited John Sculley, formerly president of PepsiCo as Apple president and CEO in 1983. "If you stay at Pepsi, five years from now all you'll have accomplished is selling a lot more sugar water to kids. If you come to Apple you can change the world," Jobs told Sculley.
Two years later Sculley constructively ousted Steve Jobs from his own company. In June 1985, Sculley laid off 1200 employees as he relentlessly focussed on controlling costs, reducing overheads and rationalising product lines. Admittedly, Apple had earned the industry nickname of 'Camp Runamok,' but Sculley's unyielding tactics and specifically his attitude regarding Steve Jobs, left a bad taste in many mouths. Without the energy and drive of Steve Jobs, Apple fell into the doldrums until, two CEOs later, and on the verge of extinction, the board finally asked Steve to come back in 1996.
Steve had, in the meantime, sunk millions into NeXT, another computer company, before finally shutting down its hardware division and concentrating efforts on its profitable operating system. He also bought the fledgling Pixar Studios from LucasFilm, and turned it into the hugely successful animation studio with hits like Toy Story, Bugs Life, Monsters Inc., Finding Nemo, and The Incredibles.
"Steve has engineered one of the most successful ventures in filmmaking over the past decade or two through the team he built at Pixar," says Jeffrey Logsdon, entertainment industry analyst. "He's probably one of the most envied guys in Hollywood."
Since the return of the Bad Boy of Silicon Valley as CEO, Apple has regained its much loved renegade spirit and youthful energy. This has also translated into higher sales figures, astronomical sales figures, in fact. The product line is once again vibrant, sassy and sexy. And now we also have the iPod – the world's most popular portable MP3 player – and finally iTunes!
"I want to put a ding in the universe."
Back in 2002, over a period of 18 months, Jobs and a small team of high-level Apple employees negotiated deals with the music industry's big five: Universal, Warner, BMG, EMI and Sony Music Entertainment. The concept was to turn around the industry's traditionally protectionist stance on digital distribution – clearly an uphill battle.
"They realized that the Internet was in their future, but they were shell-shocked with Napster and people stealing their content, so the major discussions with the labels were really over giving the users broad personal use rights. We worked through that, and they learned. I think they trusted us to do the right thing. You know, almost everybody in the music industry uses a Mac – and they all have iPods – even the ones who don't use a computer have somebody else load up their iPods with the songs they want. So I think they see Apple as the most creative of the technical companies, a very artist-friendly company, very credible," said Steve Jobs shortly after the April 2003 launch.
"Our idea was to try to come up with a music service you don't have to subscribe to. You can just buy music at 99 cents a song, and you have great digital, as well as great rights to use it. You can burn as many CDs as you want for personal use, you can put it on your iPod, you can use it in your other applications, and you can have it on multiple computers. And we were able to convince the big five music companies to go along with us on this. So it's a pretty landmark offering. Nobody has ever seen anything like this before."
In the week following the launch, the iTunes Store sold a million tracks, to the great amazement of record executives who claim they would have been satisfied with a monthly turnover of a million. And the really great thing about it is that both the iPod and iTunes are fully compatible with both Microsoft and PC. Over the last year, nearly 70 percent of music files downloaded legally, were downloaded from iTunes.
Riding on the iPod and iTunes wave, Apple shares reached a new 52-week high of $83.94 on the NASDAQ in mid February. Before the advent of the iPod three years ago, Apple shares were trading around a meagre $11. Apple showed a net income growth of 300 percent over the last year with reported net income of $295 million, or 70 cents a share, in its first-quarter results. This compares to $63 million, or 17 cents per share, in the year-ago period. On 18 February Apple also announced a two-for-one stock split, which effectively doubled investors' shares held at the close of business on 18 February. Forrest Gump must be smiling... again!
The split comes after Apple sold more than 4.5 million iPods during its most recent quarter, a stunning 500% increase over the year-ago period. Heck, just one year ago only 2.7 million digital music devices were sold worldwide. Apple is experiencing unprecedented demand for its iPod, and according to industry analysts, the Apple iPod now owns 92% of the U.S. market and over 60% of the global market, both considerable increases over year-earlier figures.
Buoyed by the popular iPod, Apple has been voted the world's 'most influential brand' in a poll of branding professionals conducted by Brandchannel.com, thereby nudging Google out of its familiar top spot. Brandchannel.com's annual Reader's Choice Awards officially dubbed Apple the brand with the most impact in 2004. New to the awards is another of Steve Jobs' companies, the animation powerhouse Pixar, which branding professionals now feel has global brand impact alongside powerhouses like Amazon, Starbucks and Nokia.
Apple's popular iPod digital music players are also helping boost sales of its signature Macintosh computers. A recent survey of 200 iPod users in the United States found that 6 percent were formerly PC users who had bought a Mac after buying an iPod. Another 7 percent of the iPod users surveyed said they planned to buy a Mac in the future. High levels of customer satisfaction with the iPod digital music player should lead to a further increase in Apple sales.
"Expose yourself to the best things humans have done, and then try to bring those things into what you are doing."
When all is said and done, it is hard to argue with Hartmut Esslinger, who worked with Jobs to design the Apple IIc in 1982, and later the Macintosh. "I think he's a great person no matter what people say, fantastic vision. Steve is one of the few people who know what they want, and gets it. It's not primarily that he wants to make money; he wants to advance culture. You can see that with Pixar," Esslinger says. "Everybody tries to please somebody else with mediocre stuff. Steve is uncompromising on quality and not everybody likes it. But so be it. I think it is envy of one talented, or envy of one courageous."
Steve Jobs is surfing the biggest wave of his life, but the Steve Jobs-watchers, even his most loyal fans, know that he has been here before. He revolutionised personal computing with the Apple Mac, but Microsoft came along, copied it, and squashed Apple. Hopefully Steve Jobs has learned his lesson, and hopefully he will surf this one off into the sunset.