1997–2001: Apple's comeback

Return of Steve Jobs

On July 9, 1997, Gil Amelio was ousted as CEO of Apple by the board of directors. Jobs stepped in as the interim CEO to begin a critical restructuring of the company's product line. He would eventually become CEO and served in that position until August 2011. On August 24, 2011, Steve Jobs resigned his position as chief executive officer of Apple before his long battle with pancreatic cancer took his life on October 5, 2011.

On November 10, 1997, Apple introduced the Apple Store, an online retail store based upon the WebObjects application server the company had acquired in its purchase of NeXT. The new direct sales outlet was also tied to a new build-to-order manufacturing strategy.

Microsoft deal

At the 1997 Macworld Expo, Steve Jobs announced that Apple would be entering into a partnership with Microsoft. Included in this was a five-year commitment from Microsoft to release Microsoft Office for Macintosh as well as a US$150 million investment in Apple. As part of the deal, Apple and Microsoft agreed to settle a long-standing dispute over whether Microsoft's Windows operating system infringed on any of Apple's patents. It was also announced that Internet Explorer would be shipped as the default browser on the Macintosh, with the user being able to have a preference. Microsoft chairman Bill Gates appeared at the expo on-screen, further explaining Microsoft's plans for the software they were developing for Mac, and stating that he was very excited to be helping Apple return to success. After this, Steve Jobs said this to the audience at the expo:

If we want to move forward and see Apple healthy and prospering again, we have to let go of a few things here. We have to let go of this notion that for Apple to win, Microsoft has to lose. We have to embrace a notion that for Apple to win, Apple has to do a really good job. And if others are going to help us that's great, because we need all the help we can get, and if we screw up and we don't do a good job, it's not somebody else's fault, it's our fault. So I think that is a very important perspective. If we want Microsoft Office on the Mac, we better treat the company that puts it out with a little bit of gratitude; we'd like their software. So, the era of setting this up as a competition between Apple and Microsoft is over as far as I'm concerned. This is about getting Apple healthy, this is about Apple being able to make incredibly great contributions to the industry and to get healthy and prosper again.

The day before the announcement Apple had a market cap of $2.46 billion, and had ended its previous quarter with quarterly revenues of US$1.7 billion and cash reserves of US$1.2 billion, making the US$150 million amount of the investment largely symbolic. Apple CFO Fred Anderson stated that Apple would use the additional funds to invest in its core markets of education and creative content.

iMac, iBook, and Power Mac G4

While discontinuing Apple's licensing of its operating system to third-party computer manufacturers, one of Jobs's first moves as new acting CEO was to develop the iMac, which bought Apple time to restructure. The original iMac integrated a CRT display and CPU into a streamlined, translucent plastic body. The line became a sales smash, moving about one million units each year. It also helped re-introduce Apple to the media and public and announced the company's new emphasis on the design and aesthetics of its products.

In 1999, Apple introduced the Power Mac G4, which utilized the Motorola-made PowerPC 7400 containing a 128-bit instruction unit known as AltiVec, its flagship processor line. Also that year, Apple unveiled the iBook, its first consumer-oriented laptop that was also the first Macintosh to support the use of Wireless LAN via the optional AirPort card that was based on the 802.11b standard; it helped popularize the use of Wireless LAN technology to connect computers to networks.

Mac OS X

In 2001, Apple introduced Mac OS X (now known as macOS), an operating system based on NeXT's NeXTSTEP and incorporating parts of the FreeBSD kernel. Aimed at consumers and professionals alike, Mac OS X married the stability, reliability and security of Unix with the ease of a completely overhauled user interface. To aid users in transitioning their applications from Mac OS 9, the new operating system allowed the use of Mac OS 9 applications through the Classic environment. Apple's Carbon API also allowed developers to adapt their Mac OS 9 software to use Mac OS X's features.

Retail stores

In May 2001, after much speculation, Apple announced the opening of a line of Apple retail stores, to be located throughout the major U.S. computer buying markets. The stores were designed for two primary purposes: to stem the tide of Apple's declining share of the computer market and to respond to poor marketing of Apple products at third-party retail outlets.