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after they signed Apple into existence. Wozniak held up one of their newly produced circuit boards and described the microprocessor, the eight kilobytes of memory, and the version of BASIC he had written. He also emphasized what he called the main thing: “a human-typable keyboard instead of a stupid, cryptic front panel with a bunch of lights and switches.” Then it was Jobs’s turn. He pointed out that the Apple, unlike the Altair, had all the essential components built in.
Then he challenged them with a question: How much would people be willing to pay for such a wonderful machine? He was trying to get them to see the amazing value of the Apple. It was a rhetorical flourish he would use at product presentations over the ensuing decades.
The audience was not very impressed. The Apple had a cut-rate microprocessor, not the Intel 8080. But one important person stayed behind to hear more. His name was Paul Terrell, and in 1975 he had opened a computer store, which he dubbed the Byte Shop, on Camino Real in Menlo Park. Now, a year later, he had three stores and visions of building a national chain.
Jobs was thrilled to give him a private demo. “Take a look at this,” he said. “You’re going to like what you see.” Terrell was impressed enough to hand Jobs and Woz his card. “Keep in touch,” he said.
“I’m keeping in touch,” Jobs announced the next day when he walked barefoot into the Byte Shop. He made the sale. Terrell agreed to order fifty computers.
But there was a condition: He didn’t want just $50
printed circuit boards, for which customers would then have to buy all the chips and do the assembly. That might appeal to a few hard-core hobbyists, but not to most customers. Instead he wanted the boards to be fully assembled. For that he was willing to pay about $500 apiece, cash on delivery.
Jobs immediately called Wozniak at HP. “Are you
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sitting down?” he asked. Wozniak said he wasn’t. Jobs nevertheless proceeded to give him the news. “I was shocked, just completely shocked,” Wozniak recalled. “I will never forget that moment.”
To fill the order, they needed about $15,000 worth of parts. Allen Baum, the third prankster from Homestead High, and his father agreed to loan them $5,000. Jobs tried to borrow more from a bank in Los Altos, but the manager looked at him and, not surprisingly, declined. He went to Haltek Supply and offered an equity stake in Apple in return for the parts, but the owner decided they were “a couple of young, scruffy-looking guys,” and declined. Alcorn at Atari would sell them chips only if they paid cash up front.
Finally, Jobs was able to convince the manager of Cramer Electronics to call Paul Terrell to confirm that he had really committed to a $25,000 order. Terrell was at a conference when he heard over a loudspeaker that he had an emergency call (Jobs had been persistent).
The Cramer manager told him that two scruffy kids had just walked in waving an order from the Byte Shop. Was it real? Terrell confirmed that it was, and the store agreed to front Jobs the parts on thirty-day credit.
Garage Band
The Jobs house in Los Altos became the assembly point for the fifty Apple I boards that had to be delivered to the Byte Shop within thirty days, when the payment for the parts would come due. All available hands were enlisted: Jobs and Wozniak, plus Daniel Kottke, his ex-girlfriend Elizabeth Holmes (who had broken away from the cult she’d joined), and Jobs’s pregnant sister, Patty. Her vacated bedroom as well as the kitchen table and garage were commandeered as work space. Holmes, who had taken jewelry classes, was given the task of soldering chips. “Most I did well, but I got flux on a few of them,” she recalled. This didn’t
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please Jobs. “We don’t have a chip to spare,” he railed, correctly. He shifted her to bookkeeping and paperwork at the kitchen table, and he did the soldering himself.
When they completed a board, they would hand it off to Wozniak. “I would plug each assembled board into the TV and keyboard to test it to see if it worked,” he said. “If it did, I put it in a box. If it didn’t, I’d figure what pin hadn’t gotten into the socket right.”
Paul Jobs suspended his sideline of repairing old cars so that the Apple team could have the whole garage. He put in a long old workbench, hung a schematic of the computer on the new plasterboard wall he built, and set up rows of labeled drawers for the components. He also built a burn box bathed in heat lamps so the computer boards could be tested by running overnight at high temperatures. When there was the occasional eruption of temper, an occurrence not uncommon around his son, Paul would impart some of his calm. “What’s the matter?” he would say. “You got a feather up your ass?” In return he occasionally asked to borrow back the TV set so he could watch the end of a football game. During some of these breaks, Jobs and Kottke would go outside and play guitar on the lawn.
Clara Jobs didn’t mind losing most of her house to piles of parts and houseguests, but she was frustrated by her son’s increasingly quirky diets. “She would roll her eyes at his latest eating obsessions,” recalled Holmes. “She just wanted him to be healthy, and he would be making weird pronouncements like, ‘I’m a fruitarian and I will only eat leaves picked by virgins in the moonlight.’”
After a dozen assembled boards had been approved by Wozniak, Jobs drove them over to the Byte Shop. Terrell was a bit taken aback. There was no power supply, case, monitor, or keyboard. He had expected something more finished. But Jobs stared him
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down, and he agreed to take delivery and pay.
After thirty days Apple was on the verge of being profitable. “We were able to build the boards more cheaply than we thought, because I got a good deal on parts,” Jobs recalled. “So the fifty we sold to the Byte Shop almost paid for all the material we needed to make a hundred boards.” Now they could make a real profit by selling the remaining fifty to their friends and Homebrew compatriots.
Elizabeth Holmes officially became the part-time bookkeeper at $4 an hour, driving down from San Francisco once a week and figuring out how to port Jobs’s checkbook into a ledger. In order to make Apple seem like a real company, Jobs hired an answering service, which would relay messages to his mother.
Ron Wayne drew a logo, using the ornate line-drawing style of Victorian illustrated fiction, that featured Newton sitting under a tree framed by a quote from Wordsworth:
“A mind forever voyaging through strange seas of thought, alone.” It was a rather odd motto, one that fit Wayne’s self-image more than Apple Computer.
Perhaps a better Wordsworth line would have been the poet’s description of those involved in the start of the French Revolution: “Bliss was it in that dawn to be alive / But to be young was very heaven!” As Wozniak later exulted, “We were participating in the biggest revolution that had ever happened, I thought. I was so happy to be a part of it.”
Woz had already begun thinking about the next version of the machine, so they started calling their current model the Apple I. Jobs and Woz would drive up and down Camino Real trying to get the electronics stores to sell it. In addition to the fifty sold by the Byte Shop and almost fifty sold to friends, they were building another hundred for retail outlets. Not surprisingly, they had contradictory impulses: Wozniak wanted to sell
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them for about what it cost to build them, but Jobs wanted to make a serious profit. Jobs prevailed. He picked a retail price that was about three times what it cost to build the boards and a 33% markup over the $500 wholesale price that Terrell and other stores paid.
The result was $666.66. “I was always into repeating digits,” Wozniak said. “The phone number for my dial-a-joke service was 255-6666.” Neither of them knew that in the Book of Revelation 666 symbolized the “number of the beast,” but they soon were faced with complaints, especially after 666 was featured in that year’s hit movie, The Omen. (In 2010 one of the original Apple I computers was sold at auction by Christie’s for $213,000.)
The first feature story on the new machine appeared in the July 1976 issue of Interface, a now-defunct hobbyist magazine. Jobs and friends were still making them by hand in his house, but the article referred to him as the director of marketing and “a former private consultant to Atari.” It made Apple sound like a real company. “Steve communicates with many of the computer clubs to keep his finger on the heartbeat of this young industry,” the article reported, and it quoted him explaining, “If we can rap about their needs, feelings and motivations, we can respond appropriately by giving them what they want.”
By this time they had other competitors, in addition to the Altair, most notably the IMSAI 8080 and Processor Technology Corporation’s SOL-20. The latter was designed by Lee Felsenstein and Gordon French of the Homebrew Computer Club. They all had the chance to go on display during Labor Day weekend of 1976, at the first annual Personal Computer Festival, held in a tired hotel on the decaying boardwalk of Atlantic City, New Jersey. Jobs and Wozniak took a TWA flight to Philadelphia, cradling one cigar box with
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the Apple I and another with the prototype for the successor that Woz was working on. Sitting in the row behind them was Felsenstein, who looked at the Apple I and pronounced it “thoroughly unimpressive.” Wozniak was unnerved by the conversation in the row behind him. “We could hear them talking in advanced business talk,” he recalled, “using businesslike acronyms we’d never heard before.”
Wozniak spent most of his time in their hotel room, tweaking his new prototype. He was too shy to stand at the card table that Apple had been assigned near the back of the exhibition hall. Daniel Kottke had taken the train down from Manhattan, where he was now attending Columbia, and he manned the table while Jobs walked the floor to inspect the competition. What he saw did not impress him. Wozniak, he felt reassured, was the best circuit engineer, and the Apple I (and surely its successor) could beat the competition in terms of functionality. However, the SOL-20 was better looking. It had a sleek metal case, a keyboard, a power supply, and cables. It looked as if it had been produced by grown-ups. The Apple I, on the other hand, appeared as scruffy as its creators.
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CHAPTER SIX
