4. Apple Inc.
Apple, Inc. is a standalone company and not a member of a conglomerate. A con-
glomerate is a combination of two or more corporations engaged in entirely dif-
ferent businesses that fall under one corporate group, usually involving a parent
company and many subsidiaries, while a standalone company is an independent
operating firm.
2
5. Apple, Inc.’s official mission statement is, “Apple designs Macs, the best
personal computers in the world, along with OS X, iLife, iWork, and pro-
fessional software. Apple leads the digital music revolution with its iPods
and iTunes online store. Apple has reinvented the mobile phone with its
revolutionary iPhone and App Store, and is defining the future of mobile
media and computing devices with iPad” (Apple.com). This is an extremely
weak mission statement. Infact, it sounds more like a product listing that
an actual mission statement. It should be changed to the following:
“We believe anything is possible. We exist to challenge the status quo in everything
we do. We invent technologies and services that are simple to use and enhance how
you live. We are committed to bringing the best personal computing experience to
students, educators, creative professionals and consumers around the world through
our innovative hardware, software and internet offerings.”
3
6. 4
Just months before he died, Steve Jobs revealed plans for a new space-like headquarters
that Apple would eventually move into sometime in the not-so-distant future. Apple
CEO Tim Cook announced that Job’s vision will come true by the year 2016.
Currently, Apple, Inc. headquarters is located in Cupertino, CA. and is considered a centralized
organization. Centralized organizational structures rely on one individual to make decisions and
provide direction for the company. They can be extremely efficient regarding business decisions
because they typically develop the company’s mission and vision, and set objectives for managers
and employees to follow when achieving these goals. But, centralized organizations can suffer from
the negative effects of several layers of bureaucracy. These businesses often have multiple manage-
ment layers stretching from the owner down to front-line operations. Business owners responsible
for making every decision in the company may require more time to accomplish these tasks, which
can result in sluggish business operations. Examples of centralized organizations are Wal-Mart, Mc-
Donald’s, Microsoft, General Motors, and Ford. A decentralized organizational structure often has
several individuals responsible for making business decisions and running the business. They rely
on a team environment at different levels of the business. Individuals at each level in the business
may have some autonomy to make business decisions. A broad-based management team helps to
ensure the company has knowledgeable directors or managers to handle various types of business
situations. But, decentralized organizations can struggle with multiple individuals having different
opinions on a particular business decision. As such, these businesses can face difficulties trying to
get everyone on the same page when making decisions. Examples of decentralized organizations
are Ebay, Johnson & Johnson, Wikipedia, Kelloggs and Craigslist.
7. 5
Apple was established on April 1, 1976 by Steve Jobs and Steve Wozniak.
During his high school years, Job’s worked summers at Hewlitt-Packard, and
it was there that he met his future business partner, Wozniak. After dropping
out of college, he began working for Atari, an early pioneer manufacturer of
personal computers. Coincidentally, Wozniak also worked for Atari, and the
future founders of Apple teamed together to design games for Atari com-
puters. The two were also skilled hackers and designed a telephone blue box,
which was an electronic device that stimulated a telephone operator’s dialing
console and provided the user with free phone calls. Steve Jobs spent plenty
of time at Wozniak’s HomeBrew Computer Club, a haven for computer geeks
and a source of invaluable information about the field of personal computers.
They had both learned enough to try their hands at building personal com-
puters and they produced fifty full assembled computers that were sold to an
electronics store called the Byte Shop. This sale was what encouraged the pair
to found the corporation, which was named after Steve Job’s favorite fruit.
The Apple logo is a representation of the fruit with a bite taken out of it; the
bite represents a play on words – bite and byte.
8. 6
Perhaps more than any decade prior, the 1970s
played host to an explosion in consumer elec-
tronics gadgets that changed how we educate,
entertain, calculate, and communicate. Many
significant electronic and computer inventions
that continue to play a vital role in society today
date back to the 1970s. The American public
was greatly impacted in various ways due to
the affordability, efficiency, and novelty of these
inventions. One exceptionally important inven-
tion that led to other significant innovations in
computer technology was the development of
the microprocessor.
The 1970s, also, characterized a spirit of dis-
covery and exploration. A voyager program
was released which consisted of the Voyager
1 and Voyager 2. They were sent on unamed
expeditions to several of the outer planets in the
solar system. The program also sent a Voyager
Golden Record with the spceship presenting
aspects of life on Earth to intelligent alien life
forms outside the Earth. The record contained
pictures and other data about human beings
and other living beings on earth. It also had an
assortment of music from across cultures.
Furthermore, the 1970s were also the start of
Fiber Optics. In 1970 Corning glass announced
that it had created a glass fiber so clear that it
could be used to communicate pulses of light.
Soon after, GTE and AT&T began experiments
to transmit sound and image data using fiber
optics, which transformed the communications
industry.
July 20, 1976. The Viking 1 Lander successfully
lands on Mars and send back to Earth the first
close-up pictures of the planets surface
July 4, 1976. U.S. Bicentennial
September 9, 1976. Mao Tse-tung, the founder
of the Chinese Communist Party, dies
September 17, 1976. NASA unviels first Space
Shuttle, the Enterprise
July, 1976. First laser printer introduced by
IBM, the IBM 3800
9. Apple Computer’s 30-year history is full of highs and lows, which is to be expected of a
highly innovative company. It has evolved throughout the years into an organization that
is very much a representation of its creator, Steve Jobs. Apple has made several hugely suc-
cessful product introductions over the years and it has also completely fallen on its face on
several occasions. Apple reached a point where many thought it would not survive. When
asked in late 1997 what Jobs should do as head of Apple, Dell Inc.’s then-CEO Michael S.
Dell said at an investor conference: “I’d shut it down and give the money back to the share-
holders.” One thing is for sure though; Apple has repeatedly captured the world’s attention
thanks in large part to its rebellious underdog attitude and continuous efforts to reset expec-
tations of what’s possible from consumer electronics. Although, their products aren’t usually
the first of their kind, they are almost always the first to get it right. Take the iPod, it wasn’t
the first portable mp3 player, but it was the first to be intuitively designed and well-market-
ed. The same could be said of the iPhone for the smart phone market and the iPad for the
tablet market. In the PC industry, there is this rule that some of the branded vendors take
three tries to get something right, while Apple often gets it in one try. Apple can say to itself
that it’s going to revolutionize the professional laptop or smartphone and then not only fol-
low through with enviable designs, but sell them at unheard of profit margins. When Apple
decides to go ahead and make a revolutionary product, it buys up literally almost all of the
world’s stock of the components that define the gadget. This prevents the competition from
quickly releasing clones of Apple’s iconic machines, or matching Apple in price without
cutting corners. Moreover, where Apple really stands out, among its competition, is in its
marketing. The company simply seems to understand what will get people excited about its
products, and then executes on that vision. You don’t see the company talking about features
or technology, but about how the computer will make your life better. Apple has not been
afraid of in-your-face campaigns either. The company has run campaigns that have shown
Intel-based laptops catching fire and getting flattened by steamrollers.
7
10. Opening its first store in 2003,
which provided customers with a hip
place to hang out, buy products and
receive personal tech support from
the “Genius Bar,” Apple now has over
400 stores worldwide. Backed by an
army of zealous fans, and recruit-
ing more each day eager to know
what the company thinks up next,
an entire ecosystem of media outlets
have risen to monitor the deeply
secretive company’s every move. But,
Apple rarely introduces a new type
of product. Thus, instead of being
the pioneer, they are the expert at
refining existing products. Apple in-
creases the appeal of these products
by making them stylish and more
functional. True wealth doesn’t just
come from launching one big prod-
uct or making one big deal. It comes
from tapping into streams of revenue
that keep producing profits month
after month. Nobody is better at this
than Apple. It started in 2001 with
iTunes, a free music player with a
built-in store. Ever since then, Apple
has been raking in hundreds of mil-
lions of dollars a year from iTunes
sales of music, movies, and books.
Then there’s the mobile market. Ver-
izon and AT&T love Apple because
their iPhones are great at inspiring
customers to pay extra every month
for a data plan. With all of these
different sources of recurring reve-
nue, Apple wouldn’t have to launch
another product and they would still
be making money for years to come.
It all comes down to their brand –
which Apple has artfully developed
since their inception.
8
11. Of course, a brand is so much more than a name,
marketing campaign, or aesthetic. The real sub-
stance of Apple’s brand comes from the perception
that their products are intuitive, reliable, and pow-
erful. But according to the laws of physics, what
goes up must come down. Apple has been stum-
bling lately, which is the overall consensus, coming
from the press and Wall Street recently. Demand
for the iPad and iPhone is dropping and Apple
isn’t doing interesting or exciting things anymore.
Reuters, which is one of the companies making
displays for the iPads, has slowed production,
possibly because of reduced demand. This is being
blamed on two factors. The first is competition
from the Android world. The second is that the
iPad Mini is “cannibalizing” iPad sales, or in other
words, it has basically killed off the iPad. Another
problem Apple currently faces, under CEO Tim
Cook, is that the iPhone can’t keep up with the
new and exciting market. The problem, some say,
is that Apple screwed up and overestimated de-
mand, while it could also be that Apple is cutting
demand artifically to prepare for the new iPhone
5S. Apple’s fortunes are and have for a long time
been boom-and-bust based on shipments. Apple
ships a new iPhone, they dominate the market for
a few months. Sales level off again, then the air gets
sucked out of the room when everybody starts an-
ticipating the next iPhone model. Right now we’re
in the post-iPhone 5, pre-iPhone 5S doldrums.
Also, Android phones have suddenly gotten super
cheap. There is a class of people numbering in the
hundreds of millions or possibly even a billion
or two who never had a smart phone because of
the high cost. Suddenly, Android handset makers
are churning out very low-cost smart phones. So
millions of people are moving from feature phones
to smart phones, and they’re not buying the rela-
tively pricey iPhone. So the market share numbers
have shifted strongly away from iOS and toward
Android. In reality, people are confused by the
complexity of the consumer electronics market,
and focus on the horse-race aspect of marketshare
numbers, stock prices and other metrics. But the
reality is that Apple was very successful and very
profitable two years ago, one year ago and remains
so today. But with all the competition and new
technologies forming, its hard to predict Apples
future.
9
13. Apple’ focuses on users and lets them decide how and where they’ll use its products. In
terms of the demographic characteristics, Apple is targeting the Generation X and Y co-
hort. Generation X consists of mostly working adults, while most have already established
a successful career, ages 33 to 50. Therefore, they are earning high and steady incomes, en-
abling them to afford Apple’s expensive and sophisticated devices. Generation Y consists
of mostly teenagers and young adults, ages 12 to 30. Generally, todays modern generation
is more materialistic and modernistic, which is why the advancement of technology has
attracted this group to Apple’s products. The young adults mostly have jobs and are not
married, therefore they do not have to support any family or children, which means they
have more discretionary income to spend on luxury items for themselves. As for teen-
agers, although most do work and have a steady income, their parents generally provide
them money to pay for electronic goods, mostly for school and communication purposes.
Overall, Apple is marketing to people who have very few characteristics: middle/upper
income folks who are willing to pay a bit more for a better user experience on devices with
sleeker designs and people who like to have fun with technology. Owning an Apple prod-
uct makes a consumer anything but ordinary, it makes them an independent thinker, an
innovator, and ahead of the crowd.
11
14. Apple competes against other companies; that’s part of
doing business. But today, more than ever before, Ap-
ple faces increasing competition from companies that
aim to recreate and then build on Apple’s own innova-
tions. In 2007, Apple introduced the original iPhone.
There was nothing like it in the marketplace: a multi-
touch screen that took up almost the entire face of the
device, a user interface based on discrete apps. The
competition responded, at first, by trying to recreate
the iPhone. But those competitors and their customers
initially found that simple iPhone knockoffs weren’t
very exciting. Part of the problem was that, as late
CEO Steve Jobs promised and as Samsung has found
out all too well, Apple had “patented the hell out of it.”
Perhaps even more significantly, simply copying the
iPhone wasn’t such a simple or straightforward task;
even today, some competitive platforms struggle to do
smooth scrolling and zooming. It’s helpful to think of
Apple as a media/technology platform company that
competes against other platforms rather than against
specific companies. Apple is a hardware company, but
its strength comes from the integration of the iOS eco-
system - iPhones, iPads, iPods, AppleTV box and soon
the full TV. Once someone is in that ecosystem with
one of the products, moving to another is really tempt-
ing. It’s almost identical to Microsoft’s position in the
late 80s/early 90s - once someone had Windows, they
would almost certainly use Word. And once they used
Word, they’d almost certainly use Excel, etc. So the
biggest threats to the Apple ecosystem are threats to the
iOS ecosystem, specifically anything that eliminates the
need to use a particular Apple product in conjunction
with another. These can come in the form of replace-
ment ecosystems or single products that break a spe-
cific link in the Apple chain. For example, Spotify and/
or rdio have the potential to break iOS’s lock on music
consumption. No longer does one need to use Apple
products, even if their existing music collection is in
iTunes. Alone, that’s not enough to really threaten Ap-
ple. But imagine if every app maker made it super easy
to transfer your app purchases from the iOS versions to
the Android versions.
12
15. Ever since the now widespread smartphone was first in-
troduced into our tech savvy society, the technology titans
have been struggling to dominate the smartphone market.
Realistically, however, Apple and its notorious iPhone has
been the king of the smartphone space for years now, turn-
ing insanely large profits with each updated model that’s
been released. But while Apple has continued to overpower
other smartphone makers in terms of profit, the past year
or so has seen an interesting trend in the rise of potential
competitors—as of 2012, Apple and only one other com-
pany turned profits on their smartphone revenue. The
other company? None other than Samsung. This surprising
profit split has caused many to take a step back and look
at Samsung as a company, and also as a viable smartphone
competitor to Apple. While Apple’s profit is indeed huge,
Samsung is actually selling more smartphones, and gain-
ing buyers at a greater rate. Earlier last month, Samsung
announced its partnership with Best Buy. The Korean
electronics manufacturer is opening boutiques inside 1,400
Best Buy stores across the country. If this sounds familiar,
it’s because Apple has already made its mark on Best Buy
stores with dedicated sections that display various products
ranging from iPads to MacBook Airs to iMacs (Samsung,
2013). More importantly, though, there is no question that
Samsung’s Galaxy line of smartphones are giving Apple’s
iPhone a run for its money. In fact, some loyal iPhone fans,
disappointed with the incremental updates in the iPhone 5,
already are looking for something new. Smartphone aficio-
nados agree that when it comes to innovation, Samsung has
surpassed Apple. The Samsung Galaxy S4 in particular is a
real standout in the smartphone market. Its bigger screen,
higher resolution camera, and lots of bells and whistles are
likely to attract a lot of consumers who are fed up waiting
for Apple to reset the standard in smartphones. In fact,
some would say that the iPhone 5’s 4-inch display is almost
retro. Truth be told, Apple has rarely been on the cutting
edge of hardware. For example, the company was at least
a year behind in adding 3G to the iPhone, and it took its
sweet time offering 4G LTE. It still doesn’t offer NFC, the
exchange of information between smartphones with a
simple tap or wave, something that is becoming standard in
many Android devices. There’s no question that Samsung’s
devices are growing in popularity. In fact, a recent report
from market researchers at Strategy Analytics suggests that
Samsung’s sales grew nine times faster than Apple’s during
the first quarter of 2013. Some of this growth was due to
low-end devices, but Samsung is also mustering a following
for its Galaxy brand of devices (Samsung, 2013).
13
16. A few years ago, almost no one had a tablet. These days, tab-
lets are nearly as common as air. As they’ve risen in popular-
ity, so has the number of options you have when buying one.
The two most popular on the market are the Kindle Fire HD
and the iPad Mini. The iPad Mini is everything you’ve come
to know and love from the full-sized iPad, shrunk down to a
7” form factor. The iPad Mini’s biggest strength is its app cat-
alog. It’s able to run every app in the App Store, which is far
and away the number one reason to buy an Apple tablet over
any other brand. But, if your on a tighter budget, The Kindle
Fire HD 7” is $199 – two thirds the price of the iPad Mini’s
$329 entry point, and with more hardware power, the Kindle
Fire HD packs far more punch than Apple’s 7” tablet. Al-
though, Amazon actually takes a slight financial hit for each
Kindle Fire it sells, its ultimate goal to make that up in con-
tent sales. In fact, helped by the launch of its tablet computers,
according to an industry study released on April 16, 2013,
Amazon.com Inc has grabbed more than a fifth of the mar-
ket for digital music downloads. AmazonMP3, the online
retailer’s digital music business, had 22 percent of the market
for music downloads in the United States in last year’s fourth
quarter. That compares with 15 percent in 2011, 13 percent
in 2010, 10 percent in 2009 and 7 percent in 2008. Amazon
is using the Kindle Fire to try to sell more digital goods, such
as music, video, apps and games, where iTunes leads. Ama-
zon sells digital music without Digital Rights Management,
or DRM, a technology that limits how people can consume
such content. The company’s DRM-free approach boost-
ed demand because it let consumers listen to music on any
devices, including Apple devices like iPods and iPhones.
Although Amazon perhaps seems like the unlikeliest compet-
itors against the likes of Apple, there are a number of reasons
for why it could be a major player in this market. First and
foremost, Amazon knows how to sell things. Not only is it
the biggest e-commerce player in the world, but it’s also the
best. E-commerce is an art in its own right and selling prod-
ucts online takes a very specific skill set. Amazon has spent
millions on understanding how to sell to customers, and
has been a true pioneer in using data to sell more products
through its recommendation engine. Secondly, Amazon has
done an incredible job of persuading its customers to save
their credit card numbers on the site. As a result it literally
has millions of credit cards on file, which enables it to offer
services such as One-Click purchasing. This gives it a huge
advantage when compared with other competitors. This
allows for frictionless, simple transactions for a huge pool
of existing customers which is something that is incredibly
valuable. Also, The Kindle Fire is, essentially, Amazon’s digital
content portal. Whether you’re talking about Kindle eBooks,
Amazon mp3, Amazon Instant Video or Amazon’s own app
store, everything Amazon is known for in the digital content
realm is at home on the Kindle Fire. The sheer breadth of
products offered by Amazon has transformed it into a one-
stop-shop for Android mobile content. Finally, Amazon is not
afraid to compete on price. They’ve shown signs of this with
its “Free App Of The Day” program through which it gives
away one premium app each day. The interesting thing about
Amazon as a competitor is that it can live with razor thin
margins. This makes it dangerous for companies it seeks to
compete with because it doesn’t care about profit in the short
term, it is heavily going after market share in every market it
plays in, unlike Apple which has preferred margins in the last
ten years. Amazon will make and sell hardware almost at a
loss to collect market share and in doing so can try to begin
to replace Apple’s ecosystem.
14
17. A new battle front for Apple is Google’s cloud: Google Maps
vs. Apple Maps, Siri vs. Google voice search, and iCloud vs.
Dropbox et al. As we grow accustomed to an always online
world of ubiquitous computing, our phones become less of
a device in and of itself and more of a gateway to its cloud
services. With a subtle, yet powerful update to its Gmail for
iOS app, links to YouTube, Google Maps, and Chrome now
go directly to those relevant apps (if installed), instead of the
mobile web (Brown, 2013). This is an absolutely brilliant play
through which Google can not only neutralize Apple, but also
leverage Apple’s tremendous success to its own benefit, by en-
hancing the experience of Google’s dedicated users, deepen-
ing loyalty to Google’s own products, and driving incremental
revenue. Since mobile hardware and core OS functionality
have largely reached a near-term point of peak innovation,
the product itself will become effectively transparent to the
end user, with attention, instead, shifting to the Web (or,
cloud) services/content that those devices allow easy access to
on an anywhere, anytime basis (Brown, 2013). Unfortunately
for Apple, this shift substantially diminishes the value of its
closed-loop hardware/software core, while simultaneously
highlighting the strengths of Google’s business. Additional-
ly, almost everything Google has done since inception has
focused on anywhere, anytime cloud services that function
like utilities, seamlessly across all devices, across all operating
systems, all the time. For Apple to compete, it must quickly
introduce a broad spectrum of high-impact, high value, high
consumption Web services that also function seamlessly
across all vendors, all OS’s, and all devices. If Apple doesn’t,
it risks seeing its precious hardware turned into little more
access devices for Google’s services, even as it continues
losing marketshare to Google’s own Android-based hardware
services, which do an even better job of accessing Google’s
services. Also, Google released its Chromebook Pixel laptop
in February, designed to eventually get it out from under
Apple and Microsoft’s thumbs completely. Much of Google’s
business strategy is easy to figure out: Search is Google’s mon-
eymaker and Android is its pipeline to mobile. So investing
in its own brand of high-end PCs is a smart move for Google
because it would be foolhardy for it to rely on Windows and
Mac OS X to serve as a management hub for the rest of its
products and services. Microsoft and Apple are very focused
on emphasizing the strengths of their own goods and not
those of a competing third party. Google probably built the
Chromebook laptop to prove that with the right hardware,
a Web browser can come amazingly close to offering the
same experience as any other laptop running a full-blown
operating system. And now that Android and Chrome have
been joined under the same roof at Google, it’s not hard to
imagine Google one day producing a dual-mode tablet, that
when docked to a keyboard and monitor, seamlessly shifts
over from Android to Chrome OS. It’s a good bet that’s why
Google put so much effort into building this new laptop, and
why we’ll be hearing a lot more about this kind of technology
in the next two to three years (Brown, 2013).
15
19. ENTRANCE/EXIT
ENTRANCE/EXIT
ENTRANCE/EXIT
GENIUSBAR
ACCESSORIESWALL
ACCESSORIESWALLiMACDISPLAY
iPODDISPLAY
Chicago’s Lincoln Park Apple store location, 801 W North Ave., Chicago, IL 60642 at 7:00pm. This location is a stand
alone store and when I visited on Wednesday, May 8th, the business was quite brisk. There were over 20 employees work-
ing and almost all of them were attending guests when I arrived. But, for some reason anytime, doesn’t matter when or
what day of the week I go, it’s always crowded. I think its location definitely has something to do with it, as it’s right off of
the North/Clybourn CTA train stop and convenient to get to.
Store Layout:
17
Laptops
Laptops
Laptops
Laptops
LaptopsLaptops
Laptops
LaptopsLaptops
Laptops
Laptops
Apple
TV
Apple
TV
iPads
iPads
iPods
iPods
iPods
iPods
iPhones
iPhones
iPhones
iPhones
20. Computers
Desktops
iMac
Mac Mini
Laptops
MacBook Air
MacBook Pro
Workstation
Mac Pro
Portable Media
Players
iPod
iPod shuffle
iPod nano
iPod touch
iPod classic
Smartphones
iPhone
iPhone 5
iPhone 4S
iPhone 4
Tablet
Computers
iPad
iPad mini
iPad 2
TV
Apple TV
Apple has historically kept a relatively small assortment of products, but over the last ten years it has slowly ex-
panded its reach into new product categories. However, even as Apple has expanded its product assortment over
the years, it has proven the merits of a closely integrated product mix, with a specific focus and a limited scope.
For the second largest company in the United States its product mix and product lines are still astonishingly
small, which proves that diversification isn’t always necessary for success. Apple’s product assortment by classi-
fication and sub-classification:
Digital
Media
Players
iTunes
Music
Movies & TV
Apps
Books
Accessories
AirPrint Printers
Small-in-One
All-in-One
Multifunction
Apple Care
Macs
iPods
Apple TV
iPhones
iPads
Cables & Docks
USB Cables
Charge/Sync Cables
Camera Adapters
AV Adapters
VGA Adapters
USB Adapters
AV Cables
iPod Docks
Stereo Cables
HDMI Adapters
Dual-Link Cables
DVI Adapters
Ethernet Adapters
Cases
iPad Cases
iPad Sleeves
Battery Cases
iPhone Cases
iPod Cases
MacBook Sleeves
Charging Devices
Power Adapter
Car Chargers
External Batteries
Charging Stations
A/C Chargers
Headphones
Ear Hooks
In Ear
Neckband
On Ear
Active Noise Cancelling
Wireless
Keyboards & Trackpads
Music & Audio Creation
Guitar Inputs
Microphones
USB Audio Interfaces
DJ/VJ USB & iOS Controllers
Speakers
Portable
AirPlay
Bluetooth
Stands
iPad Stands
Storage
Airports
External Hardrives
Internal Hardrives
18
21. The Apple store is dominatd by its private label brands and its prod-
ucts tend to follow a simple, better, best pricing hierarchy, where
the only real difference is storage capacity. Because it is a master
of adjusting prices to maximize profitability, it doesn’t depend on
extra charges to improve margins on lower-priced products. They
make the perceived benefit to the consumer obvious in the price.
No percieved benefit, no high price. The products that exhibit this
pricing strategy are the Mac’s, iPods, iPhones and iPads. For exam-
ple, a regular iPad costs $499/599/699 for 16/32/64 GB of storage.
If you want an iPad with built-in 3G, it costs $130 extra for the iPad
itself. An iPad with 3G also requires the purchaser to sign up for a
pricing plan with a phone carrier in order to access the iPads 3G
capabilities. Since Apple’s selling prices rely heavily on its products
embellishments, it uses those embelishments to create higher-cost
selections into “options” available once a customer has already
chosen a product. When the options dont increase product costs, the
perception is price simplicity. The iPod shuffle, iPod nano and iPod
classic are all great examples of this because when a consumer buys
any one of them, they aren’t directed to choose more options aside
from color; because these products don’t have any embellishments,
they are simple. In more complex products, Macs, for instance, the
final price gets more tangled. A MacBook Pro, for example, without
the retina display has two different possible screen sizes 13” and 15”
and three processor speeds. Simple enough, but after that, a cus-
tomer has additional choices in memory and hard-drive size. Apple
represents those options as a way to “customize” or embellish a Mac,
which keeps the illusion of pricing simplicity by treating the options
as a special case that won’t interest most people. Even in the smart-
phone arena, iPhone, there is a complexity because consumers want
wireless service or apps. Consequently, the wireless and app services
wipe out your GB storage rather quickly, depending on the user. The
older version, iPhone 4, only offers 8GB of data while the iPhone 4S
offers twice that amount. The 8GB and/or 16GB on the older versions
might not be enough for some and for those who want more storage
capacity, their only option is to get the newest iPhone 5, which has
three pricing options, $199/299/399 for 16/32/64 GB. Prices can vary
quite a bit, but Apple leaves third parties, whether carriers or content
producers, to set those prices, associating the complexity with some-
one else.
Mac
MacBook Air
11-inch: 64GB - $999
11-inch: 128GB - $1,099
13-inch: 128GB - $1,199
13-inch: 256GB - $1,399
MacBook Pro
13-inch: 2.5GHz - $1,199
13-inch: 2.9GHz - $1,499
15-inch: 2.3GHz - $1,799
13-inch: 2.5GHz with Retina display - $1,499
13-inch: 2.6GHz with Retina display - $$1,699
15-inch: 2.4GHz with Retina display - $$2,199
15-inch: 2.7GHz with Retina display - $2,799
Mac Mini
2.5GHz - $599
2.3GHz - $799
2.3GHz with OS X - $999
iMac
21.5-inch: 2.7GHz - $1,299
21.5-inch: 2.9GHz - $1,499
27-inch: 2.9GHz - $1,799
27-inch: 3.2GHz - $1,999
iPod
iPod Shuffle
2GB - $49
iPod Nano
16GB - $149
iPod Touch
32GB - $299
64GB - $399
iPod Classic
160GB - $249
iPhone
iPhone 5
16GB - $199
32GB - $299
64GB - $399
iPhone 4S
16GB - $99
iPhone 4
8GB - $0
iPad
iPad Mini
16GB - $329
32GB - $429
64GB - $529
16GB + Cellular - $459
32GB + Cellular - $559
64GB + Cellular - $659
iPad 2
16GB - $399
16GB + 3G - $529
iPad
(with Retina display)
16GB - $499
32GB - $599
64GB - $699
128GB - $799
16GB + Cellular - $629
32GB + Cellular - $729
64GB + Cellular - $829
128GB + Cellular - $929
19
Apple Brand Apple’s Outside Brands
Belkin
- iPhone, iPad, iPod and Laptop Cases
- USB Cables
- Charge/Sync Cables
- Adapters
Logitech
- Mouses and Keyboards
- Headphones
- Keyboard Covers
Speck
- iPhone and Laptop Cases
Herschel
- iPad Sleeves
Sena
- iPad Sleeves
JayBird
- Headphones
RHA
- Headphones
urBeats
- Speakers
- Headphones
Sennheiser
- Headphones
Bowers and Wilkins
- Speakers
- Headphones
Eskuche
- Headphones
Harman Kardon
- Speakers
- Headphones
G-Tech
- Hard Drive
Moshi
- Keyboards
- Mouses
- iPhone, iPod, iPad and Laptop Cases
Incase
- iPhone, iPad, and Laptop Cases
- USB Cables
- Charge/Sync Cables
- Adapters
Microsoft
- Microsoft Office
Adboe
- Photoshop, InDesign, and Illustrator
iHome
- Speakers
- Headphones
22. Most Apple products come in two colors: black or white. This is especially true for the iPads and iP-
hones, whereas the iPods come in a variety of color options besides just black or white. The iPod nano
and shuffle come in pink, red, yellow, green purple and blue; the iPod touch is also available in green,
red and blue. The only Apple product that doesn’t feature color options are the Mac computers. But,
this assortment is not only available at Apple stores, these products and color options are also availbale
at other resellers that have been approved by Apple. Some retailers also feature Apple Shops, which
are Apple-designed outlets located within the electronics department of retail stores, such as Best Buy.
Many are staffed with Apple Solutions Consultants, who are trained Apple employees, who can help
consumers find the best soultions for their needs. A list of resellers that have been approved by Apple
and sell Apple products are listed below:
Catalog and Internet Resellers: Abt Electronics, Amazon.com, CDW Computer Centers, Datavision
Computer Video, Frys.com, J&R Computerworld, Mac Connection, MacMall, MacZone, Micro Cen-
ter, OnSale, PC Connection, Target.com, and Staples.com.
Supercenter Resellers: Target and Walmart.
Warehouse Club Resellers: Costco and Sam’s Club.
Specialized Superstore Resellers: Office Depot, Staples, and Best Buy.
Specialty Store Resellers: AT&T, T-Mobile, Sprint, Verizon Wireless, and Radioshack.
20
23. The Apple store fits perfectly into the clean Apple
image. It’s obvious that “the Apple feel” was a top
priority in all of its stores development. Wide swaths of
white space around tables of clean Apple electronics.
Although the stores do carry products other than their
own, mostly accessories, they aren’t presented the same
way that their own products are. They are off to the side
and harder to find. The Apple Store pays attention to
every detail. You might think that Apple positions all its
notebook computers for aesthetic reasons. That’s partly
true. The tables are uncluttered and the products are
clean. But the main reason notebook computers screens
are slightly angled is to encourage customers to adjust
the screen to their ideal viewing angle—in other words,
to touch the computer! It’s also why all the products in
the Apple Store are loaded with apps and software and
connected to the Internet. Apple wants you to see the
display for yourself and to experiment with apps and
web sites to experience the power and performance of
the devices. Customers in an Apple Retail Store can
spend all the time they want playing with the devices
and using the Internet and nobody will pressure them
to leave.
Apple’s mission statement is pretty weak and doesn’t
really provide any meaningful information about the
company or its objectives, instead it is more of a de-
scription of the products it carries. But, in those terms
alone, the Apple store does relate back to its mission
statement because the stores all feature its products in
a user friendly way to show its consumers why their
products are so fantastic. Interactivity is built in to
every aspect of the Apple Store experience. For exam-
ple, trainers who teach customers how to use Apple
products in “One to One” workshops do not touch
the computer without permission. Instead they guide
customers to find the solutions themselves. The Apple
Store was never created on the premise that people
want to buy stuff. Instead Apple discovered that by
creating an ownership experience, customers would be
more loyal to the brand. The Apple Store was designed
to create an ownership experience from the moment
a customer walks through the door. When Steve Jobs
gave a tour of the first Apple Store in 2001, he said that
all computers were connected to the Internet. “You can
go up to any computer and start surfing, go to your
personal web site, or do whatever you want to do on
the Internet.” The devices have changed but you can
still walk up to any product in the store and start using
it—read books on the iPad, discover apps on an iPod
Touch, listen to music on an iPod, or play games on the
new MacBook Pro. The ownership experience is more
important than a sale.
21
24. Part III:
Marketing
Analysis
Marketing is the system of business activities designed to plan,
promote, and distribute products and services to present to cur-
rent and potential customers.
Marketing Concept is the states that all business activites should
be geared towards satisfying customer wants and needs.
22
25. Apple’s marketing strategy can be summed up in one word: Empathy;
the ability to understand another person, connect at a core, gut level
with their innermost emotional wants and desires, build the best
product on the planet, then offer them that product which fulfills
their desires. Steve Jobs knew that if he focused on serving the cus-
tomer, and if he built exactly what the customers wanted, they would
continue to open their wallets. Apple has always been more focused
on meeting customer’s needs than anything else. Therefore, they orig-
inally didn’t need to compete on price and could set their own prices,
because they were delivering something much more powerful—value.
What made Steve different from other marketers, is he understood
that his job as a marketer was not to focus on making money or sales,
and, unlike other marketers, it showed in the way he presented his
products:
Here are some quotes that reflect Steve’s focus in business:
- “You’ve got to start with customer experience and work backward—
not the other way around” (Apple.com)
- “Being the richest man in the cemetery doesn’t matter to me. Going
to bed at night saying we’ve done something wonderful; that’s what
matters to me” (Apple, 2013)
The company simply seems to understand what will get people
excited about its products. You don’t see the company talking about
features or technology, but about how the computer will make your
life better . Apple has not been afraid of in-your-face campaigns. The
company has run campaigns that have shown Intel-based laptops
catching fire and getting flattened by steamrollers. Simply look at
where Apple puts its logo on its products. On the laptops, the logo
is right side up when the screen is open. Many vendors don’t under-
stand the power of walking into an office space and seeing a large
number of logos advertising it’s products to everyone in the office and
anyone who comes into it. Apple understood that the logo is not for
the person who bought the computer, but for the person who is in the
market for one. It is a good advertising placement method and not a
throw-away design element. Apple definitely does its best placement
in TV shows. Most TV shows are meant to showcase real life and will
often show characters on computers. Even though other vendors get a
spot here and there, Apple is king when it comes to placement while
its competitors logos are hard to see and generally missed.
When shoppers sleep outside of stores, just to be one of the first
to buy an iPhone, it’s obvious that Apple is a company that enjoys
fanatical brand loyalty. However, this brand success is not a result
of dumb luck or forces beyond Apples control; it’s a part of a well
thought out plan to deliver strong products to create an “Apple
culture.” So what makes these buyers so loyal? It’s because Apple
knows that to its customers, a Mac computer or iPhone are more than
just pieces of electronics equipment, they’re a part of who they are
through their self-expression and lifestyle. Owning an iPhone makes
a consumer anything but ordinary, it makes them an independent
thinker, an innovator, and ahead of the crowd. Apple’s obsession with
understanding its customers and deepening their Apple experience
shows in everything the company does. Apple carefully considers
what consumers are looking for, so its products are a result of both
extensive research and strong design. This planning is a large contrib-
utor to Apples high customer satisfaction rates. It’s plain and simple:
easy-to-use products not only make your customers happy, but it
also makes them want to buy more products from you in the future.
For example, a visit to an Apple retail store is more than any other
normal shopping trip. The store invites customers to stay a while, use
the equipment, and soak up all of the exciting new technology. By
creating a store strictly devoted to Apple products, the company has
made an excellent customer loyalty move. More importantly, the staff
isn’t focused on selling stuff, it’s focused on building relationships and
trying to make people’s lives better. Their primary job is to figure out
what a customer needs and helping them get it, even if its a product
that Apple doesn’t carry.
Additionally, because all of Apples products complement each other,
they offer their customers complete solutions. Apple users general-
ly don’t have to stray to find products and solutions they want. If a
consumer buys an iPod, they can download music for it via iTunes.
This sort of control over the user process, from hardware to software,
strengthens customer loyalty. Also, Apple products are not compat-
ible for use with other systems. For example, many files available
through Apples iTunes store are encoded with DRM (digital rights
management) technology. In most cases, the DRM feature keeps
songs from playing anywhere besides an Apple product. For that
reason, it’s not likely that a customer will want to start from scratch
with another company’s MP3 player that won’t accept all of his/her
music. In addition, many consumers may not be ready to buy an
Apple computer, but they’re willing to give gadgets like the iPod or
iPhone a try. By selling products with lower entry costs, it creates an
opportunity for new users to be introduced to Apple. If these users
enjoy their gadgets, they’re more likely to consider buying an Apple
computer in the future. Apple, also, sells its products to schools and
universities to allow students to become familiar with its interface
and superior performance. By creating this early exposure, Apple is
capturing customers before they even know that they are customers.
Finally, Apple offers consumers a number of different ways to enjoy
its products with its new innovations. Although the architecture of
Apple products are consistent, its portfolio isn’t. By giving customers
an opportunity to employ Apple in their living rooms, pockets, and
offices, Apple makes it easy to stay loyal to a brand they already like.
If there is one area where Apple beats all other industrial giants such
as Microsoft, or even Samsung hands down, it is the presentations.
Each time Apples goes into producing any new product, the whole
world stops and zooms in to analyze and counter-analyze the specs of
the upcoming products. Despite having plenty to share, Apple choos-
es the simplest route and that is of addressing the general public. In
its advertisement campaign, rather than challenging people’s intel-
lect and throwing all kinds of computing or mobile jargons at them,
Apple sticks to the basic. The latest ad campaign for the iPhone 5S,
rather than concentrating on its oh-so-powerful processors simply
magnifies some of its very basic features such as its larger screen
display and color options.
From presentations to advertisements, Apple’s marketing strategy has
been in a language people can understand and that is definitely one of
the biggest reasons why its been such a successful company.
23
30. In conclusion, Apple has made its way to the top and is, cur-
rently, among the largest and most well known electronic and
software manufacturing companies in the world. It’s achieved
competitive advantages by creating an innovative hardware
design and by understanding and implementing its logo, on its
products, so that customers in the market for an electronic de-
vice will see it everywhere. But, lately, Apple is finding itself in
a bit of a rut. Simple refreshes of their existing products, falling
share prices and public opinion waning all amount to a compa-
ny in trouble. Well at least they would if they didn’t have over
$140 billion in the bank and a very loyal user fan base. Apple
is still a big deal, obviously. The arts and entertainment indus-
tries love the iMac and Macbook hardware; the iPod is still
one of the most want Mp3 players on the market; iPhone sales
alone are enough to make most of its competitors jealous and
the tablet revolution cleared a pathway with its introduction
of the iPad. But for all their might and magic, what can Apple
offer the technological community and the consumer now, that
someone else can do for cheaper and sometimes better?
The industry that Apple operates in is notoriously fickle, cut-
throat, cruel and unforgiving. The competitive landscape will
be much different ten years from now. There will be entirely
new products replacing the old ones that are currently in the
marketplace, and there will be new companies competing to
provide those products with the best possible quality and at
the lowest possible price. Nevertheless, I’ve become skeptical
about its future. The death of Steve Jobs, stiffening competition,
and the collapse of new product launches give ample room for
doubt whether Apple is still the company we once knew.
Even taking into account its problems, Apple is still a great
company with no shortage of assets. While analysts like to fo-
cus their attention on how Apple appears incapable of growing,
it’s simply unquestionable that Apple has incredible buying
power, and that power isn’t going to fade away. Furthermore,
it retains strong competitive positions in smartphones and
tablets, two categories far from saturation, and MacBooks and
iTunes will still bring in serious cash for the foreseeable future.
To achieve even 10% profit growth, they will need to find over
$5 billion a year, which is more than most companies earn in
total. But Apple needs more than good products, they need
breakthroughs and right now those are looking pretty dry. As
the company struggles to maintain growth on an enormous
revenue base, Tim Cook and his management team seem un-
able to articulate any clear vision for the future.
As of now, only one thing is certain: The Apple that we know
today will essentially no longer exist ten years from now. Ten
years from now Apple may be an even greater and more valu-
able company than it is today. Or the company’s brand may
lose its cool, the company’s products may lose their dominant
market position and profitability. The only thing we can know
for sure is that the Apple ten years from now will be fundamen-
tally different from the company it is today—selling fundamen-
tally different products in a fundamentally different competitive
landscape, and under a fundamentally different set of circum-
stances.
28
31. 29
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