Apple Computer

Moon, Sung Jin
Park, Ji Hong
Theerawat

Agenda
Apple Overview
Apple in PC industry
Problem & Analyze
2

Apple History
3
2007, iPhone
2007, Apple TV
2006, MacBook
with intel chip
2003, iTunes/ Power Mac G5
2001, iPod / os X
1998, iMac
1997, rehiring Jobs
1996, Acquisition withNeXT
1994, PowerMac family
1991, Powerbook
1987, MacII
1985, First ever quarterly loss, laid of one-fifth of employees
1985, Resignation of Jobs
1984, Macintosh
1983, Apple Lisa
1978, Apple II
1976 Foundation
1976
1989
1985
1980
2005
1993
1997
1991
1995
The Steve Jobs Years
The Steve Jobs Years
The Sculley Years
The Spindler Years
The Amelio Years

Apple Overview
4
Mac
Macs
Main Product Line
Key Numbers
Accessories
Revenue
$ 32.48 billion
(2008)
Applications
Servers
Operating income
$ 6.28 billion(2008)
Op. Margin 19.82%
Wi-Fi
Net income
$ 4.83 billion(2008)
Profit margin 14.88%
iPod
+
iTunes
Products
Total
Assets
$ 39.57 billion(2008)
ROA 12.21%
iTunes
Accessories
Total
Equity
$ 21.03 billion(2008)
ROE 22.97%
iPhone
Employees
35,000
(Q1 FY 2009)

Apple Core Capabilities
5
Leadership
Steve Jobs
Business
Innovation
Performance
Sales/Profits
Customer
Insight
Design
Innovative
Graphic & Design
Ease of Use

Apple Core Business
6

Agenda
Apple Overview
Problem & Analyze
7

8
History
The first portable computer
The first computer mouse
1963, Douglas Engelbart
1975, IBM 5100
The first IBM PC
The first laptop computer
1979, Grid Compass 1100
1981, IBM 5150

x86 CPU vs. CPU for MAC
1991, 386 microprocessor
1981 First IBM PC
1982, 80286
1993, Pentium
1999 Pentium III
1996 Pentium II
2006 Intel Core Family
2008 Intel Atom
2000 Pentium IV
2003 Pentium M
1976
1983
1994
2005
9

OS VS. MAC OS
1981 DOS
1985, MS Windows
1991, LINUX
1998, MS Windows98
1988, IBM OS/2
1995, MS Windows95
2000, MS Windows ME
2000, MS Windows2000
2001 , MS Windows XP
2006 , MS Windows Vista
1992, MS Windows 3.1
2009 , MS Windows 7
1991
1984~1987
1987
1988
1999
1997
2001
10

11
PC industry overview
PC industry ( Momentum Scarcity, Worse Profitability )
Potential Market Growth ↓ ; New Demand(X), Exchange Demand(O)
Overcapacity ; Customer Needs ( Capacity Mobility, Networking, AV)
Entry Barrier ↓ Competition↑  Price ↓ = Worse Profitable
Red Ocean ; HP, Dell, Renovo(IBM), TOSHIBA etc.
POOR ; IBM Sells PC area to Renova.
Apple
Brand image ; The Most Innovative Company (Biz Week), Steve Jobs
Product Performance/Software/Design
Design Priority Management
Product Innovation/R&D Technology ; Mac Air

12
Analyzing for PC Industry
Fabrication Companies
★★
Professionals
Educators
Home
Students
Government
Entry
HP / Dell
Toshiba
Acer / Gateway
IBM / Sony
★★★★
★★★★
Buyer
Supplier
Processor Chip
Graphic Card
Software
Peripheral equipment
★★★★
Rivalry
★★
Substitution
Microsoft Touts FonePlus
Adesso’sCyberPad
PDA / UMPC / PMP

13
Analyzing for PC Industry
★★
★★★★
★★★★
★★★★
★★
Rivalry
Entry
Supplier
Buyer
Substitute
Low product
differentiation
Brand name
- Entry barrier
Economics of
Scale ↓
No legal or
governmental
barriers
Threat of new
entrants
Highly price
sensitive
Reliability and
customer
service
become
important
factors.
Insignificant
switching cost
(except, Macs)
Large number
of suppliers for
components
like hardware,
keyboards, etc.
But two major
inputs are
monopolized
- MS, Intel
High switching
costs
Table PC,
Auto PC,
PDA,
iPhone,
Smart Display
Strong Presence of PC
High
concentration
Price War
- Low Margin
Decreasing
profitability
Low
differentiation

14
Key Success Factor_PCIndustry

15
Components of the Strategy_APPLE
Product Positioning
High Price
Apple
Lenova (IBM)
HP
High Performance
Dell

Agenda
Apple Overview
Problem & Analyze
16

Questions
Has Jobs finally solved Apple’s long-standing problems?
Is the iPod different?
17
November 23, 2009
Growth Strategy: Apple Computer 2006

Core Business & Business Expansion
Home Entertainment
(Apple TV)
Music Distribution
(iTunes)
PC Manufacturing
Telecommunication
(iPhone)
MP3 Manufacturing
(iPod)
18
November 23, 2009

Products & Ecosystem: iMac
19
Alternative Technologies
Wintel as the Alternative Technologies
Application Software
Specifically on Mac OS and OS X, there would be only made to support Mac OS and OS X even today such as iWork, iLife, etc.
Operating System
Initially, Allow only Mac OS and OS X with non-compatible
Lately, OS X is more compatible to MS product
Recently, allow Windows to install on “OS X Boost Camp”
Device & Microprocessors
Initially, Use the G4 as proprietary hardware technology
Lately, Use the Intel for better performance and allow more open and compatibility
Consider: Controlled Openness
November 23, 2009

Products & Ecosystem: iPod
20
Alternative Technologies
Consider as ecosystem and device synchronization and compatibility, there is no alternative technologies or competitor arises
Application Software
Open for Music both label and indies
Open for Application Development
Sell with acceptable price & business model (pay by piece)
Operating System
iTunes as Platform or OS, which offer free download as well as Mac & PC compatible
Device & Microprocessors
Serve the different market purpose and functions such as iPod Shuffle, iPod Nano, iPod Touch, iPod limited edition with the price, which is available for everyone.
Consider: Openness
November 23, 2009

Products & Connection
21
November 23, 2009

Growth Connection
New Value Chain
New Geographies
OS X on Intel
iTunes
5
Mac Related
Dev.
Content Distribution
9
6
Music Distribution
2
7
New Channel
Pixar Animation
New Business
3
Apple
iPhone
8
1
5
iPod
iMac
4
5
Apple TV
iMac
+ Intel
New Customer Segment
New Products
5
22
November 23, 2009

Long-standing problem solved?
End of the case
Jobs as CEO
Jobs return as interimCEO
iPod was introduced.
iTunes was introduced.
In General: All of the new territories and development are on the initial state. However, the long-standing problem may not be completely resolved as controlled openness with business model.
23
November 23, 2009

Additional: Leadership
24
Mature Business: Operators
Create Value
Growth Business: Business Builder
Emerging Opportunities: Entrepreneur
Invest
Time
Leadership: The successor of Steve Jobs would be the person to maintain the sustain growth and position Steve Jobs as advisor and/or explore new opportunity.
November 23, 2009

Thank you

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Apple Computer

by Eric Moon on Dec 15, 2009

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Apple Computer — Presentation Transcript