2. PURPOSE
• Identify the reasons of Apple success
• Analyze the iPod business model
development
• What are Apple’s swift growth key factors in
global music area?
• To learn how to grow fast and succeed
3. Apple Inc.
Product range from $59…$7,000
Electronics
Computers
Software
Worldwide sales
Retail stores
On-line stores
Direct sales force
Most Admired*
2008 in USA
2008…2010 worldwide
* by Fortune magazine
4. iPod
• iPod is a line of portable media players designed and
marketed by Apple and launched on October 23, 2001.
5. iPod Business Model I
Infrastructure Offer Customer
Partner Network Key Activities Value Customer Customer
Propositions Relationships Segments
OEM (Original Hardware design „1000 songs in your
equipment Lovemark Massmarket
manufacturers): Sofrware pocket“
Switching costs (Mac owners)
Sony (battery) Marketing Simple & easy to use
Wolfson (Codec/Dac)
Small size (lighter
Toshiba (Disk drive) than cell phones)
Texas Instrument
(FireWire) Key Resources Apple design
Distribution „Music is part of
Linear Technology (Power More memory Channels everyone's life“
management)
iPod hardware Plays all music Apple stores
LG Display (LCD display)
formats
Synaptics (scroll wheel) Apple brand Apple.com
People CD quality
Record companies
Marketing companies Content & agreements Fast file transfer
Fast battery charge
Cost Structure Revenue Streams
Variable costs: Fixed costs: iPod sales (2002) - $143 millions or 2,5% / net sales
iPod Music records Music products (2002) - $4 millions
Software design
Marketing Apps Store
Software licences
Finance
6. iPod Business Model II
Infrastructure Offer Customer
Partner Network Key Activities Value Customer Customer
Propositions Relationships Segments
OEM (Original Hardware design
equipment Lovemark Massmarket:
manufacturers): Sofrware Simple & easy to use Switching costs Teens (primary)
Sony (battery) Marketing Ultraportable iTunes Younger adults to
Wolfson (Codec/Dac)
Apple design age 29 (secondary)
Toshiba (Disk drive)
Texas Instrument (FireWire) Fashion
Linear Technology (Power Key Resources Intuitive & Fun Distribution
management)
Apps
Channels
LG Display (LCD display)
iPod hardware Apple stores
Synaptics (click wheel) Additional features
Apple brand Apple.com
Record companies Doc connector iTunes store
People
Marketing companies USB Electronic store
Content & agreements
(BestBuy)
iTunes software Windows support
Cost Structure Revenue Streams
Variable costs: Fixed costs: iPod sales (2004) $1.3 billions – 15,8% / net sales
iPod Music records Music products (2004) $278 millions – 3,4% / net sales
Software design
Marketing Software licences
App store
Finance
7. iPod Business Model III
Infrastructure Offer Customer
Partner Network Key Activities Value Customer Customer
Propositions Relationships Segments
OEM (Original Hardware design
equipment Lovemark Massmarket:
manufacturers): Sofrware Simple & easy to use Switching costs Teens
Sony (battery) Marketing Apple design iTunes Adults
Wolfson (Codec/Dac)
Smaller
Toshiba (Disk drive) Active people
Texas Instrument (FireWire) Apps
Linear Technology (Power Key Resources Accessories Distribution
management)
iPod family Channels
LG Display (LCD display)
iPod hardware Apple stores
Synaptics (touch wheel) Co-products
Apple brand (Nike, HP, StarBucks Apple.com
Record companies , Car manufactures) iTunes store
People
Marketing companies Electronic store
Content & agreements
Car companies Web store
iTunes software
Cost Structure Revenue Streams
Variable costs: Fixed costs: iPod sales (2008) $9,2 billions – 24,5% / net sales
iPod Music records Music products (2010) $4,9 billions– 7,6% / net sales
Software design
Marketing Software licences
App store
Finance