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Apple inc. case study

Apple Research and Apple Inc. Case Study
MBA 670-Info Mgt for Compet Advantage Xiaosheng Zhang 1609346

What Apple’s competitive advantages? 4“I’s” secure the success of Apple: innovative hardware and software, incomparable design, incredible managing and marketing and influential leader. Innovation obvioussignificant to Apple, range from first generation Apple-I to iMac to iPhone 5, Apple leading the recordthat released and upgraded products every 12 to 15 months.No matter iOS, iTunesnor Siri, software one hand securesthe company’s revenue, on othertopples over traditional concept. Design is key of Apple’s concept, ease of use and simple of look differentiate all those “i”-products with others.What Apple designed makes technological devices more portable, multifunctional and interrelated.No one has been able to design a better MP3 player than iPod, which “continued to hold more than 70% of the U.S. MP3 market in 2012.”[1] To Apple’s success, incredible managing and marketing also crucial. Apple had a narrowest production line make sure the focus of innovation, had outsource of production improve the management of inventory.The company rarely talking about features or technology,but how the product will make life better.

While, people said three greatest apples influenced the world. Other than Adam and Eve, Newton and his head, Steve Jobs’sharp mind, foresight and charisma not just interpret on products but can be treated as a competitive factor to the company.

Why did Apple struggle historically in PCs? PC industry is a highly competitive sector that dominant PC manufactures such as Dell, Hewlett-Packard, Acer and Lenovo are all accepted “Wintel” as the industry standard.Despite “closed” Macintosh OS had grown faster in recent years, Apple’s share of the worldwide PC market still remained very low, below 5% since 1997[2].

Meanwhile, the industry average selling price declining. Driving by the lower prices and expanding capabilities, now PCs average selling prices declined by a compound annual rate of 8%– 10% per year from the early 1990s through 2005.[3] It directly influence the profit margin, which the average PC manufactures’ profit margin, excluding Apple, just 5% [4], and the R&D input. Secondly, the emerging New of new market and product the brings more






theinnovation to Asia; new concept or category from laptops to Ultrabooks to lightweight mini notebooks initiated market capacity but also competition.

Further, the majoritybuyers of PCs are price concern and more knowledgeable of them moved away from full-service dealers bought PC or PC parts directly from manufacturer. Home consumers accounting for more than 50% of worldwide PC shipments[5], who are extremely price concern. The shifts of distribution decline the profit margin directly.

How sustainable position Apple isin PCs, MP3 players, and smartphones? Thanks to the stable upgrade OS, the strategically build-in Intel chip, and the well-cooperated software vendors, Apple’s PCs developed faster than the industry. With the help of cutting- age design, Apple became the third-largest PC vendor in the U.S. in 2011[6]. Meanwhile, the companysecured high profits margin in the industry, about 41% that is almost doubled than second one Dell in 2011 [7]. Despite Apple’s globally PC market share remained below 5%, the rate raised steadily in recent years.

In the MP3 player market, Apple’s iPod without doubt account the biggest market share. Relying on sleek design and feature, iPod initiated the industry standard, established anaccessory market and taken highest gross margin. While, Apple’s iTunes secured the iPod market position. Using pay-per-song basis,

iTunes brings a galvanic impact on iPod. “In the quarter before the release of iTunes, Apple sold only 78,000 iPods. After the iTunes launch, iPod sales shot up to 304,000 units. [8]” Speaking of smartphone, the every 12 to 15 months releasediPhone becomes an icon of the industry. By 2011, the iPhone had a globally market share of smartphone barely 4%, however Apple generated more than 50% of the cellphone industry’s total profits.[9] Due to the popular of iPhone, Apple always have the negotiate benefits from carriers which secure the sale volume and service quality.

What are Apple’s long-term prospects for the iPad? Apple has two long-term prospects for iPad: profit and industry standard.

Apple first introduced its tablets in 2010, at that time iPad was initiated for change the future of the personal computer.By the Feb of 2012, 55 million iPads had been sold and make $35 billion revenue for Apple. [10] No doubt, iPad is aim to profit.

At one point in 2011 iPad was enjoyed the market share over 81%, but now it shrunk to just 52%,[11] why? Since Samsung’s Galaxy Tab as well as Amazon’s Kindle Fire and other competitive products. Apple need iPad to struggle more market share in long-term.

But, if people think Apple’s prospects for iPad just profit, which was wrong. It was easily to tell the changing of the PC industry after the first lunch of the iPad. Consumer was introduced a more portable, multitask and sleek design concept of a personal computer.

As Apple’s “Digital Hub” strategy describe, Apple want to built up integrated

hardware and software Hub. Therefore,iPad another aim is challenge the personal computer “Wintel” standard by change people computer using habit. Then built up a Mac oriOS leading computer standard, secure the future benefits for Apple.

What advice would you offer the new CEO Tim Cook? Keeping the pace of Apple’s initiate innovation. Apple introduced many cutting age and life changing technologies, Cook should keep the innovation pace of the company and feel free to challenge traditional concept and industry standard.

Improving the customer communication. This is only part that Steve Jobs did not deal well, and made Apple looks like a arrogant company. Developing a customer communication system will help Apple improving the service while may get change to find more business chance. Pay attention to the developing market in Asia. China for instance, it is the world’s largest market not just for mobile. Apple did not easy handle it until now,issues such as a lawsuit from iPadname and suppliers' factories bad working conditionsdrag on Apple development in China.

Reference 1-Apple Inc. 2012, P8, Harvard Business School, Jordan Golson, “Apple Report Best Quarter Ever in Q1 2012: $13.06 Billion Profit on $46.33 Billion in Revenue,” cited NDP in MacRumors.com, http://www.macrumors.com/2012/01/24/apple-reports-best-quarter-ever-inq1-2012-13-06-billion-profit-on-46-33-billion-in-revenue 2-Apple Inc. 2012, P1, Harvard Business School, see Exhibit 3a of the case or Apple’s PC market share, worldwide. 3-Apple Inc. 2012, P4, Harvard Business School , IDC (International Data Corp.) data, as cited in Graham-Hackett, “Computers: Hardware,” Standard & Poor’s Industry Surveys, December 8, 2005, p. 7. 4-Apple Inc. 2012, P4, Harvard Business School, FY 2011 financial results for Acer, Dell, HP, IBM, Lenovo, Thomson One, accessed April 2012. 5-Apple Inc. 2012, P4, Harvard Business School, Thomas W. Smith, “Computers: Hardware,” Standard & Poor’s Industry Surveys, October 22, 2009, p. 18. 6-Apple Inc. 2012, P7, Harvard Business School,Rajani Singh and David Daoud, “Worldwide PC Market: 4Q11 Review,” IDC, April 2012, p. 11. 7-Apple Inc. 2012, P20, Harvard Business School,Exihibit5, PC Manufacturers’ Key Operating Measures, 1997–2011. 8-Apple Inc. 2012, P9, Harvard Business School,Apple, Inc., December 21, 2001 Form 10-K405 (filed December 21, 2001); “Number of iPods sold through 2002: 600,000,” Apple press release, July 2002,http://www.apple.com/pr/products/%20ipodhistory/ 9-Nokia at the crossroadsBlazing platforms, The Economist http://www.economist.com/node/18114689?story_id=18114689 10-Apple Inc. 2012, P13, Harvard Business School,Horace Dediu, “Apple sold more iOS devices in 2011 than all the Macs it sold in 28 years,” quoting Apple CEO Tim Cook at the Goldman Sachs—Apple 2.0 Fortune Tech, February 16, 2012, http://www.asymco.com/2012/02/16/ios-devices-in-2011-vs-macs-sold-it-i n-28-years/ 11-iPad Mini Proves Major For Apple Shares, Forbes http://www.forbes.com/sites/richardsaintvilus/2012/11/23/ipad-mini-provesmajor-for-apple-shares/

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