The Apple I, sold as a kit computer, was designed almost exclusively by a genius named Stephen Gary "Woz" Wozniak. It was designed over a period of years from parts Woz had free access to at his job as a Hewlett Packard engineer. HP encouraged its engineers to use company stock and lab facilities to experiment with new and interesting technology. Woz took full advantage of this privilege and when he got his hands on a MOStek 6502 at the 1975 Wescon electronics show in San Francisco, he had all the parts he needed to build the Apple I.
Woz chose the 6502 over the popular Intel 8080 because of cost. An 8080 cost $179, the 6502 cost only $20. Woz's creation debuted in April 1976 at the Homebrew Computer Club in Palo Alto, but few took it seriously. Most other Homebrew computers were built around the Intel 8080 chip. Undaunted, Wozniak's friend Steve Jobs thought the two could make some money selling circuit boards, instead of passing out schematic diagrams for free at the Homebrew club. "Let's hold them up in the air and sell a few," Jobs insisted.
The pair tried to interest their employers into buying the design. Woz's bosses at HP turned him down. Steve's employer, Atari, also took a pass. Spurned by their employers and in need of start up money, Jobs convinced Woz to sell his prized HP 65 programmable calculator for $250. Jobs sold his red and white Volkswagen bus for $1500.
The two brought in another friend, Ronald Gerald Wayne, a 41 year old Atari draftsman, to help design the company logo and write the Apple I manual. The newly formed Apple Computer Company filed partnership papers on April Fools Day 1976. Ron Wayne was given 10% ownership for his work on the Apple I documentation, but later he sold out because he feared going into debt in order to manufacture the boards.
When the first batch of printed boards was ready, Jobs went about trying to find customers. Jobs was able to convince Paul Terell, the owner of Byte Shop in Mountain View, California, to purchase fifty Apple I motherboards for $500 each. The Apple partnership took out a $5,000 loan and convinced suppliers to extend 30 days' credit on $15,000 worth of parts. Jobs and company took the bare circuit boards from the supplier and assembled them in the garage of Steve Jobs' parents on Crist Drive in Los Altos, California.
Paul Terell believed that what he was buying was a fully-assembled computer with a power supply and case. Jobs and Woz considered a fully-assembled computer to be the completed circuit board because they had originally planned to sell the Apple I as a bare board with instructions on how to complete it for $50 each to Homebrew Club members. Terell honored the agreement despite the misunderstanding and the young company was able to pay off all its debts with one day to spare.
Atari founder, Nolan Bushnell, Jobs' former boss, recommended that he speak with Don Valentine of the venture capital firm Sequoia Capital. Valentine turned him down, but referred Jobs to Mike Markkula, Jr., who had recently made a fortune on his stock options at chip makers Fairchild and Intel. Markkula secured capital for Apple Computer.
With a new source of funding, Woz was able to further refine the design. Although superior to other kit computers of the day, the Apple I was still far from an easy-to-use-device. It was necessary meticulously enter hexadecimal data by hand before you could even begin to use BASIC. Woz solved the problem with a card that sold for $75.
The Apple Cassette Interface Card plugged directly into an upright connector, the Apple I's sole expansion slot. It read in data from a standard audio-grade cassette tape player at 1500 bits per second. A free tape of Apple BASIC was included with the card.
The Apple I was sold through several small retailers beginning in July 1976, and included only the circuit board and 4K RAM for $666.66. The Apple Cassette Interface was sold separately for $75. An additional 4K RAM could be purchased for $120.00. The buyer had to provide the power supply, an ASCII keyboard, and a case (if necessary). Apple discontinued the Apple I with the release of the Apple II in 1977. The Apple II was a much more practical and user friendly computer with its own case with built-in keyboard and power supply.