Steve Jobs & Macintosh – The Failure That Led To Success

Steve Jobs & Macintosh – The Failure That Led To Success
ElisaRiva / Pixabay

The perspective of a couple of decades allows us to better understand how Apple Inc. (NASDAQ:AAPL)’s Macintosh personal computer was such a brilliant leap forward and still a complete sales flop. A recent article by Chris O’Brien in the Los Angeles Times explores the issue of Steve Jobs and Macintosh, and the genius that the Mac represented, in some depth.

Play Quizzes 4

Early Steve Jobs

Most modern culture historians see Jan. 24, 1984 as the day when the PC revolution truly began. Steve Jobs — sporting his trademark bow tie — walked onstage to unveil the Apple Inc. (NASDAQ:AAPL) Macintosh and his enthusiasm immediately infected the crowd. Anybody who has watched the video of the event can see how much the crowd loved him and how excited they were about the device he was talking about.

How Value Investors Can Win With Tech And “Fallen” Growth Stocks

Valuation Present ValueMany value investors have given up on their strategy over the last 15 years amid concerns that value investing no longer worked. However, some made small adjustments to their strategy but remained value investors to the core. Now all of the value investors who held fast to their investment philosophy are being rewarded as value Read More

Macintosh sales started off gangbusters too, but not for long. The company sold 70,000 Macintosh computers through April. However, by year end, sales had dropped to only 10,000 a month. The company discontinued the Lisa in 1985, and with Macintosh sales falling off a cliff, Apple Inc. (NASDAQ:AAPL) plunged into a major crisis.

Steve Jobs and Scully

Jobs and Scully clashed on a number of issues. For starters, Jobs had been removed from the Apple team developing the Lisa PC, and he was deeply resentful. He turned that resentment into determination that the Macintosh would be better and cheaper.

However, Jobs lost a battle with his personally picked CEO, John Sculley, over the marketing costs of the Macintosh. Jobs wanted to price the Macintosh at around $2000 to drive demand, but Sculley insisted the price be set at $2,495 to include marketing and advertising costs.

The crisis mentioned above eventually precipitated a showdown between CEO Sculley and Jobs later in 1985, with Jobs losing out and leaving Apple Inc. (NASDAQ:AAPL) in late summer. In a 2010 interview, Jobs still pointed to the cost as the main reason for the failure of the Macintosh.

Problems with Macintosh

But a steep price tag wasn’t the only reason the early Macintosh failed. According to Walter Isaacson’s biography of Jobs, “The problem was a fundamental one: It was a dazzling but woefully slow and underpowered computer, and no amount of hoopla could mask that.”

Isaacson also noted the the Macintosh had only 128K of memory, compared with the 1,000K RAM in the Lisa. the PC also did not have an internal hard drive. The Macintosh didn’t even have a cooling fan as Jobs believed that it “distracted from the calm of the computer.” Issacson somewhat drily points out that “This caused many component failures and earned the Macintosh the nickname ‘the beige toaster,’ which did not enhance its popularity.”

Macintosh led the way

Its problems notwithstanding, the Macintosh led the way in terms of the design of the modern PC. Steve Jobs constantly preached the importance of tight integration between hardware and software as critical for usability, and he has been proven correct. Furthermore, the basic graphical user interface of the Macintosh and, of course, the mouse, became the standards of personal computing.

Updated on

No posts to display