ce- meteoric rise ) the whole package. That is the outcome Apple is trying to achieve with the iPad. design, retail and R&DThe market evolved to the point where what Apple had what the buyers neededmarket for PC's matured – differentiate - find value because it meets their tastes they are willing to pay for it
How iPad was developed?
“Creativity is just connecting things.” Steve JobsIvi EerikPiret PussRoland Siirak Apple INC
Apple Inc.• Fortune magazine worlds most admired company2008-2010• No 1 in AMR Research Supply Chain Top 252008-2010• Global Top 20 Media Value Ranking winner 2010US$ 941,457 "Buzz" value• Best Global Brands 2010 Top Riser+37% to 21,143 ($m)The most valuable technology company in the world!
Apple Inc.• Founded April 1, 1976• Designs and creates consumer electronics & software• 49 900 employees• 301 retail stores, Apple.com, iTunes, AppStore• Revenue $26.7 billion in 1Q11 - ↑71% over the 1Q10• Cash balance ≈ $60 billion What are they doing differently?
iPad• Tablet computer - platform for audio-visual media• Launched in April 2010, new iPad 2 in March 2011• Size and weight between smartphones and laptops• The fastest-selling technology product in history! (≈ 500 000 iPad 2-s sold during opening weekend)• Fantastic piece of equipment• Cool and innovative• Digital revolution
How iPad was developed• Market niche between notebooks, e-books & smartphones• Same operation system as iPod Touch and iPhone – iOS• Runs programs approved by Apple via online store• Functional objective – simple & elegant stage for Apps (AppStore offers 65,000 iPad specific & 400,000 in total)• Shift from computers to consumer electronics ecosystem ↓ Digital lifestyle revolution
The iPad is not just a product – it’s an ecosystem & Apple is a creator of business ecosystems.
How did it come to life?Before - features & price are important → market saturated ↘ Apple was good, but expensive ↗ ↙R&D ↓ Now - user experience matters• Portable computing ↙ ↓• Industrial design Business matures• Simple ↓• Retail distribution Need to differentiate ↓ ↓ Ecosystem ↚ Apple - lovemark ↚ Customers taste ↓ Meteoric growth
iPad BUSINESS MODEL KEY KEY VALUE PRO- CUSTOMER CUSTOMER PARTNERS ACTIVITIES POSITIONS RELATIONSHIP SEGMENTS-retailers -software engineering -digital lifestyle revolution -lovemark -mass market- hardware , software vendors -hardware manufacturing -Simple user interface -trust, loyality -trendy lifestyle(OEM)-s - retail -high quality products -personal approach -higher income customers-media partners (via iTunes) -hardware design -valuing the customers - worries -free life - fans of technology,- lifestyle partners (AT&T,etc) -marketing -Innovative graphic, design innovation-distributors (retail, online -entertainment -open minded customersstores) - web browsing - eBook KEY RE- - Face Time CHANNELS SOURCES -Apple brand -Apple Stores - hardware -Apple.com -software -retailers - people COST STRUCTURE REVENUE STREAMS -software (App Store) -products -materials and manufacturing (50% of retail cost) -accessories - R&D, cost of sales (royalties, marketing) – 25% -iTunes Content Apple margin estimate -25% -AppleTV
What is the magic behind Apple`s success? Apple brand Steve Jobs Turning innovation into icons Creating a new market Being ahead of time & competition Combining internal and external ideas Search for new technologies Partnerships Best industrial design Simplicity of user interfaceChannels (Apple Stores, App Store, iTunes) ECOSYSTEM
Learning points • Cool brand makes a difference • Customers are buying your value proposition So create & re-create your offer! • The fast and the furious succeed Your alliances need to perform• You need not to be the first in the market, but the best• Surprise your customer with simplicity and high quality • Open innovation brings results • Mergers & Acquisitions speed up the process • Ecosystem is the KEY