Steve Jobs delivers a keynote address at the 2005 Macworld Expo in San Francisco. Photographer: Justin Sullivan/Getty Images
“We are deeply saddened to announce that Steve Jobs passed away today,” Apple said. “Steve’s brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve.”
Jobs embodied the Silicon Valley entrepreneur. He was a long-haired counterculture technophile who dropped out of college and started a computer company in his parents’ garage on April Fools’ Day, 1976. He had no formal technical training and no real business experience.
What he had instead was an appreciation of technology’s elegance and a notion that computers could be more than a hobbyist’s toy or a corporation’s workhorse. These machines could be indispensable tools. A computer could be, he often said, “a bicycle for our minds.” He was right -- owing largely to a revolution he started.
Jobs’s passing was met with an outpouring of grief from consumers who flocked to Apple stores, technology executives who partnered and competed with Jobs over the years and even President Barack Obama and First Lady Michelle Obama.
“Michelle and I are saddened to learn of the passing of Steve Jobs,” Obama said. “Steve was among the greatest of American innovators -- brave enough to think differently, bold enough to believe he could change the world, and talented enough to do it.”
On his watch, Apple came to dominate the digital age, first through the creation of the Macintosh computer and later through the iPod digital music player, the iPhone wireless handset and more recently, the iPad tablet.
And Jobs would prove himself not just a techie visionary, but the virtuoso executive who built the world’s second-most valuable company after Exxon Mobil Corp. (XOM)
The opening act of Jobs’s professional ascent stretched from 1976 to 1984. He scored his first hit with the Apple II computer, a device that resonated with schools and some consumers and small businesses, and made Apple an alluring alternative to IBM, then the world’s largest computer maker. Apple had its initial public offering in 1980 and the graphical Macintosh was born just over three years later.
During his second act, from 1984 to 1997, Jobs’s star dimmed. In 1985, he was fired after a power struggle with Apple’s board. He started another computer company, NeXT Computer Inc., and bought a digital animation studio from filmmaker George Lucas. The firm later took the name Pixar.
String of Hits
Apple’s purchase of NeXT in 1997 brought Jobs back to the computer maker he helped found and commenced his career’s third act. The company was foundering. He ignited a flurry of innovation and growth -- and achieved what may be the greatest comeback in business history.
Whether he was working on the Mac or the iPhone or backing the computer animation that yielded an unbroken string of Pixar hits, Jobs proved that complex technologies could be designed into simple, beautiful products that people would find irresistible.
His meticulous attention to product detail carried over to his public image, which grew inseparable from the Apple brand. In public he wore beltless jeans and a black mock-turtleneck.
On the few occasions he granted interviews -- appearing on the covers of Time, Fortune or BusinessWeek, for instance -- he fretted over such minutiae as which photographer would take his picture. The reclusiveness only added to his mystique.
“The mystery is actually wonderful,” said Regis McKenna, a computer-industry marketing consultant who first worked with Apple in the 1980s. “You want to know more about this company the more mysterious it is.”
Product Unveilings
Another way Jobs manufactured his aura was with product unveilings. He obsessively prepared for the choreographed occasions, often at Apple’s Cupertino campus or San Francisco’s Moscone Center, rehearsing his delivery many times over. He would scrap presentations wholesale, even at the last minute, if they weren’t up to snuff.
He captivated audiences, and the gadgets he introduced resonated with consumers the world over, adding billions of dollars in revenue. Sales surged 82 percent to a record $28.6 billion in the June 2011 period, the last full quarter before Jobs resigned, and the stock closed at $376.18 on Aug. 24, before the move was announced. That gave Apple a market value of $348.8 billion.
All that success came with an ego to match. Jobs was a notorious control-freak with authority issues, associates and former employees say. He came close to breaking securities laws by backdating employee stock options. Even his worsening health -- or his non-disclosure of his illness to shareholders -- drew scrutiny from authorities.
‘Park Different’
In Apple’s parking lot, people often noticed Jobs’ silver Mercedes-Benz SL 55 AMG parked in the handicapped spaces. His cars were easy to spot because he refused to put license plates on them. “It’s a little game I play,” he told Fortune in 2001. Employees stuck notes under the car’s windshield wipers, encouraging Jobs to “Park Different,” a play on the “Think Different” Apple advertising slogan.
Jobs was known to praise people one minute and belittle them the next. According to “The Second Coming of Steve Jobs” by Alan Deutschman, this management style was known at Apple as the “hero-shithead roller coaster.” No one was immune from Jobs’s tirades, and he had strained relationships with colleagues, friends, and family throughout his life.
“Steve Jobs is a bit like a campfire,” Neil Sims, a headhunter who helped recruit executives for Jobs, said in an interview in October 2008. “Everyone wants to be close enough to stay warm. No one wants to get close enough to get burned.”
Growing Up
Steven Paul Jobs was born Feb. 24, 1955, in San Francisco, to unwed college graduate students Joanne Carole Schieble and Syrian emigrant Abdulfattah “John” Jandali. He was adopted by Clara and Paul Jobs, who raised Steve in the middle-class enclaves of Mountain View and Los Altos in California.
“That was right in the heart of Silicon Valley, so there were engineers all around,” Jobs said in a 1995 interview conducted by the Smithsonian Institution. “It was really the most wonderful place in the world to grow up.”
Jobs took advantage of the local technological ferment. His father had a workshop in the garage, and created a space for his son to tinker. A neighbor, who was a ham radio operator and Hewlett-Packard employee, taught him about electronics. Young Steve loved figuring out how things worked.
“It gave a tremendous level of self-confidence,” Jobs said in the Smithsonian interview. “Through exploration and learning one could understand seemingly very complex things.”
Self-Confidence
That self-confidence was on full display before he hit high school. As Jobs once told BusinessWeek, at age 12 he called William Hewlett, the co-founder of Hewlett-Packard Co. (HPQ), about some parts for a frequency counter he was trying to build. Hewlett stayed on the phone 20 minutes; Jobs got the parts he needed -- and eventually, a summer gig at Hewlett-Packard.
Catherine Lawler Jacobs, who lived around the block from the Jobs family, said she remembers Steve as a teen. Jobs appeared in her driveway one day, asking for her help setting up an office in his parents’ house. She’d been earning money selling turquoise jewelry and a neighbor recommended her as someone who knew a little about business. Jobs had no money to pay her but offered her shares in his new company.
“I said, and I remember this exactly, ‘I don’t want any phony shares. I want to get paid,’” Jacobs recalled in an interview. “You see, I wasn’t going to be burned by some nerd who was always hanging out in his garage.”
5-Cent Cans
In 1972 Jobs graduated from Homestead High School in Cupertino, also the alma mater of his future business partner, Steve Wozniak, Class of 1968. He then headed north to attend Reed College, a liberal arts school in Portland, Oregon, famous for its Bohemian atmosphere. He dropped out after six months.
He didn’t leave right away, though. He stuck around campus for another year and a half, sleeping on friends’ floors and living off the money he raised by collecting bottles for 5-cent deposits. He listened in on classes, too, including one that would inspire a lifelong mission of elegant design -- a course on calligraphy.
“It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating,” Jobs said in a 2005 commencement address at Stanford University.
As Jobs told those Stanford grads, he “connected the dots” between this developing aesthetic sense and his technical understanding. He realized that technology and artistry could be complementary. More than that, the new world of computers offered a new medium for creativity.
Back in California
By late 1974, Jobs was back in California, immersed in the technology-tinged counterculture of Silicon Valley. He traveled to India, became a Buddhist, experimented with LSD. He also hung out with his friend Wozniak -- they’d met a few years earlier through a fellow electronics enthusiast -- at the Homebrew Computer Club, a group of engineers and hobbyists who would meet to swap parts and ideas.
The two started working together on projects, with Woz the tech genius and Jobs the brash idea man. An early effort was a “blue box” -- a hacker’s term for a device that taps into the phone system to make free long-distance calls. It worked.
“What we learned was that we could build something ourselves that could control billions of dollars worth of infrastructure in the world,” Jobs said in the 1996 PBS documentary “Triumph of the Nerds.” “That was an incredible lesson. I don’t think there would ever have been an Apple computer had there not been blue boxes.”
Apple’s Origins
Wozniak began putting together a contraption he and Jobs could show off to their Homebrew buddies. The Apple I was little more than a motherboard, the main circuit board in a personal computer. Whoever bought one -- Woz and Jobs sold 50 to a local hobby store -- had to supply their own case to hold the circuitry, not to mention a keyboard and monitor. It may have been primitive, but it was the proof of concept they needed. They knew they could build a better computer, and Jobs knew people would buy it.
The pair officially began Apple Computer on April 1, 1976. Twelve months later the company introduced the Apple II. It was a hit and became the first widely used home computer. The company’s sales reached $117 million in fiscal 1980, the year the company went public.
The Apple II was hardly a technological great leap forward. Yet unlike its predecessor, it did come with a keyboard and was housed in a plastic case. Nor was it alone in the marketplace. Commodore and RadioShack Corp. (RSH) also came out with early home- computer models around the same time; the Altair 8800 had been introduced in 1975.
‘Bad Guys’
IBM entered the market in 1981 with its own PC, using software from a tiny startup called Microsoft Corp. rather than building its own operating system. Jobs professed to be unconcerned, even running a full-page ad in the Wall Street Journal, saying “Welcome, IBM. Seriously.”
The Mac’s slow start gave IBM and other machines running Microsoft software and Intel Corp. (INTC) chips a chance to win adherents and build an ecosystem.
What set Apple apart was its charismatic frontman, Jobs, who was rapidly turning into a business superstar. He hyped. He dated Joan Baez and Diane Keaton. He saw himself and his company as an anti-establishment force, waging a noble campaign to battle the faceless power of IBM.
“You always need to have bad guys and good guys in America,” said McKenna, the technology marketing expert. “Apple was thumbing its nose at this big world of monolithic standards. It became a rebel. It became a symbol of fast growth, youth.”
Big Brother
Us-versus-IBM was the guiding worldview behind the famous TV commercial that introduced Apple’s next major product, the Macintosh. The 60-second spot, directed by Ridley Scott, ran only once, during the 1984 Super Bowl. It depicted an Orwellian world of grim conformity. A lone woman wearing a tank top sprints through the grayness and throws a hammer through a giant screen, shattering the droning visage of Big Brother.
The Mac, with its mouse and graphics, demonstrated Jobs’s ability to see the potential of new technologies and package them in a way that would appeal to the most demanding aesthete he could imagine: himself.
Jobs had first seen a graphical user interface prototype a few years earlier on a visit to Xerox Corp. (XRX)’s Palo Alto Research Center, and immediately knew it was the future of computing. He had no compunction about copying the idea.
“Ultimately it comes down to taste,” Jobs said in “Triumph of the Nerds.” “It comes down to trying to expose yourself to the best things that humans have done and then trying to bring those things in to what you’re doing. I mean, Picasso had a saying. He said, ‘Good artists copy. Great artists steal.’”
Inscrutable Autocrat
The Mac project showed another side of Jobs: the inscrutable autocrat. He could be charming and rude almost in the same sentence, leaving underlings scared or dazzled or both. People who worked for Jobs called his powers of persuasion the “reality distortion field.” Andy Hertzfeld, an early Apple engineer, described the phenomenon in “Revolution in the Valley,” his 2005 book about the development of the Macintosh computer.
“The reality distortion field was a confounding melange of a charismatic rhetorical style, an indomitable will and an eagerness to bend any fact to fit the purpose at hand,” Hertzfeld wrote. “If one line of argument failed to persuade, he would deftly switch to another.”
Jobs’s Intolerance
Andrea Cunningham, who worked with McKenna on marketing the Mac in the 1980s, said that Jobs’ intolerance of aesthetic infractions never let up. Cunningham was with Jobs in his room at The Carlyle hotel in New York City for a magazine cover shoot. Jobs, who Cunningham said “always had to have the environment exactly right,” began yelling about a particular flower he wanted -- a calla lily.
“He was being such a pill,” said Cunningham, who is now head of marketing of Rearden Commerce in Foster City, California. “Where do you get a calla lily in New York in December at 11 at night? I found a florist. I found the calla lilies. And the next thing was a bowl of strawberries on the piano. And a separate bowl of whipped cream. We spent three or four hours doing this.”
Jobs could bewitch too, as he did when he hired PepsiCo Inc. executive John Sculley to be Apple’s CEO in 1983. Jobs famously asked him, “Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?”
Uncontrollable
“He looked up at me and just stared at me with the stare that only Steve Jobs has,” Sculley recalled in “Triumph of the Nerds.” “I just gulped because I knew I would wonder for the rest of my life what I would have missed.”
Not long after the launch of the Mac, Jobs’ relationship with Sculley and Apple’s board soured. Arthur Rock, the Silicon Valley venture capitalist and early Apple board member, said Jobs’s obsessions and unyielding personality got the best of him.
“Back then he was uncontrollable,” Rock said in a 2007 interview with Institutional Investor. “He got ideas in his head, and the hell with what anybody else wanted to do. Being a founder of the company, he went off and did them regardless of whether it ended up being good for the company.”
The Mac didn’t sell well during the 1984 holiday shopping season, and Sculley demanded in April 1985 that Jobs be relieved of day-to-day duties and serve as a non-executive chairman, playing the role of outside spokesman. Jobs hated the idea and tried to get the backing of Apple’s directors. The board sided with Sculley and Jobs was out.
Down, Not Out
Jobs was 30 years old and devastated, but not for long.
“I didn’t see it then,” Jobs said in his 2005 Stanford speech, “but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again.”
In 1985 he founded NeXT, which developed a powerful computer based on the Unix operating system. The sleek, black machines earned a reputation for elegant design and high performance; Tim Berners-Lee created the World Wide Web on a NeXT workstation.
NeXT was hardly a success. The computers were too expensive to gain a wide following. Still, the software developed at NeXT would later provide the technological underpinnings for Apple machines.
Pixar
The following year, Jobs bought George Lucas’s computer- graphics shop for $10 million and renamed it Pixar. The studio’s first feature film, “Toy Story,” was the top-grossing film of 1995, and kicked off an unbroken string of hits. Walt Disney Co. (DIS) bought Pixar in 2006 for $8.06 billion and gave Jobs a seat on the company’s board. He became Disney’s largest shareholder.
In his personal life, Jobs settled down. He married Laurene Powell in 1991 in a Buddhist ceremony at the Ahwahnee Hotel in Yosemite National Park, according to biographer Deutschman. The couple have three children.
He also reconciled with his daughter, Lisa Brennan-Jobs, who was born in 1978 to his then girlfriend Chrisann Brennan. Chrisann raised Lisa mainly on her own. By the time Lisa was a teenager and before she attended Harvard University, she moved into her father’s home.
‘More Glamorous World’
“In California, my mother had raised me mostly alone,” Lisa wrote in an article for Vogue in 2008. “We didn’t have many things, but she is warm and we were happy. We moved a lot. We rented. My father was rich and renowned, and later, as I got to know him, went on vacations with him, and then lived with him for a few years, I saw another, more glamorous world.”
Neither Lisa Brennan-Jobs nor Chrisann Brennan, now a painter in San Francisco, would comment when contacted recently.
Jobs didn’t get in touch with his biological father, John Jandali, a onetime academic who went on to run beverage services at the Boomtown Casino in Reno, Nevada. Jandali and Schieble had another child after putting Steve up for adoption, a daughter named Mona Simpson, now a novelist. Jandali left the mother of his child. Schieble raised the girl alone.
“I’m proud of the fact that he’s my biological son, even though I cannot take credit for anything he’s done,” Jandali said in an interview at the Boomtown Casino in April 2009. He said he had never spoken to Steve.
Ascendance of Gates
Jobs’s absence from Apple coincided with the ascendance of Bill Gates and Microsoft Corp. (MSFT), developer of a graphics-driven operating system of its own called Windows. Apple filed, and eventually lost, a lawsuit against Microsoft, arguing that Windows was a Mac knockoff.
When Jobs got wind of Microsoft’s plans for what would become Windows, he screamed at Gates about ripping Apple off, according to a 1983 essay by Andy Hertzfeld, the Mac’s chief software designer.
Gates coolly replied, “It’s more like we both had this rich neighbor named Xerox, and I broke into his house to steal the TV set and found out that you had already stolen it,” wrote Hertzfeld, who witnessed the interchange.
Meanwhile, Apple was dying. By late 1997, it had racked up two years of losses and the Mac’s share of the PC market was in the single digits and falling. On stage at a conference that year, Michael Dell was asked how he would revive Apple if he were CEO.
“What would I do? I’d shut it down and give the money back to the shareholders,” he said. Jobs would later say the company was 90 days from bankruptcy.
Desperate Measures
In desperation, Apple agreed to buy NeXT for $400 million in late 1996, and Jobs accepted a role as adviser to then-CEO Gil Amelio. Within seven months, Amelio was gone and Jobs was once again running the company.
One of the first things Jobs did upon retaking the reins was fire all but two of Apple’s board members. His handpicked replacements were Bill Campbell, a former Apple executive and then-CEO of Intuit; Jerome York, former IBM CFO and onetime adviser to Tracinda Corp. CEO Kirk Kerkorian; and Jobs’ longtime friend, Oracle CEO Larry Ellison. Ellison left the board in 2002; York died in 2010. Campbell is still a director.
Jobs also rebuilt the executive team, installing key technical managers from NeXT who would help him guide Apple’s strategy over the next decade. They included Jon Rubinstein, who had run NeXT’s hardware engineering, and Avie Tevanian, the young software engineer who helped create NeXT’s operating system.
Rubinstein went on to lead Apple’s iPod division before departing for smartphone maker Palm Inc., while Tevanian served as chief software technology officer. Jobs also found talent within Apple, singling out a British-born designer named Jonathan Ive to lead industrial design.
$1 A Year
As a show of Jobs’s not-in-it-for-the-money drive to fix Apple, he insisted on getting paid $1 a year, a salary package that continued for the remainder of his career.
Jobs’s remuneration instead came mainly from stock options, restricted stock and an $84 million Gulfstream V jet, given to him by the board in 2000.
Jobs’s net worth was at least $6.7 billion as of Sept. 6, according to Bloomberg estimates. His 7.4 percent Disney stake was worth $4.4 billion, and his 5.5 million shares of Apple were worth $2.1 billion. Jobs’s 138 million shares of Disney had paid him at least $242 million in dividends before taxes since 2006, according to Bloomberg data.
Stock options let holders buy shares later, usually at the trading price on the day the options were granted. Like other Silicon Valley executives, Jobs viewed the securities as a necessary incentive to keep valuable employees.
Backdating Options
“That’s the key asset Apple has -- is its talent,” Jobs would later say in a March 2008 deposition with the Securities and Exchange Commission. “I was very concerned that Apple could really suffer some big losses on its executive team with the business environment we were in, and the competitors coming after our people.”
And like hundreds of other technology companies, Apple engaged in “backdating,” or retroactively changing grant dates to those with lower stock prices. The practice could artificially boost employee compensation and ran the risk of shielding compensation costs from investors. It came under scrutiny by the SEC.
Jobs admitted in 2006 to recommending some favorable dates on options other than his own. A special committee of Apple’s board exonerated him of any misconduct, and the SEC said in April 2007 that Apple wouldn’t be sanctioned.
“Jobs was one of these CEOs who ran the company like he wanted to -- he believed he knew more about it than anyone else, and he probably did,” Arthur Levitt, a former chairman of the SEC, said in a February 2009 interview.
Jobs Returns
Levitt said that around the time of the two grants that got Apple in trouble, Jobs invited him to join the company’s board - - then disinvited him because his views on corporate governance were “too independent, too doctrinaire” for Jobs.
Levitt also praised Jobs.
“He’s among the best CEOs I’ve ever known, in spite of his irreverence, irascibility and ego,” Levitt said.
When Jobs returned to Apple in 1997, he was still an exacting connoisseur of design. Only now, he demonstrated an understanding that he needed to place his bets carefully. He culled the company’s product line, killing money-losing projects such as the Newton personal digital assistant. He ended the Mac “clone” program that let other computer makers install Apple’s operating system on their machines; he called the welcoming of clones an “ill-conceived” move that undercut Apple’s own Mac hardware sales.
IMac Unveiled
“We’re always thinking about new markets we could enter,” Jobs told BusinessWeek magazine in 2004. “But it’s only by saying no that you can concentrate on the things that are really important.”
“How he looked at things from a product perspective is very rare,” said Ed Zander, a CEO of Motorola Inc. before it split into two companies. “You don’t find many CEOs who have the attention to detail from the product experience point of view -- and understand the business side of the house.”
The first tangible result of Jobs’ return was the iMac, which he introduced at the Flint Center in Cupertino, California, in 1998. The iMac looked like no other computer: It was a bulbous, sci-fi looking number encased in translucent plastic. The unveiling that day had all the usual language of a Jobs keynote -- the iMac was “beautiful,” “cool,” and “a really big deal.”
The iMac would become Apple’s best-selling desktop ever, according to the company. The decision to offer the computer in five colors flew in the face of the then-common industry practice of packaging machines in easy-to-manufacture -- if dull -- beige boxes.
IPod, ITunes
“I remember scratching my head at the time, when Apple first came out with those first little colored desktop Macs, the iMacs,” said Blake Johnson, an assistant professor in engineering at Stanford University. “But the message and splash of five different colors was a conscious decision -- okay, we have some supply chain inefficiencies, but those are more than offset by the positive impact on customers.”
Apple was profitable again by 1998, and over the next decade released a series of blockbusters that went beyond traditional computing. The iPod media player and the iPhone were beautiful objects that ignited consumer lust in Apple’s sparsely elegant -- and typically crowded -- retail stores. Jobs dropped “Computer” from the company name in 2007 at the time he unveiled the iPhone.
Beneath the contours of Ive’s designs were two less obvious achievements. The first was the software that made all those devices work together.
Doing Jobs’s Bidding
All of it was rooted in a single operating system, OS X, which had its beginnings in Tevanian’s work at NeXT. Apple’s great strength, Jobs would say repeatedly, was that it was a software company.
“An iPod is really just software,” Jobs said at the All Things D technology conference in 2007. “It’s in a beautiful box -- but it’s software. If you look at what a Mac is, it’s OS X. It’s in a beautiful box, but it’s OS X. And if you look at what an iPhone will hopefully be, it’s software.”
The other big achievement was Jobs’ ability to create hits by getting industry partners to do his bidding. For the iTunes music store, he not only demanded that the major music labels sell their product over the Internet, but do so at a single price, 99 cents a song. He convinced AT&T Inc. to modify its network to handle the iPhone’s many features in exchange for exclusive rights to sell the iPhone to U.S. buyers. Verizon Communications Inc. (VZ)’s wireless division started selling the iPhone in February 2011.
Cancer Diagnosis
“The AT&Ts and Verizons of the world want to control the software, product, the brand, the colors, where the keyboard goes, the pricing, the distribution,” said Zander, the former Motorola CEO, who partnered with Jobs on an early music-playing phone. “Here comes Steve and he says to AT&T, you get the product but I get the brand, I get the colors, I get the software, I get the distribution pretty much, I get the pricing.”
Apple’s iPhone became the world’s best-selling smartphone in the second quarter of 2011.
Jobs said in 2004 that he had been diagnosed and treated for a neuroendocrine tumor in his pancreas. After surgery to remove an islet cell tumor, he took a month off to recuperate and declared himself healthy and cancer free.
‘Follow Your Heart’
For a few years he looked that way. He was thinner, which was no surprise after what he’d been through. One person who knew him well said that the cancer scare didn’t slow him down, convince him to spend more time with family or reconnect with friends. If anything, Jobs seemed to get even more engaged with work, said this person, who wished to remain anonymous because the matter was private.
During the 2005 Stanford commencement address, Jobs described how the inevitability of death was a motivating force in his life.
“Remembering you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked; there is no reason not to follow your heart,” he said.
Jobs’s appearance changed noticeably by early 2008. He started looking gaunt. Tech blogs bubbled with discussion about what was going on. Typical headlines: “The Incredible Shrinking Apple CEO,” and “Why Does Steve Jobs Look So Thin?”
Reports of Death
When he took the stage at Apple events, Jobs joked about his health. In August of that year, Bloomberg News erroneously published an obituary; at a product launch a month later he recited the Mark Twain line that reports of his death were greatly exaggerated. At another event that year, he projected a slide of his blood pressure.
In January 2009, Jobs said that his weight loss was caused by a “hormone imbalance”; nine days later, he began a five- month medical leave, handing control of the company to his COO, Tim Cook. Later that year, he underwent a liver transplant at Methodist University Hospital in Memphis.
Apple’s disclosures -- or lack thereof -- around Jobs’s health became a matter of debate among investors and corporate governance experts. Some said that because his health was critical to the company’s success, Apple should have said more, sooner. The counterargument: privacy laws trump investors’ right to know the details of his health. U.S. Securities and Exchange Commission officials examined in 2009 whether the company violated disclosure rules regarding Jobs’s medical status, a person familiar with the matter said at the time. No legal action was taken.
Google Gains
While Jobs was on leave that year, Apple came under competitive pressure from an unexpected source: Google Inc. (GOOG) The search giant, whose then-CEO Eric Schmidt was an Apple board member, had gotten into the smartphone business with its Android operating system.
Unlike the iPhone, Android phones were made by multiple manufacturers. The budding rivalry evoked the Mac vs. PC showdowns of the 1980s. It pitted a company -- Apple -- that made one kind of device against an array of manufacturers orbiting around a software operating system -- in this case, Google’s Android.
By the time Jobs returned to work in June, several Android devices were on the market. Google’s Schmidt resigned from Apple’s board in August, acknowledging the escalating tension between the two companies.
Jobs the following year introduced his next epoch-making product: the iPad. The run-up was full of the buzz that greeted past products. What would it look like? What would it do? Only a select handful of developers and media companies got access to pre-release versions of the iPad, and then only under strict conditions. Recipients had to agree to keep the devices tethered to a fixed object in rooms that blacked-out windows.
‘Antennagate’
At the product unveiling, Jobs said that the tablet computer would go on sale later that year, calling it “magical.” The public agreed: Apple sold more than 300,000 iPads on day one, and within a few months the device had a near monopoly share of the tablet market that companies led by Microsoft had failed to crack for a decade.
Another momentous product was in store for 2010. The iPhone 4 boasted a glass front and back and a brushed-steel band around the edge. It also came with a front-facing camera that would allow mobile videoconferencing.
While the iPhone 4 was destined for success, this time there was a glitch. Customers who held the phone a certain way experienced dropped phone calls -- the “death grip,” it was called.
‘Antennagate’
At first, Apple denied anything was wrong and suggested that customers were holding the phone incorrectly. The flaw snowballed into a public-relations crisis that came to be known as “Antennagate,” stoked by longtime grumbling over service quality on the network of AT&T, then the only U.S. iPhone carrier.
By July, Jobs had changed his tune. He apologized to customers and offered free “bumpers,” rubber cases that fit around the metal edge of the phone, so that fingertips wouldn’t cause any antenna interference.
The imbroglio had little impact on iPhone demand. Apple sold 1.7 million iPhone 4s during the first three days it was on sale; by the end of the year, the iPhone would represent nearly 40 percent of revenue.
During the introduction of a new MacBook Air in October 2010, Jobs appeared thinner than ever. Three months later, Jobs said he would be taking a new leave of absence to “focus on my health.” “I love Apple so much and hope to be back as soon as I can,” he said.
Cook’s Role
For the third time since 2004, Cook took over day-to-day operations. He oversaw the introduction of the second version of the iPad and introduced a music-storage service called iCloud. He traveled to China to discuss the iPhone with China Mobile Ltd. (941), the country’s largest mobile-phone carrier.
Jobs announced his resignation Aug. 24. “I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know,” Jobs said in a statement. “Unfortunately, that day has come.”
In the weeks preceding his resignation, Jobs was largely housebound, according to a person familiar with the matter.
“Under Steve’s leadership Apple has not only revolutionized the computer industry but also transformed how the world communicates, plays, shops and works,” Frank Quattrone, CEO of Qatalyst Partners LLP, a Silicon Valley investment bank, said at the time. “In the entrepreneur hall of fame, he is the charter member. He is, and will remain, an inspiration to the world.”
Post-Jobs Era
Cook became CEO for good. While Cook had mastered an expanding list of operational roles, including manufacturing, distribution, sales and customer service, he hadn’t demonstrated Jobs’s penchant for product vision.
In the post-Jobs era, that role would lie more squarely with head product designer Ive, who oversaw the development of devices including the iMac, iPod, iPhone and iPad. Rounding out the executive team are Scott Forstall, who is in charge of the iOS software that powers the iPhone and iPad; Philip Schiller, who leads product marketing; Bob Mansfield, who heads Mac hardware engineering; and Chief Financial Officer Peter Oppenheimer, who is tasked with overseeing Apple’s more than $75 billion in cash and long-term holdings.
Jobs left a company with a market value larger than that of Microsoft and Dell combined. Apple’s revenue reached a record $65 billion in fiscal 2010, with analysts predicting that they will exceed $100 billion in 2011.
‘Magical’ Thinking
Besides relying on surging demand for the iPhone and iPad, Apple is also counting on growth in China. “We’re just scratching the surface right now,” Cook said of the region in July. The company is also due to sell a new service called iCloud that will let users access photos, videos and other content across an array of Apple products.
The Apple Jobs left behind was well suited to confront the challenges it then faced, including the Google threat, largely because of a product lineup Jobs set in motion, analysts and investors said at the time of his resignation. The concern is whether the company can produce industry-disrupting devices long after Jobs’s influence recedes.
“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,” Bill Gates said after his passing. “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.”
At the AllThingsD conference in 2007, Gates had said, “I’d give a lot to have Steve’s taste. The way he does things is just different and, you know, I think it’s magical.”
To contact the reporter on this story: Jim Aley in New York at jaley@bloomberg.net
To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net
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