Apple’s Design Process “When you first start off trying to solve a problem, the first solutions you come up with are very complex, and most people stop there. But if you keep going, you can often times arrive at some very elegant and simple solutions.” -Steve Jobs
VISION: Apple identifies needs and use cases to make decisions about function and technologies. FOCUS: Drops 20 % of non-required functionalities to perfectly design 80 % of key user needs.
STRATEGIES Promotional Technique: Surprise element in each product launch. heavy speculation and curiosity regarding the product . Positioning: hype surrounding Apple product was created due to its unique advertising, word of mouth publicity by the users and the look and design of the product.
STRATEGIES LOCK THE CUSTOMER IN: 125 m iTunes accounts linked with credit card.
CROSS SELLING THE PRODUCT LINE: Product line covers all markets, all price ranges, all needs with an accurate segmentation. The iCustomer needs all Apple products to maximize his user experience. Integration reinforced by retail strategy. Apple Stores fosters the brand appeal and consequently, the halo effect.
COMPUTING: Strategic Move: By moving to Intel processors in 2006, it became possible to run Windows easily on Mac. High- End Consumers: iMac has 9% market share but it accounts for 90% of dollars spent on computers. Unlike Windows viruses are almost nonexistent in Mac universe.
With the iPod, Apple Generated A New Environment to Experience the Music (“Music Access and Listening” Experience Environment)
COMPETITIVE ADVANTAGE SIMPLICITY: Technical complexity hidden behind slick and intuitive user interface gives seamless experience. QUALITY: Thanks to hardware and software tight integration Apple’s product offers great quality. INNOVATION: Apple does not depend on its suppliers’ technical breakthroughs. It can innovate on hardware and software at its own pace.
Revenue Distribution: The iTunes Store represented only 11 % of Apple’s revenues in 2009. iPhone (hardware) sales represented 22 % of Apple’s revenues that amounts to $6.8 bn. 40 % of Apple revenues comes from Mac sales (desktop and laptop). Revenue of $400 m that is less than 1% of total revenue generated by App Store sales since its creation.
Microsoft ---- Google---- Apple---- In 6 years, Apple’s market cap outweighed both the new and old tech champions
Increase awareness through the web of the immunity of Mac products to worms and viruses.
Advertise using individuals that will link Generation X & Y to the iTunes and other related products.
Using movies and music groups that are geared towards Gen X and Y to promote computers and laptops.
Increase and promote the compatibility to Window operating system.
Promote the originality of Apple computers and the different style and stable system that is slightly more but worth the price difference in style, stability and speed.
Increase ties with Microsoft and Intel and their products.
Promote to business the safety of having a worm and virus free computer by using Mac.
Improve relationship with Microsoft and Intel so that companies will see them as compatible.
Increase productivity and turn around of high demand products to compete with Dell and HP.
Apple’s Marketing Lessons Make the customer king Apple customers have tremendous brand loyalty. Mac users (Mac Marines) would protest to journalists who wrote derogatory articles about the iPod’s shorter than expected battery life that many journalists would avoid writing about Apple's struggles altogether. Mac User Groups were vocal in their attempt to keep Apple executives focused on quality when they perceived the company was lowering its standards. Apple patrons feel as if they are part of a community - the result of the "us against them" mentality. Customers are loyal and have a sense of independence and an anti-establishment perspective.
Apple’s Marketing Lessons Break the marketing mould Company motto Jobs did away with “Big Box” stores Opened 1st retail store in Virginia in 2001 June 2008 - 215 stores Global chains (Australia, Canada, China, Italy, Japan, UK) Retail strategy a huge success - the “Nordstrom of technology” 1997 Macworld Expo Conference that Apple would be selling Microsoft 5% of the company for a $150 million, and be working with their archrival on new projects (Microsoft)
Apple's supply chain judged best in world again
A report by AMR Research has named Apple as the company with best supply chain practices in the world for the third year running.
In a feature exploring the secret behind Apple’s success, it was found that company’s ability to bring together two sides of the supply chain (digital and physical) efficiently and at increasingly low cost.
Digital supply chain is a new media term that encompasses the process of the delivery of digital media, be it music or video, by electronic means from the point of origin (content provider) to destination (consumer). The main processes of a digital supply chain are as follows: 1.) True on-demand product availability 2.) Ease of use and speed for content search and activation. 3.)Pricing and subscriptions 4.) Quality management built on licensing and refunds
From a high-level, we speculate that the following are the material suppliers of the Apple iPhone:
Samsung: The Singapore facility manufactures CPU and Video processing chips.
Infineon: The Singapore facility manufactures Baseband Communications hardware.
Primax Electronics: The Taiwan facility manufactures Digital Camera Modules.
Foxconn International: The Taiwan facility manufactures internal circuitry.
Entery Industrial: The Taiwan facility manufactures connectors.
Cambridge Silicon: The Taiwan facility manufactures bluetooth chipsets.
Umicron Technology: The Taiwan facility manufactures printed circuit boards.
Catcher Technology: The Taiwan facility manufactures stainless metal casings.
Broadcomm: The U.S. based facility builds touch screen controllers.
Marvell: The U.S. based facility builds 802.11 specific parts.
China facility assembles the hardware, holds inventory, and handles the pick, pack, and ship steps of the fulfillment process. The iconic iPod and iPhone maker took the top spot due to "an intoxicating mix of brilliant industrial design, software interfaces and consumable goods that are purely digital”.