"clones" - which were compatible to IBM' s models. To maintain

compatibility, all these manufacturers were forced to rely on Intel's

microprocessors, which thus were bootstrapped to industry standard, too.

As well as for Intel, the CPU manufacturer, IBM's decision has been crucial

for a company in the software field: Microsoft's (Redmond, Washington) MS-

DOS was chosen as the IBM PC's operating system and became industry

standard. It is essential to every IBM compatible PC. Microsoft, a small

company in 1980, grew explosively, and is today's superior software giant.

At the beginning of the 1980s, IBM was concerned about Intel's ability to

keep investing in R&D and therefore decided to support Intel by buying $250

million (=12%) of the company's stock. This endorsed Intel's position, and,

in 1987, IBM sold the last of its shares in a strong Intel.

Intel today

Annual report 2000

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Today, Intel supplies the computing and communications industries with

chips, boards and systems building blocks that are the "ingredients" of

computers, servers, and networking and communications products. Industry

members to create advanced computing and communications systems use these

products. Intel's mission is to be the preeminent building block supplier

to the worldwide Internet economy.

[pic]

Intel® Architecture platform products[pic] Microprocessors, also called

central processing units (CPUs) or chips, are frequently described as the

"brains" of a computer, because they control the central processing of data

in personal computers (PCs), servers, workstations and other computers.

Intel offers microprocessors optimized for each segment of the computing

market:

Intel® Pentium® III Xeon™ processors for mid-range to high-end servers and

workstations

Intel® Pentium® 4 and Pentium® III processors for entry-level servers and

workstations and performance desktop PCs

Intel® Celeron™ processors for value PC systems

Mobile Pentium® III processors for performance in mobile PC systems

Chipsets perform essential logic functions surrounding the CPU in

computers, and support and extend the graphics, video and other

capabilities of many Intel processor-based systems.

Motherboards combine Intel microprocessors and chipsets to form the basic

subsystem of a PC or server.

e-Business solutions enable services and channel programs to accelerate

integration and deployment of Intel Architecture-based systems and

products.

[pic]Wireless communications and computing products[pic] These products are

component-level hardware and software focusing on digital cellular

communications and other applications needing both low-power processing and

high performance. These products are used in mobile phones, handheld

devices, two-way pagers and many other products. For these markets, Intel

offers Intel® Flash memory, application processors based on the Intel®

StrongARM processor core, and base band chipsets for cellular phones and

other wireless devices.

Networking and communications products[pic] Communications building blocks

for next-generation networks and Internet data centers are offered at

various levels of integration. These products are used in communications

servers, network appliances and computer telephony integration equipment.

Component-level building blocks include communications silicon such as

network processors and other board-level components, software and embedded

control chips. These products are integrated in communications hardware

such as hubs, routers, switches and servers for local and wide area

networking applications. Embedded control chips are also used in laser

printers, imaging, automotive systems and other applications.

New business products[pic] These products and services include e-Commerce

data center services as well as connected peripherals.

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Intel's major customers include:

Original equipment manufacturers[pic] (OEMs) of computer systems, cellular

phone and handheld computing devices, telecommunications and networking

communications equipment, and peripherals.

Users of PC and network communications products[pic] including individuals,

large and small businesses, and Internet service providers—who buy Intel's

PC enhancements, business communications products and networking products

through reseller, retail, e-Business and OEM channels.

Other manufacturers[pic] including makers of a wide range of industrial and

communications equipment.

The emergence of the PC industry

Until the early 1970s, computers were huge machines - from the largest

ones, the supercomputers, to mainframes and minicomputers - and were mainly

used for scientific research in universities and in military institutions,

and for business calculations in major companies. Surprisingly, when the

first microprocessors appeared, none of the established companies such as

IBM, DEC or HP had the idea to build small, personal computers. They just

did not see any market for them and could not imagine what those machines

should be needed for. None of these large companies anticipated the

possibilities of PCs, which are today used in almost every office, in the

home, in the school, on airplanes, etc. and can act as typewriters,

calculators, accounting systems, telecommunications instruments, libraries,

tutors, toys and many the like.

So, it was the hobbyists, single electronics wizards who liked tinkering

with electronic devices that constructed their own computers as the first

PCs. These "computer nuts" ignited the "fire in the valley;") they launched

the personal computer revolution in Silicon Valley "out of their own

fascination with the technology. The personal computer arose from a spirit

of sharing "hard-won technical information" with other computer freaks who

developed their devices for the fun of tinkering around in this fascinating

field of electronics. Some of these frequently young hobbyists found

themselves almost overnight as millionaires, after they had sold their

devices in a newly founded firm.

Before dealing with the story of Apple, which is typical of Silicon Valley

and responsible for the breakthrough of the personal computer, some

information about the first PC and the emergence of the PC industry shall

be given.

Altair - the first PC

Altair is often regarded as the first personal computer, although it was

one of those switches and lights computers - programming is done by

arranging a set of switches in a special order, and the results appear as

different combinations of lights. In other words, such a machine is a

genuine computer, but absolutely useless, as Steve Wozniak, one of the PC

pioneers, put it.)

After the first microprocessors had come onto the market, Ed Roberts, an

engineer at MITS, a small calculator company in Texas, decided to build a

kit computer, which he intended to sell to hobbyists. He chose Intel's 8080

as the CPU for his computer, since this chip was the most advanced and

powerful at the time. As Roberts wanted to sell his computer for less than

$500 and the official price for the 8080 was already at $360, he contacted

Intel and could finally receive the chip for only $75 apiece.

By the end of 1974, Roberts finished his computer, which was named Altair.

When the Altair was introduced on the cover of the January 1975 issue of

Popular Electronics as the first personal computer, which would go for $397

only, the market response was in credible. The low price was the actual

sensation, because it was largely known that the price for the Intel 8080

CPU powering the Altair was already at $360. So many hobbyists, engineers

and programmers who had keenly waited for their own personal computer,

which they could experiment on at home, welcomed the new product and

ordered "their" Altair on the spot.

Roberts had never expected such a great response and his small firm was

flooded by those immediate orders (more than 4000). He boosted up the

production, but still could not meet the huge demand. The Altair was a

success at first, and Roberts sold many of them.

However, he had increased production at the expense of quality and further

refinement of his computer, so the Altair brought along a lot of trouble

and was finally supplanted by other computers, which were superior.

Nevertheless, the Altair as the first successful microcomputer, contributed

a lot to the PC revolution, since it encouraged other people to build

personal computers (e.g. IMSAI, Apple).

The first computer shops

During this time, the mid-1970s, the first computer shops came into

existence. Pioneering in this field was Paul Terrell who came to the idea

of running such a shop, after the Altair had been put onto the market. His

first Byte Shop opened in Mountain View (located in the heart of Silicon

Valley) by the end of 1975.

Initially, Terrell sold the Altair and accessory products such as

additional memory boards and other devices, which came onto the market.

With the arising microcomputer industry, he could offer his customers -

mainly hobbyists and engineers - more and more products, and his shop

became a success. Other Byte Shops were opened and Terrell's computer shop

chain expanded beyond the Silicon Valley. The computer shops provided its

customers with a variety of devices around the computer and also with

service and help.

The Altair was shipped as a kit computer and was to be assembled first, and

then it was still not difficult to work with it. The hobbyists helped each

other with advice. It was this spirit of sharing solutions and the common

interest in microcomputers that led to the foundation of the first computer

club.

Homebrew Computer Club

The legendary Homebrew Computer Club was the first of its kind, and

provided an early impetus for the development of the microcomputer industry

in Silicon Valley. Its first meeting in March 1975 was held in one of its

members' garage in Menlo Park in Santa Clara County. The Homebrew members

were engineers and computer enthusiasts who discussed about the Altair and

other technical topics. The club attracted many hobbyists and was attended

by nearly 750 people one year after its foundation. The Homebrew Computer

Club had its own philosophy. People meet, because they were interested in

computers and liked tinkering with them, but not for commercial reasons -

at least in its early times. Its members "exchanged information about all

aspects of micro computing technology") and talked about devices they had

designed. From its ranks came the founders of many microcomputer companies

- for example Bob Marsh, Adam Osborne, or Steve Jobs and Steven Wozniak -

the famous Apple founders.

The Homebrew Computer Club is the place where the roots of many Silicon

Valley microcomputer companies are located. It has "spawned a revolution in

micro processing") and represents an "important step in the development of

a multi-billion dollar industry.

The Apple Story

Apple provides one of Silicon Valley's most famous stories. It shows

features that are typical for most start-up firms in the valley, however,

it is unique and its early success and its contribution to the personal

computer are unmatched.

"Woz" and Jobs - the two "Steves"

Apple's history starts with the story of two young and exceptional people

who began building a computer in their garage and "launched the

microcomputer revolution,") changing our daily life in many respects.

The Apple story is the story of the two "Steves". Stephen G. Wozniak was a

typical Silicon Valley child. Born in 1950, he had grown up with the

electronics industry in Silicon Valley, and had been intrigued by

electronics from the start, since his father w as an electronics engineer.

Wozniak, known to his friends as "Woz", was bright and was an electronics

genius. At the age of 13, he won the highest award at a local science fair

for his addition-subtraction machine. His electronics teacher at Homestead

High School recognized Woz's outstanding talent and arranged a job for him

at a local company, where Steve could work with computers once a week. It

was there that Wozniak saw the capabilities of a computer (it was the DEC

PDP-8 minicomputer) and studying the manual, it became his dream to have a

computer of his own one-day. He designed computers on paper. Many other

students who grew up in Silicon Valley shared this dream.

In 1971, Wozniak built his first computer with his high-school friend Bill

Fernandez. This computer (they called it Cream Soda Computer) was developed

in his friend's garage and had "switches and lights just as the Altair

would have more than three years later.")

Bill introduced Woz to a friend of his named Steven P. Jobs. Jobs was born

in 1955, and his foster parents were - unlike most other people in Silicon

Valley - blue-collar workers. However, growing up in an environment full of

electronics, Steve came in con tact with this fascinating technology and

was caught by it.

Jobs was a loner and his character can be described as brash, very

ambitious and unshakably self-confident. With his directness and his

persistency he persuaded most people. He had the ability to convey his

notions and vision to other people quite well. An d he was not afraid to

talk to famous people and did never stop talking to them until they gave in

and did what he wanted. His traits could already be observed in his

adolescence, for instance when he - at the age of thirteen - called famous

Bill Hewlett, president of HP, and asked him for spare parts he needed for

his frequency counter.

Although Steve Jobs was five years younger than Wozniak, "the two got along

at once." Apart from their common fascination with electronics, they

"shared a certain intensity." Whereas Woz was intense in digging "deeper

into an intellectual problem than anyone else," Jobs's intensity was in

ambition. Moreover, both were genuine pranksters, and often they fooled

others with their technical knowledge.)

When they heard of "phone-phreaking" - making free long-distance telephone

calls with a device called "blue box" - the two started their first

business venture, building those blue boxes.

In 1972, Steve Jobs went to Reed College in Oregon; however, there he

became more interested in Eastern religions, dropped out a year later and

returned to Silicon Valley, where he took a job with Atari (a young video

game company) until he had saved enough money to go on a trip to India for

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