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This Week in Apple History
by Owen Linzmayer
& Bryan Chaffin

May 9 - 15: Lisa Canceled, Exponential Closes, OS X Born
Published August 9th, 2004

[Authors Note: Owen and I are still behind in this series, but are working hard to catch up. We will have all of May covered this week, with July coming shortly thereafter. - Bryan]

A company with a history as long and colorful as Apple's has more beginnings and endings than an M.C. Escher painting, and this week is another demonstration of that.

It was this week in 1985, for instance, that Apple canned the Lisa, the flopped precursor to the Macintosh.

Moving ahead 9 years, it was this week in 1994 that Apple began what would eventually be the end of Kaleida Labs, the spin-off company Apple formed with IBM a couple of years earlier. Apple laid off 20% of the work force at the company in a cost-cutting move. Kaleida had already cost the two companies tens of millions of dollars, and while the technologies Kaleida was developing were impressive, monetizing those technologies proved problematic.

Another ending happened this week in 1996 when Apple halted production of the PowerBook 5300 and issued a second recall on the computer. The resulting drag on portable sales hurt the company's already troubled bottom line.

This week in 1997, infamous PowerPC processor developer Exponential Technology shuttered its doors. Exponential had been working to bring 533 MHz PowerPC chips to market, chips more than twice as fast as the 233 MHz G3s Apple was then using. The company couldn't deliver, however, and Apple decided to look elsewhere for its processing needs.

Now, however, we get to some beginnings. It was this week in 1997 that Apple previewed OS 8 during the annual World Wide Developer's Conference (WWDC).

One year later, Apple officially announced Mac OS X, the eventual successor to the Classic Mac platform. Other new products announced this week in Apple history include OS 8.6 (1999), Sherlock 2.1 (1999), the G4 processor (1999), the Lombard PowerBook (1999), Preview Release 4 of Mac OS X (2000), Xserve and Xserve RAID (2002).

Apple also opened the first retail Apple Store this week in 2001, marking the beginning of a new fleet of stores that would eventually be opened around the world. The stores were first met with doubt and uncertainty, but Apple quickly demonstrated that they would bring in new sales and people new to the Mac platform.

That's another busy week in Apple History, to be sure. You can find more information on many of the entries below in Owen Linzmayer's excellent Apple Confidential 2.0. The other entries can be found in TMO's archives, and we link to articles whenever we can.

May 9-15

1985: Apple officially discontinued the Macintosh XL, née Lisa, on April 29, 1985, and the last Lisa rolled off the assembly line at the Carrollton, Texas, factory on May 15. Despite its lack of market acceptance during its initial availability, the Lisa now enjoys strong demand among vintage computer collectors on eBay who recognize its importance as the forerunner to the Macintosh.

1991: Steve Jobs' NeXT is forced to terminate its sales agreement with Businessland because the nation's largest computer retailer abruptly closed its outlets. Upon signing their March 1989 agreement, the two firms had estimated that they would sell 100,000 machines in three years, with annual revenues exceeding $150 million. By some accounts, Businessland sold only 360 units in all of 1989.

1994: Kaleida Labs, an historic alliance between Apple and IBM, lays off 20% of its workforce. Nevertheless, less than half a year later, Kaleida managed to release its Media Player and ScriptX language, both of which were considered technologically sound, but rival firm Macromedia had beaten them to market with Shockwave for Director and built up a commanding lead. A year after its first product introduction, and after consuming $150 to $200 million in funding, Apple pulled the plug on Kaleida Labs.

1996: Apple initiates a second recall of the PowerBook 5300. The first recall was prompted the previous September by two early-production units that caught fire due to overheating lithium-ion (LiIon) batteries. Apple replaced the faulty batteries, but the PowerBook 5300's plastic case was prone to cracking, the power plug was too thin and often snapped off, and the power supply didn't produce sufficient current to run certain combinations of expansion-bay and PC Card accessories simultaneously. To fix these problems, Apple halted production of the PowerBook 5300 and initiated another recall. According to Dataquest, this second recall helped drag down Apple's notebook revenues to $1 billion for 1996, from $1.5 billion the year before.

1997: Just days after Apple announces it will base future Macs on a next-generation PowerPC G3 line from Motorola and IBM, rival processor chip manufacturer Exponential Technology closes its doors. Exponential had been developing the X704 processor, a 533MHz PowerPC CPU at a time when Apple's fastest Mac was running at only 233MHz. However, Exponential experienced delays in production and its chips would have cost significantly more then the PowerPC G3.

Apple previews OS 8 to developers at WWDC, winning rave reviews from those looking to advance past the days of Mac OS 7.x. Ironically, OS 8 was originally named OS 7.7, but Apple changed the name of the operating system as a way of artificially ending the Mac OS licensee program, or cloning. Mac cloners had contracts with Apple entitling them to license Mac OS 7.x, so with a new designation for OS 7.7, cloning was ended with a virtual pen stroke.

Apple sidesteps the raging browser wars by announcing that Mac OS 8 will be bundled with Cyberdog 2.0, Apple's own browser built in the company's revolutionary OpenDoc platform, Netscape 3.01, Internet Explorer 3.01, and America Online 3.0. Apple later canceled both OpenDoc and Cyberdog, and made Internet Explorer the default browser for new Macs, though it continued to bundle Netscape's browser for years to come.

1998: Steve Jobs outlines Apple's latest operating system strategy at the firm's annual Worldwide Developer Conference (WWDC), essentially dumping NeXT technology in favor of Mac OS X. Apple's previous strategy revolved around Rhapsody, which required developers to completely retool their existing products. But by using a new set of APIs (application programming interface) called Carbon, developers were promised a far easier transition into Mac OS X's features such as protected memory, virtual memory, preemptive multitasking, multi-threading, etc.

Apple airs a special 30 second commercial from its successful Think Different series dedicated to Jerry Seinfeld. The commercial is aired during the final episode of "Sienfeld," on May 14th.

Continuing with the Think Different theme, Apple cofounder Steve Wozniak urges graduating Berkeley students to "Think Different" during a commencement speech. "To avoid being like others is to try not to be like others, but to be truly different," Mr. Wozniak said. "My goal was always to make the best thing that anybody could make."

1999: Apple releases Mac OS 8.6, featuring Sherlock 2.1, increased stability, and improved PowerBook battery life. Apple unveils the G4 at this week's WWDC. Apple also introduces the Lombard line of G3-powered PowerBooks.

2000: Apple releases Preview Release 4 of Mac OS X, saying that a public beta of the new operating system would be available during the summer. This news came as a letdown to many in the Mac community as Apple had promised a final release of Mac OS X during the same time frame.

2001: Apple opens the first retail Apple Store in McLean, Virginia. The company announces that it will open 25 retail stores during 2001, and that it expects the stores to be profitable during the holiday shopping quarter. It takes longer than that, however, as the terrorist attacks of September 11th throw the economy into a stall.

2002: Apple previews Xserve RAID, a very competitive rackmount RAID storage solutions that goes on to become Apple's entry into server rooms around the world. Apple also announces Xserve, a dual-G4 powered rackmount server.

A long awaited move is revealed at Steve Jobs' other company, Pixar, which first begins using Mac OS X-powered Macs in the company's workflow.

2003: Apple announces that over two million songs have been purchased and downloaded from its iTunes Music Store in its first two weeks of operation. Launched with an inventory of 200,000 songs, the iTunes Music Store provided consumers with a legal method of obtaining digital music at a typical cost of 99 cents per song or $9.99 per album.

is the author of Apple Confidential 2.0: The Definitive History of the World’s Most Colorful Company, published by No Starch Press earlier this year (US$13.97 - Amazon).

is the editor of The Mac Observer, and was egged on, in-part, in his obsession with the Mac by Owen's first book, The Mac Bathroom Reader.

You can send your comments directly to Owen and Bryan, or you can also post your comments below.

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