Apple Inc. is the largest publicly traded company in the world by market capitalization. Overtopping ExxonMobil by some $60 billion, (CNN, 2012) as well as the largest technology company in the world by revenue and profit, worth more than Google and Microsoft combined. (Appleinsider.com, 2012)Fortune magazine named Apple the most admired company in the United States in 2008, and in the world from 2008 to 2011.All these facts caused my interest in studying in Apple Inc.’s backgrounds, financial data and business strategies and performance to assess its current position and potential developments.
Apple started in 1976 as a computer company. In the last decade, however, Apple has expanded into a very intricate company that specializes in much more than just computers. In 2001, Apple broke the barrier with the iPod, eventually becoming the dominant market leader in music players. As well, Apple joined the phone industry in 2007 with the iPhone, which has also been widely successful.
BackgroundApple is probably the most well-known company when it comes to the making of technology that is cutting edge and something that everyone wants to have in their possession. Apple Computer first came to be a company in 1976 when Steve Jobs and Steve Wozniak when they released the Apple I and was located in Cupertino, California. These two young men dropped out of college, and were often viewed as outcasts in most of the places that they were at, including schools, which could have been the reason that they dropped out of college.
As most people have heard, Apple really started in the basement or garage, depending on who the person talks to rather than at some expensive business location. Which is perhaps the reason so many people were first intrigued by the brand and could be the reason that the computers were such a success, they were created by guys that knew what they wanted and passed this on to the rest of the world. And what they wanted was something that other people wanted as well.
Apple with time has brought about a significant reputation in the consumer electronic aspect. The users of Apple electronics tend to be fascinated about and loyal to the products and on the other hand those who have no experience with Apples product most times criticize them an being too expensive.
On August 15, 1998 Apple released the iMac and was able to cover up its past failures which includes the first Apple portable, which was to wrong looking and bulky and the Newton’s, Apple in entering the PDA market. In 2001, after several years of rigorous developments, Apple came up with Mac OS X a universal operating system targeted at both consumers and professionals. The Mac OS X was a different re designs from its previous the Mac OS 9 which could not constrain the power of UNIX while offering a streamlined user experience with a simplified GUI (Graphical User Interface).
The iMac line of professional computers combined with the Mac OS X regained Apples profitability coupled with the release of the iPod portable digital audio player, later in the year which was just to crown its productions. The historical success of the iPod created a platform for future product, including the best mobile device in history, the iPhone and the Mac Book line of portable computers and the latest release of the iPad on the 27th of January 2010. Current Challenges
Apple faces considerable challenges in each of its product categories and must make significant strategic initiatives, both in the short and long term, if it is to avoid a recurrence of challenges that it has faced in the past. Upon analyzing Apple’s product strategy since inception, two notable issues stand out. Reliance on proprietary designs as opposed to relatively open systems that other manufacturers can clone, enhance or interface to.
Again, currently the bundling of Mac OS X operating system with Apple hardware, a combination that only Apple can offer. In contrast, the top three PC manufactures, Dell, Hewlett-Packard (HP), and Lenovo all exclusively offer Windows and Intel (Wintel) based PCs that account for 80% of the worldwide PC sales.
An excessive focus on styling and design at the expense of neglecting actual performance. For example, the Macintosh’s slow processor in 1984 that led to IBM PCs dominance and then again Apple’s decision to switch from PowerPC chips to Intel chips in 2006 due to poor processor performance. Further, the chips Apple is developing for its latest generation of iPods & iPhones do not compare favorably with Intel’s x-86 micro-architecture.
A significant disadvantage that Apple faces by developing both the Mac hardware and operating system (OS) is that it competes with both PC manufacturers/assemblers including unbranded assemblers and an operating system developer – Microsoft that combined sell over 80% of all PCs.
All major PC vendors such as Dell, HP, Acer, Lenovo offer PCs that run on a version of MS Windows. Apple manufactures the Mac hardware and writes its own operating system – the latest version being the Lion OS X – and for the large part writes its own applications. Microsoft has over the past two decades focused on developing software; particularly operating systems, development tools, and cutting edge productivity applications such as Microsoft Office with newer versions of its major offerings every fewer years.
The sophistication of its applications has kept pace with the increase in computing power offered by microprocessors developed by Intel over this same period. This situation, of late, has been somewhat offset with Apple introducing a Mac Apps store on similar lines as an app store for the iPhone, iPad, and iPod that permits independent developers to offer applications for sale. Apple has focused on offering users a high-quality PC with an attractive hardware design and user interface, ease of use, relatively virus-free software and in-house applications.
However, Apple Macs had a performance disadvantage until 2006 when it finally moved away from the PowerPC chip line to an Intel chip set that offered superior performance and reliability and was similar to what was used on the majority of the PCs sold worldwide. Further, Apple is dependent on key IndependentSoftware Vendors (ISVs) such as Microsoft for applications such as Microsoft Office. MS Office remains critical to its Mac offering and while it has received assurances by Microsoft to develop the Office for the Mac for another 5 years, Apple does not have a comparable Office suite in development yet.
Further, there is a general lack of Mac software or apps available when compared to the plethora of software available for a Windows based PC. The iPhone, though clearly cutting-edge, has seen its competition catching up with offerings such as the Samsung Galaxy, Blackberry Torch, HTC One X, & Nokia Lumia. Each of these offer advanced touch-screen capability similar to the iPhone and some utilize the latest 3G and now 4G network like the iPhone.
These competitor phones run on closed platforms such as Windows Mobile OS or Nokia’s Symbian OS as well as the Android open source platform. While iPhone’s OS is considered to have advanced user interface technology compared to these other operating systems, one potential rival in the making may be Google’s Android open source mobile platform.
This platform does not differentiate between applications and the operating system. The implication being that it is completely free of charge, may be modified or improved upon or customized by any potential mobile handset maker, and unlike Apple’s Appstore that charges for many applications, the applications developed and downloadable for an Android powered phone are entirely free. That said, Android operating systems do have significant security vulnerabilities that give Apple a distinct advantage for now.
Throughout the last year, I’ve noticed a big change going on with Apple Inc.; well, several changes actually. Most of these changes are big, others are small, and it seems that Apple is trying to hack their way into saving more money by isolating themselves more and more.The first thing I want to point out is that they’ve stopped giving hardware to third party companies. This means that places like NewEgg.com, Best Buy, etc. won’t be selling Apple products in a certain period of time. For example, the iPhone was not available for purchase in the big super markets such as Target, Best Buy, etc., but rather only available at the Apple Store.
They have also stopped giving third party companies the availability to repair computers; Apple wants everyone to come to them for support and hardware fixes at the Apple Store.One of the biggest changes that Apple has done is cancellation of going to the Macworld next year. They’ve decided that they feel they can communicate better and distribute news better by just telling people through their own methods rather than attending “costly” conferences and shows.
This will apparently save them loads of money, but unfortunately they’re going to miss out on the fun of how people find out about their new products: through the Macworld. Such devices like the iPhone, iPod and Macbook have been introduced through the ever-motivated Macworld. But this year they called it quits.
There are a lot of other various changes that Apple has made, which are only small changes, but can lead to a long-term effect on the company. I think that these are putting the company in jeopardy, because they’re going to rely on themselves, and standing alone without allowing anyone to help with their software/hardware is risky. Taking away big shows that allow them to announce new products could lead to a cut in consumers, but they must think it’s a smarter move.
Lesson for change:Think Different.” It’s been Apple’s slogan since 1997. Thinking different is what makes Apple, well, Apple, right? It’s apparent in how Apple acts and presents itself as a company and a brand. Instead of appealing to the masses, the company has taken actions to attract those who “think different” about what a computer can, should, and will be; the same holds true for mobile devices. It’s events are different, it’s products are different, and its leadership is different. Being different gets you noticed. Being different also has a lot to do with taking risks.
People who strive to be different are those who are willing to stick their neck out and risk having it cut off (not literally, I hope). It’s not for the faint of heart, either. But without this mentality of being and thinking differently, our world would be an incredibly dull place to exist in. To achieve success and to live a good life, one must consider the idea that taking a different path, one that is veers off course and into unknown territory. Because in the business world and in every day life, being different is, at times, a huge risk, but you might just might find yourself in paradise city when you reach the end of it.
ConclusionAlthough the co-founder Steve Jobs and Apple Inc has had some bad times, Steve seems to still be able to take Apple from reporting quarterly losses to introducing new and innovative product lines. The IPod music player has become Apples number one product making Apple millions of dollars. The IPod has increased Apples earnings per share from 1.5 million dollars in the year 2005 to 3.93 million dollars in 2007. Steve has continued to pursue the creative innovations of new, stylized, and user friendly products.
This has helped Apple be able to increase its market share and the new industries and markets. Steve’s execution of the five tasks of strategic management all started with his vision. He saw that the market trends was moving towards the synchronization of mobile phones and computers as well as the digital music players, and then focused his strategic vision towards the new changes. He created his objectives around the financial success and measures of the performance by the number of units sold.
He created the strategy of entering these markets by selling highly differentiated and stylized products. He was able to implement this through his research and development of the new products and the evaluation of the market trends. When you take a second to look back on Steve Jobs roles and contributions to Apple, Inc. you see that he is the reason why Apple, Inc. is who they are today. With his awesome innovations and visions, he has been able to bring Apple, Inc. many accomplishments. We give will give Steve Jobs a grade A.