A look back in IPO: Apple, the early PC purveyor

To wrap up our series of looks into the IPOs of tech’s Big 5, we turn to Apple. Being the first of five to go public, what can we learn from Cupertino’s debut?

Apple’s 1980 public offering came more than half a decade before Microsoft’s 1986 IPO, eras of technology before Amazon’s 1997 flotation, Google’s 2004 IPO or Facebook’s 2012 public market kick-off.

Heading back in time as we are, we lack readily accessible S-1 documents that the younger entrants to the group have posted. Instead, in our look back at Apple’s IPO days, we’ll deal with the firm’s IPO prospectus (similar to our Microsoft jaunt).

So what was Apple’s story as it raced to the public markets?

Apple back then

When you think about Apple today, you probably conjure up the image of an iPhone, or an iPad, or your hatred of iTunes. Given how successful the company’s current product cycles have been, it’s almost too easy to forget that there was an Apple before the iPod.

However, back in 1980, there was no such mix of consumer gadgetry pouring out of Cupertino. Apple sold computers.

From its prospectus, here is how Apple described its personal computer business:

The Company’s principal product is the Apple II personal computer system. Apple II systems in typical configurations may be sold for suggested retail prices as low as $1,850 and up to $5,000 or more […] As of October 31, 1980, Apple had sold approximately 131,000 Apple II computer mainframes. In May 1980 the Company announced the introduction of the Apple III.

The Apple III cost comfortably more than the Apple II ($4,300 to $7,800, according to the document). Apple also noted that “approximately 100 independent vendors have developed applications software for use in connection with Apple computers.” That’s an early draft of “there’s an app for that” that the iPhone kicked off.

In addition to computers, the company noted its peripheral business. That revenue stream included “video monitors, disk drives and printers,” with a disclaimer that some of those peripherals may be “manufactured by others.” But the document’s focus was clear: Apple was a computer company, not a peripheral shop. As a computer company, it sold two main types of PCs: one aimed at consumers, and one aimed at businesses in the form of Apple III. (That the Apple III would fail in the market was not yet known.)

So how lucrative was the PC business back in 1980? It turns out that it was very lucrative.

Stellar numbers

We live in the era of recurring revenue. Microsoft and Apple have both come to appreciate subscription income, as well. Apple wants to sell you Apple Music every month, and Microsoft wants you to subscribe to Office. But back when both companies were just going public, one-off sales drove revenue, which was a very profitable sales strategy.

Turning again to its IPO prospectus, observe the following set of numbers detailing the company’s financial performance leading up to its debut:

There’s a lot in the image, so let’s walk through it together.

Reading left to right, Apple didn’t quite manage $1 million in sales during its first, approximate fiscal year. It still generated net income of $41,575, which isn’t too shabby given how young the company was.