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APPLE Inc

APPLE Inc

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Published by: Avinash Ramesh on Nov 24, 2010
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APPLE Inc APPLE Inc An Overview y y y Apple Inc (previously Apple Computer, Inc) is an American multinational corporation that

designs and markets consumer electronics, computer software, and personal computers. The company's best-known hardware products include the Macintosh line of computers, the iPod, the iPhone and the iPad. Apple software includes the Mac OS X operating system; the iTunes media browser; the iLife suite of multimedia and creativity software; the iWork suite of productivity software and its iOS Mobile Operating System. As of August 2010, the company operates 301 retail stores in ten countries, and an online store where hardware and software products are sold. Apple Computer Inc renamed itself as Apple Inc inorder to mark its foray into the consumer electronics market in addition to its traditional focus on personal computers.

y y

APPLE Inc Evolution Timeline 1976-1984 The early years y y Co-founded by Steve Jobs and Steve Wozniak, Apple s mission was to bring an easy-to use computer to the market. Apple computers courtesy of their unique proprietary design, technical excellence and ease of use sparked a computing revolution and quickly became the industry leader during these years esp with the release of Macintosh.

1985-1993 - The Sculley years y y y y y y With Apple s net income falling due to stiff competition from IBM-compatible PC s, John Sculley who took over as CEO from Jobs in 1985, made some significant strategic business decisions. Sculley s strategy was to make Apple a leader in desktop publishing as well as in education. He also aggressively tried to bring Apple into the corporate world. Although Apple offered a more complete desktop solution and enjoyed better brand loyalty than its competitors, Apple s market share continued to plummet during the late 1980 s. Inorder to overcome this setback, Sculley revamped Apple s strategy by making it a low-cost producer of computers with mass-market appeal. Mac Classic was introduced on this objective. Sculley also forged collaboration with Apple s rivals (esp IBM) on mutually beneficial terms. Sculley also aimed to drive down costs by shifting much of its manufacturing to subcontractors.

Yet. The successful outcome of these above measures inturn marked an upswing in the fortunes of Apple as its market share increased considerably during this period. Under Jobs. Secondly. Thirdly. Apple continued its restructuring efforts. Apple also pared down its inventory significantly and increased its spending on its R & D. he consolidated and trimmed Apple s product range by reducing the number of lines from 15 to 3. International growth became a key objective of his agenda. turned out to be Apple s savior when he again took charge of the company in 1997. y y y y . Inturn he pushed Apple into high-margin segments such as servers. Firstly. Apple continued to lose momentum. It outsources manufacturing of Mac products to Taiwanese contract assemblers and revamped its distribution system. He inturn introduced measures to revive Apple. He introduced a string of measures which marked a sharp turnaround in Apple s fortunes. in 1993 Michael Spindler took over as the CEO from Sculley. As a result. As a result he brought the Macintosh licensing program to an abrupt end. 1997-2007 Steve Jobs and the Apple turnaround y y y y y y Steve Jobs. Apple was not just technology company but rather a cultural force. in 1996 Gilbert Amelio took over as the CEO from Spindler. Apple s market share continued to decline between 1996-1997. Internet access devices and PDA s. He also moved to slash costs. For Jobs. Amelio infact led Apple through three reorganizations and several deep payroll cuts. despite his best efforts. Jobs also set about to reenergize Apple s image by promoting the company and its products as a hip alternative to other computer brands. he recognized that the Mac clones were cannibalizing Apple s sales. Yet. He introduced the idea of creating Mac clones and killed the plan to put Mac OS on Intel chips. Spindler again brought back the focus on core markets: education and desktop publishing. As a result. despite Spindler s best efforts. eliminating relationships with thousands of smaller outlets and expanding its presence in national chains. Apple could not sustain its profitability. .1993-1997 The Spindler and Amelio years y y y y y y y Despite Sculley s measures. Amelio s strategy made Apple to return to its premium-price differentiation strategy. he collaborated with Microsoft and reaffirmed their commitment to develop core products such as Microsoft Office for the Mac. reduced the workforce and the spending on R&D.

Some of its key features include faster network service.During the period between 2007-08. iPhone3G . The iPod product line represents a excellent combination of state of the art R & D together with increasing operational efficiency (i.is the revamped version of the iPhone. Apple TV is a device which enables users to stream movies and TV shows to a television set after downloading the content from iTunes via PC. In April 2010. security and support for standard interfaces made the Mac score over its competitors. the phone suffered from reception issues owing to the new stainless steel design. Apple also recognized that Office products was critical to its market viability and thereby collaborated with Microsoft to ensure Office suite is available on its Macintosh machines. Apple made significant strides towards enlarging its installed base. Apple still has not been able to tap the largest mobile market in the world China due to failed negotiations with the local carrier.2007-present Macintosh & Mobile consumer electronics era y y y y y Macintosh .e decrease in expenditure owing to the usage of flash drives) and better customer satisfaction. iPod classified as the icon of the Digital age was a path breaking product introduced by Apple in 2001. iPad . Apple managed to sell 6 million iPhones. ease of use. High pricing and limited functionality kept the sales of this device low. and a new uninsulated stainless steel design. multitasking. the Mac sales accounted for 43% of Apple s total revenue. By embracing Intel microprocessors in its Macintosh products. Apple released the fourth generation iPhone. iPhone4 . there was some key drawbacks in terms of the low storage capacity and poor battery life. its worldwide mobile handset market share was still less than 1%. Irrespective of the above points. However. The advent of iTunes had a significant impact on the sales of the iPods although its direct impact on Apple s profitability was far less impressive. A much improved model called Apple TV take two was released in early 2008. issues with unauthorized resellers selling iPhones in gray markets and its usage on unsanctioned networks plagued its sales significantly. However. In 2008 alone. which introduced video calling.In June 2010. iTunes represents the first legal site that allowed music downloads on a pay-per-song basis. However. the iPad running a modified version of iOS. which acts as the phone's antenna. Apple introduced their much-anticipated media tablet. the Macintosh computers remained a pivotal business for Apple. Falling component costs and design improvements helped to reduce the iPhone s cost structure while lower consumer pricing and wider international distribution helped to fuel sales.000 units on that day and reaching 500. By mid 2008. this store claimed 70% of the worldwide digital music market. Some of the key features in the Macintosh like interoperability with other machines. iPhone is a multifunction communication device nicknamed the Internet in your pocket was launched by Apple in mid 2007. a new pricing model and a new platform for adding third-party applications to the device. Although by mid 2008.000 by the end of the 1st week. the iPad was launched in the US and sold more than 300. y y y y y y .In early 2010.

interoperability with other devices and support for standard interfaces like USB port which cannot be matched up by its competitors. This also represents a case of customer focus. Apple markets its Mac products highlighting certain features which differentiates it from other PC s. By embracing Intel microprocessors and also incorporating Office Suite in the Macintosh product. Apple with the advent of the iPhone has redefined the smartphone market completely given the host of features it offers. Apple controlled all aspects of its computer and could inturn provide its customer with a more complete desktop solution than its competitors. y y y y y y y y y y . The real value add however comes with the support for downloading third party appilications from Apple s App store to the device. Apple with the advent of the iPad has come up with another path breaking invention which is unique in its own respect. This inturn helped to safeguard the interests of the various music labels. Some of the distinct features include attractive design. As a result Apple customers love their Macs while IBM customers put up with their IBM PC s. Apple invested more heavily in R & D than its competitors. the emphasis here is more on the value for money (wherein each song download costs only 99 cents) generated for the customer albeit Apple only makes a dime from this deal. Apple s strategy with regard to iPod is related to its maintaining of relationship with its key suppliers (i. high quality bundled software. By virtue of this.e flash drive manufacturers). This supplier oriented collaboration inturn helps Apple to reduce its operational expenditure. firstly the content is far superior to any other competitor. Apple was also the first company to to employ the DRM (Digital Rights Management) system called Fairplay to protect iTunes songs against piracy. foolproof security. Secondly. Thirdly. ease of use. The Apple retail experience definitely benefitted the sales of the Apple Mac as it rode on the halo effect created by the iPod which drew customers to the Apple retail store. Apple practiced horizontal and vertical integration to a greater extent than any other company. This inturn enabled Apple to focus and invent path breaking products. Apple gained more acceptability among the worldwide PC community.APPLE Inc Strategy (Key Differentiators) y Apple is known for incorporating its philosophy of comprehensive aesthetic design in its products most of which was proprietary. Apple tries to distinguish itself from its competitors by creating machines which are cutting edge and provide a tightly integrated user experience. Apple almost enjoys a complete monopoly in the market with regard to the iPad as there is no other similar product from its competitors which can match up to the iPad. This feature represents a unique offering from Apple and is not matched by any of its competitors. This feature infact provided Apple with a distinct competitive advantage over the IBM compatible PC s which could be easily cloned. In the earlier years. With reference to the iTunes Music store.

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