Steve Jobs managed to pull off one of the biggest buyouts of a new technology in history, leading him to take the personal computer market by storm.

This is your basic 1970’s personal computer.

What you see above is a programmable terminal called the Datapoint 2200, which is the earliest known device that bears some significant resemblance to the modern personal computer, with a screen, keyboard, and program storage. It was made by CTC (now known as Datapoint) in 1970 and was a complete system in a small case bearing the approximate footprint of an IBM Electric typewriter.

This was the technology of early 1970s computers. If you wanted to accomplish something on this machine, you would need to type in code to tell the computer what to do.

This technology was great and all, but it wasn’t entirely useful for personal use; there was too much of a learning curve.

Which leads us into the legendary…

1973 Xerox Alto pictured above.

Imagine having one of the greatest inventions of the 21st century in your hands, and giving it away for next to nothing because you didn’t know what to do with it.

Xerox did just that with the Xerox Alto.

The Xerox Alto, developed at Xerox PARC in 1973, was the first computer to use a mouse, the desktop metaphor, and a graphical user interface (GUI), concepts first introduced by Douglas Engelbart while at SRI International. It was the first example of what would today be recognized as a complete personal computer.

While its use was limited to the engineers at Xerox PARC, the Alto had features years ahead of its time. Unfortunately, Xerox management could not see a potential fit for this computer in the market, so, they sold it to Steve Jobs for next to nothing. Both the Xerox Alto and the Xerox Star would inspire the Apple Lisa and the Apple Macintosh.

Steve Jobs and company saw a huge opportunity with the Xerox Alto, and jumped on the opportunity to buy this machine in 1979.

Xerox failed to market this machine to a wide audience, and as a result, the machine was only used in Xerox offices and a few universities – the upper management failed to see how this machine could appeal to the average US consumer, boy were they wrong.

Here’s how the transaction worked:

  • Xerox needed a way to reduce the production costs of the Xerox Alto.
  • So, they invited Steve Jobs from Apple to come take a look at the machine because they saw the success Apple was having with pumping out personal computers at a low cost.

The deal saw Xerox getting one million shares of Apple stock in exchange for Steve Jobs receiving all relevant information concerning the technology being produced by Xerox at the time, which as we know, was nothing short of revolutionary.

Steve Jobs said this about the Xerox Alto, “Within ten minutes of working with this machine, it was clear to me that every personal computer on the planet would someday function like this, and Apple was going to produce these computers.”

With every business triumph, there also exists a failure.

In this case, Steve Jobs of Apple noticed one of the largest opportunities in recent technologies history, and he capitalized on it; implementing the Alta’s mouse technology into Apple’s software, and propelling Apple to one of, if not the most proficient personal computer manufacturer on the planet.

Some will have skepticism towards Mr. Job’s genius, but in his own words, “Xerox could have owned the entire computer industry” – Steve Jobs.

But instead, I sit here today, in 2017, writing this answer on a brand new MacBook Pro Laptop.

Well played, Mr. Jobs.

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