General Compnay Weakness: Declining Research and Development (R&D ) Investment Apple Computer’s investment in R&D has declined over the past few years. Thoug apple investment in R&D rhas increased in absolute terms from $471 million in 2003 to $782 million in 2007, its R&D investment as a perscentage of total revenues has declined from 7.6% in 2003 to 3.3% in 2006. By contrast, Microsoft corporation, one of the major competitors of the company in music player and operating system business has invested 16.1% of its total revenues on R&D, in the fiscal year 2007. Hewlett-packard, another competitor in the personal computing devices, has invested around 4.6% of the total revenues in R&D representing $3,611 million. Although, the company has been launching successful products in the past, continued deline in the R&D investments as compared to its competitors could adversely affect the future competitiveness in rapidly evolving technology markets.
This weakness has affected in particulary their new innovation the iPhone. Image – The Apple brand is not targeted towards business people, which most smart phones have targeted. Does not have a reputation as being compatible with the corporate world. (corporate business world that is dominated already with other smart phones, specially the BlackBerry phone.
Price – it price started at $600 then lowered to $350, the iPhone would be sold at a reasonable price for its value. It outperforms any other PDA or smart phone on the market bon the ground of convenience of having multiple features combined into one-device. This features increases its overall value to general customer, but not business customers. The forecasted demand for the iPhone was overstated and the marked-up price over its direct compitoter, The Black Burrey.
Apple has just started to offer lower priced models for more cost conscious consumers. $200 price cut on the Apple 8 GByte iPhone. But this after almost two years in the market competing with Blackberry, the business phone. User Interface – Touch screen interfaces suffer from the problem of “gorilla arm,” in which long-term use of a flat, solid surface for input becomes uncomfortable.