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Chester L. MillerCase 1: Apple ComputerTM583 – Strategic Management of TechnologyNovember 2, 2009Founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne in California, AppleComputer, Inc., now Apple, Inc., has experienced a roller coaster like existence over theyears. Shunning industry norms for the creation of its inventions, Apple Inc. has become asuccess story late in its existence due to the reimergence of Steve Jobs as leader of themultinational corporation. Prior to Jobs return, Apple was on the brink of dissolution causingmany industry insiders to write it off as one of the great companies that lost its way.Over the years, Apple experienced great successes and tremendous failures in key marketssegments. Of their most publicized failures was the

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when it made its debut in 1983 amidinternal wars with fellow inventors for a competing low cost personal computer. The

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wasthe first personal computer to market with a GUI (Graphical User Interface), but with a highprice tag and limited software titles it became a commercial failure. The MachintoshPortable computer, which came to market in 1989, another failure, was Apple’s first attemptat a battery powered. At a heavy 15.5 lbs and a $6500 price tag, the Machintosh Portablecomputer found few customers. Moreover it suffered from design flaws in the battery supplywhich caused harsh criticism from the industry. This resulted in Apple learning a valuablelesson from key mistakes and returning with a more popular model a few years later. In aneffort to address the Personal Digital Assistant market or PDA, Apple introduced the Newtonin 1993. The Newton suffered from project slippage and poor customer education, a termcoined scope creep. Scope creep occurs when the scope of a project is not properly defined,documented or controlled. Another of Apple’s biggest failures was its most notable changesin leadership over the years. The internal struggles between CEO John Scully and Steve Jobscaused Apple to lose its sense of direction. Steve Jobs eventually resigned from the companyand started NeXt. With subsequent failures in Taligent, Apple’s futuristic operating systemwith a new graphical user interface, a huge reduction of its workforce resulted causing Appleto undergo reinvention in the 90’s. Failed alliances with IBM and Motorola for the creation ofa new platform for its outdated Machintosh coupled with changes in leadership, Applesuffered a tumultuous existence throughout the 90’s.As Apple’s failures placed the company on the brink of failure and caused many to believethey would eventually fade away like a bad sunset, they endured and persevered with notablesuccesses which led the industry in innovation. Noted successes include the Machintosh whichdebut in Jan. 22, 1984. It’s clever ad campaign during Superbowl XVIII made it a big hit. Itwas the 1

affordable computer to offer a graphical user interface. Its creation along withsupporting software applications and advanced graphical cabilities was responsible forcreating the desktop publishing market. Following the failure of its first attempt at aportable labtop, Apple introduced the Powerbook 100 on October 21, 1991. It was muchlighter than its ancestor, the Machintosh portable, at 7lbs and had a battery life of 3hours.The Powerbook was innovative in that with several major revisions and redesigns, often beingthe first to market incorporating the latest features allowed it to become the standard forcompeting laptops. One of the greatest successes in Apple’s storied history is the IMac.Introduced in August of 1998, the all in one design available in different colors sold over 6million. The IMac was the product which largely caused Apple’s return to profitability in themid 90’s. With the unveiling of MacOS X in March of 2001, Apple reasserted itself in the OS

market with a stable counterpart to the Windows OS. Mac OS X combined stability,reliability, power and security based on a platform of the Unix operating system.With the advent of the Ipod in November 2001, Apple reinvented itself from a computercompany to an electronics company. Apple became a formidable player in the music download business. It is notable to add that Steve Jobs was at the helm of Apple during thisreinvention as a consultant and soon returned as the CEO of the company. Steve’s inventionswhile at start up, NeXt, were used to improve Apple products and reinvigorate its product lineand innovation. From the Ipod came Itunes, Apples music download store in August 2003.Rounding out its successes is the Iphone, introduced in January 2007; Apple revolutionized thesmartphone market and turned the industry upside down. It was named the invention of theyear by Time magazine and has made Apple an industry leader in key markets.Much of Apple’s success and failure is congruent with its culture. Bucking traditional trendsand definitions of what a corporation should be in terms of organizational structure andcorporate attire, Apple and other companies on the West Coast in the Silicon Valley corridorembraced individuality and creativity in its culture. This resulted in the many innovationswhich were industry firsts, setting the bar for the industry and forcing its competitors to playcatch up. It is this corporate environment which attracts the brightest talents fosteringexcellence. Apple is credited with putting Silicon Valley on the map and creating the hard-working yet corporate-casual environment. With its rebel spirit and innovative masterpiececommercial, “1984”, representing the coming of the Macintosh computer, the commercialserved as a means of saving humanity from “conformity.” It is these efforts which highlightApple’s rebellion and empowerment of the PC user from the products produced by itscompetitors, Microsoft and IBM. Steve Jobs stated once, “It’s better tobe a pirate than jointhe navy.” addressing concerns that IBM was creating a stuffed shirt atmosphere with itscorporate culture. Apple’s culture, today, reflects a continued intense work ethic and casualdress code. According to Apple’s workplace surveys, employees often leave the impressionthat there’s no better place to work than Apple. “Funny, brillian, relaxed” co-workers and“modern, spacious, beautiful” offices “filled with comfortable couches and huge picturewindows make time a pleasure.” “I can’t imagine any reason not to work here.” Standing asa rebel bucking trends and shunning industry norms created by IBM and Microsoft has enabledApple to be innovative.In closing, Apple’ss actions apply directly to the TCO’s. With TCO-A, Apple’s history hasprovided a wealth of information and insight into its ability to be innovative and compete inthe personal computer and consumer electronics market. Apple’s history of licensing and lackthereof is a direct reflection of its ability to protect its technological innovations. With TCO-B, once Apple realized it was losing money and market share with better products fromlicensees, Apple backed away from the licensing strategy enabling it to protect itsinnovations. Apple’s core technological competencies, TCO-C, were evident as a personalcomputer company prior to 2000. It changed its name to Apple, Inc. to reflect its foray intothe comsumer electronics market. TCO’s D, E, and F show how Apple has been able to buildalliances with Intel, IBM, Motorola, and others to reflect its desire to gain market share andbecome a more formidable competitor. Realistically, it was a slight turn from its originalcorporate culture of being a rebel. To become more successful in the PC market, Apple hadto embrace Intel and the Pentium achitecture and run Microsoft software products on itsmachines. Apple’s successes and failures has provided many lessons that will teach othersregarding strategies facilitating the success of a technologically driven organization.