Apple Case 30: Taking A Bite Out Of The Competition 
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Apple Case 30: Taking a Bite Out of the Competition


• Apple had the highest brand and repurchase loyalty of any computer manufacturer
• Low market share always
• Recognized as being innovative and considered to have a niche status
• iPod and iTunes examples of innovation
• Personal computer line to transition to Intel processors (BootCamp make run windows on mac machines)
• Apple’s personal computers are known for their stylish design, ease of use, seamless integration of peripherals, and high performance NEVER were able to capture a great market share partly because of the proliferation of Windows in the business consumer production.

Q1: Now that the switching costs are removed, could Apple gain market share and sustain profitability in the very competitive computer industry while simultaneously extending its reach into multimedia software and personal digital entertainment devices?

Q2: Introduction of iPhone: could Apple continue taking bites of competition on all fronts?

Company background

• Was formed by Steve Jobs (marketer) and Steve Wozniak (tech genius)
• Mission of empowering individual one person one computer with elegance of design and fierce attention to detail.
• First personal computer.
• In 1983, although not achieving commercial success, innovation was evident in the Lisa, the first GUI computer however it was priced high!!!!
• Macintosh introduced but with slow performance and limited compatible software
• Steve Jobs left


• Sculley tried to take advantage of the Apple’s unique capabilities.
• Macintosh Plus introduced and grew Mac’s reputation with graphic artists and turned Apple into a worldwide brand.
• Apple still did design in-house and manufactured most if its own products. Macs were easy to use with seamless integration and reliable performance. This premium performance meant that Apple could charge a premium price.
• In 1991, the first portable computer was introduced. Sculley in 1992 secretly authorized Apple designers to create a way for the MAC OS to run on Intel processor
• Sculley was replaced by Spindler who continued to focus on innovation.
• Spindler allowed other companies to produce Mac clones which were cancelled by Jobs later.
• Later Amelio came and he intended to reposition Apple as a premium brand but sill stock price was low. He bought Next and brought Steve Jobs back again.

Steve Jobs’ Return

• One of the first strategies was to strengthen the relationships with third party software developers including Microsoft.
• In 1997 alliance with Microsoft to create a version of Microsoft Office for Mac
• In 1998, Apple introduced the iMac personal computer with translucent plastic case and was considered as a hallmark of industrial design.
• From 1999 to 2001, Apple began acquiring software companies and creating entertaining software products such as Final Cut and DVD studio pro video editing programs to complement their reputation as a professional digital imaging destination.
• In 2001, Apple introduced Mac OS X based on NextStep and Unix that provided dual operating system environments to ease the transition.
• Also, in 2001 Apple stores were opened to influence customers to switch to Apple environments and overcome competition with other brands via third-party sellers.
• In 2001, the new strategy of Apple was to position Mac as a digital hub through creating iTunes, the new digital lifestyle.
• In late 2001, Apple introduced iPod, an MP3 music player. With iPod Apple has invented a whole new category of digital music player that lets you put the entire music collection in your pocket and listen to it wherever you go.
• In 2002, Apple introduced an iPod that would download from Windows creating its first product that didn’t require a Mac computer and opened Apple “magic” to everyone.
• In 2002, Apple released iMac and announced iPhoto. iMac flat panel was designed to be the center of the emerging digital lifestyle and run Apple’s award-winning suite of software.
• Big problem, if the company fails to produce innovative products because it created a weather system all its own.
• In 2003, Apple introduce iTunes Music Store compatible with iPod only.
• Apple held a 40% share in the digital music players and a 70% share of the paid music download market.
• By the end of 2004, iPod became a must have Christmas present.
• In 2005, Apple released the MacMini computer module, iShuffle, and Mac OSX version Tiger, billed as the world’s most advanced operating system.
• A free recycle program for iPod was announced and problems with batteries were solved.
• On June, 2005, Apple announced the switch to Intel chips in their personal computers. The goal was to provide customers with the best personal computers in the world after a ten years transition from Power PC to Intel. RISKS: devotion of customers and making programs that are compatible for both.
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