The Greatest Comeback Story Of All Time: How Apple Went From Near Bankruptcy To Billions In 13 Years

steve jobs smiles

Just 13 years ago, Apple was on the verge of bankruptcy.

But then – worried that it would be viewed as a monopoly without competition from Apple – Microsoft came to Apple’s rescue with a $150 million investment.

Had that not happened the world may never have seen iPods, iPads, iPhones or iMacs.

But that was just the start of Apple’s return to glory, the greatest corporate comeback story of all time.

1997 - Partnering with the enemy, Microsoft

1998 - Introducing the iMac

Apple was still struggling, and they needed a good product to turn things around.

The iMac, introduced in 1998, was the solution. The unique design, which resembled the Macintosh 128K, was created by Jonathan Ive, designer of now iconic Apple technology, the iPod and the iPhone. Ive reinvented the 'boring beige box' and for the first time, you could actually see a computer's guts. The all-in-one iMac sold nearly 800,000 units within its first five months.

Apple returned to the software space that year with an acquisition of Macromedia's Final Cut product.

For the first time since 1995, Apple returned to profitability. According to, the company turned a profit of $309 million in 1998.

The Lesson: Steve Jobs reportedly called a meeting at Apple, sat everyone down and said, 'You know what's wrong with this company? The products SUCK -- there's no sex in them.' Jobs' decision to throw resources into a new, futuristic computer model drew people's attention to Apple, and it paid off.

Check out the 1998 MacWorld Expo clip below.

1999 - Apple stock reaches $99 per share, profits increase 94%

Apple continued its resurgence, seeing healthier profits and thus healthier stock prices. In 1999, their sales grew 3.2%, and profits doubled to $601MM, a 94% increase from the year prior.

The Lesson: Apple began expanding its products beyond just computers with the release of Final Cut Pro. They also noted what worked with the iMac, and built out new products based on proven success. Each success showed Jobs was turning the company around, and the public grew more confident in Apple's stability.

See the first appearance of the iBook in the 1999 Macworkd Expo clip below.

2000 - Jobs becomes permanent CEO of Apple, but Apple has its most unprofitable quarter in three years

Apple announced a new strategy for tackling the Internet at the 2000 Macworld Expo. They unveiled iTools, Mac-only internet applications. They also announced Earthlink as their recommended ISP. Having successfully gotten Apple back on track, Jobs was able to drop 'interim' from his CEO title and earned himself a permanent position.

Jobs also announced that the previous quarter, 1,350,000 Macs were sold - that's one product sold every six seconds.

Later that year, Apple released new machines including The G4 Cube, a risky move that was an ultimate failure. writes, 'The Cube was Apple's answer to those who wanted an iMac without a monitor, as well as challenge to the computing industry to continue to minimize the size of computers while increasing their visual appeal. The Cube was the biggest gamble Jobs had made since the release of the iMac. It would turn out to be a resounding failure.'

This release marked the beginning of a tough few months for the rebounding company. Their third quarter was its first unprofitable one since Jobs' return. While the tech industry was seeing an overall downturn, some poor decisions by Apple aided their unprofitable quarter. The first problem was the G4 Cube was a bust. Another factor was their decision to have DVD-ROM drives in their computers instead of CD-RWs, which prevented users from being able to burn CDs.

In an attempt to right their wrongs, Apple cut prices on their PowerMac products.

The Lesson: Under the reign of Steve Jobs, Apple proved they weren't afraid to take risks and fail. They also showed that when something wasn't working, they could adjust quickly, pulling plugs and changing strategy as necessary. Jobs has said, 'We're gambling on our vision, and we'd rather do that than make 'me-too' products.'

Steve Jobs presents the G4 Cube in the keynote below.

2001 - The iPod, iTunes and the Apple Store are born

2002 - The swivel-neck iMac gets Jobs on the cover of Time

At the January MacWorld Expo, Apple released a redesigned iMac with a swivel neck, which would be discontinued two years later. That same year, they released the Xserve 1U rack mounted server. This was Apple's effort to enter the enterprise computer market with a cheaper version.

Apple sleeked up it's overall look, replacing the 'happy mac' icon with the grey logo when Jaguar was released.

Still, the company saw financial struggles in late 2002 thanks to poor macroeconomic conditions and weak PowerBook and PowerMac sales. They announced a quarterly loss of $45 million, despite the release of one of their most successful ad campaigns ever, 'Switchers.'

The lesson: Jobs kept the company new and fresh by coming up with out-of-the-box concepts. He did this in all aspects of Apple, in new products, and even in hiring decisions, drawing inspiration from everywhere. 'Part of what made the Macintosh great was that the people working on it were musicians, and poets, and artists, and zoologists, and historians who also happened to be the best computer scientists in the world,' Jobs has said.

For the 2002 MacWorld Expo, see below.

2003 - The iTunes Music Store is released

January 2003 marked the end of the Classic Mac OS era. The first PowerBooks were released in 2003 and were the first to use the aluminium exterior.

Next the third generation iPod was introduced with a dock connector in the bottom, which would lead to USB support.

The same day the iPod was released, iLife and the iTunes Music Store were announced. The online music marketplace was fully integrated into iTunes for Macs, and shortly after it was released for Windows.

The store was an instant success, selling one million songs in its first week.

This year, Apple also placed its first store in Japan.

The lesson: Think ahead, and connect the dots. Apple released products that were innovative in and of themselves, but they also connected with other products. The integration of iPods, iTunes and the iTunes Music Store prove how a sum can be greater than all of its parts.

Check out the iTunes for Windows demo, below.

2004 - iTunes leads to 70% market share, iPod mini released

Apple's market share in the computer industry continued to decline, hitting a low of 3% in 2004. But with the iTunes/iPod integration, Apple positioned itself to take the music industry by storm.

Also that year, Apple released the hit iPod Mini, and by the end of iTunes' first year, Apple had 70% market share of legal downloaded music. More than 100 million songs were downloaded by July, 2004.

Keeping with the mini trend, Apple opened a series of mini stories, about half the size of their other retail locations, in hopes of expanding to smaller markets with less demand.

The lesson: Simplicity is bliss. iTunes made downloading songs easy and legal. The iPod Mini was sleek and simple, without any bells and whistles. Apple's designer Jonathan Ives confirms their strategy: 'We are absolutely consumed by trying to devlop a solution that is very simple, because as physical beings we understand clarity.'

2005 - Release of the iPod Shuffle, Mac Mini, and transition to Intel-based Macs begins

Apple began its transition to Intel-based Macintoshes in 2005. They made the announcement at a June keynote, confirming rumours.

Continuing to push their lead in the music sector, Apple released the video iPod in 2005. This pushed iPod sales over 30 million. This year, the Mac Mini and the iPod Shuffle were also released.

The lesson: Keep innovating and improving. Apple presents multiple forms of the same devices with entirely different looks and packaging (the Nano versus the Mini). Even if improvements are slight, each product has a new identity that gets people excited.

See its release in the clip from MacWorld Expo 2005, below.

2006 - Apple passes Dell's market cap, and its Intel-based computers are significantly faster than ever

Apple put the Intel deal into action with the release of its 2006 MacBook Pro and iMac, both using Intel's Core Duo chip technology which made the systems significantly faster.

Apple's increasing improvement was evident in the stock prices. At roughly $80 per share, Apple's stocks had increased 10 fold in 10 years, up from $6 in 1997. In January 2006, Apple surpassed Dell's market cap. Just 10 years prior, Michael Dell had said that if Apple were under his control, he'd 'shut it down and give the money back to shareholders.'

The Lesson: Sell dreams, not products. Customers first and foremost care about themselves, and if you help them find out what it is they want, they will latch onto your brand. Jobs doesn't use focus groups or wait for people to make demands. Instead, he releases must-have products before people even know they will want it.

2007 - The iPhone revolutionizes the mobile industry, Apple TV is announced

In 2007, Jobs announced a company name change. Apple Computers Inc. would now be known as Apple Inc, a sign that the company was planning to definite itself by much more than its original goal.

The iPhone and Apple TV were announced at that year's Macworld Expo, and by May 2007, Apple's shares broke $100, an all-time company high.

The iPhone was Apple's first mobile attempt, and it immediately revolutionised the industry, essentially turning a video iPod into a personal device like no company had done before.

The Lesson: Steve Jobs is a relentless innovator, and Apple always seems to find a new way to produce products that improve our lives. Thinking differently has been a key component to Apple's second coming.

Check out the iPhone's intro at the 2007 Macworld Expo, below.

2008 - The App Store is unveiled, along with trackpads with multi-touch technology

Apple brought touch capabilities to their computers and iPhone with the release of trackpad in 2008. The multi-touch technology was designed exclusively for Apple and can interpret many three-finger strokes.

They also released the App store in 2008 for the iPhone and iPod Touch. The App Store was another instant hit, bringing in 60 million app sales and generating $1 million for Apple daily just one month after its launch. Jobs has said that the App store alone could be a billion-dollar invention for the company.

Later that year, it was evident just how popular the iPhone was when Apple became the third-largest mobile-handset supplier in the world.

The Lesson: Apple is great at connecting separate products to one another. The App Store, for example, was made to enhance both the iPhone and iPad. According to Jobs, 'Creativity is just connecting things.'

The MacBook Air was also released this year. See it being released at the 2008 Macworld Expo, below.

2009 - Steve gets sick

For the first time in 20 years, it was announced that Jobs would not attend Macworld Expo. In January 2009, an internal memo to Apple employees was made public and rumours were verified that Steve Jobs' health was waning. Later that month, Jobs announced a six-month medical leave of absence to recover from his illness.

Despite his absence and the recession, Apple continued to surge, reporting its best non-holiday quarter ever in Q1 2009 with $8.16 billion in revenue and a profit of $1.21 billion. Jobs returned to the company in June after having a liver transplant.

The lesson: Trust your team. A company may only seem as great as one person, but if you hire smart people, they're perfectly capable of stepping up to the plate.

See Phil Schiler give the 2009 Macworld Expo keynote in place of Jobs, below.

2010 - The year of the iPad

2010 is the year of the iPad, Apple's solution to Amazon's kindle, creating a mobile-laptop hybrid device. The iPad uses the iPhone's touch technology and apps. 500,000 units were sold during its first-week debut.

The iPhone 4 was released with new features such as Skype-like Face Time video calling. In October, Apple's stock reached an all-time high of more than $300 per share.

The lesson: Innovation doesn't require focus groups. Steve Jobs doesn't believe in asking customers their opinions. You can develop products people will want before they even know they want it. Sometimes, you can know customers better than they know themselves.

The key takeaways:

In 2010, for the first time since 1989, Apple's market cap exceeded Microsoft's. This feat would have seemed impossible back when Gates poured money into the nearly bankrupted company.

By creating great products enhanced by brilliant packaging, and by changing their computer-only mission, Apple became a technology titan. Almost every product released is a guaranteed, instant hit, and every keynote Jobs gives is a media frenzy.

From $6 per share to $300, the company has never been stronger and there seems to be no limits to what the company can achieve.

So what's to be learned from their story?

  • Think simple - The iPad is so simple 2-year-olds can use it.
  • Be different - Like the iMac.
  • Be a risk taker and make tough decisions - Jobs partnered with Microsoft and nixed the Newton.
  • Make great products, and package them even better - Show customers what they want, like the iPhone did.
  • Create an experience - Apple did this with their stores. And hype, like Macworld does for the media.
  • Be confident - don't hold focus groups and ask people what they think.
  • Be passionate - Steve Jobs said in his Stanford commencement speech: 'Have the courage to follow your heart and your intuition. They somehow already know what you truly want to become.'

Now read the story of how Steve hit rock bottom...

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