Steve Wozniak interview: iconic co-founder on the iPod, iPhone, and future for Apple

Steve Wozniak was such a chronically shy teenager he could barely summon the courage to speak to other kids, instead he would spend his evenings tinkering with calculators and dreaming of super computers.

He's a different man today. Mr Wozniak, or Woz to use one of his many nicknames, has just had a roomful of high-powered businessmen in stitches as he recounted the rocky beginnings of one of the world's most loved companies.

Mr Wozniak is the electronic engineering genius who co-founded Apple with marketing ace and teenage friend Steve Jobs.

His first love was a super computer, a poster of which he had pinned to his bedroom wall. "I told my dad I wanted to buy one, he said it would cost as much as our house. I replied: 'That's OK I'll live in an apartment'".

During his years studying, but not completing until decades later, electrical engineering and computer sciences at the University of California (Berkeley) he started down the road to professional technology development by taking on freelance commissions to design software for established companies.

When he was given his first commission to design a computer game for Atari he could barely contain his excitement. "I thought 'Oh my god, It would be the highlight of my life to design a game that kids would actually use. Steve and I didn't sleep for two days to get it done on time." His enthusiasm and creativity is clearly undiminished to this day: he still lies in bed at night imagining the next world changing "killer app".

The two Steve's were polar opposites but their differences made the company they founded, which now has market capitalisation of $92bn, work. "Steve was into everything hippy, he ran around shouting 'free love man' and eating seeds" as he embraced the flower power set. While "the second Steve", as Mr Wozniak became known, was still unable to overcome his nerves.

Even when he landed his dream job at Hewlett Packard developing calculators he was "still the sort of person who would never have a wife or a family" so he would go home watch a little Star Trek and then work on projects all night.

Indeed Apple may never have seen the light of day if Hewlett Packard (HP) had recognised the 58-year-old Californian's flair and creativity. His idea for the Apple I computer, which would transform the future of personal computing, was turned down by his employer no less than five times. "Oh my god, I wanted it so badly," he recalls.

Bill Hewlett, co-founder of HP with Dave Packard, later simply said "you win some, you lose some".

Despite the constant knock backs, Mr Wozniak was "almost too ethical" to leave HP when "the angel" Mike Markkula offered 'the Steves' $250,000 to set-up their own company. "I thought I owed it to HP to stay. But Steve [Jobs] got at all my family and they convinced me I had to do it".

Although he has been "basically retired" from Apple since 1987, it is clear his love for the company will never be diminished. He was never in it for the money, as his surprisingly frank and honest comments on the future of the company and the technology industry testify.

Last week Apple's shares tumbled nearly 20pc after two analysts downgraded the stock on fears that the consumer spending slowdown could seriously hit future profits.

While many company founders would steer well clear of commenting on valuations, Mr Wozniak says the downgrade was "correct": an admission which could wipe further millions of the shares which have fallen by from a high of $179 in August to just over $100 on the close last week.

In fact he believes: "It is time for the whole computer industry to maybe have a bit of a slowdown. For twenty years we have been in this replacement and upgrade market," he says. "It is very easy to postpone that when there are financial irregularities."

He says investment houses' over-valuation of web 2.0 and social networking websites could even lead to a minor version of the dotcom crash which saw $5 trillion wiped of the market values of technology companies between March 2000 and October 2002.

I begin to wonder whether he was even briefed by the Apple press office when he predicts the imminent death of the company's most popular product, the iPod.

"The iPod has sort of lived a long life at number one," he says. "Things like, that if you look back to transistor radios and Walkmans, they kind of die out after a while.

"It's kind of like everyone has got one or two or three. You get to a point when they are on display everywhere, they get real cheap and they are not selling as much."

Mr Wozniak even speaks out against the iPhone 3G, Apple's latest cult product which caused pandemonium in the West End when it was launched in Apple's Regent Street store this summer.

"Consumers aren't getting all they want when companies are very proprietary and lock their products down," he says when comparing the iPhone's closed operating system to the new Google phone's open source system which allows anyone to modify and adapt the way the phone works. "I would like to write some more powerful apps than what you're allowed," he laments.

If consumer technology spending plummets, and the indications are it will, Apple should be better placed than others to survive as many of their customers buy their products with almost religious devotion.

While many companies would give their all for such strong customer loyalty, both Mr Wozniak and Mr Jobs "don't like the fact that it's a bit of a religion".

"I would like to have the users influence the next generation," he says. "With a religion you're not allowed to challenge anything. I want our customers to challenge us."

Despite his frankness throughout the interview he clams up when pressed on speculation about future product launches, claiming that "nobody, not even Steve Jobs" knows what's next.

"I think he would be sitting there [unaware] right up until the day it is introduced." However, he let slip that Apple's future could lie in an "iWatch".

It is clear his teenage shyness is a thing of the past, but his inner geek certainly remains. Who else but the co-founder of Apple would name his dogs X, Y and Z, and consider naming his child Zowoz "because it's a palindrome"?