Computing Evolves. Part VI: The Tipping Point (2000-2008)

Last Updated:Tuesday, March 5, 2024

In the year 2000, the dawn of the third millennium, people played Snake on their phones. 

In contrast to the breakneck changes of the 90s, the Aughties were a time of truly incremental computer development. Not exactly mind-blowing—but not boring either! 

In part six of our seven-part series on the history of computers, we look at the ponderous years between 2000 and 2008, from Y2K to the global financial meltdown.

(If you missed Part V, you can check it out here.)

The new millennium starts with a bang

Just a few months after New Year’s Eve 2000, when the supposedly computer-zapping, apocalypse-inducing Y2K bug had come to nothing but a few messed up LED signs, the bubble burst. 

FOMO investment in Internet companies had fueled an extreme bull market starting in 1997. The upward climb got steeper and steeper until the NASDAQ stock exchange reached its peak on March 10, 2000. It popped the next day, on March 11. 

The crash begat a bear market that lasted over four years, until stocks finally recovered on October 9, 2004.

During the intervening stretch of time, many eCommerce companies went bankrupt, but a few weathered the storm, with notable survivors including eBay and Amazon. Meanwhile, freshly inked partnerships, like the infamous January 2000 AOL/Time Warner merger, resulted in catastrophic losses (in 2002, AOL/Time Warner lost $100 billion dollars, the largest annual sum in US history).

But as countless Silicon Valley offices’ bean bag loungers, Aeron chairs, and Foosball tables were being repossessed, the march of computing innovation went steadily on.

Google AdWords was launched post-bubble, in October 2000, and initially attracted just a few hundred customers.

The next year, in 2001, both Windows XP and the first version of Mac OS/X were released, inaugurating a new era of UX for operating systems.

That same year, New York-born computer wizkid Bram Cohen invented BitTorrent, the peer-to-peer file-sharing protocol that allowed users to download chunks of files from different sources. It quickly became a popular means of sharing music and video files, and a target for anti-piracy campaigners. 

2001 also witnessed the opening of the world’s first Apple Stores in McLean, Virginia and Glendale, California. Apple, on the comeback from its 90s misadventures, began to build a new retail empire that would cover the globe.

Meanwhile, streaming technology improved, social media experienced its first wave of widespread adoption, and cloud storage began to gain a market foothold.

Social media networking site Myspace was launched in 2003 by employees of a marketing company called eUniverse, and became massively popular in the mid-2000s. Then Facebook was launched in 2004, the brainchild of Mark Zuckerberg, the Winklevoss twins, and Divya Narenda, turning Myspace into a digital graveyard in short order.

In November 2005, YouTube was launched. Ahead of its public release, on April 23, company co-founder Jawed Karim uploaded the first awkward video to grace the platform. 

Amazon Web Services started to offer cloud computing services to businesses starting in 2006. In 2007, Dropbox launched its cloud-based, file-sync services. 

Also in 2007, the first Apple iPhone was released, inaugurating a new era of tiny-computers-in-the-form-of-phones.

NASDAQ, schmazdaq: computers keep doing their thing

In the 2000s, AMD and Intel become the major players in the CPU market, while Nvidia and ATI dueled for dominance in the GPU industry.

This was a period of market consolidation, as profit margins on hardware got smaller, and a glut of companies threw in the emo towel on selling out-of-the-box computers (perhaps most notably, IBM, who sold their PC computing division to China’s Lenovo in 2004). 

The clock speed of CPUs stopped increasing at a breakneck pace, as they had been doing from the 1970s to the late 1990s. By the mid-2000s, they weren’t getting much faster at all. 

However, multi-core processors became commercially available over this period. Rather than increasing the overall clock speed, they increased overall performance by allowing the CPU to handle multiple software threads at the same time. 

The first one, introduced in 2001, was the IBM Power4. It was a dual-core processor with a clock speed between 1.1 GHz and 1.3 GHz. In 2003, a collaboration with Apple resulted in a cheaper version called the PowerPC 970 (it was used to power Apple’s Power Mac G5).

Other affordable dual-core processors, like the Athlon 64 X2, launched by AMD in 2005, steadily gained a share of the mainstream market. By the end of the 2000s, multi-core processors were ubiquitous.

Meanwhile, the enormous, bulky CRT computer monitors of the 90s were gradually replaced by thinner, lighter LCD displays. 

Transistors kept getting smaller, as well, which had a big impact on the design of computers. Laptops became more powerful and less heavy. In the mid-2000s, desktop computers began to lose market share to their mobile brethren in a significant way. 

With that in mind, there’s not too much to report from the desktop front in the 2000s. From the standpoint of UX and aesthetics, it was really just Mac doing new things with all-in-one workstations.

iMac G5

Released in August of 2004, the first iMac featured a 1.6 GHz processor (1.8 GHz on the high-end model), 256MB of 400 Mhz PC-3200 DDR SDRAM, 80 GB HD, and an Nvidia Geforce FX 5200 graphics processor. It also came packed with the 4th major iteration of Mac OS X, Panther (version 10.3).

Slim, sleek, and monochromatic, the model inaugurated a new design language at Apple (one that remains in place to this day). Gone were the color options of the earlier iMac, replaced with a Henry Ford-esque emphasis on uniformity and utility.

5 months later, an upgraded model was released with an integrated webcam (dubbed the ‘iSight’). 

Laptops become less brick-like

If the 1990s were all about beige-grey tower computers, the 2000s were all about the rise of the laptops.

If you did your undergrad in this era, you may have memories of lugging your bulky Toshiba Satellite X205 or HP Pavilion dv6000t to class, then hoping the battery didn’t die before the end of your one-hour lecture. 

In response to this weightiness, a fresh new subcategory of small, light laptops appeared in the mid-2000s. They were known as “netbooks.”

Here are a couple of machines that defined the era. One PC, one Mac. 

Asus Eee 

The Asus Eee PC 701 series, launched in 2007, was the first “netbook” marketed in Western countries. In case you were wondering about its slightly off-kilter name, the three E’s are for “Easy to learn, Easy to work, and Easy to play.” 

Japan had netbooks and ‘subnotebook’ type computers for many years before this device hit the global market. Curiously enough, it took Taiwan-based Asus to culturally mediate and realize the potential of this type of device within a non-Japanese context.

The concept was simple: offer a cheap machine with stripped-down specs that could do email, word processing, and Internet on the go. For unfussy users that rarely did anything system-intensive, this was totally fine. 

The Asus Eee is indeed a teeny-tiny computer, approximately two-thirds the size of a standard 13.3” laptop, with a 2, 4, or 8 GB solid state drive, depending on the model. Wi-Fi capabilities came standard.

The original units ran on Linux, overlaid with Asus’ own proprietary OS. Later models offered Windows XP, 7, and 8.1. 

On release, the low-end model retailed for about $300, far below the $1,000+ price tag of most laptops of the time.

MacBook Pro

On January 10, 2006, Steve Jobs unveiled the very first MacBook Pro. The MacBook Pro succeeded the PowerBook G4, the last of the PowerBook series that had debuted way back in 1991. The word ‘Power’ was out; ‘Mac’ was in. 

1-inch thick and 5.6 pounds, the original model was powered by an Intel Core 2 duo processor at a clock speed between 1.83 GHz and 2.16 GHz. It also had two USB 2.0 ports, one FireWire 400 port (later models had FirewIre 800 and S-Video ports), an integrated iSight webcam, and used the very first MagSafe magnetic power connector.

In June 2007, an LED-backlit screen model was offered, which improved battery life. On October 14, 2008, Jobs unveiled a sleeker unibody enclosure that has defined all MacBook models since.

At launch, the original MacBook Pro had a suggested retail price of $2,499.

Tiny computers in our pockets: smartphones go public

Moore’s Law states that the number of transistors in a microchip doubles about every 2 years (i.e. you get twice the power in half the space). Intel co-founder Gordon Moore made this observation way back in 1965. 

By the end of the 20th century, this process of exponentially shrinking computer components meant you could have a tiny computer inside a hand-held device, like a phone.

And on that point, believe it or not, smartphones actually predate the iPhone by many years. Of course, there’s no denying that the iPhone was the smartphone to kick-start the market and make the devices ubiquitous, but other companies were testing the waters of this market as far back as the mid-90s. 

In 1996, Nokia launched the Nokia Communicator 9000, the first mobile phone with internet capability. Before the BlackBerry, it already featured a proprietary OS and many primordial features of contemporary smartphones. It also had a whopping 33Mhz CPU clock speed.

But the smartphone ecosystem was truly primitive at that point. The first iteration of a cell network with half-decent data transfer capability appeared in 1999 when Japanese telecom giant NTT DoCoMo launched i-Mode. i-Mode was the first internet mobile services platform, with data transfer speeds of 9.6 KB per second. 

The internet platform was limited, however, by the custom firmware used by different phone manufacturers (there were no Android/iOS-style standardized OSes, making software development cumbersome). Additionally, product features were tailored to the Japanese market, and Japanese phone companies were already making good money in Japan, so they didn’t feel compelled to take the risk of taking their tech to foreign markets. 

Outside Japan, Western companies started chipping away at the global market for smartphones. 

Treo smartphone series (Treo 100/300/600/650/700w/700p)

The Treo 180, the first in the series, was released in 2002. It was followed up by the Treo 300, which featured a proprietary browser called “Blazer,” 256 colors and a built-in keyboard. Both had clamshell, flip-phone designs.

The Treo 600 and later models ditched the clam design for a cramped together QWERTY keyboard and a bunch of other function buttons. 

All Treo smartphones ran off a proprietary operating system called Palm OS. Treo’s phones also included Palm Desktop, an app allowing Mac sync support. Later models adopted the Windows Mobile platform (a portable Windows platform that failed to capture a significant market share and was phased out in 2010).

iPhone (1st generation)

The original iPhone was presented on January 9, 2007. As you might expect, it quickly killed off Treo smartphones and other similar devices (*cough* Blackberry *cough*). 

The device’s responsive touchscreen allowed app designers to map features on-the-fly, rather than being beholden to functions matched to a creaky little plastic keyboard. The virtual keyboard feature also meant it was possible to toggle between different languages quickly, a  super helpful innovation for bilingual and multilingual people.

A proximity sensor decreased the screen’s brightness when the device was held to the ear to take a call. An accelerometer sensed when the device was being re-orientated from vertical to horizontal, switching the display from portrait to landscape mode automatically. 

The device boasted a 3.5” display at 320x480 resolution and was offered in 4 GB, 8 GB, and 16 GB flash memory versions at price-points to match. Integrated Wi-Fi support and Bluetooth 2.0 gave it excellent Internet capabilities, while a 2.0 megapixel camera opened up a new world of image sharing. 

The original iPhone was 0.46 inches thick and weighed 4 ounces. Its battery was a bit of a revelation as well, offering up to 24 hours of audio playback, 8 hours of calling, 7 hours of video, and 6 hours of web browsing on a single charge.

The 4GB and 8GB models available at launch retailed for $499 and $599 respectively and required a 2-year contract with a telecom provider.

Recession, recovery, recession

In the 2000s, the boom times and big moves of the 90s gave way to iterative upgrading, as computers became firmly anchored in all of our lives. Laptops got smaller, better, cheaper, and became far more widespread. Shrinking microchips meant we could stick computers in our pockets. 

This eight-year timespan, buffered on both sides by financial meltdowns, quietly set the stage for the present-day state of computer tech.

In 2008, the global economy went kaput. The Great Recession reshaped the world of finance, but so too the world of computing. In the wake of the crisis, a new emphasis would be placed on companies being agile and lean, adaptable to changing market circumstances in a more cautious, reactive way, and scaling up sustainably. 

At the same time, the further rise of social media, ecommerce, and cloud computing would make computers an inescapable part of daily life to an unprecedented degree. 

Stayed tuned for the final article in this series, Part VII, where we check out 2008-2019, from the post-recession recovery era to the tech boom we live in today.