A TALE OF FIVE COMPANIES

The story of Apple has helped to define the story of the entire global technology sector since the 1970s. Nonetheless, the fortunes of a few companies – each of them a giant in its own right – have been more than usually intertwined with those of Steve Jobs. So let’s take a moment to consider, albeit briefly, the fates of Apple and four other companies: Hewlett-Packard, IBM, Microsoft and Xerox.

APPLE

From plucky outsider to global megastar, Apple is by far and away the world’s most valuable technology company. As of May 2012, it was valued at $526 billion by market capitalization (according to Google Finance) and in 2011 was temporarily the largest company of any type on the planet, before losing top spot to Exxon Mobil. In 2002 Jobs told the New York Times what he thought was the secret of Apple’s success: ‘We’re the only company that owns the whole widget – the hardware, the software and the operating system. We can take full responsibility for the user experience. We can do things that the other guys can’t do.’

HEWLETT-PACKARD

Founded, like Apple, out of a garage, HP appeared in Palo Alto in 1939 as the baby of Bill Reddington Hewlett and Dave Packard. One of the founding institutions of Silicon Valley, the company introduced the HP 9100A in 1968, one of the world’s first mass-produced computers (although it was marketed as a desktop calculator). The firm gave early job opportunities to both Woz and Jobs but infamously turned down the option to buy a stake in the Apple I. Nonetheless, HP found itself a prominent position in the PC market, producing computers, companion hardware such as printers, and original software. Merging with Compaq in 2000, it is today, by some measures, the largest personal computer manufacturer on the planet by unit sales. However, with a value by global capitalization of $44 billion in 2012 (Google Finance), it has been dwarfed by the company set up by two of its alumni.

MICROSOFT

Microsoft was launched in 1975, about a year before Apple, by Bill Gates and Paul Allen. The two tech geniuses approached Micro Instrumentation and Telemetry Systems (MITS) claiming they could create a BASIC interpreter for the company’s new Altair 8800 computer. Having made the boast, they then set about making it true. Eschewing the ‘complete package’ philosophy of Apple, Microsoft focused on creating software to be used with others’ hardware – a market in which it remains the undisputed king. When the company sold its shares to the public in 1986 – two years after the release of Microsoft Windows – it was valued so highly that at least three employees became instant billionaires while some 12,000 became millionaires. The introduction of the Microsoft Office suite in 1990 only helped secure its market position, and from the mid-1990s the company took on the challenges and opportunities presented by the internet with gusto. For a while it seemed as if Microsoft had vanquished Apple in the commercial battle of the computer geeks, but the incredible product roster emerging from Jobs’ second spell at Apple changed the landscape. Apple overtook Microsoft as the world’s most valuable tech company by market capitalization in 2010 and then forged ahead so that, by 2012, it was valued at more than double the $244 billion of Microsoft (Google Finance).

IBM

International Business Machines Corporation (IBM) began operations in 1911 as the Computing Tabulating Recording Company. It is credited with an admirable array of game-changing inventions, from the automated teller machine and the floppy disk to the electronic keypunch and the Watson artificial intelligence program. IBM employees have picked up five Nobel prizes along the way. An established computing giant long before Apple was even a glint in Steve Jobs’ eye – indeed, before Steve Jobs was a glint in anyone’s eye – it released its first personal computer (the IBM 5150) on to the market relatively late in 1981. Backed by its trusted name, sales were impressive and the machine became a staple of offices and homes across the world. As of May 2012, IBM was given a healthy market capitalization value of $224 billion (Google Finance). However, that left it third, just behind Microsoft and a long way off Apple.

XEROX

Xerox had it all to lose in terms of the personal computer and, one might argue, that is just what it did. Founded in 1906 as the Haloid Photographic Company and known as Xerox from 1961, the company introduced the first mass-market desktop printer in 1963, with a laser printer following six years later. The groundbreaking Xerox PARC opened in 1970, developing the mouse and the graphic interface that would underpin the personal computer industry for decades.

Alas, the company put its best state-of-the-art technology into a machine, the Xerox 8010 Star, which was far too expensive for the average household, costing $16,000 when it hit the market in 1981. In the burgeoning PC arena, the company was soon eclipsed by the likes of Apple, IBM and Microsoft and, perhaps wisely, focused its attentions instead on document management (printing, photocopying, etc.), a sector in which it remains a world leader. However, as a company it is valued at about one-fiftieth the value of Apple, with a market capitalization value in 2012 of just under $10 billion.