.Apple Inc A Market Leader Overview

Assignment #3

Written By

Amjad Al - Attar 49 210 2005

Executive Summary Apple is an innovation and differentiation driven company who believes in its customers. Its adopted strategies of quality, simplicity and continuous development created an army of loyal customers around the globe. The company has introduced products that have changed industries, like Mac computers with its built-in operating system which have revolutionized the whole industry, iPod which has changed and dominated the music industry, and finally, Apple’s latest invention: the iPhone, which has changed the Smartphone

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market segment of mobile phones, and was able to gain 18% of .world’s Smartphone market share in just 2 years Table of Contents

Introduction……………………………………………………………………10 ………………………………….3 Company 1.1 Overview………………………………………………………………………… …………..3 Why, When and 1.2 How?.....................................................................................3 iPhone: Launching An 2.0 Invention…………………………………………………………………………5 iPhone: Competitive 2.1 Advantage………………………………………………………………….5 iPhone: Market Share and 2.2 Competitors………………………………………………………5 3.0 Conclusion…………………………………………………………………………… ……………………………6 4.0 References………………………………………………………………………… ……………………………..7

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Introduction 1.0 The purpose of this paper is to point out the reasons and strategies behind the success of a chosen market leader in an industry, Apple .Inc Since Apple Inc. operates in four different markets; it will be extremely hard and time consuming to cover all of its markets. Because of that, I chose one of its markets: the smartphones industry. The paper will provide a short introductory section that covers the company (when it started and what it produces) and when , why and how the company changed its strategy. Then, the Apple’s product section will follow, presenting the product, discussing its production, marketing and promotion strategies, and finally, the product’s market share and how it affected other .competitors

Company Overview 1.1 Apple Inc. is an American multinational, electronics and computer software company. The company started with the design and production of its first personal computer, the Apple I (also known as
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the Apple-1), in 1976, and incorporated later on in 1977. For the first 30 years, it has been called “Apple Computer Inc.”, but in 2007, it became “Apple Inc.” due to the diversification in the company’s .portfolio Apple Inc. started with producing only personal computers (first market). Later on, it expanded to producing its own revolutionary operating system (Mac OS X), which left an Apple' “footprint”, in the OS industry (second market). It also produced creativity, productivity, and multimedia programs, such as the “iTunes” (a worldwide known/online music player and store). The company kept on expanding until it came up with the “iPod” in 2001, to enter the portable music players market and become the leader of it (third market). In 2007, Apple Inc. entered its fourth market by launching (its new invention, the “iPhone”. (Source: wikipedia.org ?Why, When and How 1.2 After the success of the "LC" computer in the early 90s, Apple introduced a new line of computers called the "Centris". The line had two different models with very specific differences in terms of technical configuration which was confusing to the regular user. The result was a complete failure, and Apple's market share went down and continued to slide. At that time, Microsoft was offering a cheap and simple configuration products directed to "any-type" consumer, while Apple kept on producing expensive and richly engineered computers targeting experts. Instead of changing and developing new strategies, Apple started suing Microsoft as a defense mechanism. All that led to destroying Apple's reputation and losing .market share. The company thought changing the CEO would help The new CEO of Apple, Gil Amelio, made many changes, such as massive layoffs, new high budget projects, and he purchased the NeXT system, for the NeXT Operating System, hoping for success. After three years of continuous failure, Amelio was removed from

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his position and replaced by the co-founder of Apple Company, after .a long time of absence, Steve Jobs Jobs knew that the only solution was a completely new set of strategies. He started restructuring the product line, targeting both types of consumers: regular and experts, and made an extremely smart collaboration with Apple's competitor "Microsoft" regarding the Microsoft Office suit. In 1997, Steve Jobs introduced the Apple Store with a build-to-order strategy. The result was an outstanding success. Jobs realized that by targeting all types of consumers, significant changes had to be made, changes regarding the configuration, quality, simplicity, design and most important variety. Concentrating on these aspects resulted in the production of the famous and successful "Mac" computer, resulted in introducing the world wide known "iTunes" that changed the whole music industry, resulted in the introduction of the "iPod" that became the leader in the audio players industry, and finally resulted in the invention of the "iPhone", the new challenge to all competitors in the .Smartphone industry (Source: wikipedia.org )

iPhone: Launching An Invention 2.0 The idea of the iPhone began with Apple CEO Steve Jobs' requesting that Apple engineers research on touchscreens. Apple created the device during a secretive cooperation with AT&T Mobility (an American carrier) at a development cost of US$150 million. The iPhone went on sale in the United States on June 29, 2007. Apple closed its stores at 2:00 pm to prepare for the 6:00 pm iPhone launch, while hundreds of customers lined up at stores nationwide.

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The company sold 270,000 iPhones in the first 30 hours of its .launch

iPhone: Competitive Advantage 2.1 The market was in need of a step-ahead device which could provide accessibility to “non voice” data, and Apple invented that device. In 2007, Apple launched the “iPhone”: a 3.5-inch multi touch screen, music player, web browser, and larger built-in memory, features that all existing smart phones did not have. Apple’s strategy was to provide a phone with the smartest features and “ease of use” .compared to already existing competitors Apple had tremendous success in digital music market with iTunes. They have already sold 40 million iPod, and around 2 Billion songs in iTunes since its launch in 2003. According to a survey, 74% of iPhone users had experienced Apple products, either in form of iPod or Mac computers. The company has took advantage of both, the Macintosh and iPod customer base to help with the marketing and sales of the iPhone. Apple's large and very loyal customers’ base made it much easier for the company to enter the new market. Diversification strategy is considered to be risky in most cases, but .for Apple, brand loyalty of customers was the key (Source: canalys.com, parksassociates.com ) iPhone: Market Share and Competitors 2.2 Apple implemented a “focused-narrow strategy” by targeting only smart phone segment of mobile phone market. The iPhone was designed as a combination of a portable video/audio player, and a phone with the abilities to surf Internet with speed. Apple is known for its easy to use operating system, so they used it in iPhone. The main focus was ease of use and smartest than any other smart .phone at that time

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Because of the advancement found in iPhone; RIM (Black Berry producer) was forced to follow the same and have developed the same software library concept. Nokia has also started to provide the same kind of services like: Nokia Tube, Nokia map, and Nokia music .to compete in the market After 2 years, Apple was able to get around 28% market share of U.S. and 13% of world market by its differentiation strategy. After introducing iPhone, Apple introduced the next version “iPhone 3G” because of the increase demand of 3G and GPS functionality with Microsoft exchange server, which indicates Apple’s ability to deliver .customer’s needs (Source: canalys.com, brainstormtech.blogs.fortune.cnn.com )

Conclusion 3.0 Smart phone market is in early growth stage. Technology is changing rapidly in the market. Nokia and Symbian are facing challenges by Apple and RIM. There are other competitors like LG, Samsung, Motorola who are followers in the market and able to provide considerable competition in the market. Each user has different priorities, Samsung's Manager said: "There will be no Swiss “Army Knife device. You'll have more targeted solutions References 4.0

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.Apple Inc., http://en.wikipedia.org/wiki/Apple_Inc Apple I, http://en.wikipedia.org/wiki/Apple_I iPhone Market Share, http://brainstormtech.blogs.fortune.cnn.com ,PARKS CITED December 2008 http://www.parksassociates.com/press/cited/2008_DEC.html ,Effective Strategies Apple Uses to Create Loyal Customers 12 http://www.bspcn.com/2007/09/14/12-effective-strategies-apple-uses-to-create /loyal-customers Smart phone market shows modest growth in Q3-But Apple and RIM hit record volumes, http://www.canalys.com/pr/2009/r2009112.htm Survey reveals extent of shift in mobile UI preferences - More than half want a touch screen in their next phone, http://www.canalys.com/pr/2009/r2009111.htm

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