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Five Rejections: How HP Passed on the Apple Computer

Zusammenfassung

Steve Wozniak designed both the Apple I and the Apple II while employed at Hewlett-Packard. Before co-founding Apple, he offered the designs to HP five times — as company policy required him to do. HP turned down the Apple I design in 1976 because it was not aligned with HP’s calculator business. Wozniak was then free to commercialize the design himself. HP’s five rejections are one of the most consequential missed opportunities in corporate history.

HP’s Engineer

Steve Wozniak joined HP’s calculator division in 1973 as an engineer, working on scientific calculators after dropping out of UC Berkeley. He was technically brilliant — a natural hardware designer who could produce clean, minimal circuits that achieved maximum function with minimum components. At HP, he was doing competent work in a field he found less interesting than his personal projects.

Throughout the early 1970s, Wozniak attended meetings of the Homebrew Computer Club in Menlo Park, California — the informal gathering of hobbyists, engineers, and enthusiasts who were building personal computers from kits and components. He was inspired by the Altair 8800 (covered in The Altair 8800) and began designing his own machine, aiming to build a complete computer that could be used without soldering skills.

The HP Policy and the Five Offers

HP had a standard policy for employee inventions: anything an employee created that was related to HP’s business areas belonged to HP. Wozniak, who took the policy seriously, offered his computer design to HP on five separate occasions between 1975 and 1976.

HP’s response was consistent: the design was interesting but not aligned with HP’s strategic direction. HP made calculators, scientific instruments, and measurement equipment. A personal computer kit for hobbyists did not fit the product line. HP’s managers could not envision how a computer sold to individuals at home would become a business HP should be in. Each rejection freed Wozniak legally and ethically to pursue the design outside HP.

He resigned from HP in 1977, after the Apple II was already designed and after Steve Jobs had convinced him that the computer could be a business. He left HP to work at Apple full-time — a company he co-founded with Jobs and Ronald Wayne in April 1976.

What HP Passed On

The Apple I (1976) was a bare circuit board — a single-board computer that required a power supply, keyboard, and display to use. It sold for $666.66 (Jobs’s choice — Wozniak thought $500, Jobs doubled it and added a third for margin). 200 units were built and approximately 175 sold, primarily through Paul Terrell’s Byte Shop in Mountain View.

The Apple II (1977) was the machine that mattered. Wozniak designed color graphics into the machine using a clever trick involving the NTSC signal: the Apple II generated a color image on a standard television set by exploiting interference between the pixel clock and the NTSC color burst frequency. He added a floppy disk controller — a design so efficient it used fewer chips than anyone thought possible — that made the Apple II the first mass-market personal computer with reliable, fast secondary storage.

The Apple II sold 1.3 million units before it was discontinued. Its success financed Apple’s future product development, including the Macintosh. Apple’s revenue in fiscal year 1980 was $117 million; by 1982 it was $583 million. HP’s calculator division — the business Wozniak had worked in — remained profitable but never generated returns at that scale from personal computing.

HP’s Later Entry and the Counterfactual

HP eventually entered the personal computer market, producing the HP-85 (1980) and later the HP-150 (1983, with a touchscreen) and becoming a major PC manufacturer after its merger with Compaq in 2002. None of these products had the cultural or financial impact of the Apple II or the Macintosh.

The counterfactual is stark: if HP had accepted Wozniak’s offer, the Apple II might have been an HP product. The company’s engineering culture, distribution channels, and brand reputation would have been behind it. Whether HP would have commercialized it the way Jobs did — and whether Jobs and HP would have worked together productively — is speculative. What is documented is that HP looked at the machine five times and could not see what it was.

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