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APPLE AT 20: FIGHTER TO THE CORE : PIONEERING FIRM FACES IDENTITY CRISIS.

Byline: Catalina Ortiz Associated Press

Happy birthday, Apple.

The company that started the personal computer revolution, transforming arcane and forbidding technology into a common, easy-to-use tool, will turn 20 on Monday.

Apple Computer Inc. faces a rough road as it begins its third decade. Its problems, largely of its own making, have continually prompted concern about its future. But no one questions the company's accomplishments.

``They have an undisputed position in history for really defining what the personal computer is,'' said Pieter Hartsook, publisher of The Hartsook Letter, which focuses on Apple and its products.

``I think without Apple we wouldn't have a personal computer industry as we know it today,'' he said.

The Cupertino company that started April 1, 1976, is much more than its artful integration of hardware and software. Few corporations have had such an influence on their industry and the public.

The company's distinctive, rainbow-striped Apple logo is recognized all over the world. People still remember the 1984 ``Big Brother'' commercial introducing the Macintosh. While few can name the founder of IBM, many can identify Steve Jobs and Steve Wozniak, whose founding of Apple has the quality of legend.

``Apple is a grand capitalist experiment. It started with two guys in a garage. Their idea was initially rejected. . . . Despite that they went on and built this $(11) billion company,'' said Guy Kawasaki, a longtime Apple marketer.

``People can relate to Apple - in the sense of trying to do things a better way, trying to take on the status quo, being the underdog - even being a little messed up at any given point,'' he said. ``You have to love Apple, warts and all.''

Apple isn't celebrating its birthday until next year, the 20th anniversary of its incorporation. But it was on April Fool's Day in 1976 that Jobs, then 21, and Wozniak, 26, formed a partnership to sell the Apple I, scarcely more than circuits on a board, lacking a keyboard and even a case.

The common myth is that Jobs and Wozniak - like the founders of Hewlett-Packard - started Apple in a garage. But both acknowledge they actually worked out of their apartments.

At the time they founded Apple, computing meant using a ``dumb'' terminal linked to a mainframe - or putting together a primitive machine from a kit. Wozniak designed Apple I for himself and other enthusiasts; Jobs saw it as a commercial product.

Hewlett-Packard Co., where Wozniak worked, and Atari Corp., Jobs' employer, weren't interested in making or funding the computer. But A.C. ``Mike'' Markkula, a retired semiconductor executive, came up with cash and a business plan.

In 1977, Apple Computer produced the Apple II, the first commercially successful personal computer. Apple's sales skyrocketed, hitting $1 billion in 1982.

Apple made computing history again in early 1984, when it introduced the Mac, which featured a ``graphical user interface,'' allowing users to click on symbols and options in menus rather than typing complex commands. The Mac set an industry standard with superior ease of use and such features as sound and video.

The company says - and industry analysts agree - that much of the history of the personal computer industry since then has been competitors' attempts to catch up. It was only with Microsoft Corp.'s Windows 95 that the industry-dominating PCs using Intel Corp. chips approached the Mac's user-friendliness.

``If you take a hard look at Microsoft's strategy over the past 10 years, much of what they did is they went to school on Apple,'' said Tim Bajarin, president of Creative Strategies Research International in San Jose.

Despite its groundbreaking Macintosh and the computer's almost cultlike following, Apple in recent years has lost ground.

``Frankly, it's been hubris,'' said Mark Hall, editor-in-chief of MacWEEK. That, he and other industry observers believe, caused Apple to make its greatest mistake.

Apple, feeling secure in its superior technology, only in late 1994 agreed to let other companies clone the Macintosh - and charged more for it than rivals did for IBM-type PCs.

``The irony is the company that designed technology to make it accessible to the masses priced it to make it accessible only for the elites for so many years,'' Hall said.

A low point came earlier this year, when Apple reported a $69 million loss for the October-December quarter and saw its market share continue to erode. And warnings of a much-worse second quarter came true earlier last week, when officials announced a $700 million loss after writing off unsold products and paying for jobs cut in restructuring.

A continual subject of takeover speculation, Apple reportedly was in merger talks with Sun Microsystems earlier this year.

But new CEO Gilbert Amelio, who succeeded Michael Spindler in February, indicated Apple intends to remain independent. It plans to let more companies clone the Mac and focus on such key markets as home, education and desktop publishing.

While announcing the huge second-quarter loss, the company's biggest quarterly loss ever, Amelio said he still considers Apple's problems to be fixable.

Apple's strong points continue to be its superior technology and its people, said James Buckley, president of Apple Americas, the company's North American division.

APPLE HISTORY Important events in Apple's history:

1976 - Apple Computer is formed on April Fools' Day, shortly after Steve Wozniak and Steve Jobs create a new computer circuit board. The Apple I computer goes on sale by the summer for $666.66.

1977 - Apple is incorporated by its founders and a group of venture capitalists. It unveils Apple II, the first personal computer to generate color graphics. Sales soar to the $1 million-a-year level.

1980 - Apple goes public with 4.6 million shares priced at $22 apiece - one of the biggest stock offerings undertaken. Overseas expansion begins.

1984 - The easy-to-use Macintosh computer is unveiled.

1985 - Wozniak resigns, and Jobs leaves after a power struggle with CEO John Sculley and starts a new computer venture, Next Inc.

1991 - Apple and IBM announce an alliance to develop new personal computer microprocessors and software. Apple unveils PowerBook portable Macintoshes.

1993 - Apple introduces the Newton, a hand-held, pen-based computer. The company reports its then-worst quarterly loss, $188 million, in July, and Sculley is replaced as chief executive officer by Apple President Michael Spindler. Apple restructures, and Sculley resigns as chairman.

1994 - Apple introduces Power Macintosh computers, machines based on the PowerPC microprocessor it developed with IBM and Motorola. Apple and IBM agree to build computers able to run each other's operating software. Apple decides to license its operating software, allowing other companies to ``clone'' the Mac.

1995 - Power Computing ships the first Macintosh clones. Apple is plagued by executive departures, parts shortages and trouble predicting demand.

1996 - Apple reports a $69 million loss for the last three months of 1995, and announces a reorganization including at least 1,300 layoffs. Directors oust CEO Spindler and hire Gilbert Amelio, CEO of National Semiconductor. Apple announces a $700 million loss for the first quarter of 1996.

CAPTION(S):

2 Photos, Box

Photo: (1--Color) Gilbert Amelio was appointed CEOto help Apple compete in a world full of user-friendly computers.

Associated Press

(2) Steven Wozniak demonstrates a (then) new Apple II in September 1986. Wozniak and Steve Jobs founded Apple in 1976.

Associated Press

Box: APPLE HISTORY (See text)
COPYRIGHT 1996 Daily News
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1996, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:BUSINESS
Publication:Daily News (Los Angeles, CA)
Geographic Code:1USA
Date:Apr 1, 1996
Words:1203
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