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Apple inc


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  • 2. Introduction and History:Steve Jobs and Steve Wozniak founded Apple on April 1, 1976. The two Steves, Jobs and Woz(as he is commonly referred to – see, have personalities that persist throughout Apple’sproducts, even today. Job’s was the consummate salesperson and visionary while Woz was theinquisitive technical genius. Woz developed his own homemade computer and Jobs saw itscommercial potential.The company introduced the Apple II on April 17, 1977, at the same time Commodore releasedtheir PET computer. Once the Apple II came with the modern spreadsheet program, salesincreased dramatically. In 1979, Apple initiated three projects in order to stay ahead of thecompetition: 1) the Apple III – their business oriented machine, 2) the Lisa – the plannedsuccessor to the Apple III, and 3) Macintosh.In 1980, the company released the Apple III to the public and was a commercial flop. It was tooexpensive and had several design flaws that made for less-than-stellar quality. One design flawwas a lack of cooling fans, which allowed chips to overheat.Apple released the Lisa in January 1983 and was notable for being the first computer sold to thepublic that utilized a Graphic User Interface (GUI). Unfortunately, the Lisa was not compatiblewith existing computers, and therefore came bundled “with everything and a list price to match.”At $9,995 (over $21,000 in 2005 dollars), the Lisa missed its target market by a wide margin.Apple introduced the Macintosh with great fanfare during the 1984 Super Bowl. The Orwellian-themed commercial (directed by Ridley Scott, of ‘Alien’ fame) portrayed IBM as Big Brotherand embodied Macintosh and Apple as freedom-seeking individuals breaking away from thisoppressive regime. The commercial was largely successful and sales for the Mac started strong.However, Mac sales later faded. Apple introduced Mac Portables in 1989 and the firstPowerBooks in 1991. On May 6, 1998, Apple introduced the new iMac, a product so secret thatmost Apple employees had never heard of it. The new iMac was a runaway success with its all-in-one architecture, and ease of use. It brought Apple to a new market of users – those who hadnever owned a computer before. Jobs further simplified the product lines into four quadrants2
  • 3. along two axes: Desktop and Portable on one, Professional and Consumer on the other. Applecompleted the matrix with the introduction of the consumer-based iBook in 1999.The year 2001 was an important year for consumers of Apple products. Apple opened their first25 retail stores (totaling 163 stores in 4 countries as of May 2006). In September 2001, Appleintroduced the new iMac featuring a screen on a swivel.The new iPods (portable music players)was a tremendous success. Apple sold so many that Apple’s dependence on Mac sales wassignificantly less. This was no small feat considering that the 2001 iMac became Apple’s best-selling product “by a long shot”. Apple offered iTunes (a free application) to help theirconsumers organize music on iPods and Macs.In 2003, Apple expanded iTunes by 1) opening the iTunes music store to allow Mac users topurchase music online and 2) expanding iTunes to Windows users. . In 2005, Apple announcedthat it would start using Intel-based chips to run Macintosh computers. In April 2006, Appleannounced Boot Camp, which allows users of Intel-based Macs to boot either Mac or WindowsOS. This functionality allows users who may need both OSs to own just one machine to runboth, albeit not simultaneously.3
  • 4. Vision Statement:"Man is the creator of change in this world. As such he should be above systems and structures,and not subordinate to them."Mission Statement:“Apple is committed to bringing the best personal computing experience to students, educators,creative professionals and consumers around the world through its innovative hardware, softwareand internet offerings”4
  • 5. Logos over the Years:1976 1976-1998 1998-present5
  • 6. Leadership Structure:Apple Inc was founded by Steve Jobs and Steve Wozniak. Mike Markkula was the financier, andMichael Scott was the CEO at that time.Mike Markulla stepped into his position as CEO in August 1981. John Sculley left PepsiCo tojoin Apple in April 1983.Jobs left Apple to form NeXT computer in 1985.and in 1997 he joined Apple again.And the present CEO of Apple Inc is Timothy D. Cook.Ranking in Fortune 500:Apple leapt nine spots to become the 6th rank company in the Fortune 500. In 2012s rankings,Apple was ranked 17th, but revenues grew to US$156.5 billion, enough to rank it just behindfifth ranked Berkshire Hathaway.6
  • 7. Product Line:Apples core product lines are the• iPhonesmart phone,• iPad tablet computer,• iPod portable media players,• Macintosh computer line.Competitors:Sony is an example of a competitor with a unique position against Apple. Sony Music suppliesApple with many of the songs for iTunes. Sony also creates a version of the Walkman portablemusic player that is a direct competitor to the iPod.Dell is also a competitor in personal computers and laptops.7
  • 8. SWOT AnalysisStrengths: Technical savvy – Product lines are easy to use and stable. Recent integration withMicrosoft products lines and Intel processors demonstrate ability and willingness to adaptto a diverse customer base. (Mossberg) Such innovation, however, would not besustainable without a learning environment tolerant of mistakes. While the pure technicalexpertise alone is not a valuable or rare resource, it becomes very costly to imitate whenit exists within the socially complex, entrepreneurial culture of Apple. Financial vitality – Cash reserves remained robust and stable despite stagnant marketshare growth in the computer hardware and software arenas. Apple exploited this byresisting market pressures to reduce costs, tightly integrating product packages, andforming strategic alliances (i.e. securing the backing of all major music distributors in thesupport of iTunes). Brand loyalty – The only way that Apple could maintain the financial vitality describedabove is via a fanatical, almost cult-like, affair with its customer base. Such brandloyalty is extremely costly and time-consuming to imitate. Steve Jobs – As discussed earlier, Jobs proved to be a vital component to Apple’ssuccess. During his absence (1985-1996), Apple experienced the most turbulent(financial and innovative) timeline in its history. Immediately upon his return, hereplaced most of the Board of Directors, pruned and focused the new product ideas, anddelivered seven consecutive quarters of positive earnings to shareholders. As such, Jobsis certainly a valuable, rare, and hard to imitate resource that Apple fully exploits.8
  • 9. Weaknesses: Steve Jobs – Jobs was a big strength for apple inc but after his death apple will face lotsof difficulties.Opportunities: Consumer electronics – With the startling success of the iPod and iTunes, Apple enteredthe consumer electronics market. By expanding the iTunes concept to downloadablemobile phone features and movies (podcasts), the door is now open to develop new andpotentially profitable strategic alliances with peripheral component manufacturers(speaker, home stereo, etc.) and media transmission giants (Disney, TBS, Verizon, etc.). PC hardware and software market growth – With cross-licensing of operating systemplatforms in place, Apple entered the high-volume business environment traditionallydominated by Windows-based PCs. The introduction of Intel-based processors promptedbusinesses to replace PCs with iMacs. They did this to gain a level of stability andreliability in their business applications that PCs failed to provide. An example is Japan’sAozora Bank Ltd., who is replacing 2,300 PCs with iMacs. (Wingfield) Apple mustestablish themselves as a credible player in business desktop applications to overcome the“desktop publishing” stereotype.9
  • 10. Threats: Legal risks – In a market that literally changes at the speed of thought, patent andcopyright infringement risks remain high. As long as operating systems and supportsoftware packages continue to converge and remain relatively easy to imitate, present andfuture lawsuits are inevitable. The Apple records claim against iTunes remainsunresolved. Competition – This threat occurs primarily on two fronts: PC hardware/software andconsumer electronics. For the same reasons discussed in the opportunities section, thethreat of imitability (cloning, pirating, etc.) increases. As relative newcomers to theconsumer electronics arena, will Apple retain a competitive advantage as they diversifytheir offerings (speakers, home entertainment systems, etc.).10
  • 11. Financial Analysis:FinancialperiodNet sales (MilUSD)Net profits (MilUSD)Revenue growthReturn on netsalesFY 2008 38,200 8,139 35% 16%FY 2009 45,356 9,455 42% 18%FY 2010 65,225 14,013 52% 21%FY 2011 108,249 25,922 66% 24%FY 2012 156,508 41,733 45% 27%11