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  • 1.2. The Early 1980s and John Sculley
  • 1.3. The Change in Structure
  • 1.4 The New Organization without Jobs
  • 1.5. The present Apple’s structure
  • 2.2. Promotion:
  • 3.1.1. Focus on design
  • 3.1.2. Believe in Jobs
  • 3.1.4. Believe Apple is better than all others
  • 3.2. Culture of Secrecy
  • 3.3. Threat of Rivalry:
  • 3.4. The Threat of Suppliers:
  • 3.5. Threat of Buyers:
  • 4.1. AIM alliance
  • 4.2.2. Background to form alliance:
  • 4.2.3. Apple-Microsoft alliance:
  • 4.2.4. Benefits of the alliance:
  • 4.2.5. Results of the alliance:
  • 4.2.6. Element to the success of the alliance:
  • 4.3.2. Background to form alliance:
  • 4.3.3. Apple-Nike alliance (Competitive alliance):
  • 4.3.4. Benefits of the alliance:
  • 5. List of mergers and acquisitions by Apple

The members of Group 4

:

1. Trần Thị Hoàng Phượng 2. Lai Kim Thuận 3. Nguyễn Thị Thanh Lê 4. Võ Thỵ Kiều 5. Nguyễn Thị Xưa

082719Q 080879Q 082701Q 082698Q 080888Q

 Foreword
If there’s one company that is the envy of the high-tech community these days, it’s Apple. Steve Jobs is hailed as a genius CEO and lauded for a string of hit products. Apple Inc is an American multinational corporation that designs and markets consumer electronics, computer software, and personal computers. Apple’s market capitalization is over $200 billion dollars currently, easily ranking it in the top 10 companies in the world by market cap, and just shy of Microsoft for biggest technology company. Apple has once again been named the most admired company by Fortune magazine, and it did so with the highest margin of victory the magazine has ever recorded for a number one - Apple scored a 7.95 on the index system used by the magazine, while number two Google scored a 7.70. To get its list of the Top 50 Most Admired Companies, Fortune's survey asked businesspeople to vote for the companies that they admired most, from any industry. Apple was voted #1 for the third year in a row in a poll of executives, industry analysts and company directors. Apple is delivering an experience that makes customers happy to spend as much money as they can afford to spend. With 250 million iPods, 43 million iPhones, and 32 million iPod touches sold to date, plus the promise of a gamechanging iPad, Apple won this year's vote by the highest margin ever for a No.1. ." While so many companies are struggling to break even in the current recession Apple is getting stronger day by day. The last three years has seen Apple's profits soar, take a look at these figures: a profit of 8.2 Billion in 2007 followed by a profit of 11.2 Billion in 2008 and most recently a profit of 17.2 Billion in 2009. That is more than a 100% growth in profit from 2007 to 2009- Incredible! "What makes Apple so successful? Product, product, product," the magazine wrote about Apple ". This is the company that changed the way we do everything. Its track record for innovation and fierce consumer loyalty translates into tremendous respect across business' highest ranks." Everyone wants to understand the secrets of Apple’s success. This essay help us find what Apple’s secrecy and CEO Steve Jobs’s leadership.

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 Table of content: Foreword ......................................................................................................................................1 I. History of the Apple company corporation..................................................................................4 1. Operating History...................................................................................................................4 2. Product History......................................................................................................................6 3. Steve Jobs.............................................................................................................................13 II. Organizational Architecture......................................................................................................18 1. Organization structure..........................................................................................................18 1.1. The history of Apple management structure...............................................................18 1.2. The early in 1980s and John Sculley..........................................................................18 1.3. The change in structure...............................................................................................18 1.4. The new organization wthout Tobs.............................................................................22 1.5. The present Apple’s structure.....................................................................................24 2. Incentive system...................................................................................................................30 2.1. Reward........................................................................................................................30 2.2. Promotion....................................................................................................................30 3. Organizational culture..........................................................................................................30 3.1. Apple corporate...........................................................................................................30 3.2. Culture secrecy............................................................................................................31 3.3. Culture of Innovation..................................................................................................33 III. Apple’s environment................................................................................................................33 1. General.................................................................................................................................33 1.1. PC industry..................................................................................................................33 1.2. Apple international......................................................................................................34 1.3. Interbational growth....................................................................................................34 1.4. Analysis of environment change.................................................................................34 1.5. Apple response to the environment change................................................................35 2. Apple’s Competitor..............................................................................................................37 3. External analysis..................................................................................................................39 4. Internal analysis...................................................................................................................42 IV. Business strategy.....................................................................................................................43 1. The change of strategy.........................................................................................................43 1.1. Beginning....................................................................................................................43 1.2. Sculley with strategy of low cost in 1990...................................................................43 1.3. 1990-1995: Apple vs Microsoft..................................................................................44 1.4. 1997-Steve Jobs: Matrix product................................................................................47 1.5. Apple’s present strategy: Product Differentiation......................................................47 2. Apple’s competition.............................................................................................................48 2.1. Apple’s competitive advantage...................................................................................48 2.2. Apple’s weakness........................................................................................................49 2.3. Creation & sustainning of competitive advantage......................................................49 2.4. 11 Effective strategy Apple uses to create loyal customers........................................49 3. Branding strategy.................................................................................................................51 3

4. Apple’s alliance...................................................................................................................52 4.1. AIM alliance...............................................................................................................53 4.2. Apple – Microsoft alliance..........................................................................................53 4.3. Apple – Nike alliance..................................................................................................56 5. List of mergers & acquisitions by Apple.............................................................................58 V. R&D and Marketing..................................................................................................................60 1. Marketing strategy...............................................................................................................60 1.1. The marketing tactic...................................................................................................60 1.2. Ipod marketing plan....................................................................................................61 1.3. Apple Iphone marketing plan......................................................................................62 1.4. SWOT analysis...........................................................................................................64 1.5. Marketing objectives...................................................................................................65 1.6. Marketing Mix strategy...............................................................................................65 1.7. The real secret of Apple’s successful marketing strategy...........................................66 2. R&D.....................................................................................................................................66 2.1. Apple’s R&D..............................................................................................................66 2.2. Marketing research......................................................................................................68 2.3. 4 Innovation secret......................................................................................................68 3. Apple’s advertising..............................................................................................................69 VI. Apple’s financial analysis........................................................................................................73 VII. Reference................................................................................................................................78

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opened in California. • 1976: December . • 1976: Wozniak proposes that HP create a personal computer. • 1976: April . • 1978: Apple Computer begins work on an enhanced Apple II with custom chips.Apple I computer board is sold as a kit. • 1978: Apple Computer begins work on a supercomputer with a bit-state architecture. iPod music player. 1. which they call the Apple I computer. provides the first system of the Apple II. 175 Apple I kits have sold. • 1979: September . and Macintosh computers.I. and sent to the shop of Steve Jobs and Steve Wozniak. for $ 1295. • 1979: June . and the combined company on January 3. codenamed Lisa. Co-founder Steve Jobs and Steve Wozniak created Apple Computer into effect April 1. with "computer" from its name and continue to release the iPhone and iPad. one of the first computer stores. • 1977: April . Apple established itself as a leader in the consumer electronics industry. but was soon convinced that he should leave and join Apple Computer. for U. $ 666. is a multinational corporation that creates consumer electronics. $ 1195.2. Apple Computer has been primarily a manufacturer of personal computers. 1977. code named Annie.Apple Computer. • 1976: March . With the introduction of successful iPod music player in 2001. Apple is the largest technology companies in the world.S.000 units were sold. Operating History:  1973-1984: Jobs and Wizniak: • 1973: Steve Wozniak joined HP. formerly Apple Computer Inc. 50. • 1977: May .Steve Wozniak and Steve Jobs finish work on a computer circuit board. and brought a new philosophy of the company's products are recognized and simple design . with 48KB memory. • 1976: July . 1976. computer software.Wozniak remains at HP. on April Fool's Day. For over two decades. in Cupertino.10 months after its introduction. Macintosh. • 1979: October .Steve Wozniak and Randy Wigginton demonstrate the first prototype of the Apple II at a Homebrew Computer Club meeting. California. He was denied. and Power Mac line. but faced revenue and market share in recent years low stone 1990. Today.Apple Computer introduced the Apple II Plus.Steve Jobs and Steve Wozniak formed Apple Computer Company. • 1976: October .5 years after the introduction of the Apple II.Apple Computer moves from 'Jobs' garage to an office in Cupertino.S. who was ousted from the company in 1985. • 1976: August . and commercial servers.Apple Computer sold 35. Apple's core product lines are the iPhone. returned to become chief executive of Apple in 1996. HISTORY OF THE APPLE COMPANY CORPORATION Apple Inc. • 1977: March . Price: U. • 1975:The Byte Shop..Steve Wozniak begins work on the Apple II. including Apple II. 5 . Jobs. with the release of the Apple I.66.000 Apple II computers for the financial year.

Apple introduced the Macintosh Plus. • 1983: June .• 1984: Apple sells 250. its original price is $ 10. and Macintosh operating systems.000 units sold in total (90. • 1983: July .Apple Computer introduced the Apple III.Apple Computer announced that 70.retirement Apple Computer and Apple III Apple III +. an Apple II computer workalike. • 1980: September . During its lifetime. 100. • 1981: Apple Computer officially reintroduces the Apple III. $ 3499.Apple Computer officially begins marketing the Lisa computer.The Macintosh XL (formerly called Lisa) is dropped from the line of Apple computer products.S. • 1981: September . $ 4. • 1984: January . 5MB file.Apple Macintosh Computers and abandon the original Macintosh 512K.Apple Computer sells over 78.S. • 1984: November . • 1984: January . Price is $ 2600.Apple introduces the Macintosh 512K enhanced. • 1986: July .500 to $ 8. which will become the Apple IIe. $ 2000.Apple Computer introduced its first hard drive. • 1986: April .Apple Computer has officially launched Lisa computer. It uses all new software. • 1986: April .S.Apple Computer introduces the Apple IIe for U. • 1983: June .Apple Computer released the Apple IIc. • 1985: April . • 1980: Apple Computer begins project "Diana". to U.000. priced U. • 1982: Franklin Computer Corp. • 1982: Sales of all Apple II systems to date: 750.000 Apple II computers in the fiscal year. • 1985: March . • 1984: April . • 1986: January . with improved software and a hard disk. for U.Apple Computer begins shipping the Lisa.Apple Computer Macintosh XL abandoned. • 1983: December .The 2 millionth Apple II computer is sold.Apple Computer officially renamed Lisa Macintosh XL.000. Spindler. for U. • 1983: June . $ 1300.  1985-1997:Sculley.Apple released a new version of the Lisa computer.Apple Computer introduces the Apple IIe enhanced. $ 3200.S. an Apple II computer workalike. announced the Franklin Ace 1000. • 1983: December .000 made). Lisa 2. • 1982: Apple Computer becomes the first personal computer company to reach $ 1 billion in annual sales.Apple introduces the Macintosh 512K for U. • 1984: April .• 1979: Apple Computer begins work on "Sara".Apple Computer introduces the design of the Apple III Apple III +. • 1983: January . $ 1400.000. • 1983: June .000. • 1983: Franklin shows an operating Franklin Ace 1200 Apple II compatible for U.Unitronics shows Sonic.000 th Macintosh system. the codename for what would be the Apple III. • 1984: September . the first legal (at) Apple II clone. • 1984: May .S. 6 . with only 65.000 Macintosh computers have been shipped in the first days after notification of 100. $ 2200. • 1982: Sales of Apple II Plus to date: 45. Steve Jobs introduced the Apple Macintosh.Apple Computer. • 1980: Apple ships the first Apple III units with limited numbers. • 1983: January .Apple launches new Macintosh to the press.one millionth Apple II was made.Video Technology introduces the Laser 3000.S. Amelio: • 1985: January . Prices range from U. • 1980: May .000 units were produced.S. $ 3000.S.

• 2001: May .Apple Computer introduces the Macintosh SE/30.A new iMac based on the G5 processor was unveiled and was made available in mid-September. • 2004: August .The first Intel-based machines. • 1997: Entering into partnership with Microsoft. U. 7 . • 1989: September . using the G4 processor.Steve Jobs officially announced that Apple will begin producing Intel-based Macintosh computers beginning in 2006. • 2010: January . for U. • 2005: June . • 2001: October . $ 6500. • 1987: March .Eric Schmidt left Apple of board. Next and its Next step operating system.S.Apple Computer introduces the open architecture of the Macintosh II.Apple Computer announces the Macintosh IIci.S.Apple announced the opening of a line of Apple retail stores. Open. • 1987: March .Apple purchased Steve Jobs' company.Apple Computer introduces the Apple IIGS. were introduced. • 1987: January . • 2001: Apple introduced Mac OS X. • 2009: August . • 1987: March . $ 8700. • 2004: December .Apple introduced the Apple Store. for U.Apple Computer announces the Macintosh Portable.The phone carries the iOS4.Apple introduced its first iPod portable digital audio player. NeXT • 1996: December . $ 1000. • 2006: January .4 "Tiger" to the general public.Apple released Mac OS X v10. an operating system based on Next's Nextstep and the FreeBSD kernel. with the Apple 3. $ 3900.  2002-present: • In early 2002: Apple unveiled a redesigned iMac. • 1997: July-The returns of Jobs • 1997 :November . and Performa.Apple -Motorola alliance. • 2005: April .S. Inc. • 2008: July .Apple Computer makes its first million Macintosh PCs. shortened its name to simply Apple Inc.S. • 2007: January .Apple Computer.• 1986: September .5 drive.Apple Computer Macintosh 512K enhanced to give up.Apple Computer introduces the Apple IIe Platinum.S. • 2002: Apple also released the Xserve 1U rack mounted server. • 1991: Apple partnered with long-time competitor IBM to form the AIM alliance. • 1994: Apple started the Power Macintosh line Apple purchased Steve Jobs' company. • 2010: April .S. • 1993: Apple released the Newton. • 1987: Apple Computer begins shipping the Macintosh II. • 1990: Apple's response to the PC threat from IBM was a profusion of new Macintosh lines including Quadra. • In mid-2003: Steve Jobs launched the Power Mac G5. $ 6500 • 1989: September . • 1989: January .Apple introduced iPhone 3G.Apple introduced the Macintosh SE for $ 2900 U. were introduced. based on IBM's G5 processor. their newest mobile operating system. an early PDA. U. the iMac and MacBook Pro. • 1987: March .  1998-2001: Apple of renaissance: • 1999: Apple introduced the Power Mac G4. Centris. for about U.The Apple iPad was announced.

• 2010: June - Apple introduced the iPhone 4, which they call "the biggest leap since the original iPhone". 2. Product History: 1976 Apple I 1977 Apple II 1979 Apple II+ 1980 Apple III & III+ 1983 Apple ][e Lisa/Lisa 2/Mac XL 1984 1984 Commercial Graphical User Interface (GUI) Macintosh 128k Apple IIc & IIc+ Macintosh 512K 1985 Apple IIe Enhanced/Platinum 1986 Macintosh Plus Macintosh Plus ED Macintosh 512Ke Macintosh ED Apple IIgs 1987 Macintosh II Macintosh SE 1988 Macintosh IIx 1989 Macintosh SE/30 Macintosh IIcx Macintosh SE FDHD Macintosh IIci Macintosh Portable 1990 Macintosh IIfx Macintosh Classic Macintosh IIsi Macintosh LC 1991 Macintosh Classic II Macintosh Quadra 700 Macintosh Quadra 900 8

PowerBook 100 PowerBook 140 PowerBook 170 1992 Macintosh LC II Macintosh Quadra 950 PowerBook 145 Macintosh IIvi Macintosh IIvx PowerBook 160 PowerBook 180 PowerBook Duo 210 PowerBook Duo 230 PowerBook Duo 270c PowerBook DuoDock 1993 Macintosh Centris 610 Macintosh Centris 650 Macintosh Color Classic Macintosh LC III Macintosh Quadra 800 PowerBook 165c Workgroup Server 80 Workgroup Server 95 Macintosh LC 520 PowerBook 180c Macintosh Quadra 660av Macintosh Quadra 840av PowerBook 145B Workgroup Server 60 Newton Message Pad (OMP) PowerBook 165 Macintosh Centris 660av Macintosh Color Classic II Macintosh LC 475 Macintosh LC III+ Macintosh Quadra 605 Macintosh Quadra 610 Macintosh Quadra 650 Macintosh TV PowerBook Duo 250 1994 Macintosh LC 550 Macintosh LC 575 Newton Message Pad 100 Newton Message Pad 110 Power Macintosh 6100 Power Macintosh 7100 Power Macintosh 8100 9

PowerBook Duo 280 PowerBook Duo 280c PowerBook DuoDock Plus/II Workgroup Server 6150 Workgroup Server 8150 Workgroup Server 9150 PowerBook 520 PowerBook 520c PowerBook 540 PowerBook 540c Macintosh LC 630 Macintosh Quadra 630 PowerBook 150 Newton Message Pad 120 1995 Macintosh LC 580 Power Macintosh 5200 LC PowerBook 550c Power Macintosh 6200 Power Macintosh 7200 Power Macintosh 7500 Power Macintosh 8500 Power Macintosh 9500 PowerBook 190 PowerBook 190cs PowerBook 5300 PowerBook 5300c PowerBook 5300ce PowerBook 5300cs PowerBook Duo 2300c Power Macintosh 5300 LC 1996 Network Server 500/700 Workgroup Server 7250 Workgroup Server 8550 Newton Message Pad 130 Power Macintosh 5260 LC Power Macintosh 5400 LC Power Macintosh 7600 Power Macintosh 8200 Power Macintosh 6400 PowerBook 1400c/cs Power Macintosh 4400 Power Macintosh 7220 Power Macintosh 6300/120 1997 PowerBook 3400 Power Macintosh 5500 Power Macintosh 6500 10

Power Macintosh 7300 Power Macintosh 8600 Power Macintosh 9600 eMate 300 Newton Message Pad 2000 Workgroup Server 7350 Workgroup Server 9650 20th Anniversary Macintosh PowerBook 2400 Newton Message Pad 2100 PowerBook G3 Power Macintosh G3 1998 Macintosh Server G3 Power Macintosh G3 All-in-one PowerBook G3 Series iMac PowerBook G3 Series (rev. 2) 1999 iMac (Rev. C) Power Macintosh G3 (Blue & White) iMac (Rev. D) PowerBook G3 (Bronze Keyboard) iBook Power Macintosh G4 (AGP Graphics) Power Macintosh G4 (PCI Graphics) iMac (Slot Loading) iMac DV/SE 2000 iBook SE PowerBook G3 (FireWire) iMac (Summer 2000) iMac DV (Summer 2000) iMac DV+ iMac DV SE (Summer 2000) Power Macintosh G4 (Gigabit Ethernet) Power Macintosh G4 Cube iBook/iBook SE (FireWire) 2001 PowerBook G4 Power Macintosh G4 (Digital Audio) iMac (Early 2001) iMac SE (early 2001) iBook (Dual USB) iMac (Summer 2001) Power Macintosh G4 (Quicksilver) iBook (Late 2001) iPod PowerBook G4 (Gigabit Ethernet) 11

1.0) iBook G4 (Early 2004) PowerBook G4 Family Power Macintosh G5 (June 2004) iPod (Click Wheel) iMac G5 iBook G4 (Late 2004) iPod (U2 Special Edition) iPod photo 2005 iPod shuffle Mac mini PowerBook G4 (1.0) PowerBook G4 (12.1" DVI) PowerBook G4 (15" FireWire 800) PowerBook G4 (17" 1.2002 iBook (14.1") iMac (Flat Panel) Power Macintosh G4 (Quicksilver 2002) eMac PowerBook G4 (DVI) iBook (Mid 2002) Xserve iMac (17") Power Macintosh G4 (Mirrored Drive Doors) iBook (Late 2002) PowerBook G4 (1 GHz/867 MHz) 2003 PowerBook G4 (12.5 .67 GHz) iPod mini (2nd gen) Power Macintosh G5 (Early 2005) eMac (2005) iMac G5 (Ambient Light Sensor) 12 .1") PowerBook G4 (17") Power Macintosh G4 (FireWire 800) iMac (Early 2003) Xserve (Cluster Node) Xserve (Slot Load) / Xserve RAID iBook (Early 2003) iPod (Dock Connector) eMac (ATI Graphics) Power Macintosh G5 iMac (USB 2.33 GHz) iBook G4 2004 iPod mini Xserve G5 Xserve G5 (Cluster Node) eMac (USB 2.

iPod (color) iPod (color U2 SE) iBook G4 (Mid 2005) iPod nano iMac G5 (iSight) iPod (with video) PowerBook G4 (Dual Layer SD) Power Macintosh G5 (Late 2005) 2006 iMac (Early 2006) MacBook Pro Mac mini (Early 2006) MacBook Pro (17-inch) MacBook iPod (with video. Late 2008) MacBook Air (Late 2008) MacBook Pro (15-inch. Aluminum. U2 SE) iMac (Mid 2006) Mac Pro iMac (Late 2006) iPod nano (2nd Generation) iPod shuffle (2nd Generation) Mac mini (Late 2006) MacBook Pro (Late 2006) MacBook (Late 2006) Xserve (Late 2006) 2007 Apple TV MacBook (Mid 2007) iPhone MacBook Pro (Mid 2007) iMac (Mid 2007) Mac mini (Mid 2007) iPod classic iPod nano (3rd Generation) iPod touch MacBook (Late 2007) 2008 MacBook Air Mac Pro (Early 2008) Xserve (Early 2008) MacBook (Early 2008) MacBook Pro (Early 2008) iMac (Early 2008) iPhone 3G iPod classic (120 GB) iPod nano (4th Generation) iPod touch (2nd Generation) MacBook (13-inch. Late 2008) 13 .

Mid 2010) MacBook (Mid 2010) iPhone 4 3. Early years Jobs was born in San Francisco and was adopted by Paul and Clara Jobs who named him Steven Paul. Jobs returned to California and began attending meetings of the Homebrew Computer Club with Wozniak. Steve Jobs Steven Paul Jobs (born February 24. In 1972. He came back a Buddhist. 14 . in search of spiritual enlightenment. Daniel Kottke. Jobs' biological parents – Abdulfattah Jandali and Joanne Simpson. California. Jobs returned to his previous job at Atari and was given the task of creating a circuit board for the game Breakout. Mid 2009) iPod classic (Late 2009) iPod nano (5th Generation) iPod touch (3rd generation) iMac (Late 2009) MacBook (Late 2009) Mac mini (Late 2009) Mac mini (Server.2009 MacBook (Early 2009) MacBook Pro (17-inch. 1955) is an American business magnate and inventor. He took a job as a technician at Atari. He is well known for being the co-founder and chief executive officer of Apple. Late 2009) 2010 iPad MacBook Pro (13-inch. Mid 2009) MacBook Pro (15-inch. Jobs experimented with psychedelics. Mid 2009) MacBook Pro (15-inch.1. He was soon hired there and worked with Steve Wozniak as a summer employee. During this time. a manufacturer of popular video games. Early 2009) iMac (Early 2009) iPod shuffle (3rd Generation) Mac mini (Early 2009) Mac Pro (Early 2009) Xserve (Early 2009) iPhone 3GS MacBook (Mid 2009) MacBook Air (Mid 2009) MacBook Pro (13-inch. Jobs graduated from high school and enrolled in Reed College in Portland. Oregon. Jobs then traveled to India with a Reed College friend. calling his LSD experiences "one of the two or three most important things [he had] done in [his] life". Mid 2010) MacBook Pro (17-inch. and frequented after-school lectures at the Hewlett-Packard Company in Palo Alto. 3. Mid 2009) MacBook Pro (17-inch. Jobs attended Cupertino Junior High School and Homestead High School in Cupertino. In the autumn of 1974. California.

it was largely dismissed by industry as cost-prohibitive. California. NeXT Computer. Like the Apple Lisa. The following year. In the years 2003 and 2004. Jobs and Iger announced that Disney had agreed to purchase Pixar in an all-stock transaction worth $7.2. it contracted with Disney to produce a number of computer-animated feature films. however. The NeXTcube was described by Jobs as an "interpersonal" computer. The first film produced by the partnership. Once the deal closed. 3. and at the end of May 1985 – following an internal power struggle and an announcement of significant layoffs – Sculley relieved Jobs of his duties as head of the Macintosh division. In 1983. Jobs loved to demo the NeXT's e-mail system. This put considerable strain on NeXT's hardware division. In October 2005. NeXT transitioned fully to software development with the release of NeXTSTEP/Intel. the NeXT workstation was technologically advanced. Steve Jobs. Apple recruited Mike Scott from National Semiconductor to serve as CEO for what turned out to be several turbulent years.2. Jobs and Wozniak had been friends for several years.3 Pixar and Disney In 1986. having met in 1971.4 billion. Prior to cofounding Apple. Toy Story. and in 1993. as Pixar's contract with Disney was running out. As Apple continued to expand.3." At Apple's annual shareholders meeting on January 24. brought fame and critical acclaim to the studio when it was released in 1995. and in early 2004 Jobs announced that Pixar would seek a new partner to distribute its films once its contract with Disney expired. an emotional Jobs introduced the Macintosh to a wildly enthusiastic audience. Steve Wozniak and Ronald Wayne founded Apple. Jobs bought The Graphics Group (later renamed Pixar) from Lucasfilm. Apple aired a Super Bowl television commercial titled "1984.2.000 machines. and Iger quickly worked to patch up relations with Jobs and Pixar. California. and eventually taken over by Jobs. An industry-wide sales slump towards the end of 1984 caused a deterioration in Jobs's working relationship with Sculley. Jobs founded another computer company. Jobs ran NeXT with an obsession for aesthetic perfection.2.1 Beginnings of Apple Computer In 1976. Wozniak was an electronics hacker. as evidenced by such things as the NeXTcube's magnesium case. Jobs and Disney chief executive Michael Eisner tried but failed to negotiate a new partnership.2 NeXT Computer Around the same time. 3. after having sold only 50. which he believed was the next step after "personal" computing. In 1978. Career 3. Bob Iger replaced Eisner at Disney. was initially intended to be a high-end graphics hardware developer. Steve Jobs managed to interest Wozniak in assembling a computer and selling it. 15 . Steve Jobs lured John Sculley away from Pepsi-Cola to serve as Apple's CEO. the company began looking for an experienced executive to help manage its expansion.The new company. 2006. On January 24. After years of unprofitability selling the Pixar Image Computer. 1984. but has since relocated to Emeryville. The development of the Mac was started by Jef Raskin. During a time when e-mail for most people was plain text. Jobs became The Walt Disney Company's largest single shareholder with approximately 7% of the company's stock. which was originally based at Lucasfilm's Kerner Studios in San Rafael.

which he received in exchange for Disney's acquisition of Pixar.4 Return to Apple In 1996. which also included the features of an iPod and. Forbes estimated his net wealth at $5. which evolved into Mac OS X. 3. the company has branched out. Jobs also reminds his employees that "real artists ship".S. The investigation is focusing on false dating of the options resulting in a retroactive $20 million increase in the exercise price. He also owned 138 million shares of Disney. In 2006. Apple announced that it would buy NeXT for $429 million. thereby incurring taxable income of $20. by lashing out at environmental and other advocates at Apple's Annual Meeting in Cupertino in April. With the introduction of the iPod portable music player. At the 2000 Macworld Expo. Jobs owned 5. a few weeks later. While stimulating innovation.1 billion in 2009. customer who buys a new Mac.1 Wealth As of October 2009.3. by which he means that delivering working products on time is as important as innovation and attractive design. iTunes digital music software. With the purchase of NeXT.Jobs also helps oversee Disney and Pixar's combined animation businesses with a seat on a special six-man steering committee. revolutionized the mobile browsing scene. with its own mobile browser. This indicated backdating. Despite the company's record-breaking profits and $40 billion cash on hand. Apple announced it would take back iPods for free at its retail stores. Apple entered the cellular phone business with the introduction of the iPhone.000. Cyberdog.2. bringing Jobs back to the company he co-founded. Jobs officially dropped the "interim" modifier from his title at Apple and became permanent CEO. The case is the subject of active criminal and civil 16 . In recent years. 3. The deal was finalized in late 1996. as compiled by Indiana University's Center on Philanthropy. In 2005. In March 1998. He soon became Apple's interim CEO after the directors lost confidence in and ousted then-CEO Gil Amelio in a boardroom coup. introducing and improving upon other digital appliances. As of 2006.10. which allegedly should have been $21.000 that he did not report as income. Although he may well have donated significant sums anonymously.3. most of which was granted in 2003 when Jobs was given 10 million shares. Jobs has not reinstated a philanthropic division at Apple. Jobs eliminated all corporate philanthropy programs as a temporary cost-cutting measure until profitability improved. some have doubted this assumption. a multi-touch display cell phone. making it too costly for the manufacturers to continue making machines. after resuming control of Apple in 1997. Steve Jobs was granted stock options in the amount of 7. Jobs responded to criticism of Apple's poor recycling programs for e-waste in the U.Business life 3.3. to concentrate Apple's efforts on returning to profitability.30. Jobs also changed the licensing program for Macintosh clones. Jobs had not appeared on national tallies of charitable donations totaling $1 million or more. and the iTunes Store. 3. most notably NeXTSTEP.5 million shares of Apple with an exercise price of $18. However. the company made forays into consumer electronics and music distribution. Jobs immediately terminated a number of projects such as Newton. In 2007.S. and OpenDoc.426 million shares of Apple. much of the company's technology found its way into Apple products. making him the 43rd wealthiest American. he further expanded Apple's recycling programs to any U. given Jobs' equally poor track record on corporate philanthropy.2 Stock options backdating issue In 2001.

Although it reportedly remained in an almost unfurnished state. Jobs bought an apartment in The San Remo. it turned out that Michael Dell wasn't perfect at predicting the future. Health concerns In mid-2004.3. Fortune wrote that he "is considered one of Silicon Valley's leading egomaniacs. Based on today's stock market close. but I thought it was worth a moment of reflection today. mellow individual" and never interfered with the creative process of the filmmakers. starting when Jobs first criticized Dell for making "un-innovative beige boxes." In 2006. Jobs had a public war of words with Dell Computer CEO Michael Dell. The email read: Team." alluding to Jobs' compelling and larger-than-life personal. when Michael Dell was asked what he would do if he owned thentroubled Apple Computer. Jobs lived in the mansion for almost ten years. by a court decision. the Woodside Town Council gave Jobs approval to demolish the mansion. There's an old Wayne Gretzky quote that I love."On October 6. Since thevery beginning. Steve Jobs banned all books published by John Wiley & Sons from Apple Stores in response to their publishing an unauthorized biography. Stocks go up and down. in a Gartner Symposium. he said "I'd shut it down and give the money back to the shareholders. not where it has been. Jobs was a "mature. 1991. In June 2004. Jobs has always aspired to position Apple and its products at the forefront of the information technology industry by foreseeing and setting trends. iCon: Steve Jobs. once said that Jobs "would have made an excellent king of France. ran the company. head of worldwide sales and operations at Apple. Jobs is also a Beatles fan.government investigations found that Jobs was unaware of these issues and that the options granted to him were returned without being exercised in 2003. On July 1. 17 . a $7 billion class action suit was filed against several members of the Apple Board of Directors for revenue lost due to the alleged securities fraud. Jobs purchased a 17. on the condition that he advertise the property for a year to see if someone would move it to another location and restore it. Reed Paul Jobs. In January 2007 Jobs was denied the right to demolish the property. at least in innovation and style.6.Personal life Jobs married Laurene Powell. 1997. In 2005. Lisa Brennan-Jobs (born 1978).3 Management style Much has been made of Jobs' aggressive and demanding personality.4. 14 bedroom Spanish Colonial mansion. Timothy D." Jef Raskin. 'I skate to where the puck is going to be. Steve.The couple have a son. Steve Jobs sent an email to all employees when Apple's market capitalization rose above Dell's. from his relationship with Bay Area painter Chrisann Brennan. on March 18. 3. 3.000-square-foot (1. 3. Jobs also has a daughter. a former colleague.and two other children. He has referenced them on more than one occasion at Keynotes and also was interviewed on a showing of a Paul McCartney concert. Floyd Norman said that at Pixar. Apple is worth more than Dell. and things may be different tomorrow. In 1984.' And we've always tried to do that at Apple. During Jobs' absence.600 m2). Presiding over the wedding was the Zen Buddhist monk Kobun Chino Otogowa. an apartment building in New York City with a politically progressive reputation. Cook. Jobs announced to his employees that he had been diagnosed with a cancerous tumor in his pancreas. 2008. In 1982.

Jobs was named the CEO of the decade by Fortune Magazine. On December 5. Jobs said that he had been suffering from a "hormone imbalance" for several months. in an internal Apple memo. During a July conference call discussing Apple earnings.a 1996 three-part documentary for PBS. referring to his blood pressure. In August 2009. similar concerns followed Jobs' 2008 WWDC keynote address. who had previously acted as CEO in Jobs' 2004 absence. again reviving questions about Jobs' health. • Nerds 2. intensifying rumors concerning Jobs' health. opined that shareholders had a right to know more. Jobs underwent a liver transplant at Methodist University Hospital Transplant Institute in Memphis. Apple announced that marketing vice-president Phil Schiller would deliver the company's final keynote address at the Macworld Conference and Expo 2009. Jobs concluded his presentation with a slide reading "110 / 70". In popular culture Jobs was prominently featured in three films about the history of the personal computing industry: • Triumph of the Nerds . On November 5. about the rise of the home computer/personal computer. however. Apple officials stated Jobs was victim to a "common bug" and that he was taking antibiotics. Bloomberg mistakenly published a 2500-word obituary of Jobs in its corporate news service. 3. 3. On November 27.0. containing blank spaces for his age and cause of death. (and sequel to Triumph of the Nerds) which chronicles the development of the Internet. In November 2009 Jobs was ranked #57 on Forbes: The World's Most Powerful People. On December 16.a 1999 docudrama which chronicles the rise of Apple and Microsoft. given Jobs' hands-on approach to running his company.7. became acting CEO of Apple.Honors He was awarded the National Medal of Technology from President Ronald Reagan in 1985 with Steve Wozniak and a Jefferson Award for Public Service in the category "Greatest Public Service by an Individual 35 Years or Under" in 1987. Jobs was named the most powerful person in business by Fortune Magazine. 2009. He was portrayed by Noah Wyle.In early August 2006. 2008. many news carriers and blogs reported on it. 2009 on Apple. participants responded to repeated questions about Steve Jobs' health by insisting that it was a "private matter. On January 14. Tennessee. Jobs was selected the most admired entrepreneur among teenagers on a survey by Junior Achievement. On August 28.1 . Tim Cook. 2009. 2007. Although the error was promptly rectified. 2007. • Pirates of Silicon Valley . Jobs' prognosis was "excellent". Women and the Arts. Jobs responded at Apple's September 2008 Let's Rock keynote by quoting Mark Twain. stating he would not address further questions about his health. located at The California Museum for History. Jobs delivered the keynote for Apple's annual Worldwide Developers Conference. In a statement given on January 5.com.a 1998 three-part documentary for PBS. Jobs wrote that in the previous week he had "learned that my health-related issues are more complex than I originally thought" and announced a six-month leave of absence until the end of June 2009 to allow him to better focus on his health. Jobs has also been frequently parodied: 18 . 2008.8. Two years later." In April 2009. with Jobs still involved with "major strategic decisions." Others. California Governor Arnold Schwarzenegger and First Lady Maria Shriver inducted Jobs into the California Hall of Fame.

• Jobs was also parodied on Mad TV and Saturday Night Live. 1977. Jobs’ focus was on creating new and different products. The Macintosh people believed that once on the market their product would be better than Lisa and any other Apple product. Considering Apple’s new competitive pressures. competitive fiefdoms. which hadn’t yet introduced a product. they soon experienced sales beyond the garage’s capacity. he had the following reaction: As a member of the executive staff. a parody of Calvin and Hobbes. Jobs hired John Sculley from PepsiCo. Once Sculley joined the company. starring Steve in the role of Hobbes and his attempts to explain to Calvin his job. He was the visionary responsible for Apple’s reputation for innovation. Within that division was a smaller splinter group in charge of the Apple III. before that. • 30 Rock parodied Jobs's keynote presentation style. • II. but the products failed to win acceptance and could not compete successfully with the IBM PC. Setting up shop in Jobs’ garage. vice president of marketing. Together. MyPods. ORGANIZATIONAL ARCHITECTURE OF APPLE 1. In fact. Markkula was recruited as the company’s first professional manager. there were many. Sculley was hired for both his executive and marketing expertise. choosing Sculley with his corporate experience as the company’s new president was considered by Jobs to be “one of the most important decisions in Apple’s history”. As cofounder of Apple. • Jobs was also parodied in "Mypods and Boomsticks". Markkula retired from his posts as CEO and president but remained as director and consultant. Organization Structure: 1. Apple Computer was incorporated on January 3.1. A. The Macintosh and Lisa teams were not getting along. A group called PCDS (Personal Computer Systems Division) was responsible for the development and marketing of the Apple II. and Steve’s Macintosh team. they created the Apple I. turtleneck and all in the episode "Cutbacks". The Early 1980s and John Sculley Since 1981.a feature called Calvin and Jobs. With financing from Markkula and a group of venture capitalists. where he had been the president of domestic operations and. Jobs’ notion of “one person-one computer” became a central tenet of the Apple belief system. In the same year. I came away with a clear impression that there wasn’t a common understanding of the company we were trying to build. They routinely referred to the Apple II people 19 . Apple’s mission was to change the world by bringing computers to the masses. Apple’s market share relative to its industry competitor had steadily declined. There was the Lisa computer division. a 2008 The Simpsons episode which features an adventure into the 'world' of Mapple. and "Steve Mobbs". Apple attempted to enter the business market with its new Lisa and Apple III computers. In May of 1983.C. 1.2. who visualized a personal computer that could be used easily by anyone. The history of Apple management structure: Apple Computer was formed in 1976 by Steven Jobs and Stephen Wozniak.Mad Magazine .

Yocam. two companies. Everyone had great ideas. The Change in Structure In December of 1983.” Sculley also installed tighter control policies and increased the market focus and level of discipline of Apple’s managers. he did not want to be insulated from the organization. Each division was responsible for its own functions and could be managed as “independent profit-and-loss centers.14 He wanted many people reporting to him.”. another for the Lisa product and the development and production of the Macintosh.” 1.”12 He later gave this position to Del W. existed. They also resented that they had been moved to a building that was two and a half miles from the Apple campus. with two powerful product divisions responsible for their own manufacturing. Three or four home-marketing groups. corporate finance. I found people all over the organization doing the same thing. there was duplication of activities and resources within the company. Sculley recalls. both line and staff people. distribution. His main change was to reduce the number of Apple product divisions to three: a division for Apple II products. Sculley hoped that the new structure would eliminate most of the overlap without causing massive layoffs. and finance and a small central organization for sales. marketing. “Now there was a distinct hierarchy. The Apple II group resented this favoritism. Sculley reorganized management. Jobs was placed in charge of Macintosh division but maintained his position as chairman of the board of directors. No longer did he have more than a dozen vice presidents reporting to him. “When I arrived. Also.” Exhibit 2 presents the organizational chart 20 . for example. a six-year Apple veteran. But some structure was needed if people were to feel a greater sense of accountability.as “bozos” and were given perks such as free fruit juice and a masseuse to work the tense backs of the Mac engineers.3. and an accessory products group. so he could “assess all the pieces. Sculley placed himself in charge of the Apple II group to “learn how a product division worked. each competing with the other. as was the case when he arrived. each reporting to Sculley and his staff. Furthermore. and human resources--in essence.

Jobs and his director of engineering were missing schedules for crucial parts 21 .Internal Problems Disappointing market performance was attributed to internal problems.

The company failed to communicate a business image for the Macintosh to the market. However. They were “months behind with a large disk drive that would help Mac run sophisticated software programs for business and make it easier for users to share information.resigned. Stephen Wozniak. In the early 1980s. Jobs. According to several insiders. especially since their division was producing more than twice the revenues as the Macintosh division. led by Del Yocam. These representatives also sold the products of other manufacturers. The Apple II group could have its own factories and sales organization for the K-12 (kindergarten through 12th grade) education and consumer markets.” and the internal competition was self-defeating. I saw Apple in PepsiCo terms. which would be the motivating force behind purchases of computers. Macintosh. A former Macintosh employee stated. Jobs complained that Sculley didn’t understand the nuts and bolts of the business or how products were developed and questioned Sculley’s competence. Jobs believed that Apple should focus on technology. not as an office machine or as the technology leader that it is”. The Apple group considered this intolerable favoritism.000 to 7. Apple relied on 300 manufacturers representatives over whom they had no direct control. the staff began to experience conflict with the independent dealers who still provided most of Apple’s revenue. There were also marketing problems. Nor did he hide his feelings. Sculley described his own perspective of the organization: Initially. “elbowing” them out of markets. couldn’t abide the success of the venerable Apple II.of the system. Apple had become “two different warring companies. In February 1985.What I didn’t realize was that it wasn’t working. Frito-Lay and Pepsi-Cola could comfortably and successfully exist as separate entities under Pepsi-Co.” In addition. Therefore. soon after.with its own independent operations. The members of the Apple product group. People were getting burned out. avocado machine for yuppies and their kids. which had 6.Sculley was losing confidence in Jobs’ 22 . were frustrated by Job’s favoring the Macintosh product group. getting close to the market was of fundamental importance. This image problem was compounded by the fact that Jobs and Sculley disagreed over marketing strategy. Apple established a 60person direct sales staff. “Mac was being perceived as a cutesy. Customer needs should determine the product. Unlike IBM. a devout believer that new technology should supersede the old. He once addressed the Apple II marketing staff as members of the “dull and boring product division. The two groups became too competitive with each other. designer of the Apple I and an engineer in Yocam’s group. Apple had no salesforce with direct access to corporations.000 direct salespeople. Sculley thought the focus should be on customer needs. These problems were heightened by conflicts between the Apple II and Macintosh Divisions. The direct salespeople were accused of selling Macintoshes at lower prices than dealers. targeted the university and business markets.” Jobs’ intense involvement with the Macintosh project had a demoralizing effect on Apple’s other divisions.

When Jobs failed to order necessary parts for the Macintosh XL. and the Lisa computer and some development efforts were eliminated.S. I became more remote from the business.4 The New Organization without Jobs In May of 1985. Campbell became responsible for U. I was constantly surprised by new and disturbing findings. The three product divisions were consolidated into one called Product Operations.46 Other cutbacks were made across the organization except for R&D. Sculley announced another reorganization. 1. As chairman. and Apple had to discontinue the product after having introduced it only three months earlier. Sculley felt that he was losing control: It was nearly impossible to get the right information quickly when I needed it most. Jobs operating role in the company as chairman was taken away. was promoted to head all of Apple’s international operations. 60% of whom were in manufacturing. and Michael Spindler.ability to manage the Mac division. He really had more knowledge about what was going on in the business than I did because all the information was coming up through the product divisions. The company was downsized in an effort to reduce operating costs. Sculley imported two top-level executives to headquarters in California from Europe. Sculley became concerned. The corporate staff basically became an impotent group. Jobs was making all the decisions and was being favored over all the other vice presidents. including the failure to order parts for the Macintosh XL. Sculley was in Jobs’ shadow.44 The board was also unhappy with the way Jobs was running the Macintosh division. he was under me. A total of 1. The management inexperience of many of Apple’s key players as well as my own lack of experience in the personal computer industry should have been early warning signs that a decentralized organization wasn’t suited for our volatile marketplace.200 employees were laid off. he resigned from Apple. It set up a system under which people would fight for what was best for their groups. He was not taking the action he needed to run the company. who had been running European marketing and sales. Yocam was placed in charge of engineering. The direct sales force was dismissed except for those on established accounts. Jean-Louis Gassee. a German national. manufacturing. The other part of the reorganization called for bringing in a new general manager of the Macintosh Division to replace Jobs. and distribution. factories were closed. They had all the power. As Sculley explained. Also.The organizational structure contributed to these management problems. And as head of a product division. Steve was over me. was promoted to replace Jobs as head of product development. not what was best for the company as a whole. Apple became one 23 . head of Apple France. According to middle managers at Apple. They encouraged Sculley to exercise his authority as CEO and hire a new general manager to improve the Macintosh’s sales. On September 17. The organization created two power bases and removed me from day-to-day operating decisions. Advertising was reduced. marketing and sales. and William V. 1985. largely a financial organization.

of few companies to have two Europeans at the highest levels of senior management. Exhibit 3 is an interoffice memo from Sculley introducing the new organizational structure to Apple’s employees The executive staff. As you know. key mangers and I have met almost daily over the past several weeks to develop a new organization. Apple has been a divisionalized company with several highly autonomous profit centers which have acted almost like stand-alone companies: I am please to announce a new structure which is vastly simplified and organized around functions: 24 .

1. I get to come in and work with some of the most brilliant people in the world. In the process of moving to this new organization. Let we find out about how Apple organized? This is Apple’s organizational structure chart.The new organization will reduce our breakeven point. finance. this streamlining will allow us to eliminate unnecessary job duplication in the divisional structure. (As shown in the organization chart. manufacturing. We’re great at figuring out how to divide things up into great teams. We play in the best sandbox?” Apple organizational structure is a solid foundation. Steve Jobs said that: “One of the keys to Apple is that Apple is an incredibly collaborative company. We’re the biggest start up on the planet. We meet for three hours every morning and talk about all the business. However. and human resource staffs. and we talk to each other. So what I do all day is meet with teams of people… I have one of the best jobs in the world. each division has had its own product development. (Updated in 24/11/2010) 25 . We take such a strong step only because it is clear that the new organization and management team will vastly improve Apple's profitability for success as an industry leader. management information systems.) The new organization would be more effective at providing products the marketplace wants and at providing them in a more timely manner.5. It should also simplify internal communication of company objectives and allow for greater consistency in their implementation. In addition to the greater effectiveness of the organization it should also be more efficient making us more profitable on lower sales than would have been the case with the former organization. The reorganization will be costly in the short run. We’re organized like a startup. This is a painful and difficult decision. we will reduce the number of jobs at Apple by 1200.We have selected leaders of each functional area who have had considerable experience in their specialty and in managing people. You know how many committees we have at Apple? Zero. about what’s going on everywhere. The present Apple’s structure In recent speech.

Software Engineering. directors are expected to take a proactive. Worldwide Product Marketing. iOS software. Apple's Board of Directors oversees the Chief Executive Officer and other senior management in the competent and ethical operation of Apple on a day-to-day basis and assures that the long-term interests of shareholders are being served. Industrial Design.Apple’s Executive Board According to the above link. and set standards to ensure that Apple is committed to business success through the maintenance of high standards of responsibility and ethics. Hardware Engineering. COO. focused approach to their positions. under CEO Steve Jobs there are 10 Senior Vice Presidents: CFO. To satisfy the Board's duties.000 employees. Retail and General Counsel. The management duties will be separated out but they will ultimately report to the few at the top. Operations. These executives lead over 35. 26 .

and peripheral devices (e. in conjunction with Apple’s articles of incorporation and bylaws. the Finance Department). Apple II most recently introduced the Apple IIe. Description of Apple divisions: There are two major types of divisions within Apple: +Product Division: esponsible for the development. Apple Computer had five product divisions responsible for the development. Thanks to the influence of its founders. asking random people 'do you work on MobileMe” Apple management: To manage its products and marketing. Steve Jobs often walked around the office barefoot even after Apple was a Fortune 500 company. effective decisionmaking and appropriate monitoring of both compliance and performance. software. this trait had become a key way the company attempts to differentiate itself from its competitors. evaluation and manufacture of computer systems. It also had four product support divisions which handled marketing. The governance structure is designed to foster principled actions. there were a number of administrative departments in charge of overseeing Apple’s day-to-day corporate activities (e. The important role of CEO Steve Jobs: CEO Steve Jobs Jobs-an Apple co-founder who is considered the company's creative leader is key factor of Apple’s success. In addition. Numerous employees of Apple have cited that projects without Jobs' involvement often take longer than projects with his involvement.The Board has adopted the following committee charters and governance guidelines that.. distribution and post-sale product support (e. Personal Office Systems Division (POSD): design and manufactures mass-storage devices for Apple computer systems 27 . each with his own idea of what Apple should be.g. peripheral devices includes includes: Personal Computer Systems Division (DCSD): is responsible for Apple II and Apple III computer system and is constantly working to refine and improve them.g. North American Sales Division). form the governance framework for Apple. Macintosh).g. evaluation and manufacture of computer systems. Another presents the image of Jobs "wandering the hall with a flamer thrower in hand. software. As the company has grown and been led by a series of chief executives. a significantly enhanced version of the Apple II.. By the time of the “1984” TV ad.

compensation. Sales and marketing for the Far East. In addition to handling counseling. It is all responsible for developing. investor. conducts market research. and benefit programs the department is responsible for staffing and training to ensure that Apple has the people it needs to reach its goals. The group also coordinates all proposed marketing activities to ensure that Apple’s messages to each segment are clear. The activities report to Vice Presidents. and manages employee. South Africa Central and South America and handled by Intercontinental Sales. Legal Services make certain that Apple complies that the law in all business operations. printers. The division also handles direct sales to volume user and is responsible for the identification and penetration of major markets. It also represents the company in legal disputes with individuals. and the government. which track all sales and inventories. +Product Support Divisions: which handle marketing. Exhibit 1 represents what such an organization probably would have looked like. in addition. There are. In addition. its people. The division handles advertising and public relations activities. and are lumped together under “ Administration”. Administrative Departments: Many activities at Apple fall outside the neatly structured division. Operations Division: is responsible for most of the Apple’s manufacturing activity. business. distribution and both-scale product support. Such operations include the following: Financial department monitors Apple’s financial well-being. In addition. investor. Texas. Human Resources also provides the resources to assist employee in reaching personal and professions goals. service and support. and press communications. Finance also oversee Apple’s Management Information Services (MIS) computers. which manufactures in Dallas. installation. Communications Division sees that sales prospects. Human Resources safeguard and helps develop Apple’s most valuable asset. supporting the efforts of original equipment manufacturers (OEMs) and assisting others divisions in tailoring Apple Products to European markets. and others parties interested in Apple receive whatever information they need. Market Marketing group identifies and defines target markets for Apple and develops strategies for approaching them. a number of administrative departments in charge of overseeing Apple day to day corporate activities includes: North American Scale Channels Apple’s products to customers through field sales groups which service a larger dealer network. Ireland. modems and plotters Macintosh Division (MAC) is pursuing product line that promises to become the hightest volume personal computer system of the ‘80s. and Singapore. Cork. Other product division manufacture the initial pilot units and establish process procedures. and marketing accessory products. APD designs and markets a variety of monitors. Products ready for high-volume production are then transferred to the Operations Division. just as the divisions do. European Division manage field scales and distribution activities throughout European. Its highly successful National Accounts Program furnishes Fortune 1000 corporations with direct sales. It provides accounting and cash management services to the company as a whole. 28 .Accessory Product Division (APD): produces all keyboards for Apple computers. they are intimately associated with daily operations of the company. at the same time working with each division to help project and manage expenses. facilities and the Apple Education Foundation both now report to Legal Services. manufacturing.

9 1985 1918 . 8 1984 1515 .1 million in 1987. net income. 1 1983 982.4 1989 5284. 0 29 . The table shows net sales.1 1988 4071 . and the total number of employees for years 1982-1989 YEAR Net sales (millions USD) 1982 583.Growth Business market expansion resulted in a 30% increase in Apple’s sales from $1. predicting a more than doubling of revenue to $10 billion annually by the early 1990s.9 million in 1986 to $2.901.3 1986 1901 .9 1987 2661 . Apple expected this rapid growth to continue.661.

New high-level management positions included vice president of advanced technology and vice president of U.…there is a limit to how many engineers can walk directly into Sculley’s office to pitch their ideas”.S. there were constant battles between Apple’s sales. In October of 1988. 30 . marketing. Major European companies.2 154. Apple’s European revenues grew by 55%. Apple’s foreign operations now consisted of three manufacturing facilities in Ireland and Singapore and distribution facilities in Europe. Sculley created a new position of Chief Operation Officer to which Yocam was appointed.” said Spindler. captured 15% of the business market in 1988. In an effort to centralize operations and involve Apple’s senior management in day-to-day decisions. As the “bureaucracy continues to grow. Canada. and Australia. anymore. European sales alone made up nearly one-third of total revenues for Apple. Sculley doubled the size of Apple’s field force and the number of employees grew to 10. Apple experienced the same success in new markets such as Spain. The staff was increased by over 150 people. and Japan.” “The technical people didn’t respect the marketing department. 5 400.and Britain’s Plessey purchased a significant number of Macintosh machines. Holland. faster than revenue growth for the entire company. Sweden.836. and Australia.66 “We can’t do everything from the U. there was less time available for Sculley to devote to day-to-day operations.67 A new corporate “account management” program was established. Its Swedish subsidiary. developed in 1985. the marketing department was disorganized. The proportion of Europeanmade components used in Apple’s Irish production plant was increased and Apple opened a $10 million R&D center in Paris that employed 50 engineers. Belgium. Germany’s Bayer and BASF. and there was little possibility that we could afford all the projects it was working on”. An International Business Market Structure By 1988. valuable things are happening in Europe. Apple gained 6% of the overall European market. 3 454. Sales in Japan also took off as localized products were developed. sales and marketing. Canada.3 (millions USD) 76. Upper managers were “not all lined up facing in the same direction. Apple had established strong markets in France. These problems required even more of Sculley’s time.Net Income 61. and engineering departments. International growth spurred Apple to expand its European headquarters in Paris.7 64. which included several hundred corporate account specialists fanning out across the Continent. Also. 0 217. Sculley hoped that this change would free up more of his own time to spend on long-term planning.1 61. such as France’s Aerospatiale and Renault.0 As the number of employees increased.S.

or maybe even a 'thank you' for recent prosperity. Keep it simple. West market opportunities in Pacific Rim and Latin American nations.1. Apple Products and Apple USA. and Missouri are awaiting arrival of the complimentary players. and Apple’s internal information systems operations were incorporated into Apple USA. 31 . responsible for all product development. The CEO's level of passion. 2. an iPod shuffle is a small investment for a company to reward its employees for the best quarter in our history. In the past. "Seeing as last year we all received additional vacation time. sales and marketing. The four functional divisions were replaced by two. So far. According to sources. service. U. Sculley segmented this division’s operations into business and education market units and a marketing support unit. AppleInsider has confirmed that certain stores in New York. Michael Spindler was placed in charge of Apple Europe responsible for sales. In my next post I'm going to talk about the core processes of strategy and operations and their impact on execution. and attention to detail around these goals will have a huge impact on whether this becomes just another exercise or truly becomes central to the culture. autonomous Pacific and European units and creating the Apple USA division from what was formally known as U. But if you have talent and devote to the company really. ability to mentor. and the role of Chief Operating Office was removed. Incentive system: 2. Apple announced the iPod shuffle just over a week ago. and demand regular progress. important. Each division was headed by a president who reported directly to Sculley. manufacturing operations and marketing. 2.2.S. California. and is already in tight supply with Apple's online store quoting backlog of up to 4 weeks. where lucky employees can walk away with cool gadgets such as the iPod photo. Apple responded by splitting its International Division into separate. Jean-Louis Gassee was placed in charge of Apple Products. Apple’s International Division was split into Apple Europe and Apple Pacific. Sales and Marketing. Apple's retail employees. Apple has offered promotional items to retail staff of stores that meet weekly or monthly sales targets. Reward: Apple is handing out free iPod shuffles to many of its retail employees. You do not need a gigantic process or staff to do these things. do not work on commission. and marketing operations for primarily France. Exhibits 7 and 8 show the old and new Apple structures." one employee said.S. Promotion: No one can deny that Apple are quite strict in managing their staff. however. service and support.This growth was accompanied by a realization that Apple’s various markets were distinct and required different expertise. Sources says that the freebies may be an incentive to increase the work ethic amongst Apple sales reps. To date the player has been met with favorable reviews from both the main stream media and Wall Street analysts. Several Apple employees at the company's retail stores have been told to expect a free 1GB iPod shuffle sometime in the next three weeks. Apple retail stores that meet weekly quotes often hold weekly raffles. you still can receive the appropriate promotion.

increasing employee engagement with business and improving business efficiency. behaviors. but for the most part. and developing people who fit those beliefs Corporate culture is the intangible assets of each business. Bob is a deligent employee. Steve Jobs has been the Apple’s savior. Apple really gets design. but also for product development capability and capacity to unite union the collective enterprise becomes prosperous. Here is what makes Apple’s corporate culture so unique: 3. If an employee doesn’t help the company do that. Over the past decade. Unlike Microsoft.For example: Bob Mansfield who was senior vice president of Macintosh Hardware Engineering. 3. Believe in Jobs Apple is an interesting firm. Focus on design The first thing that every employee must remember about Apple is that the company cares more about the design of products than any other firm in the market. which has historically done a poor job of creating aesthetically pleasing products. He was even considered one of the candidates to replace Steve Jobs in the future. Sometimes. believing in Steve Jobs has been good for Apple and good for both employees and consumers.1. 3. Along with the development of market economy. it also expects from its customers. Bob has taken over the devices hardware management as well from Mark Papermaster. Apple does everything differently.1. and deliver some of the better products on the market. retaining. that belief in Jobs can go too far. innovate beyond all expectations. This approach of enterprises not only work to promote your business done business methods "people are center". who was leaving Apple in the wake of the iPhone 4 antenna troubles. Culture is a powerful force in attracting. and sets out to beat any and all expectations. the construction of corporate culture is an essential job but not less difficult. It’s not always easy. Organizational Culture: 3. and ways of working that define how people behave in an organization. Forget everything that came before it When employees come to Apple. He has helped the company revive its aging business model. Its corporate culture extends beyond its employees to its consumers. but Apple seems to get it right every time. Bob plays more important role in the team of Apple employees.3. He joined Apple in 1999 and oversees the team that has delivered dozens of breakthrough Mac products including the MacBook Air and the all-in-one iMac line. One of the most important things it expects is for both stakeholders to believe in Steve Jobs. what it expects from its employees. Apple Corperate Culture is the collective norms. The work is shaped by processes and organizational designs that reflect the values. Powerful cultures are reinforced by leaders who embody those beliefs. or 32 . they might end up with another company sooner than they think. it knows how to meet those desires. Whether it’s the design of products. In August 2010. as evidenced by the most recent iPhone antenna debacle. Now. He always tries his best to complete all of work and receive the appreciation. Apple should pay more attention to human factors by Corporate culture is to create a code of conduct for businesses without having to create direct effects.1. how it goes about devising ideas for new products. It understands what consumers want.2.1. 3.3. So. they are expected to immediately do one thing: forget everything they ever knew about the technology world.

To pretend like something is similar to a past employer is a mistake that could cause more trouble than it’s worth.simply the way it carries itself. Culture of Secrecy Apple is one of the most mysterious companies in the world. Edward Eigerman who spent four years as a systems engineer at Apple and now runs his own technology consulting firm was fired from Apple in 2005 when he was implicated in an incident in which a co-worker leaked a preview of some new software to a business customer as a favor. this issue is too sensitive. 33 . Secrecy at Apple is not just the prevailing communications strategy. but it has become a call to arms for all of the company’s lovers and employees. It sued several bloggers who had covered the company. and then must enter a separate password for each new person can walk in their office. Apple haters can’t stand that. and the company has been known to spread disinformation about product plans to its own workers. Mr. Employees working on top-secret projects must pass through a maze of security doors. Apple then tries to track down the source of news reports that include the incorrect details. A California appeals court ruled for the bloggers. Whereas Microsoft always believes that the other shoe is about to drop. swiping their badges again and again and finally entering a numeric code to reach their offices. Apple took its obsession with secrecy to the courts. He said Apple routinely tries to find and fire leakers. He believes that his company is the best in the world and it should carry itself that way. But it’s very difficult to understand the reason why Apple always keeps distant to their clients." the manager said. Employees have been fired for leaking news tidbits to outsiders. A senior staff currently working for Apple refused to answer when asked about his health status jobs. And one member of Apple said that: Philip Schiller. or as punitive to those who dare violate the company’s rules on keeping tight control over information. No one can deny that it is the intriguing technology company in the world. It is baked into the corporate culture. arguing that they had violated trade-secret laws and were not entitled to First Amendment protections. and turn on a red warning light when devices are unmasked so that everyone knows to be extra-careful. Few companies are more secretive than Apple. and the company had to pay $700.4. Work spaces are typically monitored by security cameras. "Do not talk about that. 3. Secrecy is part of their culture and there are times at which one can’t really grasp the big picture. Apple’s senior vice president for marketing. Apple is different. The secret is not only a "strategic" relation with the media but also has become a cultural characteristic of Apple. Apple believes that it can stop the shoe from ever falling. according to a former employee who signed an agreement not to discuss internal matters. All areas within the company's headquarters are monitored by security cameras.000 in legal fees. Five years ago. "Law silent" Apple's harsh that even the senior managers also felt very scared when facing or just "walk" through Steve Jobs. 3. Believe Apple is better than all others Apple has an ego unlike any other company in the space. Some Apple workers in the most critical product-testing rooms must cover up devices with black cloaks when they are working on them. everything is different at Apple. Part of that is due to Steve Jobs’ ego. This company has rejected chatting with the world through blogs and dropping tidbits of information about its inner workings.2. even when that information has been published in the newspaper last week. their bags were checked and searched.1. has held internal meetings about new products and provided incorrect information about a product’s price or features. even with their own shareholders. Employees who work in secret project to go through a series of security doors.

In January 2007. which competitors like Microsoft and Sony knew about before it was unveiled. On that key issue. it must be useful. Jobs was on a leave of absence and had passed responsibility for the day-to-day operations of the company to the chief operating officer. Beyond CEO Steve Jobs’ charisma. Its competitive 34 . director of the John L. It boils down to “how we do things around here. the experts are divided.” In Boston Consulting Group released their Innovation 2006 study. But even by Apple’s standards. shareholders and the public is at odds with the approach taken by many other companies. It's not following the classic 'market-led' innovation path that inevitably leads to incrementalism and 'me-too' innovation. is unparalleled. Customers trust Apple and view it as a lighthouse guiding them on what to adopt next. beliefs.” said Gene Munster. Some believe Apple did not need to disclose Mr. and perhaps federal regulators. which are embracing online outlets like blogs and Twitter and generally trying to be more open with shareholders and more responsive to customers. the biggest question is whether Mr. an analyst at Piper Jaffray who has covered Apple for the last five years. Jobs’ liver transplant because Mr. or even a few . “They don’t communicate. though the innovative product is widely acclaimed. attitudes and operating norms. Steven P. and expanding markets and sales channels . The culture is the collective personality that embodies the values. Apple is telling its customers what's next. it’s a little odd that they are getting a reputation for lack of transparency. Success comes from new products with innovative differentiation. several new features generated spontaneous applause with what I term the “Wow factor.the likes of Motorola and Nokia . Regis McKenna.” said Charles Elson. Weinberg Center for Corporate Governance at the University of Delaware. Innovation does not depend on just one person. innovation is the key element that helps a company not only to survive. once again Apple stole the limelight by introducing the innovative new iPhone . where transparency is critical. a well-known Silicon Valley marketing veteran who advised Apple on its media strategy in its early days.Apple also sued a blog called Think Secret and settled the case for an undisclosed amount. “In this environment.all of which are vital for achieving competitive advantage. 3. The statements about Apple quoted in the article was "every single person in the company contributes to Apple's innovation success every day. Apple is very focused on the user experience and how design impacts that experience. Culture of Innovation In today’s fast-paced business environment. but as part of the settlement that blog shut down. and build entirely new markets that meet untapped customer needs. Against powerful major competitors . the more information you give the marketplace the better. Apple had a rank as the most innovative company.3. If Apple has it. Timothy Cook.the name is in dispute. said the culture of secrecy had its origin in the release of the first Macintosh. For corporate governance experts. Every organization has a unique ethos that drives its success or failure in the face of accelerating change. It’s a total black box. its handling of news about the health of its chief executive and co-founder. philosophies. who has battled pancreatic cancer and recently had a liver transplant while on a leave of absence. agile business processes. but thrive.” Apple’s “culture of innovation” allowed itself to reinvent its business processes and products.it stems from a culture that encourages and breeds innovative thinking. “For a technology company that views itself as innovative. Apple’s decision to severely limit communication with the news media. Jobs.Apple introduced a new design that is expected to capture significant market share. Jobs’ approach has led to violating laws that cover what companies must disclose to the public about the well-being of their chief executive.

III. Compaq. the bargaining power of supplier is high to the Apple. These competitors offer similar product to apple with only little different in features. head of Apple’s international division. International Growth In 1987. and. HP. Strong bargaining power of suppliers creates high cost of computer components. under his strong leadership. Several Apple competitors are IBM. Low threats of substitute product also characterize the industry. brand and design. the company established a European headquarters in Paris with a staff of 45 people and built a production plant in Ireland. However. 1. Still. and IBM) and only small of them has capability and willingness to provide the best for Apple. the home market of hobbyists. This condition made the price of processor component is high. PC Industry A large number of competitors especially from Wintel (Windows Intel) family create a ‘red ocean’ for Apple.S. there are no pure substitutions for Apple personal PC. Its drive for innovation also led it to think creatively about how to develop and incentivize its people.3. consumer market. international growth became a priority at Apple. never took off with the same popularity that it had elsewhere. Lenovo. Wintel platform is not produced by single firm rather than combination of firms.”58 Sculley turned to Michael Spindler. Germany. Competitors in the British education market shut out Apple. General 1. APPLE’S ENVIRONMENT 1. This limits the ability for Apple set price too high. Spindler developed a businesslike approach to the European market. Apple International Apple was an early market leader in Europe. AMD. “We were going to reduce our dependency in the U. Gateway. Sculley said. In Germany. He brought more experienced computer industry professionals into Apple’s older European subsidiaries and stressed a professional. Dell. sales. Since Wintel personal computer is the same kind of product with Apple.g. similar to the one Apple developed in the U. 35 . The European market for PCs was expanding faster than the U. 1.1. Apple achieved a high profile and a critical mass of buyers. Both Gassee and Spindler tried to convince Apple to pay more attention to growing markets abroad. Toshiba. and France. ECS. Apple was not as successful in Britain and Germany. Besides Wintel personal computer. the great number of competitors with similar product specification and the birth of Internet are also strengthening the bargaining power of final consumers. corporate image from the start in newer ones.S.2. etc.advantage went beyond productivity and efficiency to rewiring itself for creativity and growth. As there is only small number of processor suppliers (e. Cyrix. At the other side.S. Fujitsu. Sony. Before 1983. Apple depended on growth in markets abroad to cover up declining U. In order to appeal to these consumers. which meant sales growth in the international area would be important because otherwise people could feel Apple was failing. market. Apple managed its international operations from California. Acer. Spindler’s strategy involved focusing more closely on the needs of corporate and other markets rather than on those of home users. Intel. to develop a strategy for growth in the European market. This drew criticism from the European computer industry.S. Gassee led a successful marketing effort in France. the company expanded sales into Britain. it is considered as rivalry instead of product substitution. where Apple products were most popular.

He cut back the network and upgraded the remaining distributors to lure large corporate dealers who were accustomed to dealing with IBM. Strategy has to be reshaped based on internal and external environmental analysis. this made Apple strategy have to be adapted continuously as a response of the dynamics of environment. so do strategy. As environment change.Spindler reorganized Apple’s European distribution network. Apple response to the environmental change 36 . According to Spindler. Thus. You behave and act like a local company. operations overseas. rather than just moving boxes. it made environment situation in the future more turbulent and complex for Apple. yet you are within the network of the mother company back home. Thus.S.” Spindler also championed a new “multilocal” approach to international subsidiaries. The whole world can thus become one big shopping cart for ideas and capital. Analysis of how environmental change (future) will influence the strategy The environmental change trend in current and past can depict the future. Figure 12. As Spindler explained. a multilocal approach meant “you have a network model that adapts to local markets. We put more emphasis on adding value. Mac unit sales 1.4. Apple response to the environmental change shows improvement to the company revenue. selling the same products as were successful in the United States. The rapid increasing of technological innovation.” 1. and build it back up in quality rather than quantity. “We made a decision to take the distribution network down.5. Most American multinationals simply cloned their U. which was geared more to individuals and small business buyers. changing customer need. Since the return of Steve Jobs as Apple CEO. Apple selling on MacBook shows increasing trend which represent the successfulness of Apple strategy (Figure 13). competition due to low entry barrier lead to the more and saturated and fragmentation of market.

As environmental change dynamically. Figure 13 Apple perception map Apple also reduces product category to ease consumers. Through its research and development. by creating innovative design iPod and iTunes. 37 . Apple decided to enter digital media sector. Since Apple was keep losing market share in personal computer industry. Apples most decisive move was to create a web shop with hundreds of thousands of licensed songs. Soon Apple was making big money both on the iPod and the music – a dream scenario for most companies. As a result.25 on each sold song. When Apple introduced the iPod it was not a new product. iPod and iTunes are successful due to its innovative design. Money is being made both on the hardware. Jobs has developed a new market: that of legal digital music. Currently Apple no longer creates too many product variations in order to ease consumer choosing products. easy to use and large storage. increase the artistic look of its products. which in 2005 reported $1. At the end of 2004 Apple has sold 10 million iPods and 250 million songs. but customer preferences were changing rapidly. Apples margins on the iPod Mini is on average about 35% and $0. Songs bought at the Apple music store can only be played on iPods but this has not affected the sales so far. as compared to 400 million from the previous year. With this innovative approach. Apple responded by adapting its business model and strategy in order to struggle for survive. Apples business model for the iPod generates money in many different levels. as he did previously with home computers.1 billion in sales to the record companies. Apple has been tried to create new business model to create new source of income. To gather back its market share in personal computer and mobile computer. Apple creates very distinctive and innovative design that simplifies the size of computer. software and on the accessories. The mp3 players had existed for some time without being a big success. Apple improves design to create differentiation and offer with premium price (figure 13). Apple conducts differentiation strategy. Apple quickly saw a new market and created an inferior music player with a great design.

HP specializes in developing and manufacturing computing. To respond with dynamic of innovation and create competitive advantage. and offers infrastructure services. and networking hardware. Apple’s competitors: Google. The openings of Apple Stores are in order to extend the reach of the external distribution channel. and IT consulting corporation headquartered in Armonk. 2. United States. is an American multinational information technology corporation headquartered in Palo Alto. technology. New York. As a result the cash it gets from making chips for Apple has become a very small slice of its revenue. In order to manage its brand as high class and high quality product. After IBM cannot afford Apple to provide processor that is faster to Intel. Apple leaves IBM and does alliance with Intel as a response of rapid innovation of processor. IBM manufactures and sells computer hardware and software (with a focus on the latter). which is equal to 9. hosting services. Furthermore IBM has yet to produce a version of the G5 chip that would be suitable for use in Apple laptops. USA. The Mac Mini is expected to be the first Apple computer to use Intel chips. and advertising technologies.Apple also transforms its marketing channel by using exclusive delivery channel. IBM is one of the few information technology companies with a continuous history dating back to the 19th century. operating in nearly every country. with the entire product line switching by the end of 2007. Major product lines include 38 .nearly 30% of the product weight we sold seven years earlier. Apple currently uses Intel processor for its new computer and laptops for the next five years. Apple chose to transform its retail channel into exclusive store. cost and barrier for customer to switch from Microsoft to Apple platform. We expect this percentage to grow to 13% in 2007. business consulting. International Business Machines Corporation (IBM) is an American multinational computer. Inc is a multinational public corporation invested in Internet search. Apple has no other source that capable providing high-speed processor.. The company was founded by Larry Page and Sergey Brin.5% of the weight of all products Apple sold seven years earlier. In responding social pressure on environmental issues. Sony’s forthcoming PlayStation 3 and Nintendo’s future game-playing machine. we forecast recycling 19 million pounds of e-waste per year . designing software and delivering services. Apple moves and does alliance with Intel. Hewlett-Packard Company: commonly referred to as HP. data storage. as both of the company can create mutual benefit to compete AMD for Intel and MS Windows for Apple. cloud computing. By 2010. IBM has the contract to make PowerPC chips for Microsoft’s imminent Xbox 360 console. Apple’s move to Intel is thought to have come about because of IBM’s reluctance to expand the number and range of PowerPC chips it makes. California. and is now one of the world's largest information technology companies. Apple recycled 13 million pounds of e-waste in 2006. This strategy gives benefit to Apple as it is allowing Microsoft Windows to run above it in turn it reduces the risk. and generates profit primarily from advertising through its AdWords program. and consulting services in areas ranging from mainframe computers to nanotechnology. IBM is the world's fourth largest technology company and the second most valuable global brand (after Coca-Cola). The company was founded in a one-car garage in Palo Alto by Bill Hewlett and Dave Packard. Google hosts and develops a number of Internet-based services and products. and to 20% in 2008.

Michael Dell. 39 . the Xbox 360 as well as into the consumer electronics market with Zune and the Windows Phone OS. 2009. Dell Inc is a American multinational information technology corporation based in Round Rock.. 2010. consumer products. Internet-based solutions and services. and business consumables. sells and supports computers and related products and services. The company has diversified in recent years into the video game industry with the Xbox and its successor. Established on April 4. Japan.S. EMC Corporation: (EMC) a Financial Times Global 500. point-of-sale terminals. licenses. digital production printing presses. Cisco is one of the world's biggest technology corporations. food service. In 2009. Acer of Taiwan. industrial and social infrastructure systems. and is also included in the S&P 500 Index the Russell 1000 Index. Toshiba is a diversified manufacturer and marketer of electrical products. photo copiers. The ensuing rise of stock in the company's 1986 initial public offering (IPO) made an estimated four billionaires and 12. manufactures. The stock was added to the Dow Jones Industrial Average on June 8.4 billion. Xerox Corporation is a Fortune 500 global document management company (founded in 1906) that manufactures and sells a range of color and black-and-white printers.personal computing devices. is headquartered in San Jose. gaming and public sector industries. Connecticut though its largest population of employees is based in and around Rochester. 1975 to develop and sell BASIC interpreters for the Altair 8800. Its main products are self-service kiosks. NCR Corporation is an American technology company specializing in products for the retail. and supports a wide range of products and services predominantly related to computing through its various product divisions. develops. the area in which the company was founded. Microsoft rose to dominate the home computer operating system (OS) market with MS-DOS in the mid-1980s. Xerox holds a Royal Warrant from HM Queen Elizabeth II and the Prince of Wales. entertainment. enterprise servers. networking and communications technology and services. Inc is an American-based multinational corporation that designs and sells consumer electronics. as well as a diverse range of printers and other imaging products. USA that develops. The deal closed on February 8th.000 millionaires from Microsoft employees. Xerox announced the intended acquisition of Affiliated Computer Services for $6. related storage devices. New York. and household appliances. Fortune 500 and S&P 500 company. the company is one of the largest technological corporations in the world. automated teller machines. that develops. Toshiba Corporation is a Japanese multinational conglomerate corporation. 2009. Cisco Systems.. check processing systems. USA. software. Xerox is headquartered in Norwalk. healthcare. EMC is headquartered in Hopkinton. and Lenovo of China. electronic devices and components. Bearing the name of its founder. Microsoft Corporation is a public multinational corporation headquartered in Redmond. On September 28.S. Texas. Washington. headquartered in Tokyo. The company's main business is in infrastructure. They also are one of the largest providers of IT maintenance support services. Dell of the U. Toshiba was the world's fifth largest personal computer vendor. after Hewlett-Packard of the U. delivers and supports information infrastructure and virtual infrastructure hardware. barcode scanners. electronic components and materials. United States. Microsoft would also come to dominate the office suite market with Microsoft Office. followed by the Microsoft Windows line of OSs. and services. power systems. and related consulting services and supplies. multifunction systems. financial. travel. NASDAQ100 Index and the Russell 1000 Growth Stock Index. Massachusetts. spanning information & communications equipment and systems. California.

Gestetner. Rex-Rotary. Headquartered in Suwa. Tokyo. photocopiers. Monroe. under the Infotec brand. steppers and computer printers. including cameras. Acer provides e-business services for business. telecommunications and advanced microelectronics. Acer Group has its headquarters in Xizhi.Canon Inc. scanners. education. laptops. Acer Incorporated is a Taiwan-based multinational computer technology and electronics corporation that manufactures desktop and laptop PCs. Nagano. As a chip maker. Ricoh acquired Savin. Fujitsu is the world's third largest IT services provider and the largest in Japan. Japan. and now. Chiyoda. These operations continue as a stand alone business unit. point of sale docket printers and cash registers. Ricoh Company Ltd or Ricoh. Tokyo. large home theatre televisions. Hitachi is the third largest technological company by revenue as of 2009. In the late 1990s through early 2000s. Ltd commonly referred to as OKI. It still goes by the full name in Japan. the company has numerous subsidiaries worldwide and manufactures inkjet. is headquartered in Tokyo. Oki Electric Industry Co. The company is the parent of the Hitachi Group as part of the larger DKB Group companies. photocopiers. displays. a name traditionally known for manufacturing Seiko timepieces since its founding. and offers Software as a Service (SaaS) document management solutions such as Document Mall. products continue to be marketed worldwide under the rest of these brand names. desktop computers. personal digital assistants (PDAs). government. NEC Corporation is a Japanese multinational IT company. Japan. servers. provides information technology (IT) and network solutions to business enterprises. It is one of three core companies of the Seiko Group. information and imaging related equipment. Tokyo. is a Japanese company manufacturing and selling info-telecom and printer products. multimedia and home theatre projectors. and Nashuatec. the company grew to become the largest copier manufacturer in the world. During this time. dot matrix and laser printers. Fujitsu Limited is a Japanese multinational computer hardware and IT services company headquartered in the Shiodome City Center complex in Minato. OKI Electric or the OKI Group. Ricoh produces electronic products. Taipei County. and home users. storage devices. primarily cameras and office equipment such as printers. Ricoh acquired the European operations of Danka for $210 million. is a Japanese company that was established on February 6. NEC. Hitachi Ltd. fax machines. Fujitsu's central focus is on providing IT-driven business solutions. integrated circuits. The Seiko Epson Corporation: known around the world as Epson. but the company and its subsidiaries also offer a diversity of products and services in the areas of personal computing. Japan OKI manufactured the first telephone in Japan in 1881. Although the Monroe brand was discontinued. Tokyo. LCD components and other associated electronic components. In 2006. Limited before re-branding in 1983. 1936 as Riken Sensitized Paper a company in the RIKEN zaibatsu. has its headquarters in Minato. is a Japanese multinational corporation that specialises in the manufacture of imaging and optical products. Tokyo. The company used the name Nippon Electric Company. business. part of the Sumitomo Group. Japan. Its headquarters are located in Ōta. NEC Semiconductors is among the worldwide top 20 semiconductor sales leaders. is a Japanese multinational corporation specializing in high-technology and services headquartered in Marunouchi Itchome. smartphones and peripherals. robots and industrial automation equipment. after more than 120 years the company specializes not only in developing and manufacturing telecommunication equipment but also in information products and 40 . It is headquartered in the Ricoh Building in Chūō. is a Japanese technology company and one of the world's largest manufacturers of computer printers. Lanier. communications services providers and government. Japan.

Threat of Entry: Barriers to entry: The cost of entry is relatively low. Apple doesn’t have any patents on the actual MP3 technology and others are free to use the technology. digital video recorders.2. The higher the profits the larger number of firms want and will try to enter the marketi. was released on November 2. Economies of scale: Ideally. such as Automated teller machine(ATMs) and printers. but in 2009 it began to shift its core focus away from Windows Mobile devices to devices based on the Android operating system. HTC is also a member of the Open Handset Alliance. The company initially made smartphones based primarily on Microsoft's Windows Mobile software. formerly Hong-Ta Corporation. No real technological barriers to enter the market. they are welcome to try and sell their product on the open market. OKI provides products to telecom carriers. It is a manufacturer of wireless telephone handsets. RIM is headquartered in Waterloo. Both of these substitutes are older technologies developed prior to the iPod. However. The new product would have to be cheaper and have a better design and a completely new look for the MP3 industry. who currently serves as its co-CEO along with Jim Balsillie. Proprietary Technology: Apple didn’t patent the iPod interface. Inc. 3. Motorola's handset division is now focusing on smartphones using Google's open-source Android mobile operating system. If competitors can create an MP3 player. was the first phone to the market that used the Android mobile device platform. Canada and is a sponsor of RIM Park in the northeast of the city. The first phone to use the newest version of Google's open source OS. HTC Corporation. marketed by T-Mobile in many countries as the T-Mobile G1. Motorola's home and broadcast network products include set-top boxes. Inc is an American-based. Product Differentiation: The most difficult part of trying to enter the MP3 market would be overcoming Apple’s reputation. Apple has been making high profits and been very successful in the MP3 industry. telecommunications company based in Schaumburg. 3. and high-definition television. There aren’t any legal barriers. Threat of Substitutes: The threat of substitutes is always a concern for successful industries. the larger the batches the cheaper the costs. Apple did however patent the touch interface. Motorola.0. Some of the substitutes to Apple. Research In Motion Limited (RIM) is a Canadian telecommunication and wireless device company best known as the developer of the BlackBerry smartphone. financial institutions. Illinois. Realistically there are not many new and innovative substitutes available on the market. Android 2. The HTC Dream. Its business and government customers consist mainly of wireless voice and broadband systems used to build private networks and public safety communications systems like Astro and Dimetra. a group of handset manufacturers and mobile network operators dedicated to the advancement of the Android mobile device platform. External Analysis: 5 Forces 3. and also designs and sells wireless network infrastructure equipment such as cellular transmission base stations and signal amplifiers. For new entrants the initial start up costs are high but not unbearable. 41 . It was founded by Mike Lazaridis. government agencies. Company’s can only be successful when there is perceived value from the customers point of view. 2009 as the Motorola Droid. is a Taiwan-based manufacturer of smartphones. the biggest concern seems to be the rivalries who are trying to gain market share against the iPod. large corporation as well as SMBs both directly and via distributors and dealers. computer telephony.mechatronics products. There are many consumers whom have brand loyalty with Apple and wouldn’t easily switch. Another way to increase the profit margin is charging a higher price to the consumer. and network equipment used to enable video broadcasting. Ontario. iPod mp3 player are portable compact disc players and portable radios.1. multinational.

Some other alternatives not as commonly known are the “iRiver”. The Zune is available in single size with multiple options for memory capabilities. There are multiple Apple indicators in an industry to help foresee the threat of suppliers. many have tried to imitate the innovative design.3. supplier’s selling unique or differentiated are.3. into smaller and larger physical sizes. such as the “Nano”. Threat of Rivalry: Since the birth of the iPod on October 23. Many of these rivals have aimed at competing with one specific version of iPod.4. the “Touch” and the “Classic”. 3. The Threat of Suppliers: The number of suppliers can increase the price and can reduce quality. Through the innovation of the iPod. Apple’s strategy has allowed them to position themselves and create product differentiation. Apple has been able to formulate a strategy to set them apart from the rest of the industry. One of the iPod’s largest competitors is the Windows version called the “Zuneii”. The most common indicators Zune by few firms. the “Shuffle”. Apple has differentiated themselves by providing multiple choices allowing consumers to choose their preference of iPod. Sony “Bluetooth Walkman” and the Sandisk “Sansa Fuze”. Apple has been able to sustain the market share and has continued to develop the original iPod. versions with more or less memory capabilities. 2001. supplier’s industry dominated Low High Consumer Consumer 42 iRiver Preference Preference Bluetooth Sansa Walkman Cost Fuze High . The “Sansa Fuze” is available with limited memory capabilities. Apple’s position has allowed them to influence the industry and created innovation throughout the entire industry.

suppliers threaten forward vertical integration. Apple’s iPod’s are one of a Conclusion: Initially Apple was the price setter. I wouldn’t recommend trying to enter the consumer electronics market.5. products sold are undifferentiated and standard. These are just some of the options Apple could look into. suppliers aren’t threatened by substitutes. and firms are not important customers of supplies.1 Brand Name Product Design Compatibility with Multiple Programs Adapt to Market Change V X X X X X X R X X I X O X X X X Competitive Implications Sustained Temporary Advantage Parity Sustained 43 . Overall. small number of buyers. and buyers are threatened by backward integration. A few options to retain customers could be. products are a significant percentage of buyer’s final costs. Threat of Buyers: There isn’t an overwhelming concern with the threat of buyers. maybe fifteen percent on the next purchase of the iPod. Apple could increase the length of the warranty. Apple isn’t threatened by their suppliers mostly due to the large amount of market control. Apple needs to maintain a high level of customer satisfaction to ensure they don’t switch to competitors products. The one concern Apple might have with their suppliers is there isn’t a threat of substitute product currently available on the market. Now with the changing MP3 market. In Apple’s case consumers are willing to pay a higher price for their products because they believe it carries a higher value. with an emphasis in MP3 players.products. there was no other comparable technology. buyers aren’t earning high economic profits. 3. It would not be in the best interest of Apple’s suppliers to increase their cost because of the amount of volume Apple would provide their supplier. Overall. if their suppliers were to increase costs to Apple. offer a deal if price drops within 30 days of the original purchase and Apple could refund customers the difference. Though Apple is making high profits. Apple would respond and most likely switch suppliers to another company who was interested in their business. Apple’s suppliers sell similar products that could be easily purchased from other suppliers. 4. Internal Analysis:  VRIO Analysis Table 1. offering customers ten percent off the purchase of next apple item. they control significant market share. Some leading indicators Apple could look for within the industry to foresee this threat are. it is beginning to shift and become a buyers market and Apple with have to work harder to maintain customers and guaranteed those repeat sales. There are many suppliers Apple could choose from.

in an attempt to shed the company's hobbyist image and tap into the lucrative market for office computers. All of the different iPod’s vary in colors and memory space. colors. The crucial point not to be overlooked is that the company’s mission did not guide Apple into this differentiating strategy. Apple. advertisements. energy efficiency. Since iPod’s are only compatible with Apple products. has been able to develop their iPod product design by creating different sizes. Through Apple’s use of recycling and conscious efforts to be more efficient gives Apple a sustained competitive advantage. These four areas are product and packaging design.Environmental Health and Safety X X X X Sustained Apple. ranging up to the Macintosh II FX. Inc. Inc. and lavish color graphics and sells for more than 44 . Inc. The Apple iPod is compatible with any Apple product including iTunes and The Apple Music Store. Apple. Apple.iii Apple has eliminated the use of polyvinyl chloride and brominated flame retardants in its products. but iPod users are limited to the products offered through Apple. Sculley had focused on building ever more powerful and expensive Macs. The limitations of the iPod make the iPod’s compatibility with other programs a competitive parity. Apple iTunes and Music Store offer a wide range of products for many different consumers. capacious memory. Inc. Since 1986. The brand name and logo alone allow Apple. Inc.1. many other companies provide customers with MP3 players that are affordable and comparable in memory size and use. the company sought out to make the personal computer an accessible and affordable device to the mass market. BUSINESS STRATEGY 1. The proliferation of new software and hardware technology drastically changed the landscape of the industry and Apple evolved into a leader in desktop publishing. shapes. Apple. Inc. iPod users are not able to transport music from their windows media player. Inc.” More specifically. The change of strategy 1. does not have a patent on their iPod product design other companies within the industry are able to create similar products that are affordable. Inc. thus the iPod product design is temporarily competitive. Apple. IV. responsible manufacturing. The line now includes six models. Now. customer service. which features fast processing. has taken the opportunity to add value to both the product and environment through four areas of manufacturing and service. The Apple symbol is unmistakable and impossible to imitate. The creative logo. has been able to establish their brand name through innovation and sustainability. nano. is committed to serving both the customer demands and the environments demands. Inc. Rapidly changing industry dynamics dictated Apple’s competitive strategy. has developed many different styles of iPod’s that meet customer demands. Beginning Apple began with the mission to “change the world through technology. designs and sells an iPod classic. and color. has proven their ability to adapt to market change and demand. to adapt to change through creative advertisements and product design. and product design bring additional value to the Apple brand name. Although Apple. and shuffle. and recycling. shape. Apple has also created energy efficient tools in their products allowing customers to monitor their energy consumption. or buy music from any online music store besides The Apple Music Store. touch. and memory. The iPod began as a single size. Since Apple.

Says senior vice president Albert Eisenstat. and Apple.0. It calls for new disciplines and permanent changes that go to the core of the company.S. in which Apple holds a 20% stake. called General Magic. kept churning out premium Macs. the company had a poor quarter.S. was a wholesale decentralization. high-margin approach transformed Apple into one of the fastestgrowing and most profitable makers of PCs. Windows machines aren't Mac clones. the strategy will profoundly alter the company's way of doing business. The company's problem: a dramatic change in the PC industry.2. cutthroat prices became the main selling point. engineers report directly to the product's manager. Apple will continue to produce costly.000 the price of two comparably equipped IBM clones. Right away the two laid off 400 employees. Revenue growth for fiscal 1990 is expected to sag alarmingly. He wound up canceling several projects and spinning out another into a company. who has been at Apple longer than any other top executive: ''The low-cost machines are creating a whole new ball game for Apple.9 billion in 1986 to $5. Sales in the U. The emphasis on low-cost Macs is just the outward manifestation of a whirlwind of change.'' Besides making Macs affordable to more customers and more attractive to businesses. In the last three months of 1989.000.. which lists for $2. large memory. its manager had to get all the technology sachems to agree. Those same business customers who had clamored for more powerful Apple machines now complained that Macs were simply too expensive.295. By last Christmas the company seemed totally out of step: A Mac with a color monitor. short of cash for research and development. By cutting Apple's notoriously fat and forgiving operating margins.$10. profits will drop precipitously. however. to below 6%. in fall 1988. If it works. engineers reported to the heads of their particular technology units disk drives.3%.'' In the old setup. 60. could end up an also-ran in the industry it invented. with sales flat and profits lagging 11%. Europe. or system software. and hard disk cost $5. The other two divisions. Apple will open up new markets for the aging Macintosh line and buy itself time to discover the breakthrough technologies necessary to remain a PC leader. He broke Apple into three sales and marketing divisions covering the U. and the Pacific. a program that gives IBM compatibles a snazzier screen that rivals the famously friendly Mac. He immediately accelerated the schedules of Gassee's low-cost Macs and ordered up the budget model that will replace the best-selling Mac SE. which had no cloners to fend off. Sculley also restructured the product development teams to remedy a problem that has nagged Apple from the beginning: its inability to execute simultaneously the development of more than one major product. Profits nearly tripled as well. Apple's first firings in four years. had problems. products bogged down in the lab. Microsoft also released Windows 3. video circuitry. and a division to handle product development and manufacturing. If it doesn't work.5% in 1988 to 7. The reorganization helped the European and Pacific operations thrive. most immediate priority. Sculley with strategy of low-cost in 1990: Sculley has devised a two-pronged counterattack. but ''the low-cost Mac strategy is the first. which account for nearly 90% of the global market. he hopes that the anticipated 45 . As Sculley explains it. high-powered machines. Says he: ''We have to prove we can walk and chew gum at the same time. and Apple's worldwide market share declined from 9.3 billion in the fiscal year ended September 1989.'' Sculley’s last try. Among the IBM compatibles. in which he hopes lower prices and a broader product line will jump-start unit sales. In Sculley's new arrangement. At the same time. Apple. to $454 million Unit sales of Macs started to slip. Sales swelled from $1. This high-end. and the company began to splinter as marketers and product developers blamed each other. slowed as Apple lost ground to IBM and its clones. For a product to be born. but they come close enough to make Apple sweat 1.

sending. says Sculley. The company has been struggling to bring out System 7. is developing products for Windows. fax machines. the emergence of Local Area Networks began to cultivate new applications for computers. Priority No. Claris. PowerTalk mirrored the rest of the elegant and richly engineered point-and-click Mac desktop environment. Macintosh sales for all of 1989 were about 650. that can read and manipulate handwriting and plug into computer networks. Apple and Microsoft each developed very different solutions for this need.400 messaging and X. The second priority. and printers. During The Rise of Windows. is to come up with ''innovative laptop and notebook computers. who lately had begun shifting programming resources to Windows projects. so their plans and motivations for messaging centered on sophisticated. The Mac's operating system software is what gives the machine the distinctive look and ease of use that are its main selling points. including files. particularly within the company's own core markets of education users and graphic designers working in small workgroups.3. 1. Microsoft's Exchange Server was intended to be based on open industry standards: X. and that's where we're concentrating much of our research. In the mid 90's. System 7's debut has been postponed twice as programmers iron out bugs. Apple seemed content to rely on its existing. whenever they found each other online.0 while it also made incremental progress in developing the entirely new Windows NT operating system. are the keys to the next paradigm in computing. Hence. who'd like to see Apple build what he calls ''intimate computers'' portable devices the size of a notebook. local Macs on a network were intended to exchange messages at regular intervals. Microsoft worked to improve its DOS based Window 3. 46 . Since Sculley took over R&D. Windows' allure is compelling in the five months since the software was introduced.000. he goes on. mail. Even Apple's software subsidiary. a powerful new version of the operating system that will help Apple beat back the challenges of Windows and OS/2. where we are obviously behind the power curve.'' Indeed. PowerTalk didn't require a dedicated server. In contrast. high value client machines. Apple merely entrenched in a rut of announced initiatives that failed to decisively deliver real progress or marketable products.higher unit sales will assuage software developers. ''miniaturization and mobility. established share of specific niche markets that offered large profit margins. Apple's business model revolved around selling hardware. or even a paperback book. Rather than just delivering text messages. Along those lines. PowerTalk was conceived as a client side system for choosing. Apple's PowerTalk was an entirely proprietary system based upon AppleTalk.500 directory services. The delays have convinced him that Apple needs to rethink how it manages software development. While Microsoft looked for new markets and targeted business users in particular. Sculley believes that in a few years portable computers will be as ubiquitous as calculators. Since the commercial Internet had not yet arrived. and the software that makes it all work. 1990-1995: Apple vs Microsoft Apple's distant lead in graphical computing began eroding quickly in the early 1990's. messaging was the next obvious new application for LANs. both PowerTalk and Exchange were designed prior to the arrival of the now standard SMTP email system. 3: pumping up Apple's software prowess. sounding like a computer nerd. and promised to be the next great Mac advantage.'' This concept bears the stamp of Alan Kay. Apple didn't think the world was ready for dedicated servers to handle email. After file sharing. an advanced operating system from IBM. Microsoft has sold one million copies. and interacting with various things.

Apple had already pioneered the concept of automatic network configuration and presence discovery services with AppleTalk networking and AppleShare file sharing. such as a system wide keychain and address book. Apple gravitated into the position of a research lab full of engineers working on various projects that never seemed to materialize. These projects snowballed into horrific disasters that were so complex they could never be completed. Apple's middle managers sought to prevent their pet projects from getting canceled. and a protocol stack designed to accommodate virtually every existing messaging protocol and any others still to arrive. and an extensible information cataloging system. QuickDraw GX. particularly when paired up with Apple's other gigantic snowball project. theory and practice are the same. by the early 90's. these features were reintroduced for modern IP networks under the name Bonjour a decade later. (Notable platform lesson: raw technologies don’t sell. the world was aligning behind a different set of goals and expectations for email. but which also contributed highly touted features that were tightly woven into Apple's increasingly widening strategies. Apple was shipping it in 1993 as part of System 7 Pro. Rather than creating insanely great products designed to sell and enrich the company in ways that would foster further great developments. Networking capacity was another problem for PowerTalk. The resulting suite of software was simply too much to run on existing Mac hardware. in practice. they created fiefdoms of control over various projects. finished products do. Since PowerTalk saw only marginal use. and then tied them together to create essential packages of functionality that would be hard to veto. While software had been straining to keep up with hardware advancements in the late 80's. it failed to ever become lean and refined.) The PowerTalk Disaster: PowerTalk was one of those snowballing disasters. The polling required to find other networked systems became a liability when working remotely over dial-up networks. Even for users with enough disk space and RAM to install PowerTalk. digital signatures and encryption features. a suite of messaging technologies that picked up features as it rolled downhill: extensive foreign language support. (Notable platform lesson: undeliverable zombie projects have to be put down or they will simply eat up all the brains in a company. a centralized address book with a universal addressing system.) Apple's ability to deliver products was increasingly being hampered by a lack of productoriented discipline. the lead engineer of Apple's networking efforts in the AppleTalk era. Apple was delivering overarchitected software which was simply too much for the hardware of the time. (Notable platform lesson: in theory. In the typical fashion of corporate cube politics. without any regard for the potential marketability of those products. were salvaged and are still in use today in Mac OS X. although a few of its associated ideas. It grew into the Apple Open Collaboration Environment.) Apple eventually dropped PowerTalk. 47 . By the time hardware was available to run PowerTalk and the rest of AOCE. they are not. its attempt to sell a premium version of the Mac system software. That made them impossible to deliver but difficult to kill. a classic problem for Apple's out of control software initiatives. got started with PowerTalk in 1989. systems would dial expensive circuits at regular intervals to attempt deliveries to remote PowerTalk clients. Gursharan Sidhu. simply getting mail became a problem because individual mail items quickly ate up any remaining disk space.

1. This move allowed Apple to have a desktop and a portable computer in both the professional and the consumer segments. and its market share dwindled from 8% to 3. Apple introduced the easy-to-use iMac in 1998. the failure of PowerTalk left Apple without any Enterprise products.1998. Apple: Not Down To Business Apart from A/UX. Because Apple didn't have a lot to offer larger businesses. Apple had one of its critical points in history in 1999 when it introduced the iBook. 1997-Steve Jobs: Matrix product Apple pioneered the PDA market by introducing the Newton in 1993. and updates following 1998. a simplified product mix strategy formulated by Jobs. or even any serious workgroup server strategy. the company concentrated its efforts on selling to its existing customer base: education and individuals Apple managed to lose a large amount of profit. Apple tried to build workgroup server products on top of Mac System 7. The matrix is as follows: 48 .4.4% from 1995 . but again ran into significant legacy problems: the Mac system software was never designed to accommodate the needs and requirements of a dedicated server. but was running out of time. It released a highly stable operating system in 1999. and updates following 1999. Once a platform becomes commonly established. Apple gave up on PowerTalk in 1996 and turned their attention toward the emerging commercial Internet with Cyberdog.After failing to make any progress in getting AOCE adopted by Mac users. The company also slipped in the education sector during this time by as much as 14% per year. Later. This completed their “product matrix”. Apple desperately needed a better underlying platform to built upon. it is often very difficult to unseat.

in this case. VP of Worldwide Product Marketing for Apple. containing improved versions of iDVD. Apple’s present day competitive strategy is a return to differentiation. Then Apple introduced the iPod. Apple’s mission is to deliver a highly innovative and superior solution to a customer’s personal computing needs. Apple hit another important historical point by launching iTunes. Products that are enhancements or complements to the personal computer are also vital in pursuing this differentiation strategy. Apple released the iLife package. and wireless devices. obtaining cooperation from “The Big 5” Music companies—BMG. Key elements to this strategy are an emphasis on design. stated. “iPod is going to change the way people listen to music. In reference to Apple’s recent advancements. 1. durability. iPhoto. Apple released the world’s fastest PC (Mac G5). This allowed iTunes Music Store online to offer over 200. Jobs said. and style. Apple then opened its own stores. Apple’s present strategy: Product differentiation Apple has pursued a Differentiation strategy.” That is indeed a bold statement. branding through advertising. The scope. central to the “digital lifestyle” strategy. service. EMI. Philip W. which had dual 2. PDA’s. In 2003. digital cameras. functionality. and iTunes. performance quality. in spite of protests by independent Apple retailers voicing cannibalization concerns. Apple continued its digital lifestyle strategy by launching iTunes Music Store online in 2003.0GHz PowerPC G5 processors. and ease of integration of these complements affect the “utility” consumers will gain from an Apple PC. reliability. features. and quality. differentiation encompasses tangible and intangible dimensions. This allows them to charge high premiums for their product. This marked the beginning of Apple’s new strategy of making the Mac the hub for the “digital lifestyle”. engineering skills. a personal computer. Tangible differentiation is concerned with the physical characteristics and performance of a product. Warner.” He was right. They invest a lot of money in design. For Apple. which the other manufacturers use. brand image (For example placing retail stores on premium high streets) trying to differentiate themselves from the competition by creating a “Mac” experience or way of life. 49 . Apple adopted a competitive strategy that vertically integrates these complementary products that include the iPod. Schiller. In 2003. They manufacture almost all the components their selves even if there is a cheaper alternative. Apple continued their innovative streak with advancements in flat-panel LCDs for desktops in 2002 and improved notebooks in 2003. “We are going to do for digital creation what Microsoft did for the office suite productivity. which could be out sourced this Includes the operating system called Mac OSX instead of Windows. Time will tell whether that happens.000 songs at introduction. and R&D. creativity. Sony Entertainment. meaning that even though they sell less volume they are still extremely profitable. Universal.5. Drivers needed to attain these objectives are through the firm’s unique marketing abilities. iMovie.Desktop Portable Professional Segment G3 PowerBook Consumer Segment iMac iBook In 2001. Physical characteristics include form.

higher advertising. and that. this was more due to industry wide demand contraction as industry sales declined by over 5%. on open standard networks such as the internet. yet Apple has been able to surpass their arch rival in terms of inventory turnover. despite Apple's small market share. which makes the PowerPC microprocessor for the Mac – a RISC chip which technically delivers faster performance for less complex design . This feat has significant implications. Apple's computers don't mix well with Windows servers. Motorola. The education market. is under pressure to abandon the company because of relatively low initial cost PCs. Apple’ offerings have no difficulty integrating. This however. Apple’s operating and profit margins exceeded industry averages.It is also important to note that adopting a differentiation strategy by no means insinuates that a company is not concerned with cost.2. Dell for instance has been courting the education market very aggressively. They pioneered this method and had a first mover advantage for quite some time. Creation & Sustaining of Competitive Advantage 50 . However. 2.has finally managed to improve the performance of its chips to exceed the processing speed and power of Intel's Pentiums. Apple’s weakness: Apple is lagging behind in providing the kind of interoperability that corporate and educational buyers are concerned about: the network. going to the Intel platform may be a correct strategy. Dell’s core competency is in their direct model that leverages JIT inventory. Apple made significant progress in this arena. Apple's own engineers design much of the hardware and virtually all the key software for Macintosh computers. Long term. Apple’s competition 2. If Apple had maintained its 3 year growth rate. and increased vertical integration. In 1999 and 2000. Although 2001 was a dismal year.3. long a stronghold for Apple. often set the aesthetic and technical standards for what a PC should be. Apple has one of the best management teams in place. "The economies of scale behind Intel’s new Itanium products are going to eclipse Apple. skilled labor. Regular technological breakthroughs by Apple's component suppliers has helped it keep pace in terms of performance with Windows PCs. 2. their operating and profit margins would have been competitive with Dell. Apple competitive advantages: A loyal customer base. these costs need to be continually assessed an evaluated so that they can be improved. Apple is the only vertically integrated computer company and thus can manage all aspects of the customer experience. Although differentiation adds costs by way of higher quality inputs. is due to Microsoft co-opting backend standards with their suite of server and application software – Outlook mail for instance. and HP. They streamlined operations to the point where they now have the highest inventory turnover in the industry. 2. Apple products have poor network compatibility.1. Apple's engineering and software skills could make it a force to be reckoned with in the consumer electronics business long dominated by Sony and Matsushita. Compaq. The result is a distinctive line of comp uters that are more stylish and reliable and easier to use than their Wintel PC counterparts. Motorola's R&D efforts simply can't match the money and muscle Intel devotes to its products.

it's obvious that Apple Inc. This approach has also allowed Apple to market the iPod to many different ages and ethnicities. since then they have developed numerous sizes. this brand success is not a result of dumb luck or forces beyond Apple's control. we will study 11 effective strategies Apple uses: A Store Just for Apple: Apple has historically been troubled by big-box sales staffers who are ill-informed about its products. Apple has been able to establish a brand name and an image that lead customers to live a certain lifestyle. strengthens customer loyalty. it's part of a well-thoughtout plan to deliver strong products and to create an Apple culture. By creating a store strictly devoted to Apple products. most Mac programs are produced by Apple. This is a space where Macheads can not only get service but also hang out with others who enjoy Apple products just as much as they do. However. Find out more about these and other strategies that Apple employs to achieve its tremendous customer loyalty. a problem that made it difficult for Apple to set its very different products apart from the rest of the computing crowd. they're more likely to consider buying an Apple computer in the future. By creating this space. 51 . high quality products. This is what sets Apple apart from other competing companies and will continue to help them maintain their competitive advantage. Buy an iPod. Once you've become smooth. 11 Effective strategies apple uses to create loyal customer When shoppers sleep outside of stores just to be one of the first to buy an iPhone. Apple stores are a friendly place where Mac and PC users alike are encouraged to play with and explore the technology that the company offers.4. the company has not only eliminated this problem but has made an excellent customer-loyalty move. By selling products with lower entry costs. For the average user. Apple encourages current and new customers to get excited about what it has to offer. would you want to go back to uptight? Varied Products: Many consumers may not be ready to buy an Apple computer. but they're willing to give gadgets like the iPod or iPhone a try. while PC appears uptight and old. styles. This sort of control over the entire user process. it creates an opportunity for new users to be introduced to Apple. Apple users generally don't have to stray to find products and solutions they want. up-to-the-minute and smart. Apple has done a phenomenal job creating products that complement already existing successful products to retain customers. Complete Solutions: Apple's products complement and complete each other. Consider Apple's I'm a Mac campaign. Are You a Mac?: Let's face it. Apple is a hip brand. is a company that enjoys fanatical brand loyalty. from hardware to software. The Mac guy is smooth and confident. If these users enjoy their gadgets. they have allowed consumers to create a product that meets their specific needs and lifestyles choices.Apple has been able to maintain a competitive advantage while creating innovative. It pushes a strong identification with everything young. With the many different iPod versions and personalizing options. Apple needs to maintain repeat customers and still provide the highest quality innovative products to ensure they will continue to purchase products. Apple has done an excellent job proving to customers their product is the highest quality and is incomparable to rivals’ products. 2. and capabilities that have been able to adapt with the changing market and still meet the consumer demand for MP3s. and you can download music via iTunes. Apple has created products that have become a lifestyle for consumers. Apple established the original iPod in October 2001.

Why? Because Apple makes it so easy. quality of wireless service. Unless something goes wrong. Branding strategy Apple Inc uses the Apple brand to compete across several highly competitive markets.Media Fodder: Media outlets. the consumer electronics industry with products such as the iPod. the average consumer's interaction with the company is likely to be low. 52 . By giving customers an opportunity to employ Apple in their living rooms. Products That Deliver: Apple carefully considers what consumers are looking for. Attractiveness: From packaging to aesthetic design to user-interface experience. You have to consider billing errors. its portfolio is not. interaction becomes multifaceted. including the personal computer industry with its Macintosh line of computers and related software. especially bloggers. With leaked rumors about new developments. Of course. a smiling icon and slick-looking hardware remind customers every time they use Apple products that what Apple offers is appealing. Bright colors. By creating this early exposure. Apple makes it easy to stay loyal to a brand they already like. With a phone. you don't have any reason to speak with an Apple customer-service representative. Education Sales: By selling its products to schools and universities. the iPhone presented an opportunity that could have made Apple much more involved. so its products are a result of both extensive research and strong design. they become comfortable with the interface and familiar with the superior performance the brand offers. love to write about Apple. pockets and offices. New Innovations: Although the architecture of Apple products is consistent. Because of this consistency. and this makes them more open to making a repeat purchase. customers who already own Apple products have a good idea of what they'll be getting before they make a purchase. Apple captures customers before they even know that they are customers. but also make them want to buy more products from you in the future. They know that it will be easy to adapt to new hardware. With the iPhone. and more recently in the smart phone market with the Apple iPhone. digital music distribution through its iTunes Music Store. Apple gift wraps news stories that are just begging for speculation and hype. Apple turns classrooms into showrooms. The company offers consumers a number of different ways to enjoy its products. contracts and a number of other factors that often lead to customer frustration. By perpetuating this cycle of media frenzy. 3. Apple makes its products accessible and attractive. It's plain and simple: Robust and easy-to-use products not only make your customers happy. Apple keeps its customers excited about buying new Apple products now and in the future. Consistency: All of Apple's products have the same basic architecture. This meticulous planning is a large contributor to Apple's high customer-satisfaction rates. similar to administering iTunes for the iPod. its very own expo and mysterious shutdowns of its online store. Outsourcing Unpleasantness: With Apple products. Apple was wise to stick with building a good product and letting AT&T handle the service. If students go through school using Apple products.

but iMac. Apple launched the iPhone (released in July 07) to extend the brand even further. hopes.4. the Final Cut family. The Apple brand personality is about lifestyle. The iPod Halo Effect Though Apple's iPhone and iTunes music business is profitable in its own right. the company maintains a "monolithic" brand identity everything being associated with the Apple name. the company's sales and margins have been growing strongly since 2006. Apple TV. Apple's aspirations for the iPod halo effect was was highlighted most strongly when it used the slogan "from the creators of iPod" in its promotion of iMac G5 computers. Apple Brand Architecture From a brand architecture viewpoint.1. 3.and launching apple into a completely new market: mobile handsets. The list of Apple's Trademarks reflects something of a jumbled past. Products whose market includes Microsoft computer users (for example MobileMe. the Apple brand came full-circle . innovation. The Apple Brand Personality Apple has a branding strategy that focuses on the emotions. then leveraged into the consumer electronics market. these product initiatives are growing a highly relevant.2. and therefore more acceptable to Windows users. Apple's current line-up of product families includes not just the iPod and iTunes. and then back into the consumer personal computer market. passion. Apple reports that half of all computer sales through its retail channel are to people new to Macintosh. and power-to-the-people through technology. MacBook. The predominant subbrand since the introduction of the Apple Macintosh in January 1984 has always been the Apple Mac. 3. Yet other product have been developed more for a professional market (eg Aperture. even though marketing investments around iPod are substantial. people-driven product design. Apple's buzz marketing efforts in the first half of 2007 were truly superb. iBook. Airport Extreme. iWork. 3. even when investing strongly in the Apple iPod and Apple iTunes products. it is not used for a large number of Apple's consumer products (eg Mac mini. and Apple has achieved several "best ever" quarterly financial results during the past couple of years.having been built into a branding system that originates in the personal computer market. However. The Apple brand personality is also about simplicity and the removal of complexity from people's lives. culminating in the release of one of the most highly anticipated products for many years . While the "i" prefix is used only for consumer products. A couple of years ago. Apples' branding strategy is bearing fruit. Apple has not established an "i" brand. Apple hoped that the popularity of iPod and iTunes among these new groups of customers would cause these segments to be interested in Apple's computer products.3. In a so-called iPod halo effect. dreams and aspirations. imagination. Apple Brand Strength Now Creating Financial Success So far. and Xserve). and Safari) have been named so they are somewhat neutral. Leveraging the success of the iPod. iTunes. and about being a really humanistic company with a heartfelt connection with its customers. At the same time. Safari. appealing brand image in the minds of consumer segments that Apple has not previously reached. QuickTime. In this instance.3. Since the take-off of the iPod there has been a dramatic rise in Apple's computer sales and market share. For example. This does seem to have happened. Apple is using iPod. and now iPhone to reinforce and re-invigorate the Apple brand personality. By July 2008 the buzz about the 3G iPhone resulted in over 1 million units being sold in the first 3 days of its release in over 20 countries around the world. and now iPhone. iLife. and Mighty Mouse). 53 . QuickTime. Bonjour. Apple's venture into these product areas was based on a strategy of using the music business to help boost the appeal of Apple's computing business. liberty regained.

and Motorola to create a new computing standard based on the PowerPC architecture. and later named CHRP (for Common Hardware Reference Platform). from existing Micro Channel architecture models. and changed only to support the new 60x bus style of the PowerPC Apple and IBM created two new companies called Taligent and Kaleida Labs as part of the alliance. Taligent was formed from a core team of Apple software engineers to create a nextgeneration operating system. and that since RISC was the future. Both IBM and Motorola would manufacture PowerPC chips for this new platform. The computer architecture base was called PReP (for PowerPC Reference Platform).4. code-named "Pink".1. Apple’s Alliance 4. and Taligent all failed to provide an operating system that could run on it and when Apple and IBM couldn't reach agreement on whether the reference design must or must not have a 54 . between Apple Inc (formerly Apple Computer). IBM used PReP and CHRP for PCI version of IBM's RS/6000 platform. IBM. to run on the platform. IBM. AIM alliance Historical Power Power1 Power2 Power3 Power4 PowerPC-AS PPC6xx Gekko Power Architecture Current PowerPC e200 e300 e500 e600 QorIQ PA6T POWER5 POWER6 POWER7 PPC4xx PowerPC 7xx 7xxx PPC970 Cell Xenon Broadway Titan Future PowerPC A2 e5500 The AIM alliance was an alliance formed on October 2. the next few years were a period of great opportunity. cross-platform multimedia scripting language which would enable developers to create entirely new kinds of applications that would harness the power of the platform Efforts on the part of Motorola and IBM to popularize PReP/CHRP failed when Apple. It was thought that the CISC processors from Intel were an evolutionary dead-end in microprocessor design. The CPU was the PowerPC. Kaleida was to create an object-oriented. 1991. a single-chip version of IBM's POWER1 CPU. The stated goal of the alliance was to challenge the dominant Wintel computing platform with a new computer design and a next-generation operating system.

The best-selling products include the Microsoft family of operating systems in their Microsoft Windows and Office software suite Microsoft Office. The specific contents of the alliance as follows: Microsoft made the latest version of Microsoft Office. Microsoft established in 1975 with the original name is Micro-soft.2. Background to form alliance: In 1996. Asia Pacific. 4. Microsoft Corp: Microsoft Corporation is a multinational computer technology world-class corporation of America. Apple-Microsoft alliance: In Boston in 1997. Redmond. Apple bought Next-an American computer company founded by Steve Jobs and he came back . Microsoft also will make a profit through the no small contract signed with Apple about providing the software product. 44 in the largest corporations. Although the platform was eventually supported by several Unix flavours as well as Windows NT and OS/2 (OS/2 for PowerPC).000 in 102 countries and total sales in 2008 reached 60.2 billion profit. Number of employees is 79. designed to run BeOS.Gil Amelio has had many attempts to improve Apple's losses in previous years. your primary. Microsoft is present in most countries and Microsoft branch is located more than 102 countries (2007) and classified into six regions: North America. Name of listed securities in the market as New York and Nasdaq is MSFT. used some PReP hardware but as a whole was not compatible with the standard.2. Toward Microsoft.3. and all three major seventh-generation video game consoles feature chipsets derived from the PowerPC architecture at their core. Microsoft founders were Paul Allen and Bill Gates Gardner. USA. Europe-Middle East-Africa. 55 . The PowerPC program was the one success that came out of the AIM alliance. ranked No. 4.2. 18. Taligent was absorbed into IBM in 1998.parallel port. China. Apple-Microsoft 4.During the period 1997. these operating systems generally ran just as well on Intel-based hardware so there was little reason to use the PReP systems.1.42 billion dollars. but for the sake of his apple has teamed with Microsoft to improve the situation. at that time CEO . when they transitioned all their models to Intel processors.2.5 billion. Steve Jobs announced Microsoft has agreed to an alliance with Apple: $ 150 million investment to buy shares of the company and the two sides have reached a license agreements to use inventions for 5 years. 12/1996. lost up to $ 1. Apple has been deep crisis within 18 months. Some CHRP machines shipped in 1997 and 1998 to no fanfare. Latin America. chaired by Bill Gates with headquarters located at 1 Microsoft Way. Apple started using PowerPC chips in their Macintosh line starting in 1994. but surprisingly it was one of the biggest failures of Apple. This time Apple and Microsoft were rivals in the market 20 years PC. Almost every Mac featured a PowerPC processor from then until 2006. Japan. processing. Moreover they also earn a substantial gas price of Apple shares rise again. Because when Apple earned huge resources from the PC. Washington. Internet Explorer and some Microsoft tools to Apple's Macintosh platform. The BeBox. 4. The chips have also had success in the embedded market.2. a browser. due to disappointment with the direction and performance of PowerPC development. Kaleida folded in 1995. and licensing for software for your computer. This group is developing. the alliance with Apple in this difficult period as a form of investment and support for a potential customer.

Steve Jobs. To support more than a relationship with Apple. In April 1998.  Microsoft: Cooperating with Apple is an attractive investment opportunity: When purchasing 150 million shares with the price about $ 6. Apple launched the iMac with a reasonable price and of course the iMac also integrate the Windows operating system or other software products of Microsoft. Strategic alliance with Microsoft has had a big impact on Apple's share price.Apple integrated into Internet Explorer and Mac OS and made it becomes the default browser in the operating system software in future. The alliance with Apple is saving a potential customer. from $ 6. customers and so will also help contribute to Apple over the period crisis. the company has reported three consecutive quarters of profitability with total profits up to 101 million USD. 4.4.2. In San Francisco in January 1998. . iMac. 7 / 1998. In addition. Alliance with a class companies like Microsoft at that time would be a positive sign giving a better view from the public. improving product quality and providing better choices for consumers. 4.56 to $ 26. the iMac has become the best selling PC across the country helped Apple sales greatly increased.  General Benefits: Alliance is at a reasonable complement of Microsoft software and Apple hardware which offers customers the most products completed about quality and price and more options such as Power Mac.50 NASDAQ. pushed it up nearly 35%. Microsoft also will gain more profit through the signing of this license with Apple and then Apple could become a major customer in providing integrated software and the Microsoft tools... such as in 1998. Results of the alliance: Can see a strategic alliance with Microsoft at that time has brought many benefits for Apple. In 1998 Apple launched the iMac a PC. Event of the cooperation gave Apple a new life. Benefits of the alliance:  Apple: An additional amount not less than 150 million shares was sold for Microsoft to promote its plans later Alliance with Microsoft will help bring the look. Jobs continues to inform a more profitable quarter (57 million) and a surprise to most people about the strong recovery of Apple. When Apple's sales increase again.5.. better features for Apple and PC products to improve the competitive position of Apple's previous opponents in the market of personal computers AS IBM. $ 7 per share and later.S. In fall of that 56 .2. this strategic alliance will also help Microsoft to exploit the school market is still unanswered. Apple and Microsoft had planned to collaborate on technology to ensure harmony between the Java computer programming language or the other. the share price will increase significantly and of course bring about a great bargain for Microsoft. Power Book.. Sony . In just over a week Applet Store website became the third largest trade in the U. Apple had successful beyond expectations. has announced that the company had $ 44 million profit in the first quarter. the strategy in the near future. as Apple has overcome difficult times and grow back. Microsoft will invest $ 150 million in non voting shares of Apple. Increasing competition in the market.. of course. The two companies have reached an agreement in using license patents for two products.

Efforts to build coalitions from both the broad agreement on the use of patent licenses for the product of both sides.2.. and officially became Nike. it employed more than 30. Towards Microsoft Corporation.CEO at Apple – the company decided to work with Nike in order to elevate together music and sport to a new level of performance. Element to the success of the alliance: Understand partners: Apple has been looking at Microsoft's reputation as a corporation has a range of influencing public opinion as well as large and clear customer benefits that Microsoft gives them greater than what Apple is giving Microsoft.000 people worldwide. Of course. and as Apple reached great success 1997-1998. the Microsoft bought shares of Apple or the agreement within five years mentioned above is a form of investment in Apple-a potential group. The company takes its name from Nike. Nike+. the company operates retail stores under the Niketown name. with the highly recognized trademarks of "Just do it" and the Swoosh logo.6 billion in its fiscal year 2008 (ending May 31. cooperation in technology to ensure harmony between the Java computer language or other programming languages . according to The Oregonian. Mr.1. in 1978.. Background to form alliance: Apple: For Steve Jobs . 2008). Understand yourself: Apple has itself recognized his position at that time was very difficult to go for capital and direction for products. working with Apple gave them certain benefits. the Greek goddess of victory. Nike Pro.3. As of 2008. Microsoft already has millions of customers who rely on Apple's Mac platform. Nike and Precision Castparts are the only Fortune 500 companies headquartered in the state of Oregon. which is part of the Portland metropolitan area. Oregon. Inc is a major publicly traded sportswear and equipment supplier based in the United States. It is the world's leading supplier of athletic shoes and apparel and a major manufacturer of sports equipment with revenue in excess of US $18. Air Jordan. Microsoft has increased the positive perception of customers using Internet software giant of a potential and further ensure the "survival" of a core customerApple. so when the alliance launched Apple products to their customers exactly. In other words. Nike also owned Bauer Hockey (later renamed Nike Bauer) between 1995 and 2008. 4. Hurley International. Nike Nike.2. Jobs announced a quarter continued to be profitable again and completed a very successful year for Apple. Inc. Noticing on cooperation has pushed the stock price to rise 1/8 times. thanks to this alliance.year. Umbro and Converse. Nike Skateboarding and subsidiaries including Cole Haan. In addition to manufacturing sportswear and equipment. The company was founded in January 1964 as Blue Ribbon Sports by Bill Bowerman and Philip Knight. By forming strategic alliances with Apple. Nike sponsors many high profile athletes and sports teams around the world.3. The company is headquartered near Beaverton. Microsoft also had great profit. Apple-Nike 4. The practical result of the 57 . 4.6. The operating flexibility of the wise leadership which is headed by CEO Steve Jobs: he knows how to take full advantage of the strengths that alliances bring success to bring to the company consecutively from 1997 -1999.3. Nike markets its products under its own brand as well as Nike Golf. thereby creating a mutually beneficial alliance and strong cooperation within the two companies. 4. We are not hard to realize that the alliance with Microsoft Strategy not only save Apple from the brink of bankruptcy but also take home one of its heyday in the history of its development.

adhering to a rigorous selection of strategic partners that aimed to establish a relationship leading to mutual benefits. giving instant feedback on the iPod screen about individual performance during training. this is innovation-based co-branding. and (ii) a receiver for the iPod. Nike+iPod resulted from forming a partnership between two global brands that have a mutual passion. or from a list of pre-programmed exercises that can be acquired on iTunes Music. claiming that the latter is characteristic of strategic cooperation between well-known global brands that are recognized internationally.3. the user is automatically connected to the nikeplus. Nike: According to Mike Parker – CEO. allowing communication between the Nike+ trainers and the iPod. Once the receiver is connected to the player. rhythm and calories burned. The main motivation of global brands for forming a strategic cooperation alliance of cobranding lies in the possibility it gives to combine global insignia. 4. This community had its origins in the partnership established with Apple. Information about the progress of the run is supplied by headphones and the iPod screen. the Nike+iPod option appears on the screen and the user can make a selection from his personal training list or his Power Song4. as a global brand. When the receiver is removed from the iPod and connected to a computer. taking the typology proposed by Nunes et al. which includes a sensor and a receiver for the iPod Nano player. This fitness system operates on a wireless platform. which allows evaluation of information regarding foot movement and display according to different analysis variables. Nike. The trainers have a pocket for the sensor which communicates with the receiver. in which it is possible to accompany the result of their activities individually or together with other members all over the world. which resulted in forming a competitive alliance of cobranding named Nike+iPod. This automatic sensor includes an accelerometer and a Nike+iPod patented technology. This product unites Nike trainers and the Apple iPod. Apple-Nike alliance (Competitive alliance): On 23 May 2006 the CEOs of Nike. of the win-win type.alliance was the launch of a personal trainer (or a training colleague). namely distance covered. the strategic competition alliance analyzed can also be considered as an example of complementary competence co-branding. i. The co-branded product created through the competitive alliance analyzed is the ‘Nike+iPod Sport Kit’. and of Apple. This alliance raised expectations for the launch of innovative products with the campaign slogan of “Tune your run”. two forms of technology result: (i) a sensor for the trainers. (2007).com site. Concerning the form analyzed. Chang (2008) stresses the motivation associated with the practice of global branding. more precisely through the iPod player. inasmuch as two global brands complement each other in developing 58 . announced a partnership between these two brands.3. from the joint R&D efforts of the two companies. Additionally. Steve Jobs. Nike+ consumers become members of this global community. at an event in New York. time.e. Bearing in mind the typology proposed by Blackett & Boad (1999). based on the supply of a highly differentiated and innovative product: the ‘Nike+iPod Sport Kit’. to motivate and control each stage of exercise. created the on-line Nike+ community to develop the cult associated with the brand and link consumers in any part of the world. together with the athletes Lance Armstrong and Paula Radcliffe. as well as an effective change in the way people perceive and do sport. Mike Parker. creation of products or services that let the user enjoy new experiences full of innovation and design. which allows communication between both. The strategic cooperation between Apple (iPod) and Nike is a co-branding alliance formed between two global brands. i.e.

Propel Software. Zayante. Apple has not released the financial details for most of these mergers and acquisitions. Apple acquired Emagic and its professional music software. on average.3. Nike provides the technology and ergonomic design of running shoes. and on the other hand Apple recorded a variation of 11. and made five divestments. since 2006. Apple purchased its only minority stake when it acquired 5% of Akamai Technologies. Apple's software products include the Mac OS X operating system. Apple's business philosophy is to acquire small companies that can be easily integrated into existing company projects. The company's largest acquisition was the purchase of NeXT in 1996 for US $400 million. namely technology. Apple provides its know-how and experience as a manufacturer and supplier of electronic equipment. Logic Pro. increased market share and greater international recognition of the brand. production of which is based on intensive incorporation of knowledge and technology. In the 1990s. The company has acquired twenty-one companies. 1988 Company Network Business Software Country United Value(US $) 59 . Silicon Grail Corp-Chalice (from Silicon Grail). Setting out from theoretical suppositions. a content delivery network company. List of mergers and acquisitions by Apple Apple Inc is an American multinational corporation with a focus on designing and manufacturing consumer electronics and software products. On the other. all in the 1990s. Apple made the most acquisitions in a single year in 2002. purchased a stake in two companies. The company made its first acquisition on March 2. has been on annual average 8%. contributed to increased individual brand values. Apple obtained a greater increase in brand value than Nike. The strategic competition alliance between Nike and Apple is based on a relationship of the WinMin-WinMax type.5 percentage points.a joint product that connects music and physical exercise. most of them were software companies. The acquisition led to the creation of the digital audio workstation software. On the one hand. in which parts of the company are sold to another company. That union is based on the joining of products and core competences of the two companies involved in the alliance. 4. Moreover. and the iLife suite of multimedia and creativity software. although in unequal measure 5. and the exchange of specific means and resources. and Emagic. and the iPhone line of mobile phones. For example. 18 were based in the United States. innovation and marketing. with five. the iPod line of portable media players. there were increased sales. in 2002. GarageBand.5% and the increase in the Nike brand value. Of the companies that Apple has acquired. It has also made five divestments. the joint communication efforts. when it acquired Nothing Real. Benefits of the alliance: Although this is a relationship of the win-win type. through supply and transmission of a greater benefit to users of the co-branded product: ‘Nike+iPod Sport Kit’. After signing the co-branding alliance. 1988 when it purchased Network Innovations. Therefore. benefits resulting from formation of the strategic competition alliance are unequal. The company's hardware products include the Macintosh line of personal computers. there was an increased market penetration through sharing portfolios of loyal clients.4 percentage points variation in its brand value. through co-branding. in this way allowing the creation of a personal trainer with innovative characteristics. For both global brands analyzed. now part of the iLife software suite.4. Acquisitions Date March 2. on one hand Nike recorded a 0. the iTunes media browser. in individual terms. since both brands obtain benefits. players and digital music. The value of Apple has recorded annual rates. of 22.

000 100. 2000 NetSelector Internet software April 11. 2000 Astarte-DVD Software Authorin g May 11. PowerSchool Online info 2001 systems services February 1. 2002 June 20. 1999 Xemplar Software Educatio n November 3.000. 1989 Coral Software Computer software February 7.000. NeXT Computer 1997 programm ing services September 2.000 4.000. 2001 Bluebuzz Internet service provider July 9.000 .000.000 13. 2002 Zayante Software June 11.000 404. Power Clone 1997 Computin computers g-CloneMaking January 8.000.926. 1988 Satellite communi cation Systems June 27. 1988 Styleware Computer software July 11.June 7. Nothing Real Special effects 2002 software April 4.000 15.000 15. 2001 Spruce Graphics Technolo software gies December 31. 1988 Nashoba Computer software January 3.000. Raycer Computer 1999 Graphics graphic chips January 7. 2002 Silicon Grail CorpChalice Propel Software Digital effects software Software Innovatio ns Orion Network Systems States United States United States United States United States United States United States United Kingdom United States United States Germany United States United States United States United States United States United States United States 60 62.

000 275. 2009 Silicon color Proximity P. 199 2 Acquirer Misys Comp uter Maint enanc Target com pany Sign Expr ess Grou p Target Acquirer country/ busines nationality s Maintenance United activitie Kingdom s Value(US $) 705.000 December 6.700. 2006 April 24. Semi Placebase Music productio n software Gesture recognitio n company Software Software Semiconductors Maps Music Streaming Mobile Advertisi ng Semiconductors Software Web-based mapping Germany United States United States Australia United States United States United States United States United States United States Canada 30.000. 2006 December 4.000 121.000 61 .A. Lala.000 Divestitures Date April 22.July 1.000 4.000.000.000 Stakes Date June 1. 2002 April 2005 Emagic FingerWorks October 16. 2010 Aril 27. 2010 Quattro Wireless Aril 27. 1999 December 18. 2010 Intrinsity Siri Poly9 17.000. 2008 July 7. 2008 Company Akamai Technolo gies Imagination Technolo gies Business Web site support services Imagination Technolo gies Country United States United Kingdom Value(US $) 12.com 2009 January 5. 2010 July 14.000.500.000 278.

There are many forums and blogs tracking down rumors of new 62 . design. 6. speed.1. millions of the “magical” iPad sold in a matter of weeks.000. Marketing strategy 1. or 150. They Train Their Customers. 9. 4. 199 7 Notes 1.79 million common shares SCI Syste ms Al-Waleed bin Talal Microsoft Grupo Carso Apple Com puter Apple Com puter Apple Com puter Apple Com puter Computers United States Personal comput ers Personal comput ers Personal comput ers Saudi Arabia 115. Apple’s best clients know that most of Apple’s product line is “refreshed” every year to the month. the company’s focus was on music and putting a thousand songs in your pocket. In 2007.00 0 60. which made it easy and legal to download songs to your computer or iPod.000 Series A shares. Then they kicked off the iTunes store. Microsoft has since sold this stake. 2. 7. 8.000.25 million common shares Acquired a 5% stake.6% stake. or 6. Acquired a 3% stake.650. This year. or 3. added features and overall ease-of-use. When the iPod made its debut in 2001.2 million shares Acquired a 5% stake.e May 31. 199 7 August 7. R&D AND MARKETING 1. Marketing tactic Here are five reasons why you should follow Apple’s marketing strategy: They Focus on One Thing and Make it Great. 199 7 August 6. with upgrades in memory. the iPhone changed the way smartphones were made and used. 199 6 April 2. or 8. Acquired from Power Computing Corporation Acquired from Astarte Acquired from Japan Information Processing Service Acquired from Silicon Grail Acquired a 5% stake Acquired a 3.00 0 United States Mexico 150. 3. 5.000 V.

price. Apple was reaching out to college students and graduates.2. Executive Summary: The focus of this report is on new Apple Ipod product that has created increasing demands in various outlets. Surprise and delight your customers iPod Marketing plan 1. Products don’t sell. rebels. and being the first to market something is often the key to the products success. They have a one-day Black Friday sale that saves 5-10% off certain products. desire. Even before the days of the ‘Think Different” ad campaign. need. Ipod does not use a person to sell but the product instead. but Apple has no problem charging $999 for its least expensive notebook. Companies that promote eco-friendly products gain respect and garner positive press from “green” organizations that in turn encourage their followers to buy from these companies. One day. pager. They’re Green.” For a company that expects its best clients to upgrade their hardware annually.” The marketing strategy behind the ipod and iphone is ease of use. They set their prices high and back them up with a stellar reputation for providing excellence in their products and in customer satisfaction. are all considerations. you don't need anything else. being 1st and unique is easier than being 2nd and trying to compete with the first product. and the all in one features. yes it's people that sell things. people do. and people don't buy products simply because they are surprised. creatives. They Don’t Have Sales. They Know and Market to Their Customers. most mp3's etc have limited memory. 63 . videos.2. Make your message memorable. The latest round of Apple MacBook Pro computers are billed as “The World’s Greenest Lineup of Notebooks. The 2nd answerer lists selling techniques for salespeople not marketing methods for manufacturers. but kind of dumb for sticking with bad computers. Never be first to market. they have lots of memory so you won't run out. music. OK. you can simply see and touch. Empower early adopters. and you can access the Internet from it also. but if the product is bad. Products do sell themselves if they are marketed right. your phone. no person can sell it.1. five of Apple's marketing principles:      1.. Microsoft dominated the market and Apple ran a distant second. that’s not entirely true. Visit Apple’s Environment page here. But that’s it. Check out these photos of the lines forming in Tokyo just to pre-order the new iPhone. they buy for different reasons. while Mac people are young and carefree because their computers “just work. they also target the young adults although the 2nd answer has good points there are a few things that go against normal marketing methods.. are all in one. Watch the “Get a Mac” commercials and you’ll see Apple’s attempt to paint PC users as well-meaning. and the anti-establishment.products and release dates as fans wait in anticipation of the next great Apple product. they’d better produce something that’s easily recycled. You can find a decent PC notebook at Best Buy for about $600.

During this stage there are also opportunities for wider distribution.This product allows consumers to download not only their favourite music but also books and other literature which can be read and listened to.2. using new features to market their product.e. Sufficient funds must be available when competitors unpredictably put forward their product in the market. when. Demographic Patterns: Males and females from the age of 12years and over will be in favour of this product because of its new innovation to be able to not only play music but also books and other literature which would in fact appeal to them.The stage that Apple Ipod is currently in: Apple Ipod is currently in the growth stage. He also reveals the long anticipated iPhone. Executive Summery: The Past – Steve Jobs. video consoles and TV appliances. how and why strategies will be adopted. The Apple 1 was sold as a motherboard (with CPU. 1. Between 1983 and 1996 Apple experimented with a number of failed consumer target products including digital cameras. Apple was responsible for creating the desktop publishing market due to their innovative programmes. portable CD players. which will result in higher sales. Within this marketing report there is an insight of the situation analysis of this product. made and delivered.3. announces that Apple Computer Incorporated would now be known as Apple Inc. Apple Iphone marketing strategy 1. where more and more people are aware and purchasing the product. Market share and stock prices decreased. 1. External Influences: Competitors: Competitors will regulate what. marketing strategies that have been used and the forecasted strategies.2. marketing objectives. In June 64 . increasing product demand. Capital Availability: Competition may cause mishap in the cash flow. PageMaker and LaserWriter. monitoring and controlling. the target market.1. however competition is increasing as competitors are more cognisant of the tactics of Apple Ipod i.3. Situation Analysis: Market Analysis: Internal Influences: Management: Effective management is required for the training and development of employees for the continue innovation of Apple Ipod and for retraining sufficient funds during competitor introducing new product. Steve Wozniak and Ronald Wayne established Apple on April 1. a combination of an Internet-enabled smartphone and the iPod. Product Analysis: Product Lifecycle: X. Technological Adoption: Technology must be adopted to improve overall efficiency. as more people are made aware of the product. RAM and basic textual video chips) – less than what is considered a personal computer today. the CEO and Co-Founder of Apple. This report is for Apple to give a brief description of this product. Apple introduced the iPod portable digital audio player. Additionally this Ipod can be used in your car and in other mobile settings. The Present – January 2007. In 2001. Sales are growing rapidly and profits are rising quickly. Overseas Influences: The breaking down of barriers between countries can increase the sales of the new Apple Ipod. Steve Jobs. The introduction of new products will greatly influence Apple Ipod. 1976 in order to sell the Apple 1 Computer Kit that was hand built by Steve Wozniak. The product was phenomenally successful – over 100 million units were sold within 6 years. It must be integrated directly into operations (to increase productivity). as well stay on date with the amounts of Ipod’s ordered. speakers.

2008. There is educational growth in the world. Apples target segments consist of professionals.2. he announces that the iPhone 3G would be released in July 2008. The smart phone market is still relatively small compared with general phone market. Literacy & illiteracy level is not affecting using cell phones but affecting high technological cell phones.3. The Future – Apple plans on focusing on satisfying personal consumer demands rather than merely fulfilling a demographic requirement as well as. Internet level of awareness & usage for individuals & industrial aspect are increasing worldwide Fixed phone lines capacity and development attempts.: Boycotting American products in the Islamic world):  Technological Situation Level of technology in the world is increasing. The market will rapidly increase in coming years due to lower prices and greater power. Level of usage of the E. improving performance and stability rather than introducing new features when releasing new versions of any product. 65 . corporate users. but there are more than 15 big companies competing at the world level Market. blogging etc) are high and trendy. hospitals and other institutes are increasing and can be connected to cell phones. Potentiality of the market is decreasing but it is higher than any others in the Telecom sector.  Socio-Cultural Situation Population growth leading to expansion of the sector needs for cell phones. complaints. The iPhone targets consumers who need to store information and communicate or people who want entertainment on the go. Currently. Culture’s perception of the technological devices is positive worldwide. Few people want Internet.Technology (online bidding. People depend more an more on mobile communication everywhere. Acceptance of imported products in some countries are less if there is local provider There are different social views that may affect product should be considered (e. the market for high-end phones like the Apple iPhone is small. among other things. New technologies in the cell phones are increasing. universities. and health care workers. entrepreneurs. video. this fact needs to be considered. this newer version added support for 3G Networking and assisted GPS navigation.g. and pricing strategy. Importing laws in the world with GATT are in favor of trading. Situational Analysis:  Political Situation Taxation is something that governments put and Apple should be study this as country by country case to anticipate profitability.  Economical Situation Economical growth world wide is in a big recession which need careful manipulation. Countries are very variable in stability of. and PDA features in one device because of the high price. Future plans for technological linkage between cities. students.  Competition Situation There are 19260 cell phone producer in the world. billing. colleges. so we should study each country case by case. 1.  Environmental Situation The global concern of the Global Warming issue & other pollution effects concerning the packaging material and radiation of the cell phones.

making small and precise motions.2. Compatibility –The phone will work with iTunes and with other Mac/Apple products and OS software tools which means limitless potential for upgradeability. significant switching costs are involved in going to an 66 . User Interface – Touch screen interfaces suffer from the problem of “gorilla arm”( Gorilla arm is a side-effect that humans face when using touch screens for long times as humans are not built to hold their arms at waist or head-height.Palm has the longest history in PDA market and has experiencedeveloping software for mobile devices. Threats: Competition (Palm) . The market is familiar with Palm products. This is now considered a classic cautionary tale to human-factors designers. Price – Apple does not yet offer lower priced models for more cost conscious consumers. Price – iPhone would be sold at a reasonable price for its value.4.software suite resistance to computer viruses. Partnerships – Apple can collaborate with many powerful global mobile phone companies to flood the market with iPhones. which reduces costs in marketing and increases revenue through long-term agreement deals. just as the human hand normally behaves. 1. It also has many functions of other mobile products all in one device. cramp may begin to set in. 1.4. Brand awareness – Apple is well known for cool essential gadgets like the iPods along great technological innovations like the original Macintosh. but phone prices are almost certainly going to fall when other companies undercut the price of iPhones.1. and competitors or even Apple contractors can maneuver around patents to create similar devices.) Increased competition – Smart phones are easier to make now more than ever. Downward pricing pressure – The iPhone is marketed as a highend phone. Ease-of-Use – The all-new touch screen interface recognizes multi finger gestures. S/O Analysis: Strengths: Innovative – The iPhone has an innovative touch screen. W/T Analysis: Weaknesses: Image – The Apple brand is not targeted towards business people and does not have a reputation as being compatible with the corporate world.  Sales Situation Cell phones industries are one of the most profitable industries everywhere and the Market is increasing. Upgradeable – iPhone software allows new exciting features to be brought in which take advantage of the touch screen ability. More companies may enter the market. Quality – Scratch resistant screen – durable and light metallic finish . Opportunities: Increasing demand and expansion to a new target segment – As technology advances and smart phones get cheaper Apple will attract consumers and get iPod users to upgrade to iPhones. After a short period of time. SWOT Analysis: 1.The demand of the international environmental approvals is a must (if there is any). Existing software is well established and compatible with many products for this market. and arm movement becomes painful and clumsy.4. It is also a well-known brand for businesspeople. Future versions will also be hardware upgradeable. Difficulty expanding into Asian market – There is less hype and interest in Asia since smart phones are better known and already widely used.

5. PDA/Phone market through unit sales volume of 445. Focus on the convenience of having one device for communication. 2. •Same taste as all other Apple products. lower weight. Extend on Apples image of innovation. •Adding the following features to the iphone (large disk storage capacity. •Special edition version to be launched (including the iPhone Beatles edition celebrating their 40th anniversary). Market segment will consist of companies with $10-$50 million in annual sales. Target Market: Differentiate the iPhone from other PDA’s on the market. value added device for personal and professional use. positioning the iPhone as the versatile. GPS and improved camera). Marketing Objectives: Set an aggressive buy achievable objective for the first and second years of market : 1. -Price: •Set the base model at a cheap price of $349. -Large enterprise software firms where information is critical to the end user. •A more advanced model for $399. •All Apple Stores the Apple website will dedicate themselves to the iPhone. Second-year Objectives . quality. Positioning: Using product differentiation. •Generally lower our prices to ensure we establish market dominance in as short of time as possible. Extend on the Apple brand name and link to the established meaningful positioning. Showrooms and in all cell phone providers. friends and family. pictures. 1. Sprint and Cellular One. convenient. college and graduate students who need one portable multifunction device. Primary customer targets is the middle-upper income professional to coordinate their busy schedules and communicate with colleagues.K. •Launching a cheaper version in 2008 with less advanced features along with a more advanced version for professional use. and full Internet access.. Measure the awareness and response in order to make adjustments to the marketing campaigns as necessary.are to achieve a 10 percent share based on sales. The iPhone will be promoted as both professional and hip. 67 . thinner device. First-year Objectives . and video. Primary business target is to partner with: -Large cell phone service providers. 1. AT&T. -Place: •Massive rollout worldwide at all reputable major retailers. 4G wireless. long battery life. Palm can add many similar capabilities to their products that match the iPhone and expand to a wider market through lower cost and higher-power products. •Special limited edition Beatles iPhone for special prices. Marketing Mix Strategy: -Product: •Full year warranty along with an optional three-year Apple Care warranty. Verizon.6.000. and value.iPhone. Secondary consumer targets are high school.S and U. but also music. Secondary business target is mid-to mid-size corporations that want to help managers and employees stay in communication or access critical data on the go. •Massive rollout Online.We are aiming for a 2 percent share of the U.

•A massive TV campaign is planned before launching the iPhone featuring a soon to be legendary ad to be the talk of the country.•Eye catching displays will be found at all physical stores featuring the iPhone to make the product stand out from the pack. The Real Secret of Apple's Successful Marketing Strategy: Nice product: Everything in Apple's product line was almost perfect and eye-catching design. It will be objective and more reliable. Due to various opinions. Apple’s R&D: Apple (AAPL) used their R&D budget very smartly. And as Apple's operating income rises.1. They enter a market. the percentage of R&D/operating income plummets. Apple spent 2991 million dollars while raking in 8818 million in operating income. Simple message: The message is simple to understand. •Original but tasteful advertisements at the same time. iPhone. Create credibility and always one step ahead: About 5 years ago. •Differentiate the iPhone against others is the touch screen functionality. they may have self. Their operating income has gone from -1 million dollars in 2003 to to 4409 million dollars in 2007. after apple control MP3 market domination. Apple's R&D is 34% of operating income. They usually innovate their products. easy to remember and easy to share. even to put advertisements on television. iMac… They might not be perfect but all of them are easy to remember. music. right? This can help customers find out product's information easily. The names to remember: Look at the names of Apple products: iPod. 2.7. -Promotion: •Integrate Apple message of revolutionary communications and audio/visual experience together in all media advertisements. •Advertising will be appearing on a regular basis to maintain general public awareness. R&D 2. Creating consumer's interest: Their strategy is sharing the comments with the guest from others who are using and talking about their product. •Apple Stores will have the iPhone on display a full month before its worldwide release.confidence with their success. So that The Apple's brand becomes more and more famous. take it over. They continued innovate. That works out to an increase of 881% a year the last 5 years. 2004 saw R&D/operating income at 68 . they can create good product which are suitable with customer’s tastes. cell phones. research new products. But that's not what this company did. From 2003 to 2007. Listen: They let customers use their products then invite them to speak their feelings. •Emphasize Apple brand prominently and associate the iPhone with the iPod’s groundbreaking lineage. 1. raise the bar whether it's in notebooks.

operating income 881% a year over the last 5 years. One wonders what new products come out of Apple's R&D in 2011 and beyond? 69 . Revenue in 2006 was $25 billion. Sony spent a total of $ 5.036 billion (¥543. In contrast. Sony must spend significant resources on research and development to keep up with rapidly advancing technology and shifting consumer demand. Its market cap. Revenue rose from $44 to $58 billion. It's been growing but its operating income has been growing far faster. Microsoft (MSFT) used $31 billion on research over the same period. Apple's R&D is extraordinarily cost efficient. Apple's R&D has risen 13% a year.  Compare the Research and Development strategy of Apple vs Microsoft and Sony: This graphic can help you conceptualize the revenue and R&D gap:  Analysises: Apple (AAPL) spent a total of $4. In 2007. Other tech companies seem to lack the same "vision" in allocating their R&D budget.156%. It's amazingly productive. now Q1 2008 it's dropped to 12%! On average.9 billion). In 2009. has tripled over the since the start of 2006.6 billion over the last four years. Apple hasn't skimped on its R&D. sales climbed to $43 billion.

But when it comes to breakthrough success at Apple. Yes.3. 25-45 years. Not Products: “Steve Jobs doesn’t rely on focus groups. Apple does that all the time. the iPad. Jobs doesn’t need focus groups because he understands his customers really. Brand awareness will be an important tool in taking the Apple brand from "social cool" -to "business cool”.5 million per product while Apple would spend about $78. Apple spends less than 4%." Apple customers should be glad Jobs doesn’t do focus groups. they may never have enjoyed iPods. High School and College aged people will demonstrate social uses. iTunes and other on-line application developed for the iPhone) and interviews (in Apple stores) with the same age groups listed before.2.5 million per product. We will ask for feedback on iPhone features. 20-25 years. We will continuously scour the Apple fan websites to understand what the Mac faithful are saying. and implement those changes most important to the end user in the next generation iPhone. iTunes. sometimes better than they know themselves!… Sure." says tech analyst Rob Enderle. Apple's R&D has grown the most (nearly quadrupled) while Sony's has grown the least (not quite doubled). Microsoft just spends a lot of money in R&D. "listen" to your customers and ask them for feedback. You can’t go out and ask people ‘what’s the next big thing?’ There’s a 70 . Jobs responded: "We figure out what we want. The 45 years and above will give us a plan to market to more senior well-refined group. "Steve Jobs avoids most focus groups like the plague. To bring the iPhone to the front of the business world it is important to research different ways to grow the 15-25 year old group into business uses of the product. the iPhone. We will allow users themselves to design their own ideal iPhone online and use any useful ideas to further refine future iPhone models.Now. If he had. 2. as they are our best customers 3. Asked why Apple doesn’t do focus groups. Sony spends about 8%. Microsoft spends about 17% of their revenue on R&D. or Apple Stores. Steve Jobs and his team are the company’s best focus group. really well. Marketing Research: Four age groups will be targeted: 15-20 years. Sony would spend about $11. This research will be done through surveys (via email campaign through portals such as. Four Innovation secret of Apple Put a Dent in the Universe: “Innovation requires a team and you cannot inspire evangelists unless you offer a compelling vision…. "It comes down to the very real fact that most customers don’t know what they want in a new product. The 25-45 years group will be used to determine business application and social/personal use. and 45 years and up.” Sell Dreams. period—about $9 billion last year in generalized research (that often doesn't lead to specific products). In terms of percentage growth over the last decade. If you were to break down the amount of R&D that goes purely to physical (non-software) products sold by Apple and Sony.

Some artists have documented entering into rights-negotiations with Apple. These claims were later confirmed. the 1990s Think Different campaign. the Think Different campaign linked Apple to famous social figures—including artist John Lennon and social activist Mahatma Gandhi. Today.great quote by Henry Ford. they generate more revenue per square foot than most other widely recognized brands. Their most significant ad campaigns include the "1984” Super Bowl commercial. There are specialists. special events have been used to announce products such as the Power Mac G5." In other words. Apple's portable music player. September 26. the iPod. For example. "People don’t want to just buy personal computers anymore. which are designed to reflect a plan of marketing their products to creative individuals.’"” Say No to 1. only to have Apple pull out of the discussions. 71 . has been showcased as a piece of contemporary art in New York's Museum of Modern Art. As a result. Why? According to Jobs. Apple has maintained a style of homage to contemporary visual art in many of its more famous ad campaigns. "If I’d have asked my customers what they wanted. In 1997 the “Think Different” campaign introduced Apple’s new slogan. Apple focuses much of its advertising efforts around “special events". several lawsuits have been filed against Apple by artists and corporations alike. Although the Apple Stores have no commissioned sales staff. and we’re going to show people exactly that…" (by George Ambler on Sunday. He said. Apple has been criticized for its sometimes questionable use of modern art as an inspiration for its marketing campaigns—at times re-creating a short film or music video shot-by-shot for its commercials. such as visual artist Louie Psihoyos and shoe company Lugz. Since the original Macintosh Super Bowl commercial in 1984. and the "iPod people" of the 2000s. 2010) 3. In the past. They want to know what they can do with them.000 Things: “Steve Jobs once said the secret to innovation comes from "Saying no to 1. then use the artistic imagery anyway.000 things. This philosophy has helped Apple introduce products that wow consumers because of their elegance and simplicity…” Create Insanely Great Experiences: “There are no cashiers at an Apple Store. and keynotes at conferences like the MacWorld Expo and the Apple Expo. The most recent advertising strategy by Apple is the Get a Mac campaign. which mimicked imagery from George Orwell's 1984. Jobs is as proud of what Apple chooses not to do as he is about what Apple chooses to focus on. The events typically draw a large gathering of media representatives and spectators. Apple Inc has become well known for its advertisements. creatives — even geniuses — but no cashiers. and in 2002 the Switch campaign followed. Advertising In the past two decades. they would have told me ‘A faster horse.

often remembered because Bill Gates was featured on page 11 For a special post-election edition of Newsweek in November 1984. It was a large failure and did not capture nearly as much attention as the 1984 commercial did. However. "1984" television commercial: launching the Macintosh "1984" (created by Ridley Scott) is the title of the television commercial that launched the Macintosh personal computer in the United States. dealers disliked the promotion and supply of computers was insufficient for demand. and Advertising Age magazine named this one of the 10 best promotions of 1984. Many more brochures for new models like the Macintosh Plus and the Performa followed. and many computers were returned in such a bad shape that they could no longer be sold. in January 1984.5 million to buy all of the advertising pages in the issue (a total of 39). Apple also ran a “Test Drive a Macintosh” promotion that year. In 1988 Apple released a short film titled Pencil Test to showcase the Macintosh II's animation capabilities.1980–1985 A “Macintosh Introduction” 18-page brochure was included with various magazines in December 1983.  1985–1990 In 1985 the “Lemmings” commercial aired at the Super Bowl. It began to look like a success with 200. 1990–1995 72 .000 participants. Apple spent more than US $2. in which potential buyers with a credit card could try a Macintosh for 24 hours and return it to a dealer afterwards.

These ads featured what the company referred to as "real people" who had "switched". however. An international television and print ad campaign directed users to a website where various myths about the Mac platform were dispelled. 2002. alongside flagship products like the iPod and iMac. "Think Different". has ceased. with a small Apple logo and the words "Think Different" in one corner. The television commercials were directed by Errol Morris. 73 . Print advertisements Print advertisements from the campaign were published in many mainstream magazines such as Newsweek and Time. with print ads and television commercials featuring celebrities describing how the PowerBook helps them in their businesses and everyday lives. prominently featuring the company's computers or consumer electronics along with the slogan. it refers to a person who changes from using the Microsoft Windows platform to the Mac. During 1994. Television commercials Significantly shortened versions of the text were used in two television commercials titled "Crazy Ones" directed by TBWA's Jennifer Golub with a voiceover narrated by Richard Dreyfuss. with no reference to the company's products. They featured a portrait of one of the historic figures shown in the television ad. Sometimes these were traditional advertisements. The use of the phrase. "The Switcher" was a term conjured by Apple. which atests to Apple's brand recognizition. 1995–2000 "Think Different" "Think Different" was an advertising slogan created by the New York branch office of advertising agency TBWA\Chiat\Day for Apple Computer during the late 1990s. Apple responded to the introduction of Windows 95 with both print ads and a television commercial.In the 1990s Apple started the “What's on your PowerBook?” campaign. This can be viewed on this YouTube link. during the series finale of Seinfeld. there was also another series of print ads which were more focused on brand image than specific products. It was used in a famous television commercial and several print advertisements. Apple introduced the worlds first infomercial style sitcom named 'The Martinetti's Bring Home a Computer'. This commercial aired only once. In 1995. Think Different remains an intrinsic part of Apple's identity. 2001–present "Switch" "Switch" was an advertising campaign launched by Apple on June 10. Even today. However.

and are unified by a distinctive. consistent style. Apple released a controversial series of twenty-four "I'm a Mac. "Get a Mac" The two characters from the ads who personify a PC (left. on 7 October. Sponsorships Apple is in talks with the New York Yacht Club to be a principal sponsor of an America's Cup challenge to be skippered by Paul Cayard. While they use the same form and music as the American ads. 74 . particularly with their silhouette commercials used both in print and on TV. posters in public places and wrap advertising campaigns. The campaign was officially ended in 2010. 2007. print ads. Since the launch of the original ads. similar commercials have appeared in Japan and the UK. The commercials include television commercials. Apple began advertising on FreeRice.iPod Apple has promoted the iPod and iTunes with several advertising campaigns. I'm a PC" advertisements as part of their "Get a Mac" campaign. the actors are specific to those countries. The silhouette commercials are a family of commercials in a similar style that form part of the advertising campaign to promote the iPod. In 2006. John Hodgman) and a Mac (Justin Long). Apple's portable digital music player. a program to fight world hunger.

Apple has been criticized for its iPhone ads. 2008. Apple earned $4. but backed out and promptly used the imagery anyway. In a second article. Growth.77 Apple made in the same quarter of 2009. Profitability and Value. APPLE’S FINANCIAL ANALYSIS Income statement analysis for the September 2010 quarter: This post examines Apple's Income Statement for the latest quarter. VI. In July 2007. Artist Christian Marclay denied Apple the rights to his 1995 short film "Telephones" to market their iPhone. 75 . when the device does not support Java or Flash. Apple had allegedly been negotiating with Psihoyos for rights to the imagery. The ASA took issue with the ads' claim that "all parts of the internet are on the iPhone". 'Sequence Shortened' at their beginning. but then decided against filing suit when Apple ran a similar ad during the 2007 Academy Awards broadcast. which ended on 25 September. In August.64 per diluted share in fiscal 2010's fourth quarter. we will report Apple's scores as measured by the GCFR financial gauges. The follow-up post will also provide the latest figures for the various financial metrics we use to analyze Cash Management. Debate continues about whether Apple's use of established visual art to sell its products is acceptable. More recently. for example UK Advertising Standards Authority gave Apple a grilling for each slogan but eventually Apple was let off the hook because it was actually classing its computers as workstations rather than personal computers. the newer iPhone ads show a caption.Criticism Advertising authorities in various countries took issue with these claims. although they do include a disclaimer explaining that fact. However. Colorado-based photographer Louie Psihoyos filed suit against Apple for ripping his "wall of videos" imagery to advertise for Apple TV. which depict much faster network speeds than are realistically possible on current 3G network infrastructure. the Advertising Standards Authority (ASA) in the UK had banned one iPhone ad from further broadcast in its current form due to "misleading claims". Earnings per share were nearly 70 percent more than the $2.

5 million iPads in the six months after the product's launch date on 3 April 2010. The "A4" computer chips that run the iPhone. Samsung (SEO: 005930) manufactures these chips.Apple sold 7. iPad. have always been marketed in conjunction with AT&T. Digital content is made available through the iTunes Store.9 billion. The comparable figures for fiscal 2008 were earnings of $6.5 billion. and some other products are based on the low-power ARM architecture. but the design was customized by Apple.S. 76 . News reports indicate that Apple in 2011 will start selling iPhones that will work on Verizon's network.2 billion on sales of $42. Apple earned $8. For fiscal 2009. iPhones in the U. which ended one year ago.1 billion and sales of $37. Apple's products are sold online and through the company's chic retail stores. as well as iPhone and iPad Apps stores.

Apple's Revenue of $20. Apple had been required to recognize Revenue from these products over each product's two-year estimated economic life. Apple revised how it accounts for sales of the iPhone (and the less important Apple TV). restated earlier results to conform to current accounting principles.3 billion far surpassed Apple's $18. enables Apple to recognize "substantially all" iPhone and Apple TV Revenue in the period that sales to consumers took place. The reported amount.A soaring stock price has elevated Apple's market value towards $300 billion. was 67 percent greater than Revenue of $12. making Apple the second-most valuable U.2 billion in the September 2009 quarter. Apple. This change. a record high Revenue figure for Apple. when it made the change. 77 . The following table lists Apple's Revenue by product category. As has often been the case recently. which complies with the latest standards issued by the Financial Accounting Standards Board. The "subscription accounting" method resulted in substantial amounts of deferred Revenue and costs.0 billion guidance.S. company. In the first quarter of fiscal 2010.

188 $667 $2.4% 91.885 $1254 $4.367 $625 $4.207 % Change 37.8% 22.7% "Other Music Related Products and Services" (e.207 % Change 27..102 $626 $8.401 $2.3% -3.7% 66.7% The Cost of Goods Sold(COGS) was 63.236 $3. Revenue ($B) Americas Europe Japan Asia Pacific Retail Total Sept 2010 $7.053 $1304 $3.8 percent in the September 2009 quarter.8% -5.9 percent.980 7.566 $20. "Peripherals and Other Hardware. the iTunes Store).186 $5. Service and Other Sales.177 $154 $1.235 $0.563 $2. The margin contracted nearly 5 percent (a hefty 490 basis points) from 41.061 $2.732 $3.041 $12.792 14.5% -11." and "Software." All Apple operating segments experienced torrid Revenue growth.Macintosh Units (m) ASP ($) Revenue ($B) iPad Units (m) ASP ($) Revenue ($B) iPhones Units (m) ASP ($) Revenue ($B) iPod Units (m) ASP ($) Revenue ($B) Other * Revenue ($B) Total Revenue ($B) Sept 2010 3.4% 91.606 10.7% 66.822 9.870 4.5% 15.477 $2.1% 5.051 $163 $1.343 Sept 2009 3.7% 121% 158% 74.1 percent of Revenue in the September quarter. 78 .g.458 $1.343 Sept 2009 $5. which translates into a Gross Margin of 36.2% 68.634 $1.382 $20.058 $12.

the Gross Margin still surpassed the company's 35 percent guidance (made during July's conference call)." Research and Development and Sales. and SG&A dropped from 8.Although down.4 percent of Revenue.065 billion. Because Revenue soared.7 percent.7 percent of Revenue to 7. R&D fell from 2. Apple now says that "About two-thirds of [190 basis point better-than-expected Gross Margin] was driven by lower commodity and other costs.9 to 2. The quarter did not include any separately identified "Other" operating expenses. such as restructuring charges or asset impairments. and Administrative expenses in the latest quarter summed to $2. and the remainder was mostly attributable to a better-than-planned mix of iPhone sales. 79 . only 3.2 percent higher than the company's $2 billion guidance for these Operating Expenses. General.

Subtracting the various operating expenses from Revenue yields Operating Income of $5. If the quarter had played out as implied by the Apple's July guidance.77 per share). Both figures.typepad. brought in Revenue of nearly $2. Apple says that the lower-than-expected rate was due to a greater proportion of earnings realized overseas and some one-time tax benefits.apple.3 billion.wikipedia.com http://en.biz 80 .com www. Apple's earnings also benefited from a falling tax rate. This figure was less than expected.com http://www. as international sales outpaced those in the U. we figure that Operating Income would have been about $4. Apple's guidance suggested earnings of around $3. VII. but the difference is trivial when compared to the company's bottom line. were records for Apple. The top and bottom lines of the Income Statement have continued to grow at year-on-year rates rarely seen at a large company. iPod unit sales were lower.684 billion in the September 2009 quarter.wikinvest. in its second quarter.64 per diluted share).apple.1-percent effective income tax rate was significantly less burdensome than the previous September's 32. The 21.5 percent.com http://www.8 billion. The iPad. The company sold 27 percent more Macs and 91 percent more iPhones. Revenue and Net Income.532 billion ($2.S. compared to (restated) earnings in the year-earlier quarter of $2. Apple had another exceptional quarter. Net interest and other non-operating items produced income of $14 million.informing-arts.com http://www. Bottom-line Net Income rose by 70 percent to $4. In summary. REFERENCE http://www. but the average selling price expanded.31 billion ($4.itunes.44 per share in the September 2010 quarter.org http://rohitbhargava.1-percent rate. which was 48 percent more than $3.nytimes. The company's guidance was for the rate to equal 26.447 billion.

appleinsider.cnn.com http://www.typepad.tuaw.com http://www.com http://finapps.veille.com http://findarticles.wordpress.com http://news.cnet.businessweek.dreamhosters.com http://viewfromthemountain.com http://www.com http://metainsights.mbaknol.com http://www.com http://macdailynews.ifoapplestore.newyorker.com http://bx.com http://vnexpress.http://seekingalpha.roughlydrafted.financial-gauges.com http://www.net http://www.com http://www.imgtec.alacrastore.cnet.techcrunch.com http://sec.com http://www.com http://money.com http://ivythesis.com http://fingerfans.typepad.ifoapplestore.businessweek.com http://novriansyah.com http://www.com http://www.forbes.com http://news.com http://www.com http://www.edgar-online.corporate-ir.com http://www.com http://blogs.computerworld.com http://phx.net http://www.com 81 .time.

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