In late 2008, amid the swirling news reports and rumors of his failing health, Steve Jobs, the co-founder, Chairman, and CEO of Apple, Inc. issued the following statement to his employees at Apple's international corporate headquarters in Cupertino, California. "We are in the worst economic environment since the Great Depression. However, we are determined to continue to make Apple the most innovative company in the world while increasing shareholder wealth. While hundreds of companies are firing employees, we have no intention of doing so. We will overcome this challenging economic environment and remain a strong innovative company. While others will decrease spending we will increase spending on R&D and come out way ahead of our competition in the long run."
Jobs co-founded Apple Computer with Steve Wozniak in 1976. After founding Apple, Jobs was fired by the company's board of directors 10 years later at age 30. After his termination, he went on to create two more companies. During this period Apple went through three different CEOs and their stock price dropped to $2 a share. As a result, Jobs was invited back to join the company as CEO. Not only did Jobs rejuvenate Apple, but it flourished. Jobs led the company to the forefront with cutting edge products and their stock price grew to around $200 a share by 2007. However, in 2008 Apple's stock price had dropped to around $90 due to the recession around the world. Fortunately, Apple had an abundance of cash (approximately $9 billion) on hand with no debt. The company was one of the few companies, large or small, that was able to operate with virtually no debt.
After his speech, Jobs walked into his office and sat down. Based on current economic conditions around the world, he wondered what his next steps should be to increase shareholder's wealth. Apple never issued dividends and this policy worked well for them over the years. However, Jobs wondered what he should do next to increase the firm's profitability.
STEVEN PAUL JOBS
Steven Paul Jobs was born on February 24, 1955, in San Francisco, California. Growing up in Mountainview, the heart of Silicon Valley, he exhibited behavior problems while in elementary school. During fourth grade, Job's teacher would bribe him with candy and money in order to curb his behavior. Reflecting back on these years, Jobs recounts that if such behavior continued, it would "absolutely have landed me in jail" (Leander, 2008). He found school to be so easy that he was able to skip 5th grade and move directly into Middle School. He found middle school chaotic and persuaded his parents to move to Los Altos in 1967 where he could attend the much nicer Cupertino Junior High School. This area (Los Altos, Cupertino, and Sunnyvale), was full of engineers and with this emerged many young startup companies (e.g., Hewlett-Packard).
Job's introduction to the world of electronics came during High School with the discovery of electronic hobby kits, Jobs realized that the electric world was not as complicated as it first seemed and that electronics was an interesting field. It quickly became his passion. He began attending lectures conducted by the Hewlett Packard Company (HP). This further fueled his appetite for the field and eventually he found summer employment at HP. It was here that he met future co-founder and co-adventurer Steve Wozniak.
Jobs graduated Homestead High in 1972 and eventually attended Reed College, a small regional liberal arts school in Portland, Oregon. He lasted a semester before dropping out. Though no longer enrolled, he still attended classes that interested him. Not having a place of his own, he frequently slept at the home of friends. Collecting and recycling cans provided him with money and free meals were obtained by walking across town to the Hare Krishna temple.
Jobs eventually returned home and got a technician job at the Atari Company, which paid him a mere $5 hourly wage. …