Apple Computer

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Apple Computer was founded in 1976 by Steve Jobs and Steve Wozniac in California's Silicon Valley. Mr. Wozniac created a computer that would later be called the Apple I. He intended to sell a few to his friends, but Mr. Jobs saw a brighter future for the new computer. During the early 1980s, Apple grew on the strength of its Apple II line to become the No. 2 computer marketer in terms of sales, trailing only IBM Corp.

In 1983, Mr. Jobs persuaded John Sculley, then president of PepsiCo, to become Apple's CEO. During Mr. Sculley's first year, he raised Apple's ad budget from $15 million to $100 million to increase the marketer's visibility. At the end of 1983, Apple was gearing up for a product launch that would become a milestone in both the computer industry and the advertising industry.

Chiat/Day's "1984" spot

Working with newly hired agency Chiat/Day, Inc., Marina del Rey, Calif., under the creative direction of Lee Clow, Apple prepared a spot that would generate tremendous buzz for the product. Chiat/Day created the 60-second spot, called "1984," which was inspired by George Orwell's novel of the same name. It was one of the first big-budget commercials produced.

The spot, which cost between $400,000 and $600,000, ran only once-in the sixth slot during the second half of Super Bowl XVIII. British film director Ridley Scott created a dark, eerie and stylistically severe commercial. The spot featured a female hammer-throwing champion, who used her hammer to destroy a Big Brother-like video monitor while row upon row of clonelike individuals looked on. The commercial mentioned Apple Computer only once, in voice-over at the end announcing the launch of the Macintosh.

On first viewing, Apple's board refused the commercial and demanded that the agency sell the $1 million time slot; but when Chiat/Day failed to find a buyer, the spot aired anyway. It later won more than 30 international advertising awards, including the Grand Prix at the Cannes International Advertising Festival. Advertising Age named Mr. Sculley its Man of the Year for 1984 and Chiat/Day the Agency of the Decade for the 1980s, and in 1999 Ad Age ranked "1984" No. 12 on its list of the century's best campaigns.

Apple's marketing strategy eventually led to a severely declining market share. Mr. Sculley positioned Apple as a leader in the education and home markets—a stark departure from other marketers such as IBM, which were focused almost solely on business customers—and priced the Mac at $2,000. Apple's decision to keep its operating system and software proprietary and exclusive to Apple and Mac product lines proved even more dire. By failing to license it to other hardware makers, the company allowed IBM's product design and Microsoft's Windows software to become the standard, isolating Apple and making its products incompatible with 90% of the world's computers.

In 1985, Apple again took aim at IBM during Super Bowl XIX with a spot called "Lemmings" that featured men clad in identical-looking business suits following one another in walking off a cliff. Critics suggested that this spot had the effect of driving away the business market rather than embracing it. "Lemmings," they said, made people who wore the suits—and bought the computers—feel that they were not being invited to the revolution. Apple's profit margin began to slip.

On Sept. 17, 1985, Apple's board ousted Mr. Jobs from his role as president. The following year Chiat/Day fell victim to Apple's declining sales, and BBDO/West, Los Angeles, took over the account.

Change in strategy

In a major reversal of strategy, Apple in 1990 decided to refocus on building its share in the marketplace and slashed prices on the Macintosh line. In 1991, it launched the PowerBook, which quickly became one of the hottest-selling laptop computers. However, a sense in the marketplace that the product was underpowered and overpriced haunted the line.

Early in 1993, Apple introduced the first major personal digital assistant, the Apple Newton. Mr. Sculley backed the launch with a $5 million ad budget, and Apple shifted its strategy from decentralized advertising to global marketing via BBDO/West. But the marketer continued to falter, and in June 1993, Mr. Sculley handed his CEO title to less advertising-focused President Michael Spindler. Mr. Sculley left Apple in October, as the Newton floundered. At the time, Apple also began to work with several other agencies for different projects: Wunderman Cato Johnson, San Francisco, handled direct marketing, and CKS Partners, Campbell, Calif., worked on the Newton.

Apple's answer to the burgeoning online service market, eWorld, was launched in 1994, but in part because it was priced higher than its rivals, it failed to draw a large enough audience and was discontinued after only two years. But 1994 marked the beginning of a turnaround for Apple when it introduced the PowerPC chip. Co-developed with IBM and Motorola Corp., it would drive sales of a generation of more powerful machines.

Apple also experienced a number of shake-ups beginning in 1996. Mr. Jobs sold his company Next to Apple and returned to the company as an adviser. In that role, he began retaking control of the company. Market share dipped to a low of 3.3% compared to 13.8% when BBDO/West began work on the account, and Apple initiated an agency review. BBDO/West resigned when the review was announced.

Mr. Jobs took control of the review, which came down in favor of Mr. Clow and the renamed TBWA Chiat/Day.

In September 1997, Apple began running a 60-second spot titled "Manifesto," which featured voice-over by actor Richard Dreyfus and introduced Apple's "Think different" campaign. The ads, mostly print and outdoor, featured photos of individuals, such as the Dalai Lama who, the ads maintained, had dared to "think different." Despite the bad grammar, the campaign continued to run into the 21st century.

Apple's market share began to climb again in 1998, owing largely to the introduction of its iMac line of personal computers. The new machine, initially sold in blue but later produced in a variety of different colors, was backed by a large marketing push from TBWA Chiat/Day featuring images of the computer spinning across the TV screen. In later commercials actor Jeff Goldblum touted the simplicity of creating home movies and connecting to the Internet with the device.

Apple struck innovation gold again in 2001 with the iPod, its stylized MP3 music player. Updated models of the player were released in 2002 and 2003 (the iPod mini), as well as its iTunes downloadable music store, and touted in ad campaigns from TBWA/Chiat Day featuring hip, silhouetted iPod wearers grooving to the beat.

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