Origins of Apple

Origins of Apple

"During January and February 1976 Jobs started to badger Wozniak about the possibility of making and selling some printed circuit boards so that others could build their own versions of the computer.

Wozniak had not contemplated doing anything apart from handing out schematics of the machine to any Homebrew [computer club] members who were interested. "It was Steve's idea to hold them in the air and sell a few." Jobs entertained the notion of a fleeting, informal venture that would be more of a partnership between friends than a proper company. There was no talk of Wozniak leaving Hewlett-Packard or of Jobs severing his casual arrangement with Atari. Jobs' thoughts about the possible market were limited to a few friends, members of the Homebrew Club, and one or two stores. The pair didn't consider permits, licenses, insurance contracts, and other legal demands because their idea of a company extended as far as the bylaw that required new partnerships to place a small formal advertisement in a local newspaper.

The two tossed around names for their company. One afternoon, driving along Highway 85, between Palo Alto and Los Altos, Jobs, summoning the shades of his dietary regime and his rural life in Oregon, suggested they call the company Apple Computer.

Try as he might Wozniak couldn't improve on the suggestion. "We kept trying to think of a better name but every name we came up with wasn't any better." They played with the sound of names like Executek and Matrix Electronics but the simplicity of Apple always seemed more appealing. For a few days the two
wondered whether their choice would land them in a legal wrangle with Apple Records, the Beatles' recording company, and Jobs worried that Apple Computer was altogether too whimsical for anything that even pretended to be a company. Eventually, anxious to place the partnership advertisement in the San Jose Mercury Jobs issued an ultimatum. "I said, ‘Unless we come up with something better by five pm tomorrow, we'll go with Apple.'"

Jobs reckoned that it would cost about $25 to make each printed circuit board and that if all went well they might be able to sell a hundred for $50 apiece. They agreed that each would contribute half toward the $1,300 or so that Jobs reckoned the printed circuit board would cost. Neither had much money. Wozniak was earning $24,000 a year at Hewlett-Packard but was spending most of it on his stereo system, records, and the computer that had a way of gobbling up parts.  . . .  Jobs, meanwhile, was carefully guarding the $5,000 he had saved from his work at Atari...

By the spring of 1976 Jobs had taken to religiously attending meetings of the Homebrew Club, [and] was busy sorting out people with a commercial bent from the engineers. That wasn't difficult since members were allowed to advertise their interests during the meetings. Paul Terrell was one of the more prominent
salesmen and had become an influential figure in the murky world of distributors and kit suppliers...

Terrell was one of the few Homebrew members with the means to buy more than one computer, so Jobs, hoping to obtain deposits before placing a firm order for 100 printed circuit boards, visited the Byte Shop. Terrell had been wary of Jobs at Homebrew meetings. "You can always tell the guys who are going to give you a hard time. I was always cautious of him."

Nevertheless, when Jobs slopped into the store, Terrell made time for him. Jobs showed Terrell a prototype of the Apple and explained his plans. Terrell told Jobs that he had no interest in selling plain, printed circuit boards and said that his customers didn't have any interest in scouring supply stores for semiconductors and other parts. Terrell said he was interested in buying only fully assembled and fully tested computers. Jobs asked how much Terrell would be prepared to pay for a fully assembled computer and was told anywhere between $489 and $589. The Emperor of the Byte Shops told Jobs that he would be prepared to place an order for 50 fully assembled Apple computers and would pay cash on delivery.

Jobs could not believe either his ears or his eyes- "I just saw dollar signs" - and rushed to telephone Wozniak at Hewlett-Packard. Wozniak, equally dumbfounded, told his colleagues around the lab who greeted the news with disbelief.

Wozniak placed Terrell's order in perspective - "That was the biggest single episode in all of the company's history. Nothing in subsequent years was so great and so unexpected.""

Return to the Little Kingdom by Michael Moritz is published by Duckworth Overlook.