The computer company Apple is one of the most popular computer companies in the world. Through their innovation to computer technology they have cornered the computer market. Their sales that come from a wide range of products have helped them reach the top of the computer world latter. Apple started out unlike many companies today. In 1976, two men with a passion for building electronics started on of the most popular computer companies in the world. These men, Steve Jobs and Steve Wozniak, were in their 20’s when they first started Apple. The two men had been friends for several years.
Jobs and Wozniak both members of the Homebrew Computer Club in Palo Alto, CA, began working on a design that Wozniak had created. The design would later be called the Apple I. This design was Wozniak’s first contribution to the computer world. The two men worked together in Jobs’ parents garage. Originally Wozniak had built the Apple I just for the fun of it. Jobs later persuaded Wozniak that they could sell his creation. The Apple I was debuted at a meeting of the Homebrew Computer Club in April of 1976. The two men began to sell the product to small retailers for an initial starting cost of $666.
(Hill, and Jones C59-C73) They sold nearly 200 units of the Apple I model. (Hill, and Jones C59-C73) With the hit they had created they began working on the Apple II. During this time the two men were introduced to Mike Markkula who was a retired millionaire who had worked for Fairchild and Intel. After tempting Markkula to invest money and join the team was becoming more powerful. Markkula insisted that they hire someone who had more business experience to join the team also to help the not so business savvy computer nerds. Michael Scott was hired to join the team as president of Apple.
This would help Apple become a big player in the computer world. (Hill, and Jones C59-C73) The Apple II was introduced in 1977. This machine was more eye appealing that the Apple I. It had a hard plastic case and no visible screws or bolts. This was huge in the computer world as most computers at this time looked as though they were built computer enthusiasts at home. The next year Apple incorporated something that was new to the personal computer world. They added a disk drive to the compute that allowed third party developers to create software programs for the Apple II.
The disk drive used what were called floppy disks. Two of the most notable programs to emerge were EasyWriter, which was a word processing program, and VisiCalc, which was a spreadsheet program. The VisiCalc was a hit. This program created a new market for Apple; the business world was in love with the programs. (Hill, and Jones C59-C73) Businesses could use the program for financial planning and accounting. The Apple II also became a staple for classrooms across the country, because it was easy to use and provided educational aspects to students.
Near the ending of 1980, the Apple had sold over 100,000 Apple IIs, making Apple the leader in the personal computer industry. Total Apple sold nearly 2 million computers. The Apple II was constantly being revamped and improvements were being created all along the way. This model was produced until 1993. Meanwhile Apple released the Apple III, but after being rushed through development and an early release cause this model to fail due to bugs and had a problem with crashing all the time. In 1981 the Apple III had all the kinks worked out and was released again. The year 1980 gave birth to the Macintosh.
Jobs spent many hours on research and development and gave birth to a new machine unlike any others. With technologies that he saw on visits to Xerox’s Research Center, Jobs had these new technologies added to the Macintosh. Most notably a GUI or graphical user interface, programs accessible through on screen icons, a computer mouse that would allow a user click and drag objects, and a laser printer. (Hill, and Jones C59-C73) These new technologies would later become standards in the computer world. When this machine was launched early sales were good but then began to fall.
This machine was lacking several key things: it had no hard disk drive, and had very few applications that would work on the machine. Around this time in 1985 Apple posted it’s first loss. Apple began some major changes in its inner structure. With Jobs driving people crazy with his over optimistic and some times over demanding attitude, he was voted to have his role striped from him losing his management duties and his leading roll in the Macintosh division of Apple (Hill, and Jones C59-C73). Jobs, who was not too happy with this, resigned and sold his Apple stock. Jobs went on to create a company of his own called NeXT.
NeXt would later be bought out by Apple to the tune of $425 million dollars, they also would play a big role in creating a new operating system for Apple later down the line (Hill, and Jones C59-C73). After the departure of Jobs, John Sculley, who had been made CEO by Steve Jobs while he was still with Apple, began by cutting projects such as the Lisa line, which was to expensive to make an impact in the market. From 1986 till about 1991 were the “golden years” of Apple. This is when the Mac Plus was released. It was an improved machine compared to the original Mac.
With sales on the rise from Apple II and the Mac Plus, the company had become one of the most profitable personal computer manufacturers in the world. In the early 90’s Apple’s big rival Microsoft, run by Bill Gates, had decreasing prices of their line of PCs. They also introduced Windows 3. 1 to the world. This was their first GUI. Apple soon lost its luster. In the following years steps were taken to help keep Apple in the top dog running of the computer world. They slashed prices on their current Macs and Apple IIs by 30%; they came out with a base model that had a consumer friendly price of $999 called the Mac Classic.
The work force was in need of attention. Sculley cut the work force down by 10%. Salaries of top managers were reduced by 10-15%. They also began to subcontract their manufacturing. Apple released two new products in the early 90s, the Newton handheld and the Powerbook. Other moves that were made in these years were a joint venture with IBM that created Taligent that would create a new operating system, and Kaleida, which was made to help improve the Apple and IBM compatibility with one another. Apple also adopted IBM’s Power PC microprocessor architecture (Hill, and Jones C59-C73).
Sculleys moves proved to not be enough to help Apple. With things beginning to really fall apart for Apple, Sculley left. Apple brought in Michael Spindler from Apple Europe. Spindler began executing his plans to help Apple in 1994. He allowed several companies the license for the Mac-OS allowing clones to be made. With the release of Windows 95 soon approaching Apple knew it was in for a bumpy ride. Spindler started research and development on a new and improved operating system. This is around the time when Apple really fell apart.
They began not being able to predict the amount of inventory to have and really started to lose money. Spindler was soon replaced, his duties switched over to Gilbert Amelio. Amelio was left with the dirty work of laying off more 1,300 employees. With the birth of the new operating system struggling, Apple bought NeXT from Steve Jobs and hired him back as a consultant. With Apple still on the downward slope Jobs was made interim CEO and in 1998 he took the position on a regular basis. Amelio left Apple. With Steve Jobs back at the helm of Apple it was smooth sailing from then out.
Jobs cut the product line from 60 to just 4 products. Jobs went as far as going to Microsoft and getting a $150 million investment from Bill Gates (Hill, and Jones C59-C73). Jobs also began thinking outside of the box literally and created an all-new design for their newest computer the iMac. This design was unlike any other computer on the market. The color scheme and shape mimicked attributes of a jellybean. The release of the iMac and the iBook put a jolt in Apple sales. Jobs would go on to make other dramatic changes to the Apple computers.
He introduced the Intel microprocessor which had become an industry standard in 2005(Hill, and Jones C59-C73). Apples were now faster and had lower power consumption. Apple opened its first retail store and by 2008 had 200 operating retail stores. Jobs also started Internet ordering that mocked the Dell model. This allowed them to skip the third party retail stores and get directly to the customer. All of the moves that Jobs had put into motion were helping Apple drastically. None of the moves would compare to the creation of the iPod. The iPod was a portable digital music player.
With the rise of digital media the iPod was the answer. Sales skyrocketed and the iPod became not only an industry standard for digital music players but also became a fashion statement. Along with the iPod came the iPod touch that had a touch screen display and Wi-Fi access. After the big iPod boom came the iPhone. This device changed it all. It was essentially marketed as a smart phone but had so much more. Applications were made that could be run on the phone. The iPhone was basically a hand held computer that had a phone incorporated into it. The cell phone industry would never be the same again.
Along with these additions to the Apple family was the iPad, A portable touch screen tablet very similar to the iPhone but on a bigger scale. With all of the changes that Steve Jobs made to the Apple Corporation it seems that even with his sketchy past before he resigned, he was the right man for the job. With the new technology that Apple has created in the past 5 years it seems as though they are going to be riding the wave of success for many years to come. Internal Strengths and Weaknesses The Apple Corporation had many ups and downs throughout its history.
From the get go Apple’s design work has been great. They made the clunky looking early computers into a box with smooth line design and made sure to not include visible screws or bolts. The newer machines like the iMac G5 keep true to their top of the line designing. The futuristic look makes it very appealing to conusmers. The slick and stylish iPhones and iPods go in the same category. They make sure that a great looking design goes hand in hand with every product. Brand recognition is also another strength that Apple has. The design of their products is very recognizable to consumers.
When they see an iPhone sitting on a table people know exactly what it is and who made it. Their Apple logo has been embedded into the minds of millions of people across the globe. They know when they see the apple with the bite take out of it that it is made by Apple and is going to be a top of the line product. Product diversification is also another strength of Apple. They carry a wide range of products all shapes and sizes. They have desktop computers that have different sizes, phones with different memory capabilities, digital music players with different memory space, laptop computers that have different sizes.
They have accessories of all shapes and sizes for their products. They also have most recently been dabbling with TV, now Apple has Apple TV. The halo affect that Apple has created with its products is also a great strength. When people buy an iPod or iPhone they are introduced to Apple, they then are more likely to consider more Apple products. With the compatibility of their digital music players and their phone to Apple computers, people are more likely to get a Mackbook or an iMac G5 after being introduced to their other products like the iPhone or iPod. When speaking of the iPod another thing comes to mind.
Market saturation. This is a weakness that Apple is or will soon have to deal with. The iPod boom over the last few years has got an iPod in the hands of so many people across the globe that soon everyone will have one and it will no longer be a big key component to their sales. They will need to one up the iPod if they are to keep the success going for longer than it has. Another weakness is that Apple is steering clear of Microsoft. The relationship they have could be way stronger and they could collaborate on a new machine that uses the plus sides of both companies.
This is either being avoided or is not an option for them. Another downside to Apple is that they do not have very strong sales to the business world. Corporate America would be a huge buyer of their product. With Microsoft PCs have saturated the business market; Apple is not having an easy time trying to get their machines into giant corporate business offices. External Opportunities and Threats Apple still has many possibilities that it can expand to. Apple still has the entire world that it can expand its business to. It seems that most of their focus is on the United States.
They still have many opportunities to expand their global markets into other countries that they have not yet reached and become a worldwide giant. They also have lots of potential for iTunes. The online music store has become a one-stop shop for digital media. They currently have music and movies and applications available on iTunes. They soon can branch out and make other forms of media available. They could look into having books and magazines available. Apple still has an opportunity to lower their prices of all their products. Currently Apple is known for it’s high end products that have high-end prices.
They could focus on bringing their ticket prices down to help generate more customers. Bringing in the upper-class is great but the middleclass and lower classes are still left drooling on the store front windows, not being able to afford their products. They have begun to lower their prices on some items but they need to think lower and then more sales will be headed their way. Recently Apple has been entering the world of television. They released Apple TV. This market still has lots of room for expansion. They could start having their own television series and movies.
With the explosion onto the digital media market this new avenue could create lots of revenue for them. Some major external threats exist for Apple. One major threat that is still apparent is the current status of our economy. The economy being so poor can cause some serious damage to their sales. People are in the saving money mode and not the spending mode. With people spending less Apple will definitely see a drop in their sales from the current economic crisis. The pricing of their products is high. This could threaten their status because people are looking to buy affordable products.
Not products that they need to save their money for years to consider purchasing. There are plenty of potential customers out there that cannot afford the Apple products simply because the price is too high. It they worked more on this then they could start seeing products move off the shelf faster. The computer industries main threats to Apple are the current competition. Microsoft is still an industry giant that is not slowing down. Other companies that give Apple their fair share of competition are Dell and Hewlett Packard. These companies all have their version of the desktop computer.
Some of the other companies are able to be very aggressive with their pricing and offer lower prices for their products. Microsoft answered the iPod boom with their version of a digital music player called Zune. Though sales of the Zune were low compared to the iPod, Microsoft is still hot on the heels of Apple. The other companies Dell and Hewlett Packard offer far less expensive computers to their customers that could potentially have Apple computers if the pricing was not so high compared to their machines. SWOT ANALYSIS FavorableUnfavorable
Internal| Strengths- Brand recognition- Innovative design- Product diversification- Product design- Halo Effect of new product line. | Weaknesses- iPod saturation- Weak relationship with Microsoft an industry giant-Lacking business from the business market| External| Opportunities- International expansion- Expand iTunes- Reduce prices -Expansion into the TV industry- Loyal customers| Threats-Economic crisis-High Prices-Strong competitors: Microsoft, Dell, and Hewlett Packard| Corporate Strategy The Apple Corporation’s strategy has been to create top of the line products that have the highest level of technology that is available.
Their design work ensures that each product that is sold to the customer is of the highest quality. They strive for innovation in their products. They offer a wide range of products to accommodate on all levels. They are committed to bringing the best personal computing experience to students, educators, business professionals, and consumers around the globe through innovations in hardware, software and the Internet. They strive to be recognized for award winning desktops and notebooks. Apple emphasizes its digital music revolution with iTunes and it’s market-leading iPod.
(Apple Inc. , 2000) Business Strategy Apple’s business strategy is a strong one. Have strong defenses like their fancy designs that integrate hardware, software, and services. Once people are introduced to Apple products they want more. Building loyal customers is another goal for their business strategy. Apple wants to take giant leaps with new platforms to ensure next level user experience. (Apple Inc. , 2000) Corporate Structure - (Apple Inc. , 2010) Steve Jobs – CEO Co-founder of Apple. Co-founder and CEO of Pixar Animation Studios
Tim Cook – Chief Operating Officer Cook, reports directly to Apple’s CEO. He is responsible for all of the company’s worldwide sales and operations, including end-to-end management of Apple’s supply chain, sales activities, and service and support in all markets and countries. Scott Forstall – Senior Vie President – iPhone Software Forstall reports directly to the CEO. Leads the team responsible for delivering the software at the heart of Apple’s revolutionary iPhone including the user interface applications, frameworks, and the operating system.
Jonathan Ive – Senior Vice President – Industrial Design Ive reports directly to the CEO. Since 1996 he has been responsible for leading a design team widely regarded as one of the worlds best. Ron Johnson – Senior Vice President – Retail Johnson reports directly to the CEO. He leads the retail strategy for Apple, and is responsible for its execution and performance. Bob Mansfield – Senior Vice President – Mac Hardware Engineering Mansfield is responsible for reporting to Tim Cook the chief operating officer. He oversees the team that comes up with dozens of breakthroughs for Mac products.
Peter Oppenheimer – Senior Vice President and Chief Financial Officer His role is to oversee the controller, treasury, investor relations, tax, information systems, internal audit and facilities functions. He reports to the CEO and serves on the company’s executive committee. Philip W. Schiller – Senior Vice President – Worldwide Product Marketing As a member of the Executive team, he is responsible for the company’s product marketing, developer relations, and business marketing programs reporting to the CEO.
Bertrand Serlet – Senior Vice President – Software Engineering Serlet is responsible for leading Apple’s software engineering group. He reports directly to the CEO Bruce Sewell – Senior Vice President – General Counsel He reports to the CEO. He also serves on the company’s executive team and overseas all legal matters such as corporate governance, intellectual property, litigation and securities compliance, as well as government affairs.