With iPod at its core, Apple shining at 30
By May Wong
By May Wong
SAN JOSE, Calif. — Silicon Valley's historic orchards have virtually disappeared but one notable fruit still stands: Apple.
As the storied company celebrates its 30th birthday next week, Apple Computer Inc. will have brushed off its bruises from product failures and arguably misguided decisions to emerge with a shine that's more than skin-deep.
Its brand name and products — from the Mac to the iPod — resonate as both hip and innovative.
For all of its recent successes, however, Apple also has its share of challenges ahead as it matures into a digital media provider.
In the digital music arena, where Apple dominates, French lawmakers are angling to force the company to change its successful way of chaining its popular iPod player to its online iTunes Music Store.
Recording labels also are chafing at Apple's insistence that its song downloads remain 99 cents apiece. Apple CEO Steve Jobs rebutted by calling the record industry "greedy."
In the computer space, where Apple is seeing its best sales in years, information-security companies have discovered a few new vulnerabilities in its Macintosh operating system.
Though the security breaches have been innocuous, security experts say they signal that Apple is a higher-profile target now for hackers, who in the past have focused heavily on Microsoft Corp.'s predominant Windows system.
"Apple is on more people's radar now that the company is a major force," said Tim Bajarin, president of Creative Strategies, a technology consultancy. "And these are all growing pains."
Apple's journey began in 1976 when two college dropouts — Jobs, a marketing whiz, and his friend Steve Wozniak, an engineering genius — filed partnership papers on April Fools' Day, their eyes set on building and selling personal computers.
Their first product was a build-it-yourself computer kit. A year later, in 1977, the Apple II microcomputer was born. It was not the first personal computer but it was the most successful — a hit not just among engineers, but home users, too.
The hugely successful Apple Macintosh was introduced in 1984, giving birth to desktop publishing by allowing users to create their own newsletters or printed material.
Microsoft eventually copied the user-friendly graphical interface and licensed its Windows software to manufacturers who copied the IBM PC. The clones proliferated while Macintosh sales were hobbled by Apple's decision not to license its software to other hardware makers.
The next decade was punctuated by an internal power struggle that forced then-chairman Jobs to leave the company, but he returned in 1996 when Apple was struggling for a foothold in the personal computing market and its efforts to upgrade its operating system were going nowhere.
Jobs, whose charismatic persona is the face of Apple, led the company's resurrection with one breakthrough after another — first with the iMac, then the slick new OS X operating system, then the iPod music player, then the market-leading online iTunes store.
Apple's iPod and iTunes franchises have popularized the notion of music — and more recently, video — on-the-go. They also spawned the modern explosion in podcasts, or self-made broadcasts of audio programming over the Internet to portable gadgets.
Analysts expect the iPod — which works with both Windows and Macintosh machines — and Apple's new computers based on Intel Corp. chips — the same used by Windows — will help Apple increase its 4 percent share of the worldwide PC market.
Meanwhile, Apple's financial health is better than ever. It posted record revenue of nearly $14 billion for its fiscal 2005 and is armed with more than $8 billion in cash.
No matter how well the company does with its future endeavors, many things people do today — from desktop publishing to music downloads — will long be regarded as the fruits of Apple.