The Personal Computer - Part 7

by Dick Reiman, Historian

Stephen W. "Woz" Wozniak and Stephen P. Jobs had collaborated on building a Personal Computer, and Woz had offered his invention to Hewlett-Packard, his employer who was not interested. The introduction of Altair as a computer kit had spawned many computer clubs including one in Silicon Valley named the "Homebrew Computer Club". The club began with 30 members including Woz, soon grew to 500 and held their meetings in an auditorium at the Stanford Linear Accelerator Center. Half of each meeting was devoted to audience participation, and the remaining half to small groups of common concerns. Woz demonstrated his computer board to "Homebrew C. C.".

Woz's microprocessor-based computer used an 8-bit microprocessor chip, the 6502, design by MOS Technology, a part of Commodore Business Machines, Inc. Woz wrote a BASIC interpreter for the 6502, then designed the computer itself during his evenings. He included a circuit board with 4K of RAM. Although it wasn't as powerful as Altair, it was cheaper and less complicated, and was connectable to a monitor. Jobs, back from his travels in India, offered many suggestions. Woz and Jobs decided to market their PC.

Jobs and Woz sold 100 of the boards to Paul Terrel, owner of a newly formed Byte Shop at $500 each, and this enabled them to found the Apple Computer Company. With Terrel's orders in hand, plus their own funds of $1350 and a $5000 loan from a friend, Jobs and Woz were in business. The product was only for hobbyists, since it lacked keyboards, a terminal, disc drives and other peripherals, but a market did exist. All told, Woz and Jobs sold 175 boards for $500 apiece , netting half in profits.

Woz began the design of a more sophisticated computer, and Jobs sought capital from A. C. Markkula, an alumni of Intel, and their first marketing manager who was a millionaire at age 32. Markkula liked Jobs and Woz and decided to help them write a business plan. He saw a great future in the Personal Computer and believed Woz's Apple 11, the more sophisticated design, was first rate. He decided to join Apple for a third share for $91,000 and then obtained venture capital and credit in the amount of $850,000. Apple now had both the money and the management to become a leader in the Personal Computer business.

Introduced in 1977, the Apple 11 proved to be the Volkswagen of Personal Computers. It sold for $1195, had 16K of RAM, could be connected to a monitor, and was ideal for video games. Apple's sales rose from $775 thousand in 1977 to $335 million in 1981. Its stock offering in 1980 opened at $22 per share and climbed to $29 at days end, bringing the company's market value to $1.2 billion. Job's shares were worth $165 million, Woz's $88 million, and Markkula's $154 million.

In 1981, IBM introduced its own personal computer, the "PC", which was an immediate success. With IBM's prestige and influence behind it, the exotic and expensive PC technical tool became an ordinary commodity like a TV set. Many manufacturer's rode IBM's coattails and these IBM clones competed with each other for lowest cost and were said to be "just like IBM". The Personal Computer had become an accepted addition to the technology of life