Return to profitability

1997–2007: Return to profitability

The NeXT deal was finalized on February 9, 1997, bringing Jobs back to Apple as an advisor. On July 9, 1997, Amelio was ousted by the board of directors after overseeing a three-year record-low stock price and crippling financial losses. Jobs acted as the interim CEO and began restructuring the company's product line; it was during this period that he identified the design talent of Jonathan Ive, and the pair worked collaboratively to rebuild Apple's status.

At the 1997 Macworld Expo, Jobs announced that Apple would join Microsoft to release new versions of Microsoft Office for the Macintosh, and that Microsoft had made a $150 million investment in non-voting Apple stock. On November 10, 1997, Apple introduced the Apple Online Store, which was tied to a new build-to-order manufacturing strategy.

On August 15, 1998, Apple introduced a new all-in-one computer reminiscent of the Macintosh 128K: the iMac. The iMac design team was led by Ive, who would later design the iPod and the iPhone. The iMac featured modern technology and a unique design, and sold almost 800,000 units in its first five months.

During this period, Apple completed numerous acquisitions to create a portfolio of digital production software for both professionals and consumers. In 1998, Apple purchased Macromedia's Key Grip software project, signaling an expansion into the digital video editing market. The sale was an outcome of Macromedia's decision to solely focus upon web development software. The product, still unfinished at the time of the sale, was renamed "Final Cut Pro" when it was launched on the retail market in April 1999. The development of Key Grip also led to Apple's release of the consumer video-editing product iMoviein October 1999. Next, Apple successfully acquired the German company Astarte, which had developed DVD authoring technology, as well as Astarte's corresponding products and engineering team in April 2000. Astarte's digital tool DVDirector was subsequently transformed into the professional-oriented DVD Studio Pro software product. Apple then employed the same technology to create iDVD for the consumer market. In 2002, Apple purchased Nothing Real for their advanced digital compositing application Shake, as well as Emagic for the music productivity application Logic. The purchase of Emagic made Apple the first computer manufacturer to own a music software company. The acquisition was followed by the development of Apple's consumer-level GarageBand application. The release of iPhoto in the same year completed the iLife suite.

Mac OS X, based on NeXT's OPENSTEP and BSD Unix, was released on March 24, 2001 after several years of development. Aimed at consumers and professionals alike, Mac OS X aimed to combine the stability, reliability and security of Unix with the ease of use afforded by an overhauled user interface. To aid users in migrating from Mac OS 9, the new operating system allowed the use of OS 9 applications within Mac OS X via the Classic Environment.

On May 19, 2001, Apple opened the first official Apple Retail Stores in Virginia and California. On October 23 of the same year, Apple debuted the iPod portable digital audio player. The product, which was first sold on November 10, 2001, was phenomenally successful with over 100 million units sold within six years. In 2003, Apple's iTunes Store was introduced. The service offered online music downloads for $0.99 a song and integration with the iPod. The iTunes store quickly became the market leader in online music services, with over 5 billion downloads by June 19, 2008.