Apple Inc. has been an icon in American industry over the last three decades. It was named the number one “world’s most admired company” by Fortune the last three consecutive years. Over the years, The Apple brand name has become synonymous with innovation. CEO Steve Jobs has done a remarkable job turning around the company that was near bankruptcy in 1996. As the name change from “Apple Computer” to “Apple Inc. ” in 2007 suggests, Apple is no longer just a computer company. Both revenue and net income have soared in recent years, thanks to the iPod and the iPhone.
Apple’s share price has outperformed the S&P 500 index by nearly tenfold. The company started off as “Apple Computer,” best known for its Macintosh personal computers (PCs) in the 1980’s and 1990’s. Despite a strong brand, rapid growth, and high profits in the late 1980s, Apple almost went bankrupt in 1996. Then Jobs went to work, transforming “Apple Computer” into “Apple Inc. ” with innovative non-PC products starting in the early 2000’s. In fact, by 2010, the company viewed itself as a “mobile device company.
” In the 2009 fiscal year, sales related to the iPhone and the iPod represented nearly 60% of Apple’s total sales of $43 billion. Even in the midst of a severe economic recession, revenues and net income both soared (Yoffie D. B. , Kim R. 2011). Apple has faced challenges competing in an extremely competitive market. However the company has overcome the majority of these challenges by changing strategic focus and entering the high end consumer market. Overall, Apple has pulled itself out of maturity/decline back into the growth stage.
An important element of Apple is its ability to differentiate itself from its competitors with the combination of introducing new innovative products and implementing aggressive marketing tactics. Apple pursues a differentiation strategy since it started in 1976. Only one time they offered a computer aiming for the mass market, but soon came back to their differentiation strategy. This differentiation strategy was at one point supported by a strong promotion campaign, with the goal of to ‘differentiate the Macintosh amid intense competition in the PC industry.
Apple has always been a very innovative PC manufacturer. Through excellent R&D, Apple always managed to launch PC innovations on the market. Although the products sometimes showed weaknesses, the innovative role still gave Apple a lot of attention. Apple designed its products typically from scratch, using unique chips, disk drives and monitors. This created a high value image of the Apple PCs and made the customers ‘love’ their Macs. These loyal customers allowed Apple to charge premium prices for their products. Apple in Pc Industry As technology in Pc industry became cheaper and affordable over time, Company?
s growth was driven by low prices but revenue growth did not match with the volume growth. This led to a decrease in R&D. Hence almost all PC suppliers used cost differentiations as their strategy and sell to volume. The consumers cared deeply about price, home consumers also valued design, mobility, and wireless connectivity, business consumers balanced price with service and support and at last education buyers depended on software availability. It can be said, that the dynamics were problematic for Apple because of low prices of different supplier.
But on the other hand it can be seen as favorable to Apple. The reason was Apple had control of both hardware and software. This was a unique strength which other computer industry did not possess. But on the other hand, the problem with apple and every other PC producer is that none have rare sources as the parts used in building PC’s are largely standardized. Another problem is that there is always a substitute for a certain PC. Non-Substitutable resources are also limited as the products mainly need to have the same functions.
Thus companies need to largely rely on brand name and quality, but quality increases price. This is a problem for Apple as its high quality products are more expensive than computers from other companies. Apple’s Competitive position Apple currently has eight business segments consisting of Desktops, Portables, iPod, iPhone, iPad, “Other music related products and services”, “peripherals and other hardware”, and “software, service, and other sales”. The iPhone is Apple’s smartphone and was released on June 29, 2007. Since then the iPhone has gone through 6 iterations, the most recent being the iPhone 5.
Last year, 1. 25 billion iPhone units were sold generating over $80 billion in revenue. The iPhone is Apple’s major revenue driver accounting for over 50% of 2012’s total revenue. The iPad is tablet computer which was released on April 3rd, 2010. Since inception the iPad has undergone 4 iterations. On November 2nd the most recent fourth generation iPad and iPad mini were released. On the launch day Apple sold 3 million iPad products of all kinds setting a record for sales volume on an iPad launch day. Last year Apple sold over 58 billion iPads generating $32.
4 billion dollars in revenue and accounting for nearly 21% of 2012 total revenue (UO investment group) Apple’s transition from a computer to a consumer electronics company is unprecedented and hard to replicate. Although many can only speculate about why Apple succeeded so well, they tend to credit Steve Jobs’ remarkable leadership abilities, Apple’s highly skilled employees, and its strong corporate culture (Cantrell, CNNMoney, 2012). REFERENCES Apple Inc. in 2010 DAVID B . YOF F I E . RENE E KIM 2011 Amanda Cantrell, “Apple’s remarkable comeback Story,” CNNMoney, March 29, 2011, Htpps // uoinvestmentgroup. org, technology,apple inc