An Apple a Day

What came first, the chicken or Apple? As I sit in the Hayden Library right now I spot countless students furiously typing away on Mac computers and relentlessly texting their thumbs off on iPhone’s, both products of Apple Inc. Apple is one of the most well-known companies when it comes to the making of cutting-edge technology. Apple Computer Inc. first came to be a company in 1976 when Steve Jobs and Steve Wozniak released the Apple I in Cupertino, California. Until the nineties, the company produced some of the best personal computers that could be found on the market, including the Apple brand, Macintosh and Power Mac computers.

However, they saw a turn in sales as the technology brand competition began to increase. Fortunately, 2001 came as a banner year for the company when they introduced the first Apple iPod (Cusumano). From then on, the company continued to stay on top of its game and improved upon their technology. They produced such products as the Macbook, iPhone’s, iPod touches and Apple TV. Now, Apple is a reputable brand known all over the globe. Apple is known for their innovative technology that is typically the first of its kind on the market and is something that most people want to own because of how beneficial their advancements are to daily living. I, myself, am also a pleased owner of multiple Apple products.

Apple's success can be attributed to a few factors including a lineup of products that is extensive yet connected, a scrupulously controlled retail experience, and a very particular brand of leadership at the top. While some critics argue that Apple is not the top company in technology, evidence proves otherwise. Apple is one of the most advantageous businesses because their products are simple, they are always a step ahead of competitors, and their customer service is exemplary.

Behind every company is a standard guideline of simple criteria to be met in order to achieve success. Aside from producing products beneficial to the community, they must also offer something their competitors don’t. They must be known for signature items. A good company must also focus on the customers as well and not just their products. It seems that each new Apple product is a revolutionary progress in its own right and they are easy to use. Just think of all the major news space dedicated to each new iPhone or the iPad, the many rumors and hype before a launch and the hundreds of sleeping bags lined up outside stores.

At first glance, Apple products aren’t really all that “revolutionary”. So what makes Apple different? Simplicity. The iPhone uses a single “Home” button. The iPods and all its siblings use the clickwheel for tasks, navigation and music playing. Even the Mighty Mouse is simplicity itself, eliminating the need for a clickable button. Such “human element” design plays very well with its users. Compare with the tiny buttons of old Sony music players with that of Apple. Or the chunkiness and tech-laden face of Nokia phones with the iPhone. Such simplicity even leads into branding techniques.

For example a typical Apple product launch is just a simple black background over a stark white screen. The presentations are neat, clear and to the point. There are no sparkles and fireworks, no special effects and confetti falling from the rafters. Just Steve Jobs, walking on stage, and revealing the new talked-about product as if he was discussing the weather. Even Jobs himself was simple in his trademark plain black T-shirt. In an era of hype and useless clutter, Apple’s products and brand image, as a whole, is refreshing. And this is one of the reasons why people love it.

Apple also succeeds because it uses their massive $70 billion bank account to literally stay years ahead of the competition when it comes to manufacturing and components. According to Hachman, “Nightline”, an ABC Television Network program, was given access to get a first hand look behind the walls of Apple Inc. Apple uses its cash hoard in a unique way- to maintain a decisive advantage over its rivals. When new component technologies first come out they are very expensive to produce, and building a factory that can produce them in mass quantities is even more expensive.

“Oftentimes, the upfront capital expenditure can be so huge and the margins are small enough that the companies who would build these factories cannot raise sufficient investment capital to cover the costs” (Hachman). This is where Apple comes into play! Apple uses its funds to help, if not fully cover, the construction cost of the factory in exchange for exclusive rights to the output production of the factory for a set period of time and then for a discounted rate afterwards (Hachman).

Apple then has access to these new component technology months, and sometimes even years, before rival competitors. This allows the company to release groundbreaking products that are actually literally impossible to duplicate. Eventually its competitors catch up in component production technology, but by then Apple has their arrangement in place whereby it can source those parts at a lower cost due to the discounted rate they have negotiated with the, now, most-experienced and skilled provider of those parts. In addition, their customer service is superior.

For the seventh straight year, Apple has topped its competitors in the PC industry in the University of Michigan's American Customer Satisfaction Index achieving a score of 86 out of 100 (ACSI). Apple Stores are the best example of what makes it different from its peers and are illustrative of the company's approach. Ron Johnson, senior VP for retail, states, “We don't want the store to be about the product, but about a series of experiences that make it more than a store.”

The retail stores are one of the most important ways people interact with Apple. Not just for those who are already customers, but potential customers as well. “Ten years and over 300 stores later, Apple retail stores are key to the Apple experience” (Allen). Johnson states that apple stores are “inviting, approachable, warm, interactive, and intelligent” (Allen). According to Apple about 50 million customers tromp through Apple's doors every three months, and half of them are first-time purchasers. Everything about the store is intended to represent what it is like to own and use an Apple product.

Apple controls the whole experience, from the personal accessibility of products, to the Genius bars ran by intentionally geeky/hip employees, to the architectural design made of simple, natural resources. “We don't want the store to be about the product, but about a series of experiences that make it more than a store”, claims Johnson (Allen). Some may argue that Apple’s run is near an end due to the current passing of Steve Jobs, but statistics beg to differ. Looking at rates of growth in sales and profits, or increases in market value (Paczkowski).

According to revenue statistics provided by “Apple Stores Raking in Revenue”, Apple has left Microsoft and Google, as well as IBM, Hewlett-Packard, Dell, Nokia, Intel, Cisco, EMC, Sony, AOL, and many other prominent technology firms, in the dust. Jobs and Apple defied conventional strategy Microsoft-style and have shown that more substantive innovation—coming up with consumer products that truly do seem new or almost new to the world, and not just to the company—can be exciting and fun, as well as enormously profitable. Apple should do well for several years to come, as Tim Cook's team executes on the vision and product portfolio that Jobs has left behind. But most observers worry about what will happen when Apple exhausts the ideas still on the drawing board. Jobs will not be around to champion yet another product that changes the world and fills up yet another sales pipeline. Surely, as an entrepreneur and innovator, he represented the very best that any company has to offer. “Apple’s product development roadmap stretches into multiple years ahead… Job’s departure won’t affect Apple’s product portfolio, quality, or competitiveness for a long time- if ever” (Dempsey). So then, why Apple is so successful?

Most people have a working understanding of the fact that Apple lost the PC wars to Microsoft, and only nominally understand that when Apple created the iPod and then the iPhone, the company started to go in a new direction. And anyone who’s gone into an Apple store knows full well that Apple’s customer service and stores represent the gold standard for selling and supporting tech gadgets. There are a few key principles that make it very hard for competitors to compete with Apple. Apple products stick to their reputable simplicity, they only create products they know that they will be able to better in the future, they stay ahead of their competitors, and they offer desirable customer service.

These four principles may seem a bit simplistic given the fact that Apple also has great software, industrial design and a powerful ecosystem of content, apps and services as part of the company’s success equation (Cusumano). However, it’s these criteria that are what really makes any company successful. In contrast to popular opinion, Apple’s success is driven less by the company’s products and more by the company’s marketing and business strategies. Most other oft-quoted reasons for Apple’s success are a by-product of one or a combination of the above factors.

Works Cited Allen, Gary. "Apple Stores at 10: What Went Right." Macworld 28.7 (2011): 14-15. Web. American Customer Service Index. Press Release May 2012. - American Customer Satisfaction Index. N.p., n.d. Web. 06 Mar. 2013. Cusumano, Michael. "The Legacy of Steve Jobs." Technology Strategy and Management Dec. 2011: 26-28. Web. Dempsey, P. "News Analysis: Life after Steve Jobs: However Will Apple Manage without Him?" Engineering & Technology (17509637) 6.9 (n.d.): 20-21. Web. Hachman, Mark. "'Nightline' Given Exclusive Access to Apple's Foxconn Factories." PC Magazine Feb. 2012: 1. Web. Paczkowski, AllThingsD, John. "Apple Stores Raking in Revenue." CNET News. CBS Interactive, 05 Aug. 2010. Web. 06 Mar. 2013.