Of Apple and Captain Crunch

Press, 1 December 1987, Page 55

Of Apple and Captain Crunch

GARETH POWELL

The official story of how Steve Jobs and Steve Wozniak started Apple in a garage is well known. But there are some aspects that have not, perhaps, been fully aired, some minor points of trivial interest. • The origin of the name. According to Jack Rochester and John Gantz in “The Naked Computer” the original name of the company was Apple Fruit Packers and this reflected “its owners’ concern with health food and clean living.” • The founders as criminals. In 1971 Steve Wozniak read an article about a phone freak named Captain Crunch who was defrauding the telephone company by making unpaid calls with the help of a small blue box. Wozniak and Jobs started to manufacture and sell these blue boxes — highly illegal electronic devices which tap into phone lines — and were at one stage pulled in by the police. They got away by explaining the blue box was a music synthesiser. They sold these naughty devices door-to-door around the colleges of southern California and, at one demonstration, Wozniak dialled the Vatican and tried to get the Pope on the line by claiming he was Henry Kissinger. Captain Crunch later worked for Apple as a designer. • The program that brought success. On May 11, 1979, VisiCalc was introduced at the West Coast Computer Faire in California. It sold more than 500,000 copies and was the program that forced corporate America to realise that personal computers were tools not toys. • Jobs as a mystic. The original Apple I was sold in kit form to members of the Homebrew Computer Club, which met once a month at the Stanford Linear Accelerator Centre. The company was started on SUSI2SO or SUSISOO — accounts vary — obtained by selling a Volkswagen camper-van and a Hewlett-

Packard programmable calculator. What is rarely mentioned is that Jobs dropped out of college — he was at Reed College in Oregon — and went to India in search of a guru. • The instant millionaires. In 1977, the company’s first year, sales were $U5775,000. Four years later they had reached 5U5334.8 million, with 5U5583.1 million in 1982, the following year. When Apple went public on December 12, 1980, it was, according to many commentators, among the most successful company launches of all time. Forty-seven Apple employees and ex-employees became instant millionaires. Apple’s world sales in the last financial year were SUS 266 billion, a 40 per cent increase over the previous year. • The computer as a failure. Every company occasionally produces a product that is a dog. With Apple it was the Apple 111. Harsh words such as fiasco, abortion, camel, mistake and disaster were used to describe it. And those by the Apple employees. It was code-named Annie. After it became apparent that this was not the way to go, another project, code-named Sara, got under way. This, too, bit the dust and was followed, eventually, by Lisa — at a development cost of SUS3O million — which was the precursor of the immensely successful Macintosh. • The export sales fiasco. Apple’s sales effort was, from the beginning, almost totally focused on the United States. For Apple, in the early days, the world ended in Hawaii. Even as late as 1981, export was a couple of lines in the annual report saying sales had not been great outside the United States because of supply shortages. There may have been other reasons. , Export distribution was originally held, effectively

world wide, by a company called Eur Apple run by a former Commodore executive, Andre Souson. This company in turn appointed Rudie Hoess and his company, Electronic Concepts, as distributor in Australia and that company brought in Apple computers from 1978 until 1982. Meanwhile, in parallel not serial, the distribution rights for much of Asia, Australia and New Zealand were vested by Eur Apple in a company called Delta Communication Services. At the time this company was based in Hong Kong and sold, mainly, amateur radio equipment. A managing director and principal owner was Neville McKay. Apart from running the ham radio business and ostensibly controlling Apple sales through a major part of the world — in area if not population — Neville was also fully employed as a flight engineer with Cathay Pacific, flying in 7075. In the early years he ran the business from a small building in the Kowloon Tong suburb of Hong Kong, which is better known locally for the rental of motel apartments on a very short-time basis indeed. Neville appointed a sub-agent in Australia who founded a local Delta and started importing Apples. Rudie Hoess, working under the Impression he was sole distributor, thought he was being attacked by pirates and called on Apple to help. Which, eventually, it did. By 1982 Eur Apple had become Apple’s export department. Delta in Hong Kong was no longer a sole agent. Apple Australia was formed in July of that year. Delta went into business with a German company producing an imitation of the Apple called the Med Fly. At the end of the year Apple Australia started to take over distribution from Electronic Concepts. This company went down the gurgler in January, 1984. In New Zealand, Apple distribution is handled by CED Distributors, at Auckland.