8 Moments From Apple's 40 Years, and How They Changed Our World

Apple's story begins with the personal computer. Forty years later, the iPod, the iPhone, the iPad — they are still computers, only in different shapes.

On April 1, 1976, Apple was born.

The company's first three employees were Steve Jobs, a 21-year-old hippie; Steve Wozniak, an engineer at Hewlett-Packard; and Ron Wayne, who had once been in the slot-machine business. That same day, April 1, the three signed an agreement, split the equity, and founded the company.

The company they founded meant to sell personal computers, an absolutely novel thing at the time. The plan was simple: Wozniak would tinker the circuit boards together, Jobs would handle sales, and they would do the manufacturing in a makeshift workshop at home.

Eleven days later, Wayne decided the company was too risky and walked away, cashing out his 10% stake for $800. Forty years on, 10% of Apple's market value is about $60 billion.

Hewlett-Packard may have regrets of its own. Wozniak had at first been determined to hand his design — the basis of both the Apple I and the Apple II — to HP. HP thought it was a hobbyist's toy, with no place in the company's business of expensive mainframes.

Judging by later interviews, in April 1976 neither Wozniak nor Jobs expected the company they had just started to last 40 years. From desktops to laptops, then the iPod, the iPhone, the iPad, the Apple Watch — for 40 years, Apple's history has been the evolution of the personal computer.

No other company has held on this long in such a fiercely competitive industry. Atari, a rival from the same era, went bankrupt long ago. IBM made personal computers for 24 years, then sold the business to Lenovo. Of the other PC giants, HP split itself in two and Dell went private.

The pioneers of the smartphone — Palm, Nokia, RIM, HTC — have either met their end already or are about to.

Forty years on, more than 2 billion people use what HP once saw as a toy. The operating systems, software, and internet services behind the personal computer add up to a business too large to measure, and one that has thoroughly changed how people work and live.

All of it began with that crude box assembled in Jobs's house 40 years ago.

The Story of the Personal Computer Begins With Woz's Apple II

When Apple was founded in 1976, a small number of people had come to see computers differently — a thing that, at the time, only governments and giant corporations could afford. This group wanted to build their own computer terminals, and they organized the Homebrew Computer Club.

In April 1976, Jobs and Wozniak took the Apple I they had just finished to one of the club's meetings. The room was not enthusiastic; next to soldering your own circuits, a ready-made computer offered far less fun.

Luckily, Jobs and Woz landed an order from a computer store — 50 units — and Apple went into production. Apple's first "production line" was made up of these people: Woz, Jobs, Jobs's sister, Jobs's college friend Daniel Kottke, and Kottke's former girlfriend.

At a long table in what would later be mythologized as the "startup garage," this handful of people built 50 Apple I computers by hand. The machines went to the retailer for $500 apiece.

The Apple I needed an external power supply, a keyboard, and a display. At bottom it was still a toy in the hands of a few.

Closer to the personal computer we use today was the Apple II: a complete case, an integrated keyboard. Plug it in, switch it on, and the rainbow-striped Apple logo appeared — the Apple II could already display color images.

The Apple II was shown at the 1976 West Coast Computer Faire for $1,298. Jobs and his team took more than 300 orders that day. Apple began real mass production.

For Apple itself this was a turn. Wozniak had first meant to give his circuit board away so that more people could build computers of their own. Jobs saw a business in it.

The Apple II was the first personal computer to be a real commercial success. Over the next 16 years, the various Apple II models sold close to 6 million units between them, which led directly to Apple's listing in 1980. It also showed other companies the opportunity, and the whole market grew fast once IBM entered in 1980.

The Macintosh: Jobs's First Successful Product Was a Personal Computer Anyone Could Use

The Apple II sold well, but in its early years it was still very different from the personal computer you use now.

The simplest example: it shipped with BASIC, a programming language. Today the great majority of computer users cannot program.

A computer anyone could truly use, with a graphical interface anyone could read, starts with the Macintosh in the 1980s.

IBM's personal computer, launched in 1981, outsold Apple within a year. Around then Jobs handed the CEO's seat to John Sculley, formerly president and CEO of Pepsi, and took charge of the Macintosh division himself.

From the outside in, the Macintosh was unlike other products, because its design borrowed from household appliances.

The team redesigned the prototype about once a month. Jobs went to department stores to study appliances, kitchen appliances above all. He would burst into the office, send the design team out to buy some particular appliance, and then propose new ideas from its contours and curves.

Jobs believed a computer's shape had to be approachable. At the time that word had nothing to do with computers — nobody asked a computer to look good or sit easily on the eye.

The Macintosh that finally went on stage looked almost like a face: the disk drive mounted below the screen, and the screen set in a narrower bezel. The keyboard and mouse went in front as the standard tools of interaction. That settled what a desktop computer looks like.

Just as important to the industry was the world inside the screen. Jobs carried the graphical interface he had learned from Xerox onto the Macintosh, and Apple spent enormous effort on windows, files, and the menu bar across the top of the screen — including the rounded rectangles we still know from the iPhone today.

To convince the team that rounded rectangles were necessary, Jobs once walked them three blocks and pointed out 17 road signs with rounded rectangular corners.

The Macintosh also brought the graphical interface to maturity and into wide use. Windows 1.0 did not arrive until 1985, and did not mature until the 1990s.

The Macintosh story has no perfect ending, though. At $2,495, the price was plainly too high. Monthly sales came in under 20,000 units; Apple had expected 75,000 a month.

While he ran the Macintosh business, Jobs's conflict with John Sculley sharpened. He lost the internal fight and left Apple in 1985.

While Jobs Was Gone, the Powerbook Defined the Shape of the Laptop

Sculley held the CEO's job at Apple for ten years. What happened in those ten years is generally read as a disaster for the company: the product line grew more and more confused; Apple licensed the Mac's graphical-interface patents to Microsoft, which fed directly into the later Apple-Microsoft lawsuit; and it shipped the Newton tablet, a commercial failure.

But those ten years also produced a product that shaped the whole industry: the Powerbook.

In the fall of 1990, Sculley started the Powerbook project with the goal of building a portable computer people would want. Randy Battat ran the project, John Medica led hardware engineering, and Neil Selvin handled marketing.

Apple had spread itself across too many product lines, and Sculley did not treat the Powerbook as a major product, so the project was short of people. For the design, Apple had to work with Sony.

Luckily, Sony was enthusiastic about the Powerbook. Norio Ohga, then Sony's president, authorized the project to recruit from any department in the company, and the design that would be called the Powerbook 100 was finished in 13 months.

Before the Powerbook, laptops looked very different from the ones we know. The Powerbook changed the old design: the screen half lifted as a single piece, there was room enough for the keyboard, and the keyboard moved up to leave space for the wrists. Obviously, this is still what a laptop looks like.

On October 21, 1991, the Powerbook appeared at the Comdex show in Las Vegas. It sold 100,000 units in three months and beat every competitor on the market. In fiscal 1992, the Powerbook line brought Apple $7.1 billion in revenue.

The Powerbook defined the shape of today's laptop, and it also kept Apple alive — alive long enough to reach 1997, buy NeXT, and bring Jobs back.

Design, Design, Design

Jobs had been away from Apple for 12 years. The first product after his return was the iMac G3.

By then Apple had more than 40 products on sale at once: four major computer lines, plus a tablet (the Newton), printers, scanners. Apple had become a company that sold everything. Meanwhile its earnings were falling year after year, sliding from $12 billion all the way down to $7 billion.

Beyond the routine fixes — clearing inventory, trimming the product line — the first thing Jobs did on his return was to make users love Apple again by remaking its industrial design. The first product was the iMac G3, a desktop computer led by Jobs and Jony Ive.

Look at what it was when it finally went on sale in 1998: a clean exterior, with every port hidden behind a flap on the right side of the machine. An egg-shaped back, a candy-colored translucent shell, matching mouse and keyboard, $1,299. Jobs said: "It looks so good you kind of want to lick it."

The translucence came from a thermos.

When Ive settled on the approach, he thought a translucent material, letting users see the structure inside the computer, gave a feeling at once intimate and bold. He hauled every kind of translucent object into the studio for inspiration — kitchenware, cheap tableware of all sorts, enough to fill a whole shelf.

Ive's team began studying the quality, depth, and internal texture of these translucent objects. One thermos in particular gave them a great deal: a glossy, deep-blue translucent body whose bright neck threw the structure inside into view.

The color Apple finally chose for the all-in-one was blue, drawn from a small piece of blue-green beach glass with a lightly frosted surface. It made you want to touch it; it made you feel this was a friendly design.

You could see the silver parts inside the machine. The whole thing looked like a cross between a translucent water bottle and a car taillight.

Designers' standing inside Apple kept rising, until people said that when a designer walked into a meeting it was like a priest walking into a church.

The "simplicity and reduction" Jobs preached was no easy thing in the tech industry of the time. Manufacturers all wanted to add gaudy things to new products, not strip them out.

The design strength Apple started building here only grew stronger. Almost every product after this drew attention through design first; software, the ecosystem, and user experience kept users afterward.

Starting With the iPod, Apple Turned the Personal Computer Into Anything

In Steve Jobs, the film with Michael Fassbender in the lead, the iPod comes out of a line Jobs uses to win over his daughter Lisa: "I'm going to put a thousand songs in your pocket, because I can't stand that ugly Walkman."

In the real world we know, it was Tony Fadell who made that "thousand songs" goal happen.

Before Apple invited him in, Tony Fadell was an entrepreneur with a rebellious look. He wanted to build a portable digital music player tied to a music store, but RealNetworks, then the largest online audio technology company, along with Sony and Philips, were not interested.

Jon Rubinstein recruited him to Apple. Jobs had just made the first version of iTunes by acquiring SoundJam, and he wanted Apple to design a music player to go with iTunes, one that made listening to music simple.

Fadell took the job half-reluctantly and led the whole team. Apple was not yet out of its financial crisis, and Jobs wanted the product ready in October to catch the Christmas shopping season. Fadell had six months.

Fadell chose to build on the base MP3 technology from PortalPlayer. Persuading the company to sign an exclusive agreement, he said: "This project will change Apple, and ten years from now Apple will be a music company, not a computer company."

By 2003, the third-generation iPod, paired with the Windows version of iTunes, was a huge success.

Strong iPod sales gave Apple the money that made it possible to start developing the iPhone in 2004. The iPod also remade Apple, from a computer maker selling just over 3 million machines a year into a global consumer-electronics giant selling more than 50 million players a year. It was in those years that Tim Cook built Apple's global supply chain.

The iPhone Put the Personal Computer in Your Palm

Before returning to Apple in 1997, Jobs said: "If I were running Apple, I would milk the Macintosh for all it's worth and then get busy on the next great thing. The personal-computer war is over. Microsoft won it a long time ago."

That product, it turned out, was the iPhone.

It is hard to imagine how precarious that now-classic iPhone launch was, in January 2007.

A week before the event, Apple took over the Moscone Center and built an eight-foot-square electronics lab backstage to hold and test the iPhones. Every Apple employee involved was uneasy, because in hundreds of rehearsals something went wrong every single time.

The iPhone had not even begun mass production. Apple had about 100 units in all, of uneven quality.

The iPhones used for the demo were set up by engineers along a "golden path," meaning Jobs could work the phone only in a fixed order — email first, then web browsing, and so on. Break the sequence anywhere and the iPhone froze.

This phone called the iPhone could not even guarantee a basic phone call. Engineers worried it would lose signal in the middle of the event and show the audience an empty signal bar. So they hard-coded the signal display on the demo phones: whatever the real signal was, the bars always read full.

Through all this uncertainty, Jobs delivered a launch that would be held up as a classic, and once the iPhone went on sale it sold madly.

In its first two days on the market, the iPhone sold 270,000 units, and 3.4 million within half a year. iPhone sales never fell after that; in the last quarter of 2015 alone, Apple sold 74.779 million.

On the question of what the iPhone was, BlackBerry's founder and co-CEO for engineering, Mike Lazaridis, left the classic summary. Soon after it went on sale, Lazaridis took one apart himself. His conclusion: "They put a Mac in this thing."

The App Store: Helping Software Eat the World

When the first iPhone launched, Jobs had not yet thought of building an App Store.

When developers, after that launch, began saying they wanted to write applications for the iPhone, Jobs publicly refused and encouraged them only to build so-called "web apps."

Then, in an interview with The New York Times, he explained: "You don't want your phone to be like a PC. The last thing you want is to have loaded three apps on your phone and then you go to make a call and it doesn't work anymore."

Because the "web app" experience was poor, over the following months Apple kept getting requests: game developers wanted to build richer games, financial firms wanted native apps for better security, and so on.

Inside Apple, there were voices for opening up app development too. Arthur Levinson, a board member, lobbied Jobs repeatedly by phone. Phil Schiller, then the company's marketing chief, agreed with him: "I can't imagine that we would create a product as powerful as the iPhone and not empower developers to make applications for it."

By then, BlackBerry, Windows Mobile, and Symbian phones all supported installing third-party apps.

Jobs's hesitation came from two directions. One was his long-held view that people outside Apple could easily do the system harm — infect the iPhone with a virus, for instance. The other was his judgment that working out the complicated problems of licensing third-party developers would eat a great deal of his team's energy and hurt the company's efficiency in the future.

What we ended up seeing was a review system Apple controlled tightly itself: every app built by an outside developer had to be submitted to Apple for review, and an approved app could be distributed only through the App Store.

In July 2008, iOS 2 shipped alongside the iPhone 3G, and the App Store was finally born. It caught fire at once. By September, app downloads worldwide had passed 100 million. Seven months later, the number was ten times that.

Today a software industry larger than anything the PC era ever had is built on phone apps. Apple now pays out $15 billion a year to software developers.

That $15 billion is only what sells directly through the App Store. Countless internet companies now take most of their revenue from phone apps — Uber, Didi, Meituan, Taobao.

Building a software industry on phones, something never seen before, was not the App Store's work alone. The large screen the iPhone offered (large for its time) and the finger-touch interaction Apple pushed together found the right user experience for software on a phone.

Looking back at the first iPhone's launch, Jobs called it a combination of an iPod, a phone, and a browser. Today, what the iPhone or Android phone in someone's hand actually is depends entirely on which apps are on it.

The Biggest Tech Company Starts Standing Up to the Government

Apple's scale is large enough on its own by now: 1 billion active devices, the figure in its fiscal first-quarter 2016 report, counting every Apple product — iPhone, Apple Watch, Mac computers, Apple TV.

We have unprecedented ease in getting information, and at the same time our private data is in the hands of tech companies at every moment.

Who has the right to touch personal data? On this question, tech companies and governments have slowly drifted apart.

The most recent of these conflicts, and the fiercest, also landed on Apple.

In December 2015, a terrorist attack took place in California: two suspects burst into a center for people with disabilities, killing 14 and wounding 21. It was the worst shooting in the United States in nearly three years. Police shot both gunmen dead at the scene. During the investigation, the iPhone 5c belonging to one of the suspects, a man, became key material.

The FBI applied to the court for an order requiring Apple to provide "appropriate technical assistance." Later the FBI went further, demanding that Apple build a "backdoor" into the phone so the data could be taken out.

People familiar with the matter told The New York Times that in this thorny case tied to a terrorist attack, Cook was very cautious at first, spending hours with lawyers and other Apple executives working out how to answer the federal court's order.

The result was that on February 18, 2016, a blunt open letter went up on Apple's website. Apple refused to cooperate with the FBI:

"We feel we must speak up when the US government goes too far," wrote Cook, who was 55. "In the end, we fear that a demand like this would endanger personal freedom and civil liberties — exactly what our government is supposed to protect."

A month later, the day before the hearing, the FBI gave up on its own, saying it had found an outside firm that cracked the iPhone 5c, whose encryption was not good enough.

The matter ended there for the time being, but Apple had set a precedent for a tech giant confronting the government directly.

In the past, tech companies had always chosen to avoid public confrontation with the government on sensitive matters involving terrorist attacks and violent crime. Cook made an unusual decision, and that decision finally pushed other tech giants, each with hundreds of millions of users of its own, to take sides. In the end, Apple had public support from every major American tech company, Facebook, Google, Twitter, Amazon, and Microsoft among them.

Similar conflicts happened in the 1990s, but the side pushing back was only individuals and small companies; the giants said nothing.

The choice Apple and the whole American tech industry made this year sets a remarkable precedent.

However Apple develops under Cook from here, what he did in this episode will have a lasting effect.

Today Apple is the most valuable company in the world, and it is also an extremely simple company. It does not do real estate, does not invest heavily in startups, does not talk about labs of the future.

For 40 years, Apple's business has never changed: make one good-enough product after another, and keep customers close.

And Apple's future depends on whether it can keep doing that well.

Cover image from Fortune

This article draws on Steve Jobs, iWoz, Jony Ive: The Genius Behind Apple's Greatest Products, and Mobile Storm (《移动风暴》).