The genesis of Apple

Apple Confidential 2 cover
Editor’s Note: The following article is excerpted from Apple Confidential 2.0: The Definitive History of the World’s Most Colorful Company (No Starch Press, 2004). It can be purchased online at Amazon.com.

On March 5, 1975, the first meeting of the Amateur Computer Users Group—or Homebrew Computer Club, as it was commonly called— convened in the Menlo Park garage of Gordon French. The group quickly grew from a few dozen to several hundred, so the meetings moved to the Stanford Linear Accelerator Center auditorium in Palo Alto. Steve Wozniak and Steve Jobs regularly attended Homebrew meetings where they swapped ideas with other hobbyists who dreamed of building their own computers.

Most club members focused their efforts around the $179 Intel 8080 chip at the heart of the Micro Instrumentation and Telemetry Systems Altair 8800, which had appeared on the January 1975 cover of Popular Electronics as the world’s first kit computer. Intel’s microprocessor was truly impressive, but it was out of Wozniak’s price range. As a result, Wozniak scouted around for a less-expensive alternative. At the Wescon electronics show in San Francisco, Wozniak discovered the MOS Technology 6502, which was a capable microprocessor that cost just $20. Wozniak wrote a BASIC interpreter to run on the 6502 and tested it on an HP computer that simulated the chip. Confident he could make it work, Wozniak began designing a computer around the 6502. Instead of using eight front-panel toggle switches to enter data, as on the Altair, Wozniak designed his computer to use a standard QWERTY keyboard. For output, Wozniak’s computer would connect to an ordinary television, not an expensive printer or monitor.

By March 1, 1976, less than two months after getting married at the age of 25, Wozniak had completed the basic design of his computer, and he proudly showed off his work at the Homebrew Computer Club meetings. Jobs quickly saw the potential to profit from Wozniak’s computer. Rather than pass out schematics of the computer for free, Jobs tried to convince Wozniak that they should produce printed circuit boards and sell them as a product. “Steve didn’t do one circuit, design, or piece of code,” recalls Wozniak. “But it never crossed my mind to sell computers. It was Steve who said, ‘Let’s hold them up in the air and sell a few.’” Jobs admits, “I was nowhere near as good an engineer as Woz. He was always the better designer.”

Wozniak was comfortable pulling down $24,000 annually from his job in the calculator division at Hewlett-Packard, and with a new wife at home he wasn’t about to quit to sell a bare circuit board to hobbyists. He didn’t share Jobs’ vision of a huge personal computer marketplace, nor did he have the ambition to build his own company to exploit it. Ever the dutiful employee, Wozniak approached his employer and tried to convince HP to consider making microcomputers. “I pitched my boss, the calculator lab manager, and got him all excited, but it was obvious it didn’t have a place at HP,” recalls Wozniak. Although his boss didn’t think Wozniak’s computer was appropriate for his division, he instructed an HP lawyer to call each division head asking, “You interested in an $800 machine that can run BASIC and hook up to a TV?” Everyone declined, saying “HP doesn’t want to be in that kind of market.”

Turned down by Wozniak’s employer, the duo approached Jobs’ employer. “After we had the Apple I built on a board, we showed it to Al Alcorn of Atari,” recalls Wozniak. “Atari had just come out with their first Home Pong game and it was going to be so big that they had their hands full. They thought the Apple I was a great thing, but they had plenty going themselves.” Like Hewlett-Packard before it, Atari wanted no part of Wozniak’s creation. Spurned by both of their employers, Jobs convinced Wozniak they should go it alone. To scrape together the cost of producing the original printed circuit boards for the computer, Jobs parted with his red and white Volkswagen bus for $1,500 and Wozniak sold his beloved Hewlett-Packard 65 programmable calculator for $250.

Steve Jobs inspects a ‘Blue Box’ with Steve Wozniak in 1975.

Because they were going into business, they needed a name for their company. According to Wozniak, it was Jobs who thought up the name for their new computer company one afternoon as the two drove along Highway 85 between Palo Alto and Los Altos.

“Steve was still half involved with a group of friends who ran the commune-type All-One Farm in Oregon. And he would go up and work there for a few months before returning to the Bay Area. He had just come back from one of his trips and we were driving along and he said ‘I’ve got a great name: Apple Computer.’ Maybe he worked in apple trees. I didn’t even ask. Maybe it had some other meaning to him. Maybe the idea just occurred based upon Apple Records. He had been a musical person, like many technical people are. It might have sounded good partly because of that connotation. I thought instantly, ‘We’re going to have a lot of copyright problems.’ But we didn’t. Both of us tried to think of technical-sounding mixtures of words, like Executek and Matrix Electronics, but after 10 minutes of trying, we both realized we weren’t going to beat Apple Computer.”

Realizing that Apple would be hopelessly deadlocked if they disagreed on any major issues, the two sought someone who could serve as a tie breaker and help get the company off the ground. Again, they looked to their places of employment, and it was at Atari that Jobs found his man: Ronald Gerald Wayne, 41, the video game maker’s chief draftsman. Despite the 20-year difference in their ages, Jobs and Wayne had became casual friends in the workplace and would often have philosophical discussions on the ethics of making money.

Jobs enticed Wayne to become a partner in Apple by offering him 10 percent interest in the company, with the remainder split between Jobs and Wozniak. The three formally filed the partnership papers for Apple Computer Company on April Fools’ Day 1976. “Either I was going to be bankrupt or the richest man in the cemetery,” Wayne recalls thinking. Because Apple was far from a sure thing, Wayne retained his day job at Atari and worked nights writing documentation and designing a logo for the infant company. The logo he created was a pen-and-ink drawing of Sir Isaac Newton leaning against an apple tree with a portion of a William Wordsworth poem (Prelude, Book III, Residence at Cambridge) running around the border.

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