The first week of April marks the anniversaries of the founding of Apple and Microsoft, providing an opportunity to look back at two of the greatest companies over the past 50 years.
Former Apple CEO, the late Steve Jobs once said about Microsoft CEO Bill Gates: “Bill is basically unimaginative and has never invented anything, which is why I think he’s more comfortable now in philanthropy than technology. He just shamelessly ripped off other people’s ideas.” Jobs also had advice for Gates. “He’d be a broader guy if he had dropped acid once or gone off to an ashram when he was younger.”
Bill Gates also had thoughts about Jobs calling him “fundamentally odd” and “weirdly flawed as a human being.” Further, he said that Jobs’ interaction with people was “either in the mode of saying you were s**t or trying to seduce you.”
Apple and Microsoft anniversaries
On April 1st, Apple will celebrate its 45th anniversary, and on April 4th, Microsoft will celebrate its 46th anniversary. The two tech giants got off the ground within a year of each other: Microsoft in 1975 and Apple in 1976 and achieved the prestigious status of one trillion dollar market capitalization within a year of each other. Apple reached that landmark, becoming the first publicly traded trillion dollar company in August 2018, and Microsoft joined the group in June 2019. The three other companies reaching that status include: Amazon, Alphabet Inc., and Saudi Aramco.
Despite the close proximity of the two companies’ milestones, their products and leaders and paths to the top were very different. Gates was the computer programmer interested in maths, equations and economics, whereas Jobs was the gifted public speaker, salesman and into Buddhism.
Gates and Microsoft worked on software products, whereas Jobs and Apple worked on building computers. Microsoft looked to the present when creating its products, whereas Apple looked to the future. Microsoft was a successful company gradually building its wealth, whereas Apple rose, fell to almost bankruptcy before rising to dominance in the 21st century.
Apple Inc. was founded by Steve Jobs and Steve Wozniak in 1976. The Apple II was the company’s main product and generated $2 million in profits by 1978. Only four years after it began, Apple went public on December 12, 1980. In its IPO, Apple managed to sell 4.6 million shares at $22 per share, bringing the company $100 million, and registering the biggest IPO since Ford in 1956.
Apple began selling the “Lisa,” a desktop computer for businesses in 1983, and a year later debuted the Macintosh, a personal computer largely based on the design of the Lisa. Although sales began strongly, they would later decline due to the computer’s slow processing speed and lack of software variety. This would lead to friction between Jobs, and CEO John Sculley, recruited two years earlier by Jobs. Their different visions for the company led to Jobs being forced out of the company in 1985.
While away from Apple, Jobs founded NeXT, a computer software company, which would later be bought by Apple for $400 million in December 1996. Jobs would return to Apple as an adviser, and later, CEO, in 1998.
In the first decade of the 21st century, Apple would begin its domination. In 2001, it unveiled the iPod, a digital music device which sold 400 million units and illustrated that Apple was more than just a computer company. In 2003, it unveiled iTunes, a digital music store initially only accessible to Apple devices, but shortly afterwards, another version came out which could be accessed from Windows. The iTunes library gave its users access to a large online music library and sold one million downloads during the first week and over the course of its first year, sold 70 million songs.
In January 2007, the iPhone was introduced and Apple has sold over 2 billion phones since, making it one of the largest phone makers worldwide. A decade later, Apple would introduce the iPhone X, which changed the style of the phone and increased the price by almost 50%.
The last product unveiled before Steve Jobs’ retirement was the iPad tablet. Although not an actual laptop, it served as an impetus for Apple (and in turn the industry at large) to manufacture thinner laptops. Tim Cook would take over Apple in 2011, and the first product to be unveiled post Steve Jobs would be the Apple watch in 2014. In 2019, Apple entered the streaming services business and also reported that it was in the process of creating a credit card.
In 1975, Microsoft was founded by friends Bill Gates and Paul Allen. The company’s name was a combination of microcomputer and software. When it was founded, it sold programming software to Micro Instrumentation and Telemetry Systems (MITS) for its computer called the Altair. In 1981, IBM introduced its personal computer, using Microsoft’s operating system known as MS DOS 1.0.
In 1985, the first version of Microsoft Windows was released. Although the new program was not well received, it made computers accessible to the general public by allowing a person to use a mouse to move and click around windows as opposed to typing in commands.
At the time, Steve Jobs claimed that Microsoft stole the idea of a graphical user interface from Apple, to which Gates responded that they had both taken the idea from Xerox. This was the beginning of a rivalry that would last for the next few decades. Prior to this, Gates and Jobs had been working together on the Macintosh.
The following year, Microsoft went public and sold for $21 per share. Since its IPO, Microsoft stock has split nine times. A recent calculation showed that if a person bought one share of Microsoft stock in 1986, they would now hold 288 shares with a value of over $44,000.
In 1990, Microsoft released Windows 3.0, and would continue releasing updated versions of the product, named according to the year released, such as Windows 95, Windows 98 and Windows 2000. Windows 95, however, was a revolution for the computer industry. Some of the features included it having 32-bi integerst, as well as a desktop, taskbar and start button. One of Microsoft’s goals was to push DOS out of the market and in the months prior to the rollout, it was clear that most new software programs would be written for Windows 95. Anyone who wanted those programs would have to switch to Windows 95.
The rollout of Windows 95 was grandiose with Microsoft spending more than $300 million on promotions and $12 million alone on securing the rights to playing the Rolling Stones’ song “Start Me Up” at the rollout. The Washington Post commented that the campaign was so extensive that it was just about impossible not to hear about Windows 95. A million copies were sold within four days.
Windows XP was released in 2001, and in 2015, Windows 10, which as of 2021, is still the latest version.
By 1995, almost 90% of computers were operating using Microsoft software. This market dominance led the US Justice Department to take action against Microsoft. The Justice Department filed a suit against Microsoft in 1998, claiming it was using its position in the market to directly drive out competitors and integrating its products into the Windows Operating System in a way that prevented any competition. The suit was settled in 2004.
In 1996, Microsoft and NBC partnered to start a new channel called MSNBC which is still running today.
In 2001, Microsoft created the video game system, Xbox, which is considered one of its most successful product lines to date. It would go on to create four more versions of the Xbox, including Xbox360 in 2005, Xbox One in 2014 and Xbox Series S and Series X in 2020, selling more than 100 million Xboxs worldwide.
Bill Gates handed over the reins to the company to Steve Ballmer in 2000, and eight years later, would leave his day job to focus on philanthropy.
Gates and Jobs: colleagues, competitors, and friends
Imagine investing $150 million in a company and getting booed by its supporters. That is what happened in 1997 when Bill Gates invested $150 million in Apple to rescue it from the brink of bankruptcy.
Apple had acquired NeXT in early 1997, the company started by Steve Jobs after he left Apple. Jobs returned to Apple as its CEO and found a company in worse shape than he thought. To save Apple, Jobs reached out to Gates and secured the investment which would give Jobs the time needed to revive the company.
Time magazine memorialised the moment on the cover of its magazine in 1997, quoting Jobs thanking Gates for the investment: “Bill, thank you. The world is a better place.”
In return for the investment, Apple agreed to drop a lawsuit against Microsoft and to incorporate the Windows system into Apple computers.
Despite the rivalry between the two companies and the insults hurled in both directions, Gates wrote the following upon Jobs’ passing in 2011.
“Steve and I first met nearly 30 years ago, and have been colleagues, competitors and friends over the course of more than half our lives.The world rarely sees someone who has had the profound impact Steve has had, the effects of which will be felt for many generations to come. For those of us lucky enough to get to work with him, it’s been an insanely great honor. I will miss Steve immensely.”
As we celebrate the anniversary of these two tech giants, we can reflect on how their paths to greatness were at some points through fierce competition, and at other times working together.
Zero commission means that no broker fee will be charged when opening or closing the position and does not apply to short or leveraged positions. Other fees may apply. Your capital is at risk.
For more information, visit stocks.eToro.com
This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to, buy or sell any financial instruments. This material has been prepared without taking any particular recipient’s investment objectives or financial situation into account, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to the past or future performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilising publicly available information.
The post Trillion dollar birthdays: Apple and Microsoft anniversary only three days apart appeared first on eToro.