Return to the Little Kingdom

by Michael Moritz

  To manufacture name plates for Apple’s computers, he hunted down the company that made Hewlett-Packard’s labels and came away with embossed logos on strips of thin aluminum. He rejected the first set of labels because the bands of color bled into each other. Most of the other computer companies settled for a plainer look: stamping their names onto sheet metal and refusing to pay the few extra cents to go first class.

  Meanwhile, Holt was busy taming the computer. He felt, from the moment Jobs had enticed him to work for Apple, that the only way to produce a reliable, lightweight power supply that would stay cool was to resort to an approach that hadn’t been used by any of the other microcomputer companies. Instead of settling for a conventional linear power supply that hadn’t changed much since the twenties, Holt decided to take a more elaborate tack and adapt a switching power supply he had previously designed for an oscilloscope. A switching power supply was substantially lighter and considerably more complicated than a linear power supply. It took an ordinary household current, switched it on and off with dizzying rapidity, and produced a steady current that wouldn’t blow out any of the expensive memory chips. For computer hobbyists who cursed the heat of the chunky linear power supplies, a switching power supply was something to admire from a distance. “Beware of switchers,” they warned one another. Wozniak admitted, “I only knew vaguely what a switching power supply was.” Holt’s final design was eminently reliable and smaller than a quart carton of milk.

  As Holt completed his work and the final size of the computer became clearer, Jobs returned to his former Atari workmate Howard Cantin, who had produced the artwork for the Apple I printed circuit board, and asked him to do the same for the Apple II. This time Jobs had more strenuous demands. He rejected Cantin’s first layout and insisted that on the second the lines linking chips be soldier straight. Cantin recalled the tussle. “He just drove me up the wall. I tried to tell him that there was a point at which a drive for perfection is nonproductive. He irritated me so bad I swore I’d never work for him again.” Jobs relented only when Cantin reduced the layout of the printed circuit board to the size of a lawyer’s scratch pad. Instead of taking the taped artwork directly to the printed-circuit-board manufacturers, Jobs insisted that the layout be fine-tuned, or digitized, by computer even though that caused a delay.

  As the West Coast Computer Faire drew closer, there were other humdrum concerns. The business cards weren’t returned from the printer until two days before the fair opened. A few printed circuit boards were stuffed with chips before they had been coated with their glossy silk screens. Jobs meanwhile had plumped for a brown keyboard after gauging the reaction of people like his parents to a variety of colors. Though the computers were working, the keyboards went dead every twenty minutes because of a chip that was sensitive to static electricity. Meanwhile, Wozniak was busy trying to squeeze the programming code for an abbreviated form of the BASIC language into a ROM chip. He had hoped to use a new chip from AMI but when the part failed to appear on time he had to revert to a chip made by Synertek. He, Espinosa, Wigginton, and Holt wrote some small demonstration programs that highlighted the computer’s way with color and sound. The demonstration programs were duplicated hurriedly onto cassette recorders and every time the supply of tapes was exhausted, Espinosa was dispatched to the nearby Gemco discount store to buy some more.

  More important, there was uncertainty about whether the case would be ready for the opening of the fair. After the mechanical drawings had passed muster, Mannock and Jobs had been presented with a choice between two molding processes: reaction injection or structural foam. In the former, a chemical reaction forces polyurethane to fill a mold but leaves bubbles in the finish. The latter is more elaborate, requiring pressurized foam to be injected and heated, but it also leaves a more polished result. Since nobody expected that Apple would sell more than five thousand of its second computer, Jobs and Mannock chose the reaction injection method which used epoxy tools rather than the more durable, and far more expensive, metal used for long production runs.

  The first cases that were extracted from the molds were rickety. The surfaces were uneven, the lids were bowed, and the edges lapped over the keyboard. At Apple half a dozen people used trimming knives, sandpaper, and putty to camouflage the worst blemishes and sprayed the cases with a beige paint which gave a light look. They decided to muddle though the fair without air vents on the sides of the cases that weren’t cut cleanly. With most of the preparations over they adjourned on the evening before the fair to the St. Francis Hotel on San Francisco’s Union Square. Scott and Markkula were used to large hotels but for the younger members it was their first taste of the big time. Espinosa, who had traded his newspaper route for an hourly wage at Apple of three dollars, was startled to receive a cash advance and expense-account privileges.

  Apple’s color computer was named with the same sort of reflex with which other, larger computer companies had named their machines. Just as Digital Equipment Corporation had given each successive PDP computer a progressively higher serial number, so Apple named its machine the Apple II. The computer that appeared at the West Coast Computer Faire was not one person’s machine. It was the product of collaboration and blended contributions in digital logic design, analog engineering, and aesthetic appeal. The color, the slots, the way in which the memory could be expanded from 4K to 48K bytes, the control of the keyboard and hookup to the cassette recorder, and the BASIC that was stored in the ROM chip—in effect the motherboard—was Wozniak’s contribution. Holt had contributed the extremely significant power supply, and Jerry Mannock the case. The engineering advances were officially recognized when, some months later, Wozniak was awarded U.S. Patent #4,136,359 for a microcomputer for use with video display, and Holt was given Patent #4,130,862 for direct current power supply. But behind them all Jobs was poking, prodding, and pushing and it was he, with his seemingly inexhaustible supply of energy, who became the chief arbiter and rejector.

  In January 1977 when the Homebrew Club newsletter had reached a circulation of fifteen hundred, a survey of membership revealed 181 computers of which 43 were IMSAIS, 33 Altair 8080s, and 6 Apple 6502s. Apple was in eighth place with a share that one hobbyist calculated, using a specially written computer program, of 3.2967 percent. Even if they didn’t talk about it in quite this way, the men at Apple knew that the West Coast Computer Faire could help change that pecking order. They also understood the power of first impressions. The combination of Markkula, Jobs, and the McKenna Agency turned Apple’s public bow into a coup.

  Because Jobs had made one of the first commitments to appear at the show, Apple had pride of place in the front of the hall. Markkula organized the design of the booth—ordering a smoky, backlit, large and illuminated Plexiglas sign carrying the new company’s logo and a large television screen to display the computer’s capacity. Three computers lay on two counters. These gave the impression of substance and bulk even though they were Apple’s only fully assembled machines. Meanwhile, Markkula and McKenna paid attention to sartorial graces, guiding Jobs to a San Francisco tailor and persuading him to buy the first suit of his life. “We all agreed to dress nicely,” said Wozniak. So at the start of the fair they all looked vaguely respectable even if Jobs found his three-piece suit and tie less comfortable than jeans and Birkenstock sandals.

  The harried preparations were worthwhile for the First West Coast Computer Faire was a giant hybrid—an enthusiastic Homebrew Club meeting crossed with some of the professional aspects of mainframe computer shows. A hundred or so speakers presented seminars and papers on subjects like the shirt-pocket computer, robots, computer-controlled music, computers for the disabled, high-level languages, networks, graphic speech-recognition devices, electronic mail. Some of the wheeling and dealing and back-room handshakes typical of larger fairs took place and at some of these Markkula courted potential dealers and distributors.

  There was also some critical scrutiny of the competition. A prototype of another per
sonal computer, the Commodore PET, was shown though it was displayed at a booth under the name of Mr. Calculator. John Roach, a vice-president of Tandy Electronics, best known for selling electronic devices like CB radios under the Radio Shack label, was touring the fair and subjecting both the Apple and the PET to close inspection. There was also another undercurrent. Small notices were pinned up on bulletin boards and word was passed about surreptitious meetings where phone phreaks pored over the latest issue of the TAP newsletter and whispered to one another about some new advance in telephone switching equipment.

  For the thirteen thousand who teemed through the doors and who strolled the floor with plastic tote bags stuffed with advertisements and promises, the Apple display, opposite the main entrance doors, was inescapable. Yet it was only half the size of the Processor Technology booth, smaller than the Cromemco booth and far less popular than the IMSAI stand. But Apple dwarfed other booths which had the unmistakable look of hobbyists. Little booths sold plug-in boards, flimsy magazines, and T-shirts. Companies no larger than Apple had rented sad card tables and written corporate names in felt-tip pens on paper signs. Stacked up by the flimsy yellow backcloths were half-opened cardboard boxes. They looked like what they were: exiles from the Homebrew Club trying to sell a few single-board microcomputers. One of these modest booths belonged to Computer Conversor Corporation where Alex Kamradt was still trying to sell the terminal Wozniak had designed and was advertising the Conversor 4000 as “an affordable alternative to high-priced computer terminals.”

  Apple’s booth, with its counters draped in dark cloth and piled with stacks of brochures, had the desired effect. The dozen or so people who manned the booth and distributed brochures were surprised by the interest in the computer. Some prospective customers refused to believe that a computer was housed in the plastic case and were only made believers when they were shown that the space hidden by the tablecloths was empty. A few engineers were impressed that a printed circuit board with so few chips could include color circuitry. Lee Felsenstein admired the approach. “It was highly simplistic and bold in its crudeness but it worked.” The display prompted about three hundred orders over the following few weeks, surpassing by a hundred the total number of Apple Is sold. Nevertheless, despite the folklore that built up in succeeding years, Apple didn’t take the fair by storm. Jim Warren, the show’s chief organizer, said, “I didn’t feel Apple was the strongest exhibitor,” while the issue of Byte that later carried a report of the event failed even to mention Apple.

  Wozniak, staggered to learn that the booth cost $5,000, was preoccupied with a more entertaining diversion. Along with Wigginton he was putting the finishing touches to a spoof which they had been planning for several weeks. Wozniak had composed an advert promoting a new computer called the Zaltair: a hybrid play on a new microprocessor, the Z-80, and the Altair computer. The copy described the computer in effusive terms and offered trade-in terms for owners of existing Altairs. To avoid trouble Wozniak arranged with a friend to have the leaflets printed in Los Angeles. The morning of the show, while everybody else was hovering about the booth, Wozniak surreptitiously distributed cartons of brochures around the hall. The lime-colored advertisement described the computer in extravagant and convincing terms.

  The advert left no misunderstanding about the ideal micro-computer:

  Imagine a dream machine. Imagine the computer surprise of the century here today. Imagine Z-80 performance plus. Imagine BAZIC in ROM, the most complete and powerful language ever developed. Imagine raw video, plenty of it. Imagine auto-scroll text, a full 16 lines of 64 characters. Imagine eye-dazzling color graphics. Imagine a blitz-fast 1200-baud cassette port. Imagine an unparalleled I/O system with full Altair-100 and Zaltair-150 bus compatibility. Imagine an exquisitely designed cabinet that will add to the decor of any living room. Imagine the fun you’ll have. Imagine Zaltair, available now from MITS, the company where microcomputer technology was born.

  Wozniak described the computer’s software BAZIC: “Without software a computer is no more than a racing car without wheels, a turntable without records, or a banjo without strings. The best thing of all about BAZIC is the ability to define your own language. . . a feature we call perZonality. TM.” And there was a glowing portrait of the hardware: “We really thought this baby out before we built it. Two years of dedicated research and development at the number ONE microcomputer company had to pay off, and it did. A computer engineer’s dream, all electronics are on a single PC card, even the 18-slot motherboard. And what a motherboard.”

  With its corporate logo on the spoof and a coupon offering prospective customers trade-in allowances on their Altairs, the MITS management was not amused. It frantically stamped FRAUD and NOT REAL on all the brochures it could find. Finally, despite the $400 he had sunk into the prank, Wozniak began to get nervous, and worried that thousands of computers would be returned to MITS, he and his accomplices dumped cartons of dummy ads down stairwells.

  Jobs picked up one of the advertisements and started to examine the details of the surprising new competitor—which Wozniak had plotted in a chart against machines like the Sol, IMSAI, and Apple beneath the line: “The mark of a microcomputer champ is performance.” Wozniak and Wigginton, who couldn’t smother their giggles, slid out through a side door, leaving Jobs inside gasping, “Oh, my God! This thing sounds great.” Jobs looked at the detailed rankings given in a performance chart on the back, discovered that the Apple II ranked third behind the Zaltair and the Altair 8800-b, and with an air of intense relief, sighed, “Hey, look! We didn’t come out too bad.”

  UP TO SPEC

  The spray of a public splash is made of facades, gestures, and illusions. At the West Coast Computer Faire in 1977 Apple Computer, Inc., appeared a lot larger than the actual little business that moved out of the Jobses’ garage into a shingled office building at 20863 Stevens Creek Boulevard in Cupertino. The office, Suite E-3, was smaller than a tract home and was barely a mile from the homes of Jobs’s and Wozniak’s parents. It was separated from Homestead High School by Interstate 280 and was a stone’s throw from the crossroads where the Cali Brothers’ muddy-colored silos were corralled by stores and subdivisións. Apple’s neighbors were a Sony sales office, an employment agency, a weight-loss clinic and a teachers’ organization. A plasterboard wall was run down the center of Apple’s rented quarters to separate half a dozen desks from the lab and assembly area. It was in these cramped surroundings, two hundred feet from the Good Earth Restaurant, that Apple’s founders and their hired hands turned their attention from the cosmic to the parochial.

  For almost a year the men in Cupertino concentrated on controlling Apple’s bodily functions. They were building everything from scratch and had to settle on details and procedures which they had either never encountered or had always taken for granted. To provide some sort of framework, Markkula, for the first three months of 1977, concentrated on Apple’s business plan.

  He turned for guidance to John Hall, a group controller at Syntex, a Palo Alto pharmaceutical company. Markkula and Hall were casual acquaintances. They had met at a couple of parties, shared some common friends, and bumped into each other on ski slopes in the California Sierras. Markkula knew that Hall had helped other young companies with their business plans and he asked him to do the same for Apple. Hall took a two-week vacation from Syntex and holed up with Apple’s principals for hours of meetings at the local eateries: the Good Earth Restaurant and Mike’s Hero Sandwiches. Scott helped Hall cost out a bill of materials and project manufacturing costs. Jobs provided details of contracts with parts suppliers and Wozniak and Holt were consulted for advice on engineering matters.

  For grander marketing strategy Hall and Markkula rubbed a hazy crystal ball and decided that the Apple II would launch a three-pronged assault. They thought the machine would be sold to home-computer hobbyists and to professionals like dentists and doctors who had previously shown a weakness for gadgets like programmable calculators. They also planne
d to develop the Apple as a control center for the home, linked to comforts like automatic garage doors and lawn sprinklers. Hall recalled, “We felt that we needed three tenets for a business plan. But I didn’t believe the business plan and Mike Markkula didn’t believe it. I felt it was a weak plan strategically.” Hall’s skepticism was so great that when Markkula asked him to become Apple’s vice-president of finance, he declined. “I couldn’t afford the risk of joining a screwy company like Apple.” However, he did ask Markkula whether Apple would pay in stock for his consulting work. When Markkula demurred, Hall accepted a check for $4,000.

  As the business plan took shape, Scott turned to familiar faces for help. Apple’s first receptionist, secretary, and general factotum was Sherry Livingston, a perky, bright woman who had worked for him at National Semiconductor. Uncertain about Apple’s prospects, Livingston was only convinced of its staying power after Markkula tugged open a drawer stuffed with orders. Gene Carter, who had been Scott’s boss for a while at Fairchild, was looking for a job and became head of Apple’s sales and distribution. When Scott wanted somebody to mind the books he turned to Gary Martin, a cheerful, gossipy accountant who had also worked for him at National. Martin took a look at the Apple II and thought, “Who the hell is going to want this thing? I felt so sorry for Scott I tried to buy him lunch.” Eventually, Martin decided to try Apple for a month, knowing that his boss at National had promised not to turn in his security badge.