• Wednesday, June 19, 2024
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Steve Jobs: The journey of money making

Steve Jobs: The journey of money making

Apple CEO Steve Jobs has resigned, handing the reins of the company he co-founded over to his long-time right hand man, Tim Cook. At his retirement, Apple had eclipsed oil giant Exxon Mobil as the world’s largest corporation, with a $350 billion market capitalization and nearly $80 billion in cash.

Steve Jobs’ storied life and career is legendary, and truly a case where the truth is stranger, and more inspiring, than fiction. Steve Jobs was all of these – a college dropout who recycled bottles just to make ends meet, a vegetarian Buddhist who frequently experimented with LSD, a pariah exiled from his own company and finally the founding father of three seminal products – the iPod, the iPhone and the iPad – which would redefine the landscape of personal computing forever. Now, as Jobs retires and the entire Wintel empire, which marginalized Apple during the 1980s and 1990s, lies shattered and broken in burning pieces at his feet, let’s take a look back at the life of the man who has been called the Walt Disney, Henry Ford and Thomas Edison of our time.

In 1955, the boy who would become Steve Jobs was given up for adoption by a Syrian father and an American mother, and adopted by the Jobs family in Mountain View. As a high school student, he frequently attended Hewlett-Packard lectures, working there part-time one summer. It was during that fateful summer that Jobs met the other Steve – Steve Wozniak, Jobs’ so-called “partner in crime”. The two Steves would remain friends for life, although it would be decades before their brainchild, Apple, would be born. Jobs dropped out of college after one semester, slept in friends’ rooms, recycled cans and bottles for pocket money, and ate free meals at a local Hare Krishna temple.

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It was there that Jobs was introduced to Buddhist philosophies, and he decided to travel to India in search of spiritual enlightenment. After saving up money from a brief stint at the fledgling video game maker Atari, Jobs traveled to India and became a practicing Buddhist, returning with a shaved head and donning traditional Indian clothing. Jobs openly acknowledges that he experimented frequently with LSD, calling it one of the most important experiences in his life.

In 1976, the two Steves and investor Ronald Wayne founded Apple Computers. Wayne was the “adult supervision” for the two Steves, who were both in their early 20s – similar to Google’s triumvirate of one adult (Schmidt) and two kids (Page and Brin). However, a mere two weeks later, in one of the worst business decisions in history, Wayne relinquished his 10% stake, then worth $800. Had Wayne held onto his shares, his investment would be worth more than $35 billion today. After several years of increasing profitability, Jobs lured PepsiCo president John Sculley to become the CEO of Apple in 1983, famously asking him, “Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?”

Sculley was Apple’s greatest asset in its formative years. He was responsible for increasing the company’s annual revenue from $800 million to $8 billion within ten years. Sculley was the mastermind behind Apple’s famed “1984” advertisement which took aim at IBM’s dominance of the personal computer market. He spread adoption of the Macintosh and raised its price to increase profit margins. However, Sculley was soon butting heads with Jobs over Jobs’ “non-linear” management style. In 1985, a power struggle between Jobs and Sculley ended with the Board of Directors ousting Jobs three months before his 30th birthday.

Being kicked out of Apple didn’t slow down Jobs one bit, though. In 1985, he founded his own computer company, NeXT, which produced very expensive, state of the art machines years ahead of the technological curve. It was with these computers that Jobs showed his aesthetic craftsmanship and minimalist sensibilities. His NeXTCube, enclosed in a sleek magnesium cube, was pure eye candy compared to the clunky Wintel machines that dominated the early 1990s. However, these machines proved too expensive to manufacture on a large scale, and by 1993, he had only sold 50,000 units. While NeXT was a failure, Jobs made one of his most important investments during this time. In 1986, Jobs purchased The Graphics Group, a computer graphics subdivision of Lucasfilm, for $10 million. This company, under Jobs’ guidance, would evolve into Pixar – the CGI giant that produced such hits as Toy Story, Finding Nemo, Wall-E, and countless other family friendly films. In

2006, his $10 million investment was purchased by Disney for $7.4 billion in stock, making Jobs Disney’s largest shareholder with a 7% stake.

Meanwhile, back at Apple, Jobs’ nemesis Sculley was ousted by the Board of Directors in 1993, after years of shrinking margins and profitability. Sculley was blamed for waging a pointless, costly war against IBM and the irreparable fragmentation of its product line, which offered too many variants of its core Macintosh line, baffling and alienating consumers. Apple replaced Sculley with Gil Amelio, who didn’t fare much better than his predecessor. Amelio stated, “Apple is like a ship with a hole in the bottom, leaking water, and my job is to get the ship pointed in the right direction.” Unfortunately for Amelio, a mutiny ensued and the crew tossed the captain overboard in 1996. Before he was replaced, however, Amelio purchased Jobs’ NeXT Computers for $429 million, paving the way for Jobs’ return. Jobs became the interim CEO in 1997, and by 2000 he had become the permanent CEO.

After ironically borrowing $150 million from his friend and fellow “Pirate of Silicon Valley”, Bill Gates, Jobs immediately axed several unprofitable ventures, such as the Newton (which would become the prototype for the iPad), Cyberdog and OpenDoc to shed dead weight. He then launched the first “i” product – the all-in-one computer, the iMac, in 1998. With the iMac, designed by award-winning product designer Johnathan Ive, Jobs started the theme of sleek minimalist products in an assortment of basic colors. Ive’s aesthetic theme would eventually carry over to the next major product – the iPod, and make its way into the iPhone and iPad as well. Ive’s designs have been credited as the primary reason for the brisk sales of modern Apple products. Together, Jobs and Ive were able to capture the MP3 player industry nearly instantly with the iPod in 2001, the mobile handset industry with the iPhone in 2007, and the previously non-existent

tablet market with the iPad in 2010. His moves into the smartphone and tablet markets were sharply criticized at first, by cynics who believed that the computer maker would crash and burn in unfamiliar markets, but Jobs proved them wrong with his remarkable ability to time product releases and cycles with near perfection.

Even as Jobs retires, Apple’s product line is guaranteed for at least another two years. When Jobs returned to Apple as a prodigal son, Apple shares were worth $4. Today they close in on $400. Whether or not Apple will survive the next decade without his innovation remains to be seen, but Jobs’ success as an entrepreneur and technological savant has already made him a modern day legend.

Leo Sun