Apple Bought a Look at the Future for Pre-IPO Stock

In December 1979 a small Apple delegation, led by Steve Jobs, drove to a Xerox research lab in Palo Alto and was shown three things: a graphical user interface, a working mouse, and an object-oriented programming environment called Smalltalk. The visit, which has since hardened into Silicon Valley myth, lasted maybe two hours over two days.

The deal that made it possible was unusual. Xerox's venture arm wanted to invest in the still-private Apple. Apple agreed, on the condition that Xerox open up PARC. Apple sold Xerox 100,000 shares at $10.50 each — about a million dollars — and got, in return, two formal demonstrations from PARC researchers including Larry Tesler and Adele Goldberg.

What Jobs saw at PARC had been working since 1973. The Xerox Alto, designed by a team led by Butler Lampson and Chuck Thacker, had a portrait-orientation bitmap display, a three-button mouse, and software that drew overlapping windows on screen. PARC researchers had built it for themselves and never managed to ship it as a product. By 1979 several thousand Altos existed inside Xerox, used daily, while the company's executives focused on photocopiers.

Apple's Lisa, released in January 1983, took the ideas further than PARC had. The mouse dropped from three buttons to one. Pull-down menus, drag-and-drop, and the trash can were Apple inventions, not borrowings. Bill Atkinson wrote the graphics layer that allowed clipped overlapping windows on the more limited hardware Apple was building.

The Macintosh followed a year later, at a tenth the Lisa's price. Xerox's stock, which had bought Apple's window into PARC, would have made a fortune by then.