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2011
APPLE INC.

ABSTRACT.

The need for this project is to explore the strategies of worlds top companies like Apple Inc.
and to discover the methods and ideologies of companies like this.
Project-based learning offers a wide range of benefits to both students and teachers. A
growing body of academic research supports the use of project-based learning in
school/college to engage students, cut absenteeism, boost cooperative learning skills, and
improve academic performance.This project has helped me a lot to gather a lot of knowlwdge
and growth in self-reliance, and improved attitudes toward learning . It has also provided me
Opportunities to develop complex skills, such as higher-order thinking, problem-solving,
collaborating, and communicating.
The main outcome of this project is to learn the Marketing skills and various strategies which
are applied by the large companies for their success.It also helps in developing own skills and
using the gathered knowledge in future projects and studies.

PREFACE.

Apple Inc. is an American multinational corporation that designs and manufactures consumer
electronics, computer software, and personal computers. The company's best-known hardware
products include Macintosh computers, the iPod, the iPhone and the iPad. Apple software includes
the Mac OS X operating system; the iTunes media browser; the iLife suite of multimedia and
creativity software; the iWork suite of productivity software; Aperture, a professional photography
package; Final Cut Studio, a suite of professional audio and film-industry software products;

and Logic Studio, a suite of audio tools. As of January 2010 the company operates 284 retail stores in
ten countries, and an online store where hardware and software products are sold.
Established in Cupertino, California on April 1, 1976 and incorporated January 3, 1977, the company
was called Apple Computer, Inc. for its first 30 years, but dropped the word "Computer" on January
9, 2007 to reflect the company's ongoing expansion into the consumer electronics market in addition
to its traditional focus on personal computers.Apple has about 35,000 employees worldwide and had
worldwide annual sales of US$42.91 billion in its fiscal year ending September 26, 2009. For reasons
as various as its philosophy of comprehensive aesthetic design to its distinctive advertising
campaigns, Apple has established a unique reputation in the consumer electronics industry. This
includes a customer base that is devoted to the company and its brand, particularly in the United
States. Fortune magazine named Apple the most admired company in the United States in 2008 and
in the world in 2008, 2009, and 2010.

INTRODUCTION:Steve Jobs

Steven Paul "Steve" Jobs (born February 24, 1955) is an American business magnate and inventor. He is the cofounder and chief executive officer of Apple Inc. Jobs also previously served as chief executive of Pixar Animation
Studios; he became a member of the board of The Walt Disney Company in 2006, following the acquisition of
Pixar by Disney. He was credited in the 1995 movie Toy Story as an executive.
In the late 1970s, Jobs, with Apple co-founder Steve Wozniak, Mike Markkula, and others, designed, developed,
and marketed one of the first commercially successful lines of personal computers, the Apple II series. In the early
1980s, Jobs was among the first to see the commercial potential of the mouse-driven graphical user
interface which led to the creation of the Macintosh. After losing a power struggle with the board of directors in
1984, Jobs resigned from Apple and founded NeXT, a computer platform development company specializing in the
higher education and business markets. Apple's subsequent 1996 buyout of NeXT brought Jobs back to the
company he co-founded, and he has served as its CEO since 1997.

In 1986, he acquired the computer graphics division of Lucasfilm Ltd which was spun off as Pixar Animation
Studios.He remained CEOand majority shareholder at 50.1% until its acquisition by The Walt Disney company in
2006. Consequently Jobs became Disney's largest individual shareholder at 7% and a member of Disney's Board of
Directors.
Jobs' history in business has contributed much to the symbolic image of the idiosyncratic, individualistic Silicon
Valley entrepreneur, emphasizing the importance of design and understanding the crucial role aesthetics play in
public appeal. His work driving forward the development of products that are both functional and elegant has earned
him a devoted following.

COMPANY PROFILE AND BACKGROUND HISTORY..

Company Perspectives:
Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the
personal computer in the 1980s with the Macintosh. Apple is committed to bringing the best personal
computing experience to students, educators, creative professionals and consumers around the world
through its innovative hardware, software and Internet offerings.
Key Dates:
1976: With $1,300, Steve Jobs and Steve Wozniak found Apple Computer, Inc.
1980: Apple converts to public ownership.
1982: Apple becomes the first personal computer company to reach $1 billion in annual sales.
1985: John Sculley assumes the helm after a management shakeup that causes the departure of Jobs
and several other Apple executives.
1991: PowerBook line of notebook computers is released.
1994: Power Macintosh line is released.
1996: Acquisition of NeXT brings Steve Jobs back to Apple as a special advisor.
1997: Steve Jobs is named interim chief executive officer.
1998: The all-in-one iMac is released.
2000: Jobs, now firmly in command as CEO, oversees a leaner, more tightly focused Apple.

Company History:
Apple Computer, Inc. is largely responsible for the enormous growth of the personal computer
industry in the 20th century. The introduction of the Macintosh line of personal computers in 1984
established the company as an innovator in industrial design whose products became renowned for
their intuitive ease of use. Though battered by bad decision-making during the 1990s, Apple
continues to exude the same enviable characteristics in the 21st century that catapulted the company
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toward fame during the 1980s. The company designs, manufactures, and markets personal
computers, software, and peripherals, concentrating on lower-cost, uniquely designed computers
such as iMAC and Power Macintosh models.

Origins:

Apple was founded in April 1976 by Steve Wozniak, then 26 years old, and Steve Jobs, 21, both
college dropouts. Their partnership began several years earlier when Wozniak, a talented, self-taught
electronics engineer, began building boxes that allowed him to make long-distance phone calls for
free. The pair sold several hundred such boxes.
In 1976 Wozniak was working on another box--the Apple I computer, without keyboard or power
supply--for a computer hobbyist club. Jobs and Wozniak sold their most valuable possessions, a van
and two calculators, raising $1,300 with which to start a company. A local retailer ordered 50 of the
computers, which were built in Jobs's garage. They eventually sold 200 to computer hobbyists in the
San Francisco Bay area for $666 each. Later that summer, Wozniak began work on the Apple II,
designed to appeal to a greater market than computer hobbyists. Jobs hired local computer
enthusiasts, many of them still in high school, to assemble circuit boards and design software. Early
microcomputers had usually been housed in metal boxes. With the general consumer in mind, Jobs
planned to house the Apple II in a more attractive modular beige plastic container.
Jobs wanted to create a large company and consulted with Mike Markkula, a retired electronics
engineer who had managed marketing for Intel Corporation and Fairchild Semiconductor. Chairman
Markkula bought one-third of the company for $250,000, helped Jobs with the business plan, and in
1977 hired Mike Scott as president. Wozniak worked for Apple full time in his engineering capacity.
Jobs recruited Regis McKenna, owner of one of the most successful advertising and public relations
firms in Silicon Valley, to devise an advertising strategy for the company. McKenna designed the
Apple logo and began advertising personal computers in consumer magazines. Apple's professional
marketing team placed the Apple II in retail stores, and by June 1977, annual sales reached $1
million. It was the first microcomputer to use color graphics, with a television set as the screen. In
addition, the Apple II expansion slot made it more versatile than competing computers.
The earliest Apple IIs read and stored information on cassette tapes, which were unreliable and slow.
By 1978 Wozniak had invented the Apple Disk II, at the time the fastest and cheapest disk drive
offered by any computer manufacturer. The Disk II made possible the development of software for
the Apple II. The introduction of Apple II, with a user manual, at a consumer electronics show
signaled that Apple was expanding beyond the hobbyist market to make its computers consumer
items. By the end of 1978, Apple was one of the fastest-growing companies in the United States,
with its products carried by over 100 dealers.

In 1979 Apple introduced the Apple II+ with far more memory than the Apple II and an easier
startup system, and the Silentype, the company's first printer. VisiCalc, the first spreadsheet for
microcomputers, was also released that year. Its popularity helped to sell many Apple IIs. By the end
of the year sales were up 400 percent from 1978, at over 35,000 computers. Apple Fortran,
introduced in March 1980, led to the further development of software, particularly technical and
educational applications.
In December 1980, Apple went public. Its offering of 4.6 million shares at $22 each sold out within
minutes. A second offering of 2.6 million shares quickly sold out in May 1981.
Meanwhile Apple was working on the Apple II's successor, which was intended to feature expanded
memory and graphics capabilities and run the software already designed for the Apple II. The
company, fearful that the Apple II would soon be outdated, put time pressures on the designers of the
Apple III, despite the fact that sales of the Apple II more than doubled to 78,000 in 1980. The Apple
III was well received when it was released in September 1980 at $3,495, and many predicted it
would achieve its goal of breaking into the office market dominated by IBM. However, the Apple III
was released without adequate testing, and many units proved to be defective. Production was halted
and the problems were fixed, but the Apple III never sold as well as the Apple II. It was discontinued
in April 1984.
The problems with the Apple III prompted Mike Scott to lay off employees in February 1981, a
move with which Jobs disagreed. As a result, Mike Markkula became president and Jobs chairman.
Scott was named vice-chairman shortly before leaving the firm.
Despite the problems with Apple III, the company forged ahead, tripling its 1981 research and
development budget to $21 million, releasing 40 new software programs, opening European offices,
and putting out its first hard disk. By January 1982, 650,000 Apple computers had been sold
worldwide. In December 1982, Apple became the first personal computer company to reach $1
billion in annual sales.
The next year, Apple lost its position as chief supplier of personal computers in Europe to IBM, and
tried to challenge IBM in the business market with the Lisa computer. Lisa introduced the mouse, a
hand-controlled pointer, and displayed pictures on the computer screen that substituted for keyboard
commands. These innovations come out of Jobs's determination to design an unintimidating
computer that anyone could use.
Unfortunately, the Lisa did not sell as well as Apple had hoped. Apple was having difficulty
designing the elaborate software to link together a number of Lisas and was finding it hard to break
IBM's hold on the business market. Apple's earnings went down and its stock plummeted to $35, half
of its sale price in 1982. Mike Markkula had viewed his presidency as a temporary position, and in
April 1983, Jobs brought in John Sculley, formerly president of Pepsi-Cola, as the new president of
Apple. Jobs felt the company needed Sculley's marketing expertise.

1984 Debut of the Macintosh

The production division for Lisa had been vying with Jobs's Macintosh division. The Macintosh
personal computer offered Lisa's innovations at a fraction of the price. Jobs saw the Macintosh as the
'people's computer'--designed for people with little technical knowledge. With the failure of the Lisa,
the Macintosh was seen as the future of the company. Launched with a television commercial in
January 1984, the Macintosh was unveiled soon after, with a price tag of $2,495 and a new 3-inch
disk drive that was faster than the 5-inch drives used in other machines, including the Apple II.
Apple sold 70,000 Macintosh computers in the first 100 days. In September 1984 a new Macintosh
was released with more memory and two disk drives. Jobs was convinced that anyone who tried the
Macintosh would buy it. A national advertisement offered people the chance to take a Macintosh
home for 24 hours, and over 200,000 people did so. At the same time, Apple sold its two millionth
Apple II. Over the next six months Apple released numerous products for the Macintosh, including a
laser printer and a hard drive.
Despite these successes, Macintosh sales temporarily fell off after a promising start, and the
company was troubled by internal problems. Infighting between divisions continued, and poor
inventory tracking led to overproduction. Although Jobs had originally been a strong supporter of
Sculley, Jobs eventually decided to oust Sculley; Jobs, however, lost the ensuing showdown. Sculley
reorganized Apple in June 1985 to end the infighting caused by the product-line divisions, and Jobs,
along with several other Apple executives, left the company in September. They founded a new
computer company, NeXT Incorporated , which would later emerge as a rival to Apple in the
business computer market.
The Macintosh personal computer finally moved Apple into the business office market. Corporations
saw its ease of use as a distinct advantage. It was far cheaper than the Lisa and had the necessary
software to link office computers. In 1986 and 1987 Apple produced three new Macintosh personal
computers with improved memory and power. By 1988, over one million Macintosh computers had
been sold, with 70 percent of sales to corporations. Software was created that allowed the Macintosh
to be connected to IBM-based systems. Apple grew rapidly; income for 1988 topped $400 million on
sales of $4.07 billion, up from income of $217 million on sales of $1.9 billion in 1986. Apple had
5,500 employees in 1986 and over 14,600 by the early 1990s.
In 1988, Apple management had expected a worldwide shortage of memory chips to worsen. They
bought millions when prices were high, only to have the shortage end and prices fall soon after.
Apple ordered sharp price increases for the Macintosh line just before the Christmas buying season,
and consumers bought the less expensive Apple line or other brands. In early 1989, Apple released
significantly enhanced versions of the two upper-end Macintosh computers, the SE and the
Macintosh II, primarily to compete for the office market. At the same time IBM marketed a new
operating system that mimicked the Macintosh's ease of use. In May 1989 Apple announced plans

for its new operating system, System 7, which would be available to users the next year and allow
Macintoshes to run tasks on more than one program simultaneously.
Apple was reorganized in August 1988 into four operating divisions: Apple USA, Apple Europe,
Apple Pacific, and Apple Products. Dissatisfied with the changes, many longtime Apple executives
left. In July 1990, Robert Puette, former head of Hewlett-Packard's personal computer business,
became head of the Apple USA division. Sculley saw the reorganization as an attempt to create fewer
layers of management within Apple, thus encouraging innovation among staff. Analysts credit
Sculley with expanding Apple from a consumer and education computer company to a business
computer company, one of the biggest and fastest-growing corporations in the United States.
Competition in the industry of information technology involved Apple in a number of lawsuits. In
December 1989 for instance, the Xerox Corporation, in a $150 million lawsuit, charged Apple with
unlawfully using Xerox technology for the Macintosh software. Apple did not deny borrowing from
Xerox technology but explained that the company had spent millions to refine that technology and
had used other sources as well. In 1990 the court found in favor of Apple in the Xerox case. Earlier,
in March 1988, Apple had brought suits against Microsoft and Hewlett-Packard, charging copyright
infringement. Four years later, in the spring of 1992, Apple's case was dealt a severe blow in a
surprise ruling: copyright protection cannot be based on 'look and feel' (appearance) alone; rather,
'specific' features of an original program must be detailed by developers for protection.

Mismanagement--Crippling an Industry Giant: 1990s

Apple entered the 1990s well aware that the conditions that made the company an industry giant in
the previous decade had changed dramatically. Management recognized that for Apple to succeed in
the future, corporate strategies would have to be reexamined.
Apple had soared through the 1980s on the backs of its large, expensive computers, which earned the
company a committed, yet relatively small following. Sculley and his team saw that competitors
were relying increasingly on the user-friendly graphics that had become the Macintosh signature and
recognized that Apple needed to introduce smaller, cheaper models, such as the Classic and LC,
which were instant hits. At a time when the industry was seeing slow unit sales, the numbers at Apple
were skyrocketing. In 1990, desktop Macs accounted for 11 percent of the PCs sold through
American computer dealers. In mid-1992, the figure was 19 percent.
But these modestly priced models had a considerably smaller profit margin than their larger cousins.
So even if sales took off, as they did, profits were threatened. In a severe austerity move, Apple laid
off nearly ten percent of its workforce, consolidated facilities, moved production plants to areas

where it was cheaper to operate, and drastically altered its corporate organizational chart. The bill for
such forward-looking surgery was great, however, and in 1991 profits were off 35 percent. But
analysts said that such pitfalls were expected, indeed necessary, if the company intended to position
itself as a leaner, better-conditioned fighter in the years ahead.
Looking ahead is what analysts say saved Apple from foundering. In 1992, after the core of the suit
that Apple had brought against Microsoft and Hewlett-Packard was dismissed, industry observers
pointed out that although the loss was a disappointment for Apple, the company wisely had not
banked on a victory. They credited Apple's ambitious plans for the future with quickly turning the
lawsuit into yesterday's news.
In addition to remaining faithful to its central business of computer making--the notebook
PowerBook series, released in 1991, garnered a 21 percent market share in less than six months-Apple intended to ride a digital wave into the next century. The company geared itself to participate
in a revolution in the consumer electronics industry, in which products that were limited by a slow,
restrictive analog system would be replaced by faster, digital gadgets on the cutting edge of
telecommunications technology. Apple also experimented with the interweaving of sound and visuals
in the operations of its computers.
For Apple, the most pressing issue of the 1990s was not related to technology, but concerned capable
and consistent management. The company endured tortuous failures throughout much of the decade,
as one chief executive officer after another faltered miserably. Scully was forced out of his leadership
position by Apple's board of directors in 1993. His replacement, Michael Spindler, broke tradition by
licensing Apple technology to outside firms, paving the way for ill-fated Apple clones that ultimately
eroded Apple's profits. Spindler also oversaw the introduction of the Power Macintosh line in 1994,
an episode in Apple's history that typified the perception that the company had the right products but
not the right people to deliver the products to the market. Power Macintosh computers were highly
sought after, but after overestimating demand for the earlier release of its PowerBook laptops, the
company grossly underestimated demand for the Power Macintosh line. By 1995, Apple had $1
billion worth of unfilled orders, and investors took note of the embarrassing miscue. In a two-day
period, Apple's stock value plunged 15 percent.
After Spindler's much-publicized mistake of 1995, Apple's directors were ready to hand the
leadership reins to someone new. Gil Amelio, credited with spearheading the recovery of National
Semiconductor, was named chief executive officer in February 1996, beginning another notorious era
of leadership for the beleaguered Cupertino company. Amelio cut Apple's payroll by a third and
slashed operating costs, but drew a hail of criticism for his compensation package and his inability to
relate to Apple's unique corporate culture. Apple's financial losses, meanwhile, mounted, reaching
$816 million in 1996 and a staggering $1 billion in 1997. The company' stock, which had traded at
more than $70 per share in 1991, fell to $14 per share. Its market share, 16 percent in the late 1980s,
stood at less than four percent. Fortune magazine offered its analysis, referring to Apple in its March
3, 1997 issue as 'Silicon Valley's paragon of dysfunctional management.'

Amelio was ousted from the company in July 1997, but before his departure a significant deal was
concluded that brought Apple's savior to Cupertino. In December 1996, Apple paid $377 million for
NeXT, a small, $50-million-in-sales company founded and led by Steve Jobs. Concurrent with the
acquisition, Amelio hired Jobs as his special advisor, marking the return of Apple's visionary 12
years after he had left. In September 1997, two months after Amelio's exit, Apple's board of directors
named Jobs interim chief executive officer. Apple's recovery occurred during the ensuing months.
Jobs assumed his responsibilities with the same passion and understanding that had made Apple one
of the greatest success stories in business history. He immediately discontinued the licensing
agreement that spawned Apple clones. He eliminated 15 of the company's 19 products, withdrawing
Apple's involvement in making printers, scanners, portable digital assistants, and other peripherals.
From 1997 forward, Apple would focus exclusively on desktop and portable Macintoshes for
professional and consumer customers. Jobs closed plants, laid off thousands of workers, and sold
stock to rival Microsoft Corporation, receiving a cash infusion of $150 million in exchange. Apple's
organizational hierarchy underwent sweeping reorganization as well, but the most visible indication
of Jobs's return was unveiled in August 1998. Distressed by his company's lack of popular computers
that retailed for less than $2,000, Jobs tapped Apple's resources and, ten months after the project
began, unveiled the massively successful iMAC, a sleek and colorful computer that embodied
Apple's skill in design and functionality.
Because of Jobs's restorative efforts, Apple exited the 1990s as a pared-down version of its former
self, but, importantly, a profitable company once again. Annual sales, which totaled $11.5 billion in
1995, stood at $5.9 billion in 1998, from which the company recorded a profit of $309 million. In
1999, sales grew a modest 3.2 percent, but the newfound health of the company was evident in a 94
percent gain in net income, as Apple's profits swelled to $601 million. Further, Apples' stock
mustered a remarkable rebound, climbing 140 percent to $99 per share in 1999. By the decade's end,
'interim' was dropped from Jobs's corporate title, signaling Jobs's return on a permanent basis and
fueling optimism that Apple could look forward to a decade of vibrant and consistent growth.
In July 1999, Steve Jobs filled the final quadrant in the "Apple Product Matrix"--The consumer
portable--when he introduced the iBook. Based on the same principles that had made iMac such a
hot sell a year earlier, the iBook brought style to the low-end portable market. Several months later,
Jobs announced the PowerMac G4, a significant new professional desktop machine. Apple's stock
had risen all summer, and by mid-September was trading at an all-time high, in the high 70s.
In a dramatic Keynote at MacWorld Expo SF in January 2000, Jobs unveiled Apple's new Internet
strategy: a suite of mac-only internet-based applications called "iTools" and an exclusive partnership
with Earthlink as Apple's recommended ISP. Jobs also announced that he would be dropping the
"interim" from his title, becoming the permanent CEO of Apple. Apple's sales continued to rise, as
did the stock price, which had climbed to 130 by early March.
In July 2000, Apple announced a slew of new machines, including the PowerMac G4 Cube, which
added a fifth category to Apple's four-corner product strategy. The Cube was Apple's answer to those
who wanted an iMac without a monitor, as well as challenge to the computing industry to continue to

minimize the size of computers while increasing their visual appeal. The Cube was the biggest
gamble Jobs had made since the release of the iMac. It would turn out to be a resounding failure.
The second half of 2000 was rocky for Apple. Slower sales (both for Apple and the industry as a
whole), combined with a misunderstanding of the consumer market resulted in the first unprofitable
quarter in three years. One factor in this decline was the G4 Cube, which sold poorly due primarily to
its high price compared to Apple's other products. Another factor was Apple's decision to include
DVD-ROM drives in their consumer and professional machines instead of CD-RW drives. As a
result, Apple missed sales opportunities to customers who wanted to burn their own CDs. Apple
began to rectify these problems in late 2000, when it cut prices on the entire PowerMac line. Apple
took the next step in January of 2001, when it announced a new line of PowerMacs, with either CDRW drives or a new "SuperDrive" which could read and write both CDs and DVDs. Apple also
announced two new application: iDVD, a DVD-authoring program, and iTunes, which allowed users
to encode and listen to MP3 songs, and then burn them to CDs.
All this was part of Apple's new corporate strategy, developed in the face of a massive slow down in
the Technology industry: Apple would take advantage of the explosion of personal electronic
devices--CD-players, MP3 players, digital cameras, DVD-players, etc.--by building Mac-only
applications that added value to those devices. Just as iMovie had added tremendous value to Digital
Cameras, iDVD would add value to Digital Cameras and to DVD-players, and iTunes would add
value to CD and MP3 players. It was Apple's hope that making the Mac the "Digital Hub" of the new
"Digital Lifestyle" would revitalize Apple's sales and guarantee the long-term security of the
company.
In May 2001, Steve Jobs announced that Apple would be opening a number of retail stores across
America, selling not only Apple computers, but various third-party "digital lifestyle" products, such
as mp3 players, digital still and video cameras, and PDAs. Apple also announced a major update to
the iBook line, a smaller and lighter design that borrowed heavily from the PowerBook G4. In July,
Apple refreshed iMacs and G4, and "suspended production" of the G4 Cube, ending months of
speculation as to how Apple would deal with the Cube's resounding failure in the marketplace.
The Fall of 2001 brought new revisions to the PowerBook G4 and iBook lines, the latter of which
had sold extremely well during the summer. In late October, Apple announced its first non-computer
product in several years, the iPod. The iPod was a small hard-drive-based digital music player, and
represented Apple's first hardware addition to its "digital hub" strategy. At $399, the iPod faced a
similar challenge to the woeful G4 Cube: it favored style and form-factor over price. Apple was
taking another gamble by charging a premium for the iPod's superior design and small size.
In January 2002, Apple reinvented the consumer desktop, again, when it released its flat panel iMac.
It also announced iPhoto, a new software package aimed at improving the digital camera user
experience. Apple rolled through the first half of 2002, showing profits through the first two quarters.
Apple stumbled in the second half of 2002, however, largely due to macroeconomic conditions. With
fewer PC purchases being made, Apple scrambled to keep itself fresh in a shrinking marketplace. In

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June, Apple introduced its "Switchers" ad campain, which would grow to be one of the most popular
and successfull of Apple's history. Based on non-scripted monologues of real people, the Switchers
campain made the strongest case yet for Macs in a PC world.
In July 2002, Steve Jobs announced that the free iTools service would be rolled into a new
subscription-based "dotMac" service. Combined with the newly announced iCal and iSync, dotMac
was aimed at futher centralizing the Mac in the high-tech lifestyle. In January 2003, Apple released
iLife, a bundled software package that included iTunes, iPhoto, iMovie and iDVD, for $50. (all but
iDVD could be freely downloaded from Apple's site), in a play to further push the digital-hub
concept into the consumer space.
Apple's financial troubles continued throughout 2002. In October, it announced a quarterly loss of
$45 million, due to weak PowerBook and PowerMac sales. In 2003, however, Apple began to
recover, and to build for the future. In January, Apple announced two new PowerBook G4 models, a
12" model similar to existing 12" iBooks, and a giant, wide-screen 17" model, aimed squarely at the
graphic design market. Apple also announced that it would be shipping its own Web Browser, Safari,
in an apparent attempt to depend less on Microsoft for what was widely believed to be an inferior
product.
The new PowerBooks sold well, and sales of flat panel iMacs remained steady, but Apple was still in
trouble in the professional desktop market. Motorola's development and production of the G4-family
of processors continued to lag well behind Apple's expectations. It appeared that the G4 processor
had hit a dead end. Apple worked to remedy the situation by developing a new processor with IBM,
and in June 2003 came to fruition with the release of the PowerMac G5. The G5 chip, based on
IBM's Power4 chip, was a 64-bit processor, meaning it could address more memory and process
larger numbers than its 32-bit G4 cousin. The PowerMac G5 represented a hugh shift for Apple, who
redesigned the motherboard and case from scratch. Unlike the PowerMac G4, which was based
strongly on existing G3 hardware, the G5 was all new, and fast. Though supplies were constrained,
the G5 sold well and did much to improve Apple's bottom line.
Meanwhile, the iPod was beginning to take off. In April of 2003, Apple unveiled the iTunes Music
Store, which would sell individual songs through the iTunes application, for 99 cents each. These
songs could be played only on Macs or iPods, but Apple felt that by offering an easy to use, nononsense music service, it could make significant inroads to the digital music market. Apple did their
homework: when announced, the iTunes Music Store already had the backing of the five major
record labels, and a catalog of more than 200,000 songs.
In October 2003, Apple released iTunes for Windows. While the iPod had been available for
Windows for some time, it had used third-party software which failed to provide the unique user
experience that iTunes/iPod integration allowed. With the release of a stable, user-friendly Windows
version of iTunes, which included both iPod and Music Store integration, Apple was poised to take
the digital music industry by storm. Apple cemented its position with the January 2004 release of the
iPod mini, which while smaller in capacity than the original iPod, was smaller than many cellphones.

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In the first year alone, the iTunes Music Store sold more than 70 million songs, and by July this
number had increased to more than 100 million. The iTunes Music Store had a 70% market share
among all legal online music download services. iPods had moved from expensive toys to must-have
Christmas presents, and Apple found itself in the position of having a monopoly for the first time in
several decades.
Principal Subsidiaries: Apple Computer, Inc. Limited (Ireland); Apple Computer Limited (Ireland);
Apple Computer U.K. Limited (U.K.); Apple Computer International (Ireland); FileMaker Inc.;
Apple Japan, LLC; Apple Computer B.V. (Netherlands); A C Real Properties, Inc.

Principal Competitors: Compaq Computer Corporation; Dell Computer Corporation; International

Business Machines Corporation; Microsoft Corporation; Sun Microsystems, Inc.

Vision Statement (proposed)

To become the world wide leader in computer and mp3 player sales.
Mission Statement (actual)
Apple ignited the personal computer revolution in the 1970s with the
Apple II and reinvented the personal computer in the 1980s with the
Macintosh. Apple is committed to bringing the best personal
computing experience to students, educators, creative professionals
and consumers around the world through its innovative hardware,
software and Internet offerings.
Mission Statement (Proposed)
The Apple commitment to excellence is its mission to provide
computers and service (2) for people (1) that meet the highest
standards of value and reliability. Apple is one of leaders in the
computer industry and makes the best-selling computers in the
world (7) (3). Apple provides the highest level of quality and value
for our customers. Those are timeless fundamentals. We also apply
innovative technology to our core business (4) to differentiate
ourselves and make our products irresistible to our customers,
beneficial to society, and profitable to our company (5). We strive to
provide additional opportunities for growth and enrichment of

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company personnel while maintaining a work environment for all

employees (9) that encourages personal commitment and
participation in support of achieving excellence. We are committed
to being a good corporate citizen, and being openly honest with all
of our stakeholders (6). We support activities that help to build
common understanding, enhance excellence, and enable people to
improve their lives and reinforce their commitment to society (8).

MARKETING OBJECTIVES OF APPLE..

Marketing Objectives :
The various marketing objectives that will assist in the achievement in the overall product goal are:
To be the leading supplier of MP3 players in all markets in which the company operates
Increase in sales by 20%
Increase in revenue by 20%
Progressively increase market share by at least 15% within the year.
Expanding distribution to department stores by 10%
Increasing brand awareness to 60% of potential customers
To expand existing markets by 10% in the next quarter. A promotion campaign will be introduced
to encourage present buyer to increase the use of the product.

APPLE PRODUCTS.

13

iPadFrom $499

14

iPhoneFrom $49

iPod shuffleJust $49

iPod classicJust $249

iPod nanoFrom $149

iMacFrom $1199
Apple has been so successful in these last years thanks to his fresh, imaginative way to think and do
its business: a winning combination of exceptional products, great style and design, great strategy,
innovative marketing, sleek and enticing communications.
Apple owes its overwhelming success in the last years to the iPhone and to the smart iPod and
iTunes product combination, a combination of a great hardware piece with great style, great
software, great performance, user friendly interface, with a good e-business service. The iPod +
iTunes halo effect and new great Mac computers and Mac OS software did the rest in increasing
Apple revenue stream.
In the 5 years between 2003 to 2008 the Apple share value increased 25 times, from $7.5 to $180 per
share. At july 2008 prices, before the US Financial Crisis, Apple stock market capitalization was

15

$160 billion.
In January 2010 Apple shares topped the $210 mark.
But even the best companies with the best products have bottleneck factors which often avoid full
exploitation of the opportunities.

The iPad.
The new Apple Tablet, the iPad - an unnecessary product? iPad Marketing Strategy
Steve Jobs claims the iPad gives the best way to experience the web.
Yet, the iPad does not have Flash Player, Flash is essential on the web and is used everywhere.
Surfing the Web without Flash gives you big empty boxes in the middle of a page. Video on the web
is mostly implemented in Flash. No Flash, no video.
So, what Steve Jobs says is untrue. Actually the iPad gives one of the worst web experiences you can
imagine.
Besides, the iPad does not have USB ports.

The iPod.
Few people are aware - and few market analysts too - that for the first 3 years the iPod was an
absolute flop. The iPod was launched in october 2001, and between 2001 and 2004 iPod sales were
between 100-200 thousand units per quarter, very far from today's 10-20 million units per quarter,
and the iPod sales were not even covering the product research & development costs.
Then, in June-Aug 2004 something happened, and iPod sales began to grow strongly, quarter after
quarter. Today, we all know where the iPod stands, and what a remarkable success it is.
The iPod made the fortune of Apple, and it stands out as the major turning point in the company
growth.
Few people know that the iPod + iTunes business idea was not conceived inside Apple, but was
proposed to Apple by an outside source, a music lover and Engineer named Tony Fadell.
More on Tony Fadell and on the iPod marketing on iPod Marketing Strategy
The iPod marks another outstanding result in marketing:
the annihilation of competitors. To know more see the analysis on
The iPod competitors
It should be noted that, since the second generation of iPods in 2002, the iPods were made

16

compatible not only with the Mac operating systems but with Microsoft Windows operating systems
as well.
We should ask ourselves (and to Steve Jobs): how many iPods would have been sold if the iPods
would had been compatible only with Mac operating systems?
Where the iPod is manufactured and assembled

The iPhone.
The pipeline of new products which came out from Apple in the last years is impressive, and
overwhelming. In 2007, with the successful launch of the iPhone, Apple has marked another
milestone in its development and growth.
And moreover, the iPhone enters a market - the market of mobile phones - a market which is mature,
and saturated. Nonetheless, Apple has been able to develop a revolutionary product, and to change
the paradigm in the mobile phone market.
The iPhone is 5 years ahead of all its competitors. A wonderful product, amazing user interface, great
design. It is not only a mobile phone, it is a product between a mobile phone and a laptop computer.
Even calling it a smartphone is not enough.
In July 2008 Apple launched the second generation iPhone, the iPhone 3G.

The iPhone 3GS.

In June 2009 Apple launched its third generation iPhone: the iPhone 3GS.
The iPhone 3GS has a 3 megapixel autofocus camera, video recording and editing capabilities, voice
control, longer battery life, 7.2 Mbps HSDPA internet connection. iPhone 3GS is twice faster than
the iPhone 3G. The iPhone 3GS prices: $199 for the 16GB model, $299 for the 32GB model.
more on the new iPhone 3GS on the iPhone 3GS page.
More on iPhone Marketing on the iPhone Marketing Strategy page.

Apple did great. no doubt. However Apple has done some serious mistakes.
The most serious mistakes Apple has done concern marketing and distribution strategies in Europe.
Apple has overlooked the European markets, and missing big numbers in unexploited sales. With
better marketing strategy, better communication and distribution, Apple could have made 300% more
revenues in Europe in the last 4 years. Apple Marketing in Europe
We met with with Erik Stannow, Apple Vice President of Marketing for Europe & EMEA. We have
been talking with Erik Stannow about the marketing and distribution issues of Apple in the European

17

markets and we gave some valuable suggestions to improve the Apple marketing strategy and
distribution in Europe.
Well, it seems that in Cupertino they don't care so much about Europe.

ADVANTAGES AND DISADVANTAGES OF APPLE

PRODUCTS..
MAC..
Advantages:
Easy to use
Virus free
With boot camp you can run XP or Vista on your machine, and with Parallels you can run windows
programs in OS X
Disadvantages:
Small software base compared to Windows (without using bootcamp/parallels)
Not nearly as customizable
Missing some features that are pretty basic with Windows( my biggest hate is no page up/down key,
no real backspace key, and you have to use the control key to right click)
Any more I would say that about any operating system you pick will work, I still prefer Windows Xp
over everything, but Linux, OS X, and Windows are all great choices.
I POD..
Its a fact like no other- iPod has catapulted Apple into unbelievable fame and fortune, but are iPods
really that fabulous and everything Apple would like us to believe? Is always important to give due
consideration to iPod Advantages and disadvantages before you jump into an actual investment. At
first glance, the iPods appearance is dashing and the sound of high quality. Question is however, is it
really the best-looking mp3 player available? Well, the answer will depend entirely upon your
individual taste. The other question you should ask yourself is- is it the best sounding one? Mmm!!
the answer will also depend on what your standards of quality are. One thing thats sure is with
competitors out there like Sony and Creative, you really have to pull up your socks and ensure you
have excellent sound quality ratings when compared to the competition, which have been in the
sound business for years. Is this another one of Apples gimmicks? Have a look at my list of iPod
advantages and disadvantages and judge for yourself
Program access- The addition of the iTunes program is a great feature, there is not two ways about
that. There is however also a disadvantage to iTunes and it comes in the form of being the only way
to interact with iPod. Other mp3 players are easily accessed directly from your computers My
Computer folder, just as if you were accessing your flash, C or D drives. This fact alones makes
iPod extremely limited in terms of what it can do. This also makes the use of Apple an essential
intermediary for media transferring to and from their product.

18

Only play iTunes purchases- The greatest disadvantage to Apple iPods is most probably its FairPlay
DRM protection. The program only allows songs purchased trough iTunes to be played on the
device, or on a specific computer if purchase of the songs were made from a computer. Should you
decide to invest in another brand mp3 player, all your iTune-purchased songs will be unplayable and
thus of absolute no value. Its just Apples way of keeping you loyal to their product. If any other
large technology company tried this stunt, it would get trashed and probably crucified by public
opinion.
iTunes incompatibility with other mp3 player software- Prefer to use Windows Media Player or
Winamp? Well, its a fact they are a lot quicker and less tiring than iTunes! Unfortunately you cant!
FairPlay DRM protection on downloaded songs only allows for songs to be played in iTunes or on
your iPod.
Non-replaceable battery- Your iPod purchase comes standard with a non-replaceable battery in other
words an internal rechargeable battery. As we all know- rechargeable batteries do not last forever;
eventually they will stop holding their charge and should your iPod still be under warranty you have
the option to send it to Apple. This will result in you receiving a refurbished iPod with the possibility
of not being your, if you are out of warranty, you can just through your US Dollar 300 iPod into the
garbage can. Replacement by Apple for an additional US Dollars 100 is another option you have but
that is probably what your second-hand iPod will be worth by the time the batterys fully charged. Its
also important to not that should the battery get depleted you cant spare change it, this should be
kept in mind if functionality is essential for long periods of time.
No FM radio function- There are tons of MP3 players that have FM radio functionality with option
to save radio recordings in mp3 format, but not Apple ipod! A separate adaptor need to be purchased
for this feature and to top it all, the adapter will only work with newer iPod versions and will not
allow records.
No storage space- Urgently need to store information but dont have a flash drive or a blank CD with
you? Chances are very good that you most likely have your mp3 player. IPod has absolutely no
storage space for an emergency transfer of media youve created for example in MS Word. Again,
iTunes interaction with the iPod, is to blame for this.
No voice recording function- Have an unexpected voice recording? Many mp3 players will be able
to assist in an instant, iPod unfortunately not.
No WMA format playback- WMA is a fantastic playback format that gives companies the capability
of using DRM and producing files a lot smaller than mp3 format. Its mainly for these reasons that
WMA is the preferred choice for ebook publishers. IPod has however chosen to ignore its existence.
WMA conversion is a possibility but can be an immense hassle if you have an extensive music
collection, to convert each and every song.
Expense- In general iPods are more expensive when compared to other mp3 players that offer a lot
more value for your money in terms of function, quality and overall appearance. By just giving
consideration to all the reasons previously stated, you will agree with me that iPods has way more
disadvantages than advantages. You will just be paying for the Apple name, and getting less.
Health concerns- iPod also comes with a couple of health concerns. A study recently showed that
iPods can potentially interfere with pacemakers resulting in malfunctions when placed near the heart
monitoring device. Is actually scary to think that an iPod could pose a risk to your health. In all
fairness however, no other player have probably been tested for this and might have same effect.
IPods selection may have been biased for the study due to its extreme popularity. Wait just a second
before you start sending me hate mail, its important to bear in mind that Ive mainly given
consideration to iPods disadvantages and not its advantages. I am sure there are tons of positive
19

aspects about iPod including battery charge duration and its incredible selection of accessories.
When compared to other mp3s players, iPod most certainly has more accessories than any other
mp3 players on the market.

IPHONE..
iPhone Advantages.
Brand Elevation. The iPhone home page establishes one central on-device portal for accessing all of
Apples rich content and standalone widgets. By establishing a consistent look-and-feel across all of
the iPhone widgets, Apple elevates its brand. No matter which widget they use, users get the same
user experience, navigation, and look and feel. The on-device portal approach enables Apple to
own the end-to-end user experience on the phone.
Fewer Keystrokes. By letting users drag-and-drop-and-touch, Apple eliminated as many keystrokes
as possible to discover and access rich content. This, I believe, is a smart move, considering a simple
music download from a carrier portal can take 18 to 39 clicks to execute. Thats a huge usability
hindrance as most people abandon such activities after six clicks.
To further ease data entry, iPhone widgets also connect with the Personal Information Manager
(PIM) software on the phone. This enables users to quickly email or text content to a friend. They
can grab addresses from their contacts and use them inside widgets to reduce data entry a key
feature of any on-device portal application.
Requests Remembered. The iPhone also remembers recent requests. Search for stocks using the
stock widget, and the requests will be stored, eliminating the need to reenter the same information
later. Similarly, by offering personalization features in the widgets, Apple prevents repeat data entry.
Encourage Action. When the iPhone displays content, an action bar at the bottom of the screen
provides further options for using the content. (e.g., find an address for a restaurant, then map doorto-door directions to the restaurant, then get current traffic conditions.) Okay, maybe its not called
an action bar thats what we call ours but its cool. Nice job Apple!
Multimedia Content. iPhone will offer music, streaming video, podcasts, movies, YouTube, and
more. Nobody does multimedia better than Apple, and dedicated applications are the best way to
deliver these services.
iPhone Mobile Gotchas
Despite its engineering and design capabilities, Apple still needs to address a number of key issues:
Cellular Internet Trap. Sure, the Safari mobile browser may be the best mobile browser ever. But
unless users are near a WiFi hotspot, Safari doesnt solve the fundamental problem facing Apple
and everyone else namely, every click is a connection over the cellular Internet. Worse, the iPhone
uses AT&Ts slower EDGE network rather than a 3G network. While the slow speeds are not Apples

20

fault, they reflect poorly on Apples brand making the quick-click widgets an even more important
part of the iPhone experience.
Keypad Data Entry. Apples gone out of its way to simplify data entry, but users browsing the Web
on an iPhone will still wind up tapping in URLs on the touch screen keypad. Related concerns are
the screens user-friendliness and scratch resistance. Touch screens have, historically, proved to be
good in concept but often flawed in execution.
Limited Widget Integration. Beyond its PIM integration, widget integration on the iPhone is limited.
For example, after looking up a citys weather in the weather widget, that city should appear for
mapping in the map widget. It should, but it doesnt. Similarly, the widgets could be beefed up with
more offline content options, letting consumers narrow down their search criteria offline rather than
connecting to the network every step of the way.
Third-Party Apathy? Apple may limit third-party developers to building browser-based applications.
Why not offer a Software Development Kit, or SDK, and encourage third parties to contribute to the
users experience? Obviously, Apple has been paying attention to third-party developers to see what
was and wasnt working in mobile. Shutting them out now is clearly a mistake.

I PAD..
It was impressive the expectation that Apple has lifted the world with its new iPad. Furthermore, I
believe that neither the iPhone was so often the day of submission. Something perfect, helpful and
necessary. It's like its creators describe the iPad.
And being a bit subjective, I think undoubtedly it's the most beautiful electronic device ever created
so far. Its design, finish, materials used, the taste of Apple in creating a product is undisputed, but
like everything else, find a face that subtracts a few points to this Tablet.
Today we see the advantages and disadvantages that this product offers:
The iPad combines each and every one of the most common tasks in regard to digital entertainment:
it can play videos, photos, allows us to access and view changes in social networks, read eBooks,
throwing million applications, games, play music, keep up to date our agenda, make notes, access to
Google maps and many more things that very few devices offer, and best of all is that the same taste
and style used in the product, apply it to each of these tasks.
It is lightweight, compact and offers a unique work flow. Its 9.7 inches screen is ideal for these tasks,
although some aspects are not as interesting. So we found some points that may create some
reluctance on the consumer, is that the lack of USB ports to connect external devices or a Web
camera that allows us to make video calls, have questioned the iPad.
Among the drawbacks that have created more excitement in the network, find the iPad
incompatibility with the Flash platform, which means that accessing web pages with these elements,
we find a physical vacuum in each of the regions containing these elements.

21

And if there is to be objective, we refer also to the lack of a multitasking environment, because being
a leisure device and media player, not the simple inability to play music while surfing the Internet, is
worthy of having her very account before considering purchasing the product.

APPLES PHILOSOPHY AND METHODOLOGY..

What makes Apple golden!!

The creator of the iPod and iPhone sets a dazzling new standard for innovation and mass
appeal, driven by an obsessive CEO who wants his products to be practically perfect in
every way.
By Betsy Morris, senior editor

Full list

NEW YORK (Fortune) -- The mass market is supposed to be dead, but you would never know it from
Apple. In February the iTunes Store became the second-largest music retailer in the U.S., right behind
Wal-Mart. The iPod is to music players what Kleenex is to tissue or Xerox is to copiers. Almost
everything Apple makes transcends gender, geography, age, and race. An Apple Store is a demographic
melting pot, with computer games for kids and a Genius Bar for their parents and so much cool stuff to
touch that it's a magnet for teens and twentysomethings.
Apple scoffs at the notion of a target market. It doesn't even conduct focus groups. "You can't ask people
what they want if it's around the next corner," says Steve Jobs, Apple's CEO and cofounder. At Apple
(AAPL, Fortune 500), new-product development starts in the gut and gets hatched in rolling
conversations that go something like this: What do we hate? (Our cellphones.) What do we have the
technology to make? (A cellphone with a Mac inside.) What would we like to own? (You guessed it, an
iPhone.) "One of the keys to Apple is that we build products that really turn us on," says Jobs.
With that simple formula, Apple not only has upstaged the likes of Microsoft (MSFT, Fortune 500) but
has set the gold standard for corporate America with an entirely new business model: creating a brand,
morphing it, and reincarnating it to thrive in a disruptive age. Now, just seven years after it unveiled the
first iPod, fully half of Apple's revenues come from music and iPods. Interest in the iPod and iPhone has
rubbed off on the Mac, whose sales growth outpaces the industry's. Apple has demonstrated how to
create real, breathtaking growth by dreaming up products so new and ingenious that they have upended

22

one industry after another: consumer electronics, the record industry, the movie industry, video and
music production.
In the process the company that ranks as the new No. 1 among America's Most Admired Companies has
become a roaring financial success. In the five years ended last September, sales tripled to $24 billion
and profits surged to $3.5 billion, up from $42 million. While Apple's stock is slumping along with the
market, tumbling 40% this year on worries about less-than-stratospheric sales growth, it doesn't usually
stay down for long. Apple ranks No. 1 among Fortune 500 companies for total return to shareholders
over both the past five years (94%) and the past ten (51%).
The decade coincides exactly with the return of Jobs as Apple's maestro, bringing his particular mix of
genius and obsession, as well as a tendency to play by his own rules. His utter dedication to discovery
and excellence has created a culture that has made Apple a symbol of innovation. You won't find that
word on a placard or a piece of propaganda at One Infinite Loop, Apple's headquarters in Cupertino,
Calif. There innovation is a way of life. But it isn't like creating new variations on Crest toothpaste. At
Apple, every endeavor is a moon shot. Sometimes the company misses, but the successes are huge.
Apple's goal for iPhone sales this year is ten million units, up from 3.7 million during its six months on
sale in 2007.
Apple requires a special kind of workforce. The place is divided by product but also by function along
what COO Tim Cook calls "very faint lines." Collaboration is key. So is a degree of perfectionism. Apple
hires people who are never satisfied. A designer has to be a borderline fanatic to care about the curve of
a screw on the underside of a MacBook Air or the apparent weightlessness of the tiny door that hides its
connectors. You don't get a foot in the door here unless your eyes light up when you talk about your Mac.
(Head designer Jonathan Ive referred to a new MacBook Air as "this guy" as he pointed out features in a
recent interview.) The place is loaded with engineers, but it's not just the skills that are important, it's the
ability to emote. ("Emotive" is a big word here.) The passion is what provides the push to overcome
design and engineering obstacles, to bring projects in on time -- and a peer pressure so great it
sometimes causes a team to eject a weak link or revolt against an underperforming boss. "Apple," says
Cook, "is not for the faint of heart."
Here there is no such thing as hedging your bets. "One traditional management philosophy that's taught
in many business schools is diversification. Well, that's not us," says Cook. "We are the anti-business
school." Apple's philosophy goes like this: Too many companies spread themselves thin, making a
profusion of products to defuse risk, so they get mired in the mediocre. Apple's approach is to put every
resource it has behind just a few products and make them exceedingly well. Apple is brutal about culling
past hits: The company dropped its most popular iPod, the Mini, on the day it introduced the Nano (a
better product, higher marginswhy dilute your resources?).
Apple might look like a high-wire act. But while success is never guaranteed, it's not random either.
Ownership of its operating system gives Apple an unusual degree of control over its ability to design,
change, and adapt. That allows Apple to follow the product - with no preconceptions about where it will
end up. The iPod has evolved from a device the size of a deck of cards to a Nano to a Shuffle and now
to a Touch. The Touch, says Cook, "has another roadmap in front of it" if it becomes, as he predicts, the
first mainstream Wi-Fi mobile device.

23

"Apple's DNA has always been to try to democratize technology," says Jobs, in the belief that if you
make something "really great, then everybody will want to use it." Who would have thought that a cult
brand like Apple would be resuscitating a mass market? Jobs and his true believers have proved that if
you're bold enough to build it, they will come.

Apple Computer Inc. AND THE TWO: Global Gap Analysis And Labor Productivity
Benchmarks Published
SAN DIEGO, CA -- ICON Group International Ltd. today released two of the most comprehensive
studies to date on vertical gap analysis and labor productivity benchmarks for Apple Computer Inc.
(NAS: AAPL).
The methodologist for this unique study is Philip Parker, Eli Lilly Chair Professor of Innovation,
Business and Society at INSEAD (Fontainebleau, France and Singapore). According to Professor
Parker We created these reports in response to two inescapable trends: a return to fundamentals and
globalization. The goal of these reports is to assist consultants, financial managers, strategic
planners, and corporate officers in gauging indicators of Apple Computer Inc.s financial and human
resource structure.
The Report has benchmarked Apple Computer Inc. against competing firms in the Electronic
Computers industry worldwidegoing beyond traditional methods of company benchmarking. The
results are two specialized reports: (1) global financial benchmarks using common-size statement
ratios (vertical analysis), and (2) labor-productivity and utilization measures collected across borders.
Parker notes, With the globalization of markets, greater foreign competition, and the reduction of
barriers to entry, it becomes all the more important to benchmark a companys financial indicators on
a worldwide basis.
Professor Parker states, "We are intrigued by the wide variations in basic financial and productivity
measures between Apple Computer Inc. and other Electronic Computerscompanies. The Earnings
Before Interest And Taxes (EBIT), for example, varied from -2.79 to 20.67. We see this type of
variation in the hundreds of ratios that we estimate.
What? : The Coverage of the Reports:
Two reports, financial ratios and labor productivity ratios, are available for Apple Computer Inc..
Each report reveals productivity and industry ranks for companies in the Electronic
Computersindustry. Reports for 24 of Apple Computer Inc.s competitors in Electronic Computersare
also available including:
Apple Computer Inc.
Compal Electronics Inc.
Dell Computer Corporation
D-Link Corporation
Ergodata SA
First International Computer Inc.
Fujitsu Limited
Gateway Incorporated
GVC Corporation
Hewlett-Packard Company
Interland, Inc.
24

Japan Digital Laboratory Co., Ltd.

Kontron embedded computers AG
Lintec Computer AG
Maxdata AG
Microtek International Inc.
Mitac International Corporation
NCR Japan, Ltd.
Onex Corpn
OPTIMUS SA
Psion Plc
Quanta Computer, Inc.
Sun Microsystems Incorporated
Synnex Technology Internationsl Corporation
The reports answer such questions as: How has Apple Computer Inc.s asset structure varied
compared to global benchmarks for the Electronic Computersindustry? Does it generally hold more
cash and other short-term assets, or does it tend to concentrate its assets in physical plant and
equipment? On the liability side, does Apple Computer Inc. typically have a higher percent of
payables compared to the benchmarks, or does it hold a higher concentration of long-term debt?
Does Apple Computer Inc. have a relatively higher cost of goods sold, operating costs, or income
taxes compared to global benchmarks? Have Apple Computer Inc.s returns on equity been higher or
its profit margins greater? What has been the ratio of short-term and long-term assets to employee?
What are typical capital-labor ratios? What are the average sales and net profits per employee
compared to global benchmarks?

APPLES FUTURE PLANS AND PRODUCTS.

25

Apple Future Products: What Comes After The iPad

Recently Apple unveiled iPad. Same design like iphone. It is believed that Mr Genius Steve Jobs is
expected to launch the next iBoard in 2012 and iMate in 2014.
Apple reveals future plans at the Macworld
Conference and Expo 2009. Here's where Apple
is likely headed.
- It is going to the movies, likely announcing
Tuesday the addition of movies for rent at its
online iTunes Store for $3.99 apiece for 24
hours, the common window Hollywood has
imposed on other digital movie rental services.
Apple has reportedly secured deals with 20th
Century Fox and Disney studios, and may be
close to signing deals with Warner Bros. and
Paramount.
The movie rental component on iTunes and a
product upgrade are expected to also boost the
anemic sales of Apple TV, the set-top box
launched at last year's Macworld that delivers
video and other multimedia content from your
PC to a television. Munster estimates about 1.8
million Apple TV devices were sold through
2007 and expects another 2.9 million units
to ship this year.
- It's going on a diet. A prevailing theory is that
Jobs will unveil an ultra-portable notebook,
weighing somewhere between 2 and 4 pounds,
that would fill a hole in Apple's computer
lineup. American Technology Research analyst
Shaw Wu predicts the slim "MacBook Mini"
could be priced at $1,500 to $2,000 and could feature a flash memory drive instead of a standard
hard drive to reduce the weight, boost battery life, and make it more rugged and reliable.
Apple revealed that after the success of i phone in 2008 it is planning to launch iPad in
2010,followed by i board in 2012 and i Mat in 2014.

26

APPLES MARKET SHARE..

27

They are not dramatic changes, but they are steady and heartening to the Apple universe of users and
developers. The trend continues from December numbers, and for Apple, all the trends are good.
Net Applications, a company that tracks operating system and market share by looking at results
from search engines, reports that Apple has a 9.93% share of OS users for January of 2009, up from
9.63% the previous month. Windows OS market share measured 88.26% in January, dropping
slightly from 88.7% in December.
If you add in iPhone users (0.48%) to the Mac OS X data, the Apple market share is 10.41%, which
again, is higher that last month.
Browser shares are also an interesting data point. Net Applications says Microsoft's Internet
Explorer has the lowest market share since they began tracking browsers in 2005. IE users now
comprise 67.6% of the browsers online. In the last 12 months, IE has dropped about 8%.
For the third month in a row, Mozilla's Firefox, Apple's Safari, and Google Chrome all gained market
share at the expense of Microsoft. Safari's share of 8.3% is a record for Apple.
These numbers continue to be good news for Apple, a company trying to buck a nasty recession
along with the rest of the industry.

This report shows Apples U.S. market share in fourth place among computer manufactures at
7.4%, down slightly from 8.0% in Q4 of 2008. Its difficult to compare the busy holiday (Q4) quarter
next to the slower post-holiday quarter (Q1) so for better comparison the first quarter of 2008 had
Apple holding 7.5% of the U.S. market share, again comparing that to Q1 of 2008.

28

Apples U.S. computer shipments declined 1.1% compared to the year-ago quarter. This is higher
than the overall U.S. industry decline of 0.3%.It is believed that the entire computer industry
performed better than expected due to the serge in popularity of the net book market. This is a wedge
of the computer market that Apple has no showing, thus may be a reason for the decline in market
share.

Experts also goes on to say that the average selling price of computers sold in Q1 of 2009 may have
dropped as much as 20%, again due the decrease in sales of other more expensive machines, but the
increase sales of the relatively inexpensive net books. Although Apples market share has slipped, its
gross revenue and profits appear as if they are going to be largely unaffected.
Im not going to lie, this sounds about right. Companies are losing money because of the economic
climate, and Apple is, at least according to this data, losing money by not being in the net book
arena. That said, they also believe the reason (or at least one of them) for the popularity of the net
book is the economic crisis.

29

30

31

APPLES SALES FORECAST FOR 2001-2009

Yearly Results
2001

2002

2003

2004

2005

sales - all segments

$5.373 billion

$5.742 billion

$6.207 billion

$8.279 billion $13.93 billion

profit (loss) - all segments

($25 million)

$65 million

$69 million

$266 million

sales - Retail segment

$19 million

$283 million

$621 million

$1.185 billion $2.350 billion

profit (loss) - Retail segment not reported

($22 million)

($5 million)

$39 million

$151 million

total store visitors

2.25 million

13.9 million

25.2 million

50.7 million

13

25

21

38

$92 million

$100 million

$132 million

retail lease square-feet

660,000 s.f.

902,000 s.f.

Retail manufacturing profit #

$213 million

$435 million

stores during year *

27

capital expenditures - retail

2006

2007

2008

$1.328 billion

2009

sales - all segments

$19.31 billion

$24.0 billion

$32.47billion

$36.537 billion

profit (loss) - all segments

$ 1.989 billion

$3.496 billion

$4.84 billion

$5.704 billion

sales - Retail segment

$3.359 billion

$4.115 billion

$6.31 billion

$6.577 billion

profit (loss) - Retail segment $198 million

$573 million

$1.33 billion

$1.392

total store visitors

81.1 million

102.4 million

146.8 million

170.3 million

stores during year *

41

32

54

26

capital expenditures - retail

$200 million

$294 million

$389 million

retail lease square-feet

Retail manufacturing profit # $663 million

# the excess of the Retail segments cost of sales over the Companys standard cost of sales for products sold through the
Retail
Segment. Reporting of this figure stopped with the 3rd quarter of fiscal 2007, and the revenue was added to the overall
profit/loss figure.

32

33

34

35

APPLES DISTRIBUTION POLICY..

If you build it, will they come? When they come, will it be in stock?
Apple (AAPL) resellers have said that the computer maker's distribution system improved during its
fiscal first quarter, helping them meet strong demand for the company's new
PowerPC 750 series and boosting Apple's sales into the channel and profitability.
In a move that surprised Wall Street, Apple yesterday announced that it expected to
post a profit of $45 million for the fiscal first quarter that ended in December.
Analysts expected the troubled computer maker to post a loss for the quarter, and the latest news
marks the first time the company has posted a profit since its 1996 fiscal fourth quarter.
Apple pointed to its cost-cutting initiatives and to demand for its new 750, or G3 series, as major
contributors to its anticipated profitability. Unlike the last time Apple posted a profit--in part due to
stuffing the channel with computers, a move that the company paid for in the following quarter-resellers say the G3s are flying off the shelves.
"Historically, Apple would come out with a computer and you would order 50, but only get five,"
said Ken McNeill, chief executive of reseller Club Mac. "But this time they had clear lines of
distribution. When you wanted more, they had more."
Under Apple's recent changes to its distribution system, Mac Center last month began buying its
computers directly from Apple, rather than from a distributor.
"Now that we deal with Apple, we get our products much faster," said Mac Centers Carol Frame.
Mac resellers, along with Creative Computers, the company that operates Mac Mall, all report strong
sales of the G3 products.
"Demand for the G3s is brisk," said Dan DeVries, executive vice president of marketing and
purchasing for Creative.
36

Club Mac generated $5.5 million in Apple sales in December, of which 40 percent came from the G3
computers, McNeill said. Frame noted that Mac Center sold about 75 percent more G3 computers
than expected during the last 45 days.
Apple declined to discuss its distribution into the channel pending the formal release of its firstquarter results on January 14.
Although the latest events bode well for the Apple, analysts are taking a wait-and-see approach.
Eight analysts today reconfirmed their "hold" ratings on the company, and one upped the rating to a
"weak buy" from "hold," said Chuck Hill, a spokesman for First Call.
Earnings estimates, which stood at a loss of 6 cents for the quarter before Apple's preliminary
announcement yesterday, were upped to an average of 35 cents based on seven analysts who changed
their estimates today. Apples rosy profitability picture is being helped by the fact that the G3, like
any new product, carries a higher price tag and fatter profit margin than older products.

APPLES DISTRIBUTION STRUCTURE

37

APPLES MARKETING STRATEGY

38

iPad Marketing Strategy.

At Vertygo Team we feel quite puzzled.
The iPad, the new Tablet from Apple seems like an unnecessary product.

Basically the iPad looks like a bigger iPhone, an iPhone with just a bigger display. Actually, the iPad display is
a lot smaller than the device physical dimensions, there is a fairly thick black border around each side.

It's a bulky device compared to an iPhone, of course it doesn't fit in your pocket, it is less functional and has
far less features than a netbook or a laptop computer.

What shall be the iPad marketing strategy? we bet it will follow the marketing strategy that Apple used for the
iPhone and for the iPod Touch.
At first, Apple will market the product only in the US, after 3-4 months they will market the iPad in other
countries.
After 6 months, Apple will make a price rebate. At launch the basic 16GB iPad price is $499 and does not
have 3G connectivity. The top of the range, the 64GB iPad with 3G connectivity is priced at $829.

We bet that, after 6 months from launch, Apple will sell the 64GB iPad with 3G connectivity at $499, (a $330
rebate) and the 32GB iPad with 3G connectivity at $399 (again, a $330 rebate).
Early adopters shall be thankful to Apple, once again.

We await Apple marketing executives comments on this, we promise we shall publish them on our website.

iPad Features

Apple is proposing the iPad as a mobile device to read e-books, browse the web, write and receive emails,
view movies and photos on a screen that is 30% smaller than the screen of a laptop and weighs 700 grams.
The iPad is touch screen operated - similarly to the iPhone and the iPod Touch - and has a virtual keyboard,
obviously larger than the iPhone virtual keyboard.

In detail, the iPad features a 9.7" display with 1024x768 resolution, has WiFi connectivity, is 1.3 cm thick (half

39

inch), has a total 24x19 cm size (9.5x7.5 inches) and weighs 700 grams (1.5 pounds).
Apple claims the battery lasts 10 hours. Some models will also have 3G connectivity, and will be sold at a
$130 higher price.

Steve Jobs claims the iPad gives the best way to experience the web.
Yet, the iPad does not have Flash Player, Flash is essential on the web and is used everywhere. Surfing the
Web without Flash gives you big empty boxes in the middle of a page. Video on the web is mostly
implemented in Flash. No Flash, no video.
So, what Steve Jobs says is untrue. Actually the iPad gives one of the worst web experiences you can
imagine.
Besides, the iPad does not have USB ports and does not have a camera.

We do not know where Apple is going to go with this product.

The iPad doesn't look neither impressive, nor revolutionary.

And the name too - iPad - is terrible.

Frankly, we are disappointed.

iPad Pricing

The iPad is priced starting from $499 for 16GB storage to $829 for 64GB storage and 3G connectivity.
The iPad will be on the US market by march 2010 and in the worldwide markets by june-july 2010.
Specifically, the iPad retail price will be $499 for the 16GB model, $599 for the 32GB model, $699 for the
64GB model. The Wi-Fi + 3G models of iPad will be available in April in the US and selected countries for a
suggested retail price of $629 for the 16GB model, $729 for the 32GB model and $829 for the 64GB model.
The iPad will be sold in the US through the Apple Stores.
iPod Marketing Strategy.
Everybody knows how successful the iPod has been in the last 5 years, and how it turned the fortunes of
Apple.

250 million iPods have been sold worldwide until December 2009.

40

In March 2003 the Apple share value was $7, in July 2008 the Apple share value was $180. In the years
between 2003 to 2008 the Apple share value increased a spectacular 2500%.

There is no doubt that the iPod has been the main driver in the Apple huge success in the years between
2004 to 2008.

The iPod Launch in 2001. An Absolute Flop.

Few people however are aware - and few market analysts too - that for the first 3 years the iPod was an
absolute flop. The iPod was originally launched in october 2001, and between 2001 and 2004 iPod sales were
between 100-200 thousand units per quarter, very far from today's 10-20 million units per quarter, and the
iPod sales were not even covering the product research & development costs.
Then, in June-Aug 2004 something happened, and iPod sales began to grow strongly, quarter after quarter.
Today, we all know where the iPod stands, and what a remarkable success it is.

The iPod made the fortune of Apple, and it stands out as the major turning point in the company growth.

Why the iPod initially was a flop? Probably it was a product ahead of its time. One factor certainly was that
internet connections were very slow in 2001. Broadband was very rare both in the US and Europe. Apple
probably also did mistakes in the original Communication Strategy for the iPod, investing too little and not
properly in advertising the iPod. Infact the main factor on which Apple relied about the iPod was the buzz
created by word of mouth.

Who Invented the iPod?

Few people know - and few market analysts too - that the iPod + iTunes business idea was not conceived
inside Apple, but was proposed to Apple by an outside source, a music lover and Engineer named Tony
Fadell, who was later hired by Apple. Fadell had approached other companies before Apple, including
Microsoft, and Microsoft had turned away Fadell and discarded the project, as "uninteresting" ...

Microsoft executives turned down Fadell and the iPod + iTunes business idea saying: "This will not make any

41

money".

Smart guys at Microsoft, indeed.

At Apple things for Fadell went differently.

He was listened to in the meeting. Two weeks later Steve Jobs called back Fadell, he said to him: "Ok, I put
you in charge of the development of this products and of the business concept, I give you a team of 30 brilliant
guys, designers, programmers and hardware engineers".

The iPod was developed by Tony Fadell and his team in just 12 months.

The name iPod was proposed by Vinnie Chieco, a copywriter who was called by Apple to figure out how to
introduce the new player to the public. After Chieco saw a prototype, he thought of the movie "2001: A Space
Odyssey" and the phrase "Open the pod bay door, Hal!".

The iPod. The Merits of Apple.

Even though the iPod + iTunes concept did not originated inside Apple, the merit of Steve Jobs and of the
Apple Executives was in the ability to listen, catch on the business idea, build a team around Tony Fadell,
make a smart development process, and finally coming out with an excellent product, beautifully styled by
Jonathan Ive.

And the merit of Steve Jobs and Apple was also in tirelessly development and improving the product, year
after year, adding more functions - color display, photo viewing capability in october 2004, video playing
capability in october 2005, improving battery life, improving the user interface, slimming down the player size,
increasing the storage capabilities, introducing new models as the iPod Mini, cheaper and smaller in size and
in storage capabilities, the iPod Nano having flash memory storage instead of hard disk.
Apple also kept improving the iTunes counterpart, and made numerous deals with reluctant record
companies.

Apple finally introduced in September 2007 the iPod Touch, utilizing the revolutionary touch interface initially
developed for the iPhone.

Apple iPod Construction and Outsourcing

42

It should be noted that, since the second generation of iPods in 2002, the iPods were made compatible not
only with the Mac operating systems but with Microsoft Windows operating systems as well.

We should ask ourselves (and to Steve Jobs): how many iPods would have been sold if the iPods had been
compatible only with Mac operating systems?

Think Steve, think ...

It shouldn't be forgotten that the iPod development has given Apple the technology capabilities and inspiration
for the development of their next big thing: the iPhone.

iPhone Marketing Strategy.

The Apple iPhone is an outstanding product. The iPhone is at least 5 years ahead of the competitors. The
touch user interface and the sleek and beautiful design by Jonathan Ive and his team make it a true
masterpiece of technology and design. the iPhone is not only a mobile phone, it is a product in between a
mobile phone and a laptop computer. Even calling it a smartphone is not enough.

After many rumours and speculations which started as early as in 2006, the first generation iPhone was
launched in the US on June 29, 2007.
The second generation iPhone, the iPhone 3G, was launched in July 2008.
The third generation iPhone, the iPhone 3GS, has been launched in June 2009.

The iPhone has entered a market - the market of mobile phones - a market which is mature, and saturated.
Nonetheless, Apple has been able to develop a revolutionary product, and to change the paradigm in the
mobile phone market. Apple did great on the product side, no doubt. However Apple has done some serious
mistakes in the marketing of the iPhone.

43

Mistake #1 - The iPhone Pricing at market launch.

Apple made a big marketing mistake in 2007, by reducing the iPhone retail price from $599 to $399 - a 33%
rebate - after only 3 months from the initial product launch. This way the iPhone early adopters - and Apple
most faithful costumers have rightfully felt being betrayed and exploited.
A great company must not do so serious and bad mistakes, betraying their most faithful customer base.
They had other 3 better options:
They could have waited 6 more months before reducing the price of the iPhone, or they could have delayed
the iPhone launch for 3 months, or they could have decided to price the iPhone at $399 since the initial
launch.
and since July 2008, the iPhone 3G is sold at $199, 50% less than the September 2007 price, 66% less than
the launch price of just one year earlier.

Mistake #2 - Forcing costumers in signing with AT&T as exclusive carrier and the revenue sharing
business model.
It has been a greedy and wrong marketing strategy on the side of Apple. Result: slowing down the sales of the
iPhone. 3.3 million iPhones were sold in the US between June andl December 2007, but only 2 million
contracts were signed with AT&T. Were did the remaining 1.3 million iPhones go?

Mistake #3 - the Apple iPhone and the Europe markets

The US makes 300 million inhabitants.
Western Europe makes 350 million inhabitants, more than the whole US.
On June 29, 2007 the iPhone was launched in the US. Only in November 2007 the iPhone was launched in
some European countries. To be precise only in 3 countries: UK, Germany and France. In each of these
country with the same stupid and self hammering business model used in the US, and in each country with a
different carrier: O2 in the UK, T-Mobile in Germany, Orange in France.
Only on July 11, 2008, one full year later, the iPhone has been launched in several other European countries,
as Italy, Spain, Switzerland, Austria, Ireland, Denmark, Norway, Sweden, Finland, Netherlands, Belgium. Why
so late?
It gets interesting to see the jam and confusion of prices, terms and monthly fees charged by the many
different carriers in Europe: O2 in the UK, T-Mobile in Germany, Austria and Netherlands, Orange in France,
Swisscom in Switzerland, Vodafone in Italy, Telia Sonera in Denmark, Norway, Sweden, Finland.

44

The iPhone 3G Price in Europe

On July 11, 2008 the iPhone has been launched also in other key countries worldwide: Australia, New
Zealand, Canada, Japan, Mexico, Brasil.
In conclusion: a great lesson from Apple on how to undermine a great product adopting a stupid, greedy and
self hammering marketing strategy.

The iPhone 3GS.

In June 2009 Apple launched the iPhone 3GS.
The iPhone 3GS has a 3 megapixel autofocus camera, video recording and editing capabilities, voice control,
longer battery life, 7.2 Mbps HSDPA internet connection. iPhone 3GS is twice faster than the iPhone 3G. The
iPhone 3GS prices: $199 for the 16GB model, $299 for the 32GB model.
more on the new iPhone 3GS on the iPhone 3GS page.

iPhone Sales Data.

Apple is always reluctant to give detailed data about sales of their products.
A total of 33.75 million iPhones had been sold worldwide until the $th quarter of 2009. Of these, 11.3 million
3G iPhones have been sold between July 11 and December 27, 2008.
Previously a total of 6.1 million first generation iPhones had been sold in US, UK, Germany and France.
From these data it comes that, in spite of the serious marketing mistakes done by Apple, the iPhone has been
a huge success.

The new Apple Tablet, the iPad - iPad Marketing Strategy

Apple Marketing Mix

Introduction
Apple, Inc originated from the friendship and mutual interests of Steve Wozniak and Steve Jobs.
The Two collaborated in the development of the Apple I in the early 1970s. The Apple I was a step
ahead of most computers of the time featuring a use of aTV as a display system and a cassette
interface for recording programs.
After obtaining financing for the development of Apple II, the Apple Computer Company was formed
in 1970.As the growth of home computer use grew, Apple grew with it. In 1980 the company issued
its initial public offering of investment stock.

45

Apple next introduced the MacIntosh Computer in 1983 during the Super Bowl. The computers
desktop publishing features provided the foundation for future innovations that have become
standard for the company. Today Apple, Inc has more than 33,000 employees and revenues
exceeding 42 million dollars.

Product

Portable Computers including Mac products such as Mac Book Pro, iMac, MacBook Air,
Mac Mini, Xserve

Servers including Xserve, Xsan, MacOS X Ser, MobleMe.

Accessories including MagicMouse, Keyboard, Led Cinema Display.

Wi-fi Based Stations - including Airport Express, Airport Extreme, Time Capsule.

Developer including Developer Connection, Mac Program, iPhone Program.

iPod including iPod Shuffle, iPod Nano, ipod Classic.

iPhone including iPhone3GS, iPhone3G, iPad.

iTunes including movies, TV shows, audio books, games.

Periphal products including Printers, Storage devices, digital videos and cameras.

Price

Apple is a premium brand computer that does not attempt to compete on price. The
company has reduced prices after some initial product launches. It uses skimming and preimuim
pricing strategies.

The Apple iPad is priced at a minimum of $499.

The Apple iPhone costs begin at $99.

The Apple iPod Classic is priced starting at $249.

The Apple iPod Nano costs $149.

The Apple Mac Book costs $999.

The Apple MacBook Pro is priced at $1199.

The Apple Quicktime Pro for Windows costs $29.99

Apples iPad pricing strategy includes the flexibility to lower the prices if consumer response
dictates such action. This would be consistent with a similar $200 price cut on the iPhone in 2007.

In 2009 Apple announced a reduced cost pricing structure for iTunes - songs will cost 69
cents, 99 cents or $1.29. He said the "vast majority" of the songs will cost 69 cents. Changes are
said to be a response to a slower pace of music downloads.

Place

Apple, Inc Headquarters are located at is located at 1 Infinite Loop, Cupertino, California.

46

The Apple Consultants Network includes independent professional service providers and
technology consulting firms that specialize in Apple and third-party solutions. Certified on Apple
technologies, these providers deliver on-site technology services and support to home users and
businesses of all sizes.

Apple service providers are certified technicians, who complete regular Apple training and
assessments, and offer repair services, and exclusive access to genuine Apple parts.

They are located in Asia/Pacific, Africa, the Middle East Europe and Latin America.

Apple has over 200 retail stores worldwide including the US, UK and Canada. Apple recently
opened a new retail store in Shanghai China.

Promotion

Apple, Inc offers special discounts on refurbished MacIntosh computers, iPod Nanos, and
the 8GB iPod Touch. In each case a 1 year warranty is included on the all products.

Apple, Inc authorized Training Centers are located throughout the U.S. each provides
instruction in Mac systems, Mac OS X, and Apples professional applications. A wide range of
certification exams and courses offer innovative learning opportunities for IT and creative
professionals, educators, and service techniciansdelivered exclusively by Apple Certified Trainers.

The Apple Consultants Network website provides a search tool allowing visitors to locate
nearby certified Mac product consultants in the U.S, Canada, and a number of international
locations.

The online Apple Store offers free shipping for orders over $50.

The online Apple store offers iTunes gift cards.

Apple provides a $100 rebate when you purchase a Mac or specific printers from the online
store.

Apple has packaged back-to-school offers, including some aimed at college students.

People
o

Stephen P. Jobs is the Chief Executive Officer of the Executive Board at Apple, Inc

Non Executive Board Directors include William V. Campbell, Millard S. Drexler, Albert
Gore, Andrea Jung and Author D. Levinson.

Key Senior Management team members include Timothy D. Cook, (COO), Scott
Forestall, Jonathan Ivey, (Industrial Design), Ronald B Johnson (Retail), Robert Mansfield Mac
Hardware Engineering), Peter Oppenhiemer (Chief Financial Officer), Mark Papermaster (Devices
Hardware Engineering), Philip W. Schiller (Worldwide Marketing), Bertrand Serlet (Software
Engineering), and D. Bruce Sewell (General Counsel).

Some certified Apple service providers offer additional services beyond repairs and
parts such as such as data transfer, data recovery, upgrade services, and onsite deployment and
installation.

Every Mac, iPod, iPhone, and display comes with complimentary telephone technical
support for 90 days after your purchase and a one-year limited warranty. The AppleCare Protection
47

Plan extends your service coverage and gives you one-stop service and support from Apple
experts.
o

The AppleCare Professional Video Support gives you direct access to Apple's
Professional Video Technical Support team via telephone and email 12 hours a day, seven days a
week.

Physical Evidence
o
o

Apple Incs main website is located at http://www.apple.com

The Apple logo has evolved from its original depiction of Sir Isaac Newton under a
tree to the memorable rainbow apple to the present blue Apple with a bite taken out.

Process
o

Apple converts new customers and secures their loyalty through a corporate
emphasis on customer service.

Apple seeks to attract its target market through bold public relations events (such as
the MacWorld Expo) as well as advertising imagery which borrows from contemporary modern art.

Apple has expanded its distribution channels in recent years including the addition of
Wal Mart.

Apple Inc. advertising

In the past two decades, Apple Inc. has become well known for its advertisements, which are designed to reflect a plan
of marketing their products to creative individuals. Their most significant ad campaigns include the "1984" Super
Bowl commercial, the 1990s Think Differentcampaign, and the "iPod people" of the 2000s. Apple's portable music player,
the iPod, has been showcased as a piece of contemporary art in New York's Museum of Modern Art.[1]
Since the original Macintosh Super Bowl commercial in 1984, which mimicked imagery from George Orwell's 1984, Apple
has maintained a style of homage to contemporary visual art in many of its more famous ad campaigns. For example, the
Think Different campaign linked Apple to famous social figuresincluding artist John Lennon and freedom
fighter Mahatma Gandhi.
Apple has been criticized[citation needed] for its sometimes questionable use of modern art as an inspiration for its marketing
campaignsat times re-creating a short film or music video shot-by-shot for its commercials. Some artists have

48

documented[citation needed] entering into rights-negotiations with Apple, only to have Apple pull out of the discussions, then use
the artistic imagery anyway[citation needed]. As a result, several lawsuits have been filed against Apple by artists and
corporations alike, such as visual artist Louie Psihoyos and shoe company Lugz. These claims were later confirmed.[2]
In 1997 the Think Different campaign introduced Apples new slogan, and in 2002 the Switch campaign followed. The most
recent advertising strategy by Apple is the Get a Mac campaign.
Today, Apple focuses much of its advertising efforts around special events", and keynotes at conferences like
the MacWorld Expo and theApple Expo. The events typically draw a large gathering of media representatives and
spectators. In the past, special events have been used to announce products such as the iPhone and iPad.

19801985

Page 1 of the 1984 Macintosh Introduction brochure published inNewsweek magazine.

A Macintosh Introduction 18-page brochure was included with various magazines in December 1983, often remembered
because Bill Gates was featured on page 11.[3] For a special post-election edition of Newsweek in November 1984, Apple
spent more than US$2.5 million to buy all of the advertising pages in the issue (a total of 39).[4]
Apple also ran a Test Drive a Macintosh promotion that year, in which potential buyers with a credit card could try a
Macintosh for 24 hours and return it to a dealer afterwards.
It began to look like a success with 200,000 participants, and Advertising Age magazine named this one of the 10 best
promotions of 1984. However, dealers disliked the promotion and supply of computers was insufficient for demand, and
many computers were returned in such a bad shape that they could no longer be sold.[citation needed]

49

"1984" television commercial: launching the Macintosh

"1984" (created by Ridley Scott) is the title of the television commercial that launched the Macintosh personal computer in
the United States, in January 1984.
The commercial was firstly aired nationally on January 22, 1984 during a break in the third quarter of Super Bowl XVIII.
[5]

The ad showed an unnamed heroine (played by Anya Major) wearing orange shorts, red running shoes, and a

white tank top with a Picasso-style picture of Apple's Macintosh computer, running through an Orwellian world to throw a
sledgehammer at a TV image of Big Brother an implied representation of IBM played by David Graham.[6] The
concluding screen showed the message and voice over "On January 24th, Apple Computer will introduce Macintosh. And
you'll see why 1984 won't be like '1984'." At the end, the Apple "rainbow bitten apple" logo is shown on a black
background.

19851990
In 1985 the Lemmings commercial aired at the Super Bowl; Apple went as far as to create a newspaper advertisement
stating If you go to the bathroom during the fourth quarter, you'll be sorry.[citation needed]
It was a large failure and did not capture nearly as much attention as the 1984 commercial did. Many more brochures for
new models like theMacintosh Plus and the Performa followed.
In 1988 Apple released a short film titled Pencil Test to showcase the Macintosh II's animation capabilities.

19901995
When Apple let the Mac become a religious issue more than a tool, the
consequence was high visibility and a lot of great press but also a limited
market.
Gordon Eubanks (1994)[7]

In the 1990s Apple started the What's on your PowerBook? campaign, with print ads and television commercials
featuring celebrities describing how the PowerBook helps them in their businesses and everyday lives.
During 1995, Apple introduced the worlds first infomercial style sitcom named 'The Martinetti's Bring Home a Computer'.
In 1995, Apple responded to the introduction of Windows 95 with both print ads and a television commercial.
[edit]19952000

50

[edit]"Think

Different"

Main article: Think Different

Further information: List of Apple Inc. slogans
"Think Different" was an advertising slogan created by the New York branch office of advertising
agency TBWA\Chiat\Day for Apple Computer during the late 1990s. It was used in a famous television commercial and
several print advertisements. The slogan was used at the end of several product commercials, until the advent of Apple's
Switch ad campaign. Apple currently does not use the slogan, and their commercials usually end with a silhouetted Apple
logo and sometimes a pertinent website address.
Even today, Think Different remains an intrinsic part of Apple's identity, alongside flagship products like the iPod and iMac.
The use of the phrase, "Think Different", however, has ceased.
[edit]Television commercials
Significantly shortened versions of the text were used in two television commercials titled "Crazy Ones" directed
by TBWA's Jennifer Golubwith a voiceover narrated by Richard Dreyfuss.
The one-minute commercial featured black and white video footage of significant historical people of the past, including (in
order) Albert Einstein, Bob Dylan, Martin Luther King, Jr., Richard Branson, John Lennon, R. Buckminster Fuller, Thomas
Edison, Muhammad Ali, Ted Turner, Maria Callas, Mahatma Gandhi, Amelia Earhart, Alfred Hitchcock, Martha
Graham, Jim Henson (with Kermit the Frog), Frank Lloyd Wright, and Picasso. The commercial ends with a young girl
opening her closed eyes, as if to see the possibilities before her.
The thirty-second commercial used many of the people above, but closed with Jerry Seinfeld, instead of the young girl. In
order: Albert Einstein, Bob Dylan, Martin Luther King, Jr., John Lennon, Martha Graham, Muhammad Ali, Alfred Hitchcock,
Mahatma Gandhi, Jim Henson, Maria Callas, Picasso, and Jerry Seinfeld. This commercial aired only once, during
the series finale of Seinfeld.
[edit]Print advertisements
Print advertisements from the campaign were published in many mainstream magazines such as Newsweek and Time.
Sometimes these were traditional advertisements, prominently featuring the company's computers or consumer
electronics along with the slogan. However, there was also another series of print ads which were more focused on brand
image than specific products. They featured a portrait of one of the historic figures shown in the television ad, with a small
Apple logo and the words "Think Different" in one corner, with no reference to the company's products, which atests to
Apple's brand recognizition.
[edit]2001present

51

[edit]"Switch"
"Switch" was an advertising campaign launched by Apple on June 10, 2002. "The Switcher" was a term conjured by Apple,
it refers to a person who changes from using the Microsoft Windows platform to the Mac. These ads featured what the
company referred to as "real people" who had "switched". An international television and print ad campaign directed users
to a website where various myths about the Mac platform were dispelled. The television commercials were directed
by Errol Morris.

iPod
Apple has promoted the iPod and iTunes with several advertising campaigns, particularly with their silhouette commercials
used both in print and on TV. These commercials feature people as dark silhouettes, dancing to music against brightcolored backgrounds. The silhouettes hold their iPods which are shown in distinctive white. The TV advertisements have
used a variety of songs from both mainstream and relatively unknown artists, whilst some commercials have featured
silhouettes of specific artists including Bob Dylan, U2, Eminem, Jet, Caesars, andWynton Marsalis. Successive TV
commercials have also used increasingly complex animation. Newer techniques included using textured backgrounds, 3D
arenas, and photo-realistic lighting on the silhouette characters. The "iPod nano - Completely Remastered," series of ads
for the 2nd generation iPod nano have a totally different design. The background is totally black. The colored iPod nanos
shine light and glow, showing some of the dancers, holding the iPod nanos while a luminescent light trail made by moving
iPod nanos. This is to display the fact that the 2nd generation iPod nanos are colored. The silhouette commercials are a
family of commercials in a similar style that form part of the advertising campaign to promote the iPod, Apple's
portable digital music player. The commercials include television commercials, print ads, posters in public places and wrap
advertising campaigns, and are unified by a distinctive, consistent style.

52

Get a Mac"

The two characters from the ads who personify a PC (left,John Hodgman) and a Mac (Justin Long).

Main article: Get a Mac

In 2006, Apple released a controversial series of twenty-four "I'm a Mac, I'm a PC" advertisements as part of their "Get a
Mac" campaign. The campaign was officially ended in 2010.
The ads, which are directed by Phil Morrison, star actor Justin Long (Accepted) and author and humorist John
Hodgman (The Daily Show) as a Macintosh (Mac) and a PC, respectively. The format for each commercial is similar: Long
introduces himself as a Mac and Hodgman introduces himself as a PC (assumed to be running the Microsoft Windows
operating system), then the particular facet of computing is stated, after which the Mac is depicted as being able to do
whatever the PC is able to do, but does it quicker, more safely, more creatively, or with more versatility.
Since the launch of the original ads, similar commercials have appeared in Japanand the UK. While they use the same
form and music as the American ads, the actors are specific to those countries.
The UK ads feature famous comedy duo Mitchell and Webb; David Mitchell as the PC and Robert Webb as the Mac. The
Japanese ones are played by Rahmens, with Jin Katagiri as the PC and Kentar Kobayashi as the Mac.
In April 2009, Justin Long revealed that the "Get A Mac" commercials "might be done" [8]. In May 2010, the "Get A Mac"
was officially ended and the web pages began to redirect to a new "Why You'll Love Mac" page with more features on the
Macintosh hardware and software. [9]
[edit]Sponsorships

53

Apple is in talks with the New York Yacht Club to be a principal sponsor of an America's Cup challenge to be skippered
by Paul Cayard.
[edit]Criticism

Prior to Apple adapting their computers for Intel x86 processors, Macs used PowerPC processors from IBM and Motorola
which couldn't be directly compared in terms of performance.[citation needed] This led to Apple producing several controversial
advertisements. For example, Apple's early ads for the G5 processor stipulated that:
"The new Power Mac G5 is here. It's the world's fastest computer, and the first with a 64-bit processor ...". [citation needed]
"... Introducing the revolutionary PowerPC G5 processor, the world's first 64-bit processor for personal computers ..."[citation
needed]

"... the G5's 64-bit architecture addresses dramatically more memory - over 4 billion times more than 32-bit chips - so that
the systems built around the G5 can shatter the 4-gigabyte memory ceiling that limits every other PC on earth ..."[citation needed]
Advertising authorities in various countries[which?] took issue with these claims[citation needed], for example UK Advertising
Standards Authority gave Apple a grilling for each slogan[citation needed] but eventually Apple was let off the hook because it
was actually classing its computers as workstations rather than personal computers.[citation needed]
Debate continues about whether Apple's use of established visual art to sell its products is acceptable.[citation
needed]

Artist Christian Marclaydenied Apple the rights to his 1995 short film "Telephones" to market their iPhone, but then

decided against filing suit when Apple ran a similar ad during the 2007 Academy Awards broadcast.[2]
In July 2007, Colorado-based photographer Louie Psihoyos filed suit against Apple for ripping his "wall of videos" imagery
to advertise forApple TV. Apple had allegedly been negotiating with Psihoyos for rights to the imagery, but backed out and
promptly used the imagery anyway.[10]
Debate continues regarding the moral implications and precedents set by Apple's homages to contemporary working
artists.[2] Some artists[who?] contend that seeing one's work reproduced in a corporate landscape is the pinnacle
achievement in the artist's quest to enter society's ideological landscape, and thus has its own rewards[citation needed].
Others[who?] argue that Apple's use of art without compensating the artist is unethical, and that shifting the message of a
work of art toward selling a product significantly devalues the art.[citation needed]

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Mac OS X "Tiger" kernel panic screen. This error message is similar to the "Blue Screen of Death" on a Microsoft Windowsmachine.

In August, 2006, AppleMatters, a website devoted to Apple products, carried comments by blogger Aaron Wright
questioning the veracity of Apple ads that suggest Macs don't crash.[11]Apple has previously advertised their products as
being crash-free[12] and currently advertises Macs as being "crash resistant".[13] While a number of commentators have
praised Mac OS X for its stability,[14] Apple has acknowledged the kernel panic[15] and other crash-like issues in their
technical support documentation.[16]
More recently, Apple has been criticized for its iPhone ads, which depict much faster network speeds than are realistically
possible on current 3G network infrastructure; although they do include a disclaimer explaining that fact. In August, 2008,
the Advertising Standards Authority (ASA) in the UK had banned one iPhone ad from further broadcast in its current form
due to "misleading claims". The ASA took issue with the ads' claim that "all parts of the internet are on the iPhone", when
the device does not support Java or Flash.[17] However, the newer iPhone ads show a caption, 'Sequence Shortened' at
their beginning.

Apple's Branding Strategy

Apple Inc. uses the Apple brand to compete across several highly competitive
markets, including the personal computer industry with its Macintosh line of
computers and related software, the consumer electronics industry with
products such as the iPod, digital music distribution through its iTunes Music
Store, and more recently in the smart phone market with the Apple iPhone.
Apple's product strategy is to create innovative products and services aligned
with a "digital hub" strategy, whereby Apple Macintosh computer products
function as the digital hub for digital devices, including the Apple iPod, personal
digital assistants, cellular phones, digital video and still cameras, and other
electronic devices.
The Apple Brand Personality
Apple has a branding strategy that focuses on the emotions. The Applebrand
personality is about lifestyle; imagination; liberty regained; innovation; passion;
hopes, dreams and aspirations; and power-to-the-people through technology.
The Apple brand personality is also about simplicity and the removal of
complexity from people's lives; people-driven product design; and about being
a really humanistic company with a heartfelt connection with its customers.
Apple Brand Equity and Apple's Customer Franchise
55

The Apple brand is not just intimate with its customers, it's loved, and there is a
real sense of community among users of its main product lines.
The brand equity and customer franchise which Apple embodies is extremely
strong. The preference for Apple products amongst the "Mac community", for
instance, not only kept the company alive for much of the 90's (when from a
rational economic perspective it looked like a dead duck) but it even enables the
company to sustain pricing that is at a premium to its competitors.
It is arguable that without the price-premium which the Apple brand sustains in
many product areas, the company would have exited the personal computer
business several years ago. Small market share PC vendors with weaker brand
equity have struggled to compete with the supply chain and manufacturing
economics of Dell. Apple has made big advances in becoming more efficient,
particularly in logistics and operations, but would still find it difficult to make a
profit at the price levels Dell transacts at.
The Apple Customer Experience
The huge promise of the Apple brand, of course presents Apple with an
enormous challenge to live up to. The innovative, beautifully-designed, highly
ergonomic, and technology-leading products which Apple delivers are not only
designed to match the brand promise, but are fundamental to keeping it.
Apple fully understands that all aspects of the customer experience are
important and that all brand touch-points must reinforce the Apple brand.
Apple is expanding and improving its distribution capabilities by opening its own
retail stores in key cities around the world in up-market, quality shopping
venues. Apple provides Apple Mac-expert retail floor staff staff to selected
resellers' stores (such as Australian department store David Jones); it has
entered into strategic alliances with other companies to co-brand or distribute
Apple's products and services (for example, HP who was selling a co-branded
form of iPod and pre-loading iTunes onto consumer PCs and laptops). Apple has
also increased the accessibility of iPods through various resellers that do not
currently carry Apple Macintosh systems (such as Harvey Norman), and has
increased the reach of its online stores.
The very successful Apple retail stores give prospective customers direct
experience of Apple's brand values. Apple Store visitors experience a
stimulating, no-pressure environment where they can discover more about the
Apple family, try out the company's products, and get practical help on Apple

56

products at the shops' Guru Bars. Apple retail staff are helpful, informative, and
let their enthusiasm show without being brash or pushy.
The overall feeling is one of inclusiveness by a community that really
understands what good technology should look and feel like - and how it should
fit into people's lives.
Apple Brand Architecture
From a brand architecture viewpoint, the company maintains a "monolithic"
brand identity - everything being associated with the Apple name, even when
investing strongly in the Apple iPod and Apple iTunes products.
Apple's current line-up of product families includes not just the iPod and iTunes,
but iMac, iBook, iLife, iWork, and now iPhone. However, even though marketing
investments around iPod are substantial, Apple has not established an "i" brand.
While the "i" prefix is used only for consumer products, it is not used for a large
number of Apple's consumer products (eg Mac mini, MacBook, Apple TV, Airport
Extreme, Safari, QuickTime, and Mighty Mouse).
The list of Apple's Trademarks reflects something of a jumbled past. The
predominant sub-brand since the introduction of the Apple Macintosh in January
1984 has always been the Apple Mac. Products whose market includes Microsoft
computer users (for example MobileMe, QuickTime, Bonjour, and Safari) have
been named so they are somewhat neutral, and therefore more acceptable to
Windows users. Yet other product have been developed more for a professional
market (eg Aperture, the Final Cut family, and Xserve).
The iPod Halo Effect
Though Apple's iPhone and iTunes music business is profitable in its own right,
Apple's venture into these product areas was based on a strategy of using the
music business to help boost the appeal of Apple's computing business.
Apple is using iPod, iTunes, and now iPhone to reinforce and re-invigorate the
Apple brand personality. At the same time, these product initiatives are growing
a highly relevant, appealing brand image in the minds of consumer segments
that Apple has not previously reached.
In a so-called iPod halo effect, Apple hoped that the popularity of iPod and
iTunes among these new groups of customers would cause these segments to
be interested in Apple's computer products. This does seem to have happened.

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Since the take-off of the iPod there has been a dramatic rise in Apple's
computer sales and market share.
A couple of years ago, Apple's aspirations for the iPod halo effect was was
highlighted most strongly when it used the slogan "from the creators of iPod" in
its promotion of iMac G5 computers. In this instance, the Apple brand came fullcircle - having been built into a branding system that originates in the personal
computer market, then leveraged into the consumer electronics market, and
then back into the consumer personal computer market.
Apple Brand Strength Now Creating Financial Success
So far, Apples' branding strategy is bearing fruit. For example, Apple reports
that half of all computer sales through its retail channel are to people new to
Macintosh, the company's sales and margins have been growing strongly since
2006, and Apple has achieved several "best ever" quarterly financial
results during the past couple of years.
Leveraging the success of the iPod, Apple launched the iPhone (released in July
07) to extend the brand even further. Apple's buzz marketing efforts in the first
half of 2007 were truly superb, culminating in the release of one of the most
highly anticipated products for many years - and launching apple into a
completely new market: mobile handsets. By July 2008 the buzz about the 3G
iPhone resulted in over 1 million units being sold in the first 3 days of its release
in over 20 countries around the world.
Apple Re-entering the Corporate Market via the iPhone Halo
Though no-one at Apple would say so today, the next phase of Apple's strategy
seems focused on the Corporate marketplace.
A long time ago, Apple had a fairly strong market share in large companies.
A long, long time ago (at the end of the 1970's) the first spreadsheet program
(VisiCalc) was launched on the Apple II. The first PC (the IBM PC) to run a
Microsoft operating system (PC DOS) did not appear until 1981. When Microsoft
launched its Excel spreadsheet in 1984 it appeared first on the just-released
Apple Mac, such was Apple's presence among accounting and finance
departments.
Even though Apple effectively stopped competing for corporate business during
the 1990s, the Apple Mac is still used in some corporate environments.
Microsoft still has a vigorous applications development team totally dedicated to

58

writing business software for the Apple Mac. New versions of Microsoft Office for
Apple Mac still come out approximately 2 years before similar functionality is
placed in the next version of Microsoft Office for the Windows operating system.
Over the next few years it seems likely that Apple will re-focus on the Corporate
marketplace: Apple has announced that "Snow Leopard" (the next version of
the Apple Mac operating system, due in 2009) will include features allowing Mac
computers to fully support Microsoft Exchange. This will enable corporate IT
departments to support business users who wish to use Apple Macs for their
main email clients.
Also, Microsoft continues to bring out advanced versions of Microsoft Office for
Apple Mac, and - very significantly - in mid-2008 Apple announced a software
upgrade for the iPhone which allows iPhones to be fully supported by Microsoft
Exchange email servers. Corporate IT departments can now include iPhones as
email clients.
Apple's strategy seems clear: to use the popularity of the iPhone to break back
into large corporations, and ultimately have Apple Macs on the desks of large
businesses (or more probably - in the laptop bags of middle and senior
managers in most large businesses. The Macbook Air is also clearly aimed at
this type of market).
As we say; no one in Apple will currently admit to such ambitions, but this is
clearly where Apple's branding strategy is headed.
Apple's Original Apple Macintosh Marketing Strategy
Stanford University has published contemporary records and original documents
of the marketing strategy for the Apple Macintosh launch in 1984, including
the original Apple marketing strategy and the Apple Macintosh product
introduction plan written by Regis McKenna.
It is now 25 years since the launch of the Apple Macintosh (on January 24,
1984). Having proven itself and already gained considerable popularity with the
Apple II, Apple chose to announce the Apple Mac in one of the most famousever commercials, aired during the third quarter of Super Bowl XVIII on 22
January 1984.
The formal product release came a couple of days later on January 24th, 1984.
In addition to the innovative Apple Mac graphical user interface (based on
concepts from Xerox PARC), the Mac's industrial design - shown below - was

59

revolutionary for the time. Interestingly, it share's the same screen size (9 inch)
as the latest popular PC format: NetBooks.

The original Mac graphical

user interface was
revolutionary in its day. It
introduced the use of the
The first Mac (above) had mouse and features such as
just 128KB of RAM and a
icons, fonts, folders, and
400KB 3.5-inch floppy disk audio to mainstream
drive, and a 9-inch,
computers.
512x342 pixel
monochrome display.

INNOVATION STRATEGY
Business Strategy and IT Strategy to Reproduce Apple Innovation
December 2nd, 2009

What are the Apple Innovation Secrets of Steve Jobs?

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Steve Jobs focuses Apple innovation on competitive pressures and value propositions. Its basic to his
DNA and core to his management style to relentlessly focus organizational energy on customer centered
innovation and customer experience. In a nutshell Apples innovation secret (if it can be called that) is the
relentless pursuit of innovation around the customer experience. As early as 2002 Steve Jobs told the world
what his competitive strategy was, and it is clear that as CEO he was carefully evaluating competitive
pressures and opportunities in the marketplace:
Apples CEO owns the Apple corporate strategy, and he has chosen to do one simple thing that many
companies talk about but few execute very well, Steve Jobs Business and IT strategy is 100% focused on
customer centered innovation. He knew that you find business benefit looking outward, looking at
market and business drivers rather than at products or services that exist in a silo.
I recently read a Fortune Magazine article extolling the virtues, or more the impact, of Apples Steve Jobs on
business. Certainly under Steve Jobs guidance Apple has come to represent the best of business innovation
for several reasons:

Jobs built Apple as an innovative company

After he left Apple the company nearly collapsed
He returned and turned the company around from the brink of collapse
Jobs at Apple, through his innovative guidance, has transformed three primary industries ; personal
computers (laptops and desktops), personal music, personal cell phones.
For this and other reasons Steve Jobs time at Apple has helped him become the king of American business
transformation, at least according to Fortune Magazine.

The Direction of Apples Innovative Recovery and Company Turnaround

Just after the Y2K scare, while the world was buzzing about the tech bubble burst; speculating about Apples
survival with Steve Jobs return; watching the AMD and Intel Chip wars heat up, Apple strategically avoided a
battle with its logical arch-rival Microsoft. Instead Steve Jobs made a conscious decision to take his
marbles and play a completely different game.
Rather than taking a weak company that was struggling to stay afloat and challenge the dominant market
maker Steve Jobs defined the Apple innovation strategy to focus on the integration of technology and
entertainment. Apples core competence at the time was in PCs and Laptops, but as Jobs said, they were the
only vendor that did it all, hardware, software, and operating system. He took that same approach with music,
helping to develop the ecosystem to support the IPod and to transform digital music distribution through
ITunes and the online purchase of songs.
The PC wasnt new, but Jobs approach to customer centered innovation was. The music player wasnt new,
but the IPod certainly was, and it was focused like a laser on the end of Sony Walkman dominance. Selling
music singles wasnt new, but Jobs focused Apples innovation on the ITunes store together with the
widespread use of the IPod. He created the device to play the music and he created the channel to distribute
the music. The cell phone wasnt new, and while Blackberry and Nokia owned the market, the IPhone
focused like a laser on innovative customer experience.
This PragMatic Marketing Post is about the idea that you cant innovate like Apple and I say,BALONEY!
Steve Jobs isnt dumb, quite the contrary, hes smart enough to know that you CAN innovate like Apple and
thats why Apples internal innovation methods are kept so secret! Not only that, the ACTUAL workings of
Apples innovation is a secret and PragMatic article, like so many others, merely speculates about the details
of the inner workings. This article looks at the actual company history and Jobs statements.

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From the very beginning of any market action by Apple, the corporate strategy is focused on being a market
disrupter, and in turn a market maker, by focusing relentlessly on the customer experience. And not just a
focus with existing products or services, new products and services are designed, developed, and relentlessly
pursued to please the end customer. Have you visited an Apple store? Maybe its time you did.
The Apple innovation difference is less about an inward focus on how to squeeze every last penny out of
some process or on reducing costs, such as what Lean and Six Sigma advocates. Instead, the
Apple corporate focus as driven by the CEO was outwardly focused on the marketplace, on the customer,
and how to direct that energy into improving revenue and profitability by addressing the frustrations (or
needs /wants) of customers. The Apple innovation difference is where the role of CEO is fixated on customer
centered innovation. Customer experience with Apple products was the center of innovation. New products,
new applications, and new markets all focused on customer experience.

Steve Jobs Innate Understanding of Marketing and Economics

One thing Apple did well was listen to the market, and then shrewdly move marketing programs to create
pent up demand for a product that had not yet been released. These new products were designed to
elegantly, and as intuitively as possible, address marketplace frustration.
Many commentators have described this as him having a knack for making market moves at the right time.
Baloney, Steve Jobs understands the fundamental core concepts of sales, marketing, and economics that few
teach today.
Apples core of innovation is centered on one thing, market demand. There is no law of supply and demand
there is only the law of demand. The supply side of the economic paradigm is completely irrelevant. The one
thing that is important is the law of demand only. Stop for a moment and think about that, internalize it, and
one day Ill offer some insight that I gained from a wise college economics professor who taught me this.
Where there is marketplace frustration there is internal pent up demand for that frustration to be addressed.
You can see this thinking in Apples current move today. With the deep pockets of several successful product
strategies, and on the heels of Microsofts dismal Vista operating system launch, Apple is now aggressively
going after the companys old arch rival. The market has complained about Vista, about Microsoft security
problems, about the forced upgrade march, about a whole host of problems Microsoft has experienced lately.
Apple is seizing on the market frustration with Microsoft products and the inherent, pent up demand for an
alternative. Apples timing is simply capitalizing on the Microsoft promotion of Windows 7. Apples marketing
message is resonating with the general populace and the pent up demand that is inherent in marketplace
frustration with prior versions of Microsoft Windows. That message is that the new Windows 7 operating
system is simply another fix to a long line of broken operating systems.
At the time Microsoft is bringing out its latest flagship product, Windows 7, to address criticism of the Vista
product, Apple is offering an alternative. A very successful and financially healthy Apple is now targeting
Microsoft directly.
Steve Jobs as the Apple CEO has become quite skilled at setting strategic direction along a future timeline.
As the calculus of the recent attack on Microsofts new Windows 7 operating system shows Steve Jobs is also
very adept and skilled at holding back to determine the right timing to attack a market. Think about it,
everyone in the IT world has known about the Windows Vista complaints for years. And over the last few
years that frustration in the marketplace has been building. And right on the heels of Microsofts boatloads of
marketing spend to address negative market perceptions with a new Windows 7 flagship product Apple then
pounces.

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None of this is magic, none of it is really that mysterious. Steve Jobs as Apples CEO understands
competitive pressures and value propositions. Steve Jobs gets it, plain and simple he understands that the
primary role of the CEO is to set strategic direction and long term goals. He understands the real reason
executive participation creates project success.
Does anyone really believe that the launch of ITunes, and the IPod, and the IPhone, or Pixar, or the latest
attack ads on Microsoft were some seat of the pants reaction? The quality and polish of Apple products, even
when there are glitches, indicates that planning and strategy for all of these ventures took place quite some
time in advance. Even rapid development cycles for some of the hardware, software, and operating systems
takes quite some time. Just to get the integration as seamless as Apple products often are is no small task.
So many of these plans were probably several years in the making before being released to the public.
It needs to be said that Steve Jobs approach to innovation isnt really a secret, the specific details may be, but
the approach is plain old business and IT strategy, Steve Jobs gets it! He plain understands business and IT
strategy.

What Does All of this Have to do with ERP and SAP?

A properly implemented ERP system, such as SAP, requires a solid corporate strategy that addresses
competitive pressures. To achieve that elusive business benefit from the technology spend it is crucial to have
business drivers, business strategy, and the future state direction built into the application.
The underlying ERP and SAP business case for ROI, business benefit, and success must be focused on
the intersection IT and business strategy. The most successful business strategy is always looking carefully
for upcoming market opportunities, and for enhancing the value proposition. In that business strategy there
are revenue, profitability, customer retention, and customer acquisition opportunities while focusing on the
competitive drivers in the marketplace. At the intersection of that business strategy is where IT, ERP, and SAP
strategy intersect to enable the business strategy. In the end, like any capital investment its all about how the
asset is used, or not used, which determines payback and success with its deployment.

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SWOT ANALYSIS OF APPLE CO..

64

PROBLEMS FACED BY APPLE.INC.

65

The problems, in the order he delivered them:

1. Steve Jobs. It can be argued, that Steve Jobs' most important product the thing he's spent
the better part of his energy building since he returned to Apple is not the Mac, the iPod,
the iPhone or even the iPad. It's Apple Inc., the company. The pessimistic dig on Apple, is
that it's a supremely well-organized company organized around one irreplaceable guy. The
optimistic view is that Jobs has structured it to run like his other company, Pixar, which
manages to turn out hit after hit, year after year, without a charismatic celebrity leader.
2. AT&T. Apple is a company that clearly believes in the adage that if you want it done right,
you have to do it yourself . Which is why it must stick in Cupertino's craw that they are
dependent on a carrier whose service in cities like San Francisco is almost comically bad. Has
it reached the point where Apple turns to AT&T (T) and says, Darth Vader-style, "You have
failed me for the last time"? I think not, if only because AT&T so desperately needs the
iPhone that Apple can extract far better terms from them than it ever could from Verizon
(VZ). So he takes Tim Cook at his word when Apple's COO tells analysts that the company
has reviewed AT&T's plans and is going to give it time to work out the kinks. Meanwhile,
however, AT&T's service problems are draining Apple's good will.
3. Computers. iPad. "It's really, really good, I believe. If you are sitting on a couch and you
need a computer, most people are going to reach for the iPad, not the MacBook Pro. And that
puts Apple into uncharted territory. For the first time since the original Mac replaced the
Apple II, it has two overlapping computer products. And although it took a few years for the
corpse to grow cold, the Apple II basically died the day the Mac arrived.
4. The App Store. There are two schools of criticism about the iPhone App Store: The most
vocal critics say that it is totally going in the wrong direction and should be doing what
Google (GOOG) does with the Android Marketplace offer users the option of
downloading apps that aren't vetted and approved. The other school says that Apple is going
in the right direction, but is hurtling at great speed a few degrees off course. Gruber fears that
the shouting from the first school is so loud that Apple may be ignoring the second as well.
There are game consoles like Nintendo's whose apps are as tightly controlled as
Apple's. And there are computer systems with app libraries nearly as large as the iPhone's.
But there's never before been a tightly controlled system with 150,000 apps. "If it proves
unsustainable,"!! "what are they going to do?"
5. Security. Microsoft (MSFT) put a lot of effort into building strong malware protection into
Windows 7 because its operating system is under constant attack. Apple users don't fret
nearly as much about Mac OS X malware because there is so little of it. I doesn't care which
OS is intrinsically more secure, but I m increasingly worried about Apple's sluggish response
to its own publicly disclosed vulnerabilities. For example, it took Apple 75 days to respond to
a hole in Open SSL the open-source encryption system that is supposed to protect credit
card data from getting loose on the Internet even though the vulnerability was made public
last September. "It happens again and again,". Apple is the last vendor to respond, when it
ought to be the first. Of the companies that use Open SSL and Microsoft pointedly does
not Apple is the biggest.

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6. Mobile Me. It's great for syncing your iPhone to your Mac, but what's the point of Mobile
Me's Web apps? If you're at your computer, you use Mail and Calendar. If you're out and
about, you're supposed to use the iPhone. I have a sneaking suspicion Apple put apps up on
the Web because "that's what the kids were talking about." It's like the lounge singer, he says,
who grows long sideburns after Elvis Presley arrives.
7. Back Ups. Data loss is a tragedy, and Apple is particularly vulnerable because unlike
Google the primary storage on their systems is local. Time Capsule is the right idea, but
it's not really a solution for all those people who don't even know they're supposed sync their
iPhones to their Macs. "Ultimately the long-term solution is to be in the cloud," says Gruber,
but that puts Apple on poor footing compared with Google. Given how badly Apple handled
Mobile Me, he's skeptical of Apple's ability to do cloud back-ups well.
8. Apple TV. I am not one of those who talks about Apple TV as Steve Jobs' one did. I like
Apple TV, but s it has a fundamental problem: it's primarily about watching movies and TV
shows through the iTunes store, with the result that there's a worse selection on Apple TV
than there is at any local video store. Hulu is a wonderful solution but when Boxee figured
out a way to put it on TV, the Hulu guys freaked out. They have "this crazy brick wall in their
heads," Gruber explains, that perceives computers and TVs and two fundamentally different
things. They worry about ad-supported Hulu getting on TVs when they should be worried
about people bootlegging their content for free and watching it with no ads. "I don't see,"!!
"how Apple can get from where they are to where they need to be when they are negotiating
with people that stupid."
9. Arch Rivals. A company needs direct rivals to stay hungry, but when they get big enough
they tend to run out of them. Case in point: Microsoft. "They were something to see," in the
old days, "because they were relentless, they were fearless." Its no coincidence, according to
me, that since they got busted for beating Netscape Jake La Motta-style into a bloody
pulp, the only new thing they've done is the one product that has serious rivals: Xbox. Apple's
closest rival in smartphones, is not Google (which will rake in the Web ad riches whether
Android succeeds or fails), but Palm, whose WebOS he admires.
10. About Box Credits. This one is a bit obscure, but if you look at the "About This .." under
the Apple menu for any Apple-made software, you get the same gray box with the name and
version number of the program but little else. And, most significantly, none of the names of
the people who created the program. This is a holdover of the dotcom boom, when Jobs got it
into his head that the Silicon Valley headhunters who were poaching Apple employees were
getting their names from the about boxes. Movies and TV shows may list the names of all the
people who helped make their shows because union rules insist on it, but it's also the right
thing to do. If software is a form of art, as Apple insists it is, "artists should get to sign their
work."

RECOMMENDATIONS
FOR COMPANY:

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 Lowering the cost of products and maintaining the

same quality standards
Can form joint ventures

Knowledge Management
More number of retail stores for easy access
Continuous innovation to expand

FOR OTHERS:
Do not compromise on price for quality
Choose the products based on individual needs
Be unique and different

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