Apple inc
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Apple inc



this slideshare is about history of apple. actually, this was my minor project in college on company analysis of Apple Inc.

this slideshare is about history of apple. actually, this was my minor project in college on company analysis of Apple Inc.



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    Apple inc Apple inc Document Transcript

    • Chapter-1 Introduction
    • a) Overview of the Organisation The company was founded on April 1, 1976, and incorporated as AppleComputer, Inc. on January 3, 1977. The word "Computer" was removed from its name on January 9, 2007, the same day Steve Jobs introduced the iPhone, reflecting its shifted focus towards consumer electronics. Apple Inc., formerly Apple Computer, Inc., is an American multinational corporation headquartered in Cupertino, California that designs, develops, and sells consumer electronics, computer software and personal computers. Apple is the world’s-second largest information company by revenue after Samsung Electronics, and the world’s-Third largest phone maker after Samsung and Nokia.Fortune magazine named Apple the most admired company in the United States in 2008, and in the world from 2008 to 2012.However, the company has received criticism for its contractor’s labor practices, and for Apple's own environmental and business practices. As of May 2013, Apple maintains 408 retail stores in fourteen countries as well as the online Apple Store and iTunes Store, the latter of which is the world's largest music retailer.
    • b) Profile Of The Organisation Founded: April 1, 1976 Founder(s): Steve Jobs : Steve Wozniak : Ronald Wayne Type: Public Industry: Computer Hardware: Computer Software : Consumer Electronics : Digital Distribution Headquarters: Apple Campus, 1 Infinite Loop, Cupertino California, U.S. Number of locations:406 retail stores Area served: Worldwide Key people(s): Tim Cook (CEO) : Arthur D. Levinson(Chairman) : Steve Jobs(Founder, former CEO) Revenue: US$ 156.508 billion (2012) Operating income: US$ 055.241 billion (2012) Net income: US$ 41.733 billion (2012) Total assets: US$ 176.064 billion (2012) Employees: 80,000 (2013) Website:
    • Products: 1. Mac a) MacBook Air b) MacBook Pro c) Mac Pro d) Mac Mini e) iMac 2. iPad 3. iPad Mini 4. iPod a) iPod Shuffle b) iPod Nano c) iPod Classic d) iPod Touch
    • 5. iPhone a) iPhone 4 b) iPhone 4s c) iPhone 5c d) iPhone 5s 6. Apple TV 7. iWatch Softwares: 1. Safari 2. iPhoto 3. iTunes 4. Facetime 5. Siri
    • c) Issues Of The Organisation Increasing competition Apple’s key competitors are Google, Samsung, Microsoft and many more. Google’s Android has more marketshare than Apple’s iOS and in the phone making Apple is facing strong competition from Samsung. Criticism for Apple maps Apple launched its Google Maps replacement and while that’s not much time to overhaul such a massive undertaking. Apple Maps were a catastrophe as they majority of the times were not accurate and directed its users or stranded them at some unknown place. Patent War
    • d) SWOT Analysis Strengths Weaknesses Customer loyalty combined with expanding High price closed ecosystem Incompatibility with different OS Apple is a leading innovator in mobile device Decreasing market share technology Patent infringements Strong financial performance Further changes in management ($10,000,000,000 cash, gross profit margin Defects of new products 43.9% and no debt) Long-term gross margin decline Brand reputation Retail stores Opportunities Threats Strong marketing and and iPhone 5 High demand of iPad mini advertising teams Rapid technological change iTV launch 2013 tax increases Emergence of the new provider of application Rising pay levels for Foxconn workers processors Breached IP rights Growth of tablet and smartphone markets Opportunities Price pressure from Samsung over key Threats High demand of iPad through acquisitions Obtaining patents mini and iPhone 5 Rapid technological change components iTV launch from patent infringements Damages 2013 taxdollar Strong increases Emergence of the new provider of application processors Rising pay levels for Foxconn workers Growth of tablet and smartphone markets Breached IP rights Obtaining patents through acquisitions Price pressure from Samsung over key Strong growth of mobile advertising market Increasing demand for cloud based services Android OS growth Competitors moves in online music Damages from patent infringements market components Strong growth of mobile advertising market Strong dollar Increasing demand for cloud based services Android OS growth Competitors moves in online music market
    • Strengths 1. 
 Customer loyalty combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness for the business, this has now changed. First, Apple now has a full range of apps, software and products that are interlinked and support each other. Second, new products and supplements will be released soon (iTV), hence expanding the ecosystem. Third, Apple has a strong customer loyalty, which increases due to Apple’s closed ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apple’s expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage. 2. Apple is a leading innovator in mobile device technology. Apple has been chosen as the most innovative business in the world for the 3rd time in 2012. Company’s core competency of producing innovative products is the strength the company builds upon and is able to bring the most innovative products to the market. 3. Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). Apple’s financial performance is one of the best among many companies. Currently Apple has no debt and is not directly affected by interest rates or credit markets.
    • Weaknesses 1.High price. Apple’s products cost much more than its competitors devices. Some critics argue that the price is not justified. When there’s such a fierce competition, Apple products price becomes a weakness because consumers can easily opt for similar quality but lower price products. 2.Incompatibility with different OS. The iOS and OS X are quite different from other OS and uses software that is unlike the software used in Microsoft OS. Due to such differences, both in software and hardware, users often choose to stay with their accustomed software and hardware (Microsoft OS and Intel hardware). 3.Decreasing market share. The less market share Apple has, the less it can influence its potential customers and persuade them to jump into using Apple’s closed ecosystem products. Opportunities 1. High demand of iPad mini and iPhone 5.iPad mini sales will increase Apple’s market share in the tablet market and, will strengthen firm’s competitive advantage. 2. iTV launch.iTV launch will support Apple TV sales and the products’ ecosystem. 3. Growth of tablet and smartphone markets. Growth of tablet and smartphone markets is a good opportunity to expand firm’s share in these markets.
    • Threats 1. 2013 tax increases. Tax increases in USA in 2013 will negatively affect Apple. 2. Rising pay levels for Foxconn workers. Pay levels for Foxconn’s workers already rose 3 times from 2010 to 2012. Foxconn is the main manufacturer of Apple products and the rising pay level for Foxconn’s workers will likely raise the prices for Apple products. 3. Breached IP rights. The companies that breach Apple patents might not be discovered soon and may benefit from it, while weakening Apple at the same time. Major players in this field: 1. Google 2. Microsoft 3. Samsung 1. Google: o Google Inc. is an American multinational corporation specializing in Internet-related services and products. o Google was founded by Larry Page and Sergey Brin while they were Ph.D. students at Stanford University. o Vision
    • Focus on the user and all else will follow. o Mission Google’s mission is to organize the world’s information and make it universally accessible and useful. 2. Microsoft: o Microsoft Corporation is an American multinationalsoftware corporation headquartered in Redmond, Washington that develops, manufactures, licenses, and supports a wide range of products and services related to computing. o The company was founded by Bill Gates and Paul Allen on April 4, 1975. Microsoft is the world's largest software maker measured by revenues. It is also one of the world's most valuable companies. 3. Samsung: o Samsung Groupis a South Korean multinationalconglomerate company headquartered in Samsung Town, Seoul. It comprises numerous subsidiaries and affiliated businesses, most of them united under the Samsung brand, and is the largest South Korean chaebol (business conglomerate). o Samsung was founded by Lee Byung-chul in 1938 as a trading company. Over the next three decades the group diversified into areas including food processing, textiles, insurance, securities and retail. o Notable Samsung industrial subsidiaries include Samsung
    • Electronics (the world's largest information technology company measured by 2012 revenues, and 4th in market value).
    • Chapter-2 Research Methodology
    • Objectives:To analyze the consumer electronics and find the future growth opportunities.To set up different parameters on the basis of which the consumer electronics companies will becompared so as to select one best company.To carry out the company analysis of the selected company and to suggest whether it is aviable investment option.To look at the historical performance data of the company and estimate the future performanceof stocks. Looking at this information to gain an insight on the company s future performance. Itis a method of evaluating a security by attempting to measure its future performance byexamining related economic, financial and other qualitative and quantitative factors. To estimatea value that an investor can compare with the security's current price and figure out what sort ofposition to take with that security. Scope: The scope of this project is limited to only one sector i.e. Consumer Electronics. This project is concerned with only one sector of companies in the stock market. The projectdoes not extend its scope to any other sector of companies.Source of information for this project is only secondary data. LIMITATIONS OF THE STUDY Since the road to improvement is never ending, so this study also suffers from certain limitations. Some of them are as follows:
    • Scope of project is limited in the sense that only Apple has been taken for consumer research. The extent of the survey was New Delhi only. So the suggestions or arguments given in the report may not hold true for other locations in India. Questionnaire method involves some uncertainty of response. Cooperation on the part of informants, in some cases, was difficult to presume. Because of time constraints and reserve constraints, a mix of convenient sampling and Judgement (Probability & Random) sampling was used. Also because of above-mentioned constraints, the sample size chosen for the survey was 100 people. RESEARCH METHODOLOGY: Research is often described as an active, diligent and systematic process of inquiry aimed at Discovering, interpreting and revising facts. This intellectual investigation produces a greaterunderstanding of events, behaviors or theories and makes practical applications through lawsand theories. The term research is also used to describe a collection of information about aparticular subject, and is usually associated with science and scientific method.
    • BASIC RESEARCH: Basic research is also called as fundamental or pure research. Its primary objective is theadvancement of knowledge and the theoretical understanding of the relations among thevariables. It is exploratory and often driven by researcher’s curiosity or interest. It is conductedwithout any practical end in mind. Basic research often lays down the foundation for furtherapplied research.
    • Chapter-3 Analysis Of The Organisation
    • Foundation and Incorporation(1970-80) Apple was incorporated January 3, 1977,without Wayne, who sold his share of the company back to Jobs and Wozniak for $800. Multi-millionaire Mike Markkula provided essential business expertise and funding of $250,000 during the incorporation of Apple. During the first five years of operations, revenues doubled every four months, an average growth rate of 700%.The Apple I was sold as a motherboard, which is less than what is today considered a complete personal computer. The Apple I went on sale in July 1976 and was market-priced at $666.66 ($2,690 in 2013 dollars, adjusted for inflation) The Apple II, also invented by Wozniak, was introduced on April 16, 1977, at the first West Coast Computer FaireIt differed from its major rivals, the TRS-80 and Commodore PET, due to its character cell-based color graphics and an openarchitecture. While early models used ordinary cassette tapes as storage devices, they were superseded by the introduction of a 5 1/4 inch floppy disk drive and interface, the Disk II. In the end of the 1970s, Apple had a staff of computer designers and a production line. The company introduced the Apple III in May 1980 in an attempt to compete with IBM and Microsoft in the business and corporate computing market. On December 12, 1980, Apple went public at $22 per share, generating more capital than any IPO since Ford Motor Company in 1956 and instantly creating more millionaires (about 300) than any company in history.
    • Lisa and Macintosh (1981–85): Apple began working on the Apple Lisa in 1978. In 1982, Jobs was pushed from the Lisa team due to infighting. Jobs took over JeffRankin’s low-cost-computer project, the Macintosh. A race broke out between the Lisa team and the Macintosh team over which product would ship first. Lisa won the race in 1983 and became the first personal computer sold to the public with a GUI, but was a commercial failure due to its high price tag and limited software titles. In 1984, Apple next launched the Macintosh. Its debut was announced by the now famous $1.5 million television commercial "1984". It was directed by Ridley Scott and was aired during the third quarter of Super Bowl XVIII on January 22, 1984. The Macintosh initially sold well, but follow-up sales were not strong due to its high price and limited range of software titles. The Macintosh was the first personal computer to be sold without a programming language at all. In 1985 a power struggle developed between Jobs and CEO John Sculley, who had been hired two years earlier. The Apple board of directors instructed Sculley to "contain" Jobs and limit his ability to launch expensive forays into untested products. Rather than submit to Sculley's direction, Jobs attempted to oust him from his leadership role at Apple.
    • Decline (1986–97): During this time Apple experimented with a number of other failed consumer targeted products including digital cameras, portable CD audio players, speakers, video consoles, and TV appliances. Enormous resources were also invested in the problem-plagued Newton division based on John Sculley's unrealistic market forecasts. Ultimately, none of these products helped, as Apple's market share and stock prices continued to slide. Microsoft continued to gain market share with Windows focusing on delivering software to cheap commodity personal computers while Apple was delivering a richly engineered, but expensive, experience. Apple relied on high profit margins and never developed a clear response. Instead, they sued Microsoft for using a graphical user interface similar to the Apple Lisa in Apple Computer, Inc. v. Microsoft Corporation.The lawsuit dragged on for years before it was finally dismissed. At the same time, a series of major product flops and missed deadlines sullied Apple's reputation, and Sculley was replaced as CEO by Michael Spindler In 1996, Michael Spindler was replaced by Gil Amelio as CEO. Gil Amelio made many changes at Apple, including extensive layoffs.[64] After numerous failed attempts to improve Mac OS, first with the Taligent project, then later with Copland and Gershwin, Amelio chose to purchase NeXT and its NeXTSTEP operating system, bringing Steve Jobs back to Apple as an advisor. On July 9, 1997, the board of directors ousted Gil Amelio after overseeing a three-year record-low stock price and crippling
    • financial losses. Jobs became the interim CEO and began restructuring the company's product line. Return to profitability (1998–2005): On August 15, 1998, Apple introduced a new all-in-one computer reminiscent of the Macintosh 128K: the iMac. The iMac design team was led by Jonathan Ive, who would later design the iPod and the iPhone.The iMac featured modern technology and a unique design, and sold almost 800,000 units in its first five months. On May 19, 2001, Apple opened the first official Apple Retail Stores in Virginia and California.On July 9, they bought Spruce Technologies, a DVD authoring company. On October 23 of the same year, Apple announced the iPod portable digital audio player, and started selling it on November 10. The product was phenomenally successful — over 100 million units were sold within six years. In 2003, Apple's iTunes Store was introduced, offering online music downloads for $0.99 a song and integration with the iPod. The service quickly became the market leader in online music services, with over 5 billion downloads by June 19, 2008. Transition to Intel (2005–07):At the Worldwide Developers Conference keynote address on June 6, 2005, Steve Jobs announced that Apple would begin producing Intel-based Mac computers in 2006.On January 10, 2006, the new MacBook Pro and iMac became the first Apple computers to use Intel's Core Duo CPU.
    • By August 7, 2006 Apple had transitioned the entire Mac product line to Intel chips, over one year sooner than announced.The Power Mac, iBook, and PowerBook brands were retired during the transition; the Mac Pro, MacBook, and MacBook Pro became their respective successors. On April 29, 2009, The Wall Street Journal reported that Apple was building its own team of engineers to design microchips.Apple introduced Boot Camp to help users install Windows XP or Windows Vista on their Intel Macs alongside Mac OS X. Apple's success during this period was evident in its stock price. Between early 2003 and 2006, the price of Apple's stock increased more than tenfold, from around $6 per share (split-adjusted) to over $80. I n January 2006, Apple's market cap surpassed that of Dell.Nine years prior, Dell's CEO Michael Dell said that if he ran Apple he would "shut it down and give the money back to the shareholders." Although Apple's market share in computers had grown, it remained far behind competitors using Microsoft Windows, with only about 8% of desktops and laptops in the US.
    • Widespread success (2007–11):Apple achieved widespread success with its iPhone, iPod Touch and iPad products, which introduced innovations in mobile phones, portable music players and personal computers respectively. In addition, the implementation of a store for the purchase of software applications represented a new business model. Touch screens had been invented and seen in mobile devices before, but Apple was the first to achieve mass-market adoption of such a user interface that included particular pre-programmed touch gestures. On April 2, 2007, Apple and EMI jointly announced the removal of DRM technology from EMI's catalog in the iTunes Store, effective in May, Other record labels followed later that year. Post–Steve Jobs era (2011–present):In June 2011, Steve Jobs surprisingly took the stage and unveiled iCloud, an online storage and syncing service for music, photos, files and software which replaced MobileMe, Apple's previous attempt at content syncing. Apple has achieved such efficiency in its supply chain that the company operates as a monopsony (one buyer, many sellers), in that it can dictate terms to its suppliers. On August 20, 2012, Apple's rising stock rose the company's value to a world-record $624 billion. This beat the non-inflation-adjusted record for market capitalization set by Microsoft in 1999. On August 24, 2012, a US jury ruled that Samsung should pay Apple $1.05 billion(£665m) in damages in an intellectual property lawsuit.
    • In March 2013, Apple announced a patent for an augmented reality (AR) system that can identify objects in a live video stream and present information corresponding to these objects through a computer-generated information layer overlaid on top of the realworld image.
    • Chapter-4 Findings & Recommendations
    • Findings:- Apple cannot market iPhones in Brazil because another company owns the trademark. The Brazilian telecommunications company IGM Electronica owns the brand Gradiente, which filed for exclusive rights to the name “iPhone” in 2000, before Apple had produced its iPhone. It took seven years but eventually the rights were granted, and the GGradiente iPhone was launched in 2007. According the Financial Post, Apple Inc. grew richer than Uncle Sam, having more cash on hand than the entire U.S. had spending room. This was due to the debt ceiling crisis of July 2011. Apple Inc. boasted cash reserves of $75.88 billion while Washington had an operating balance of $73.77 billion. A major difference, however, is that Apple’s figure refers to its reserve of cash, the government’s value is the amount of spending room it has before reaching an arbitrary debt ceiling. Apple now has the highest market value of any private company in the world. Apple once had more cash in the bank than the US Treasury had money to spend.Apple Inc. is sitting at $416.6 billion. Exxon-Mobile is second at $400.4 billion. Apple has more than 300 stores in 11 countries, and its retail division has become a hugely important part of the company's business, selling millions of iPods, Macs, iPhones, and iPads.
    • Recommendations:Scale up its production capabilities. Every time Apple releases a hot new gadget, customers can't get it. This is a consequence of Apple's legendarily precise just-in-time manufacturing system. Apple never wants to make more devices than it will sell, so it ramps up manufacturing in lock step with demand. That reduces its inventory costsand thus boosts its profit, but Apple's production is still too slow to keep up with instant spikes in demand. Is it possible for Apple to build products any faster than it does now? If money is no object, sure: It could set up factories in many different countries and it could invest in next-generation production capabilities that might pump out iPhones even faster (for instance, robotic assembly lines, which have the added benefit of not raising any concerns about factory conditions). Build or buy a cellular carrier. The iPhone is Apple's biggest product, but Apple sells almost all of its phones in partnership with carriers whose prices it doesn't control. Those costs are the biggest piece of a smartphone purchase, and, in the U.S. and many other places around the world, they have remained relatively stable for years. Your cellular carrier's technology and customer service also leave a lot to be desired.Steve Jobs once said that Apple's goal is to "own and control the primary technology in everything we do." Cellular data service is a key such technology, and Apple should make it a goal to own and improve that service. It could start small, building infrastructure that boosts iPhone service in congested cities, but with enough investments it
    • could build a network of its own, thus improving current carriers' service and pricesthrough competition. High demand of iPad mini and iPhone 5. iPad mini sales will increase Apple’s market share in the tablet market and, will strengthen firm’s competitive advantage. iTV launch. iTV launch will support Apple TV sales and the products’ ecosystem. Growth of tablet and smartphone markets. Growth of tablet and smartphone markets is a good opportunity to expand firm’s share in these markets.
    • Bibliography 1. 2. 3. 4. Books:1.Steve Jobs by Walter Isaacson