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APPLE INC. IN 2012

Case Study

SYNDICATE 3
ANGGORO INDRO PRADIPTO DEDY SURYAWAN NIENSY YUSFITASARI WAHDANI HAKIM PRANA SABDA PRABAWA

I.

Background
In the case at earlier, 2010, Apple Inc. launched its eagerly anticipated iPod amid great hype. The company started off as Apple Computer, best known for its Macintosh personal computers (PCs) in the 1980s and 1990s. Despite a strong brand, rapid growth, and high profits in the late 1980s, Apple almost went bankrupt in 1996. Then Jobs went to work, transforming Apple Computer into Apple Inc. with innovative non-PC products starting in the early 2000s. In fact, by 2010, the company viewed itself as a mobile device company. In present scenario Apple having largest market share in all over the world.. Apple knows as because of its unique features and innovation. Early 1980 . it having some market failure. Company feces many problems such bankcouurpcy. Profit margin was very low at that time. At the same time, Microsoft introduced Window 7, which led to a resurgence in PC sales. Even though Macintosh sales had grown faster than the industry in recent years, Apples share of the worldwide PC market had remained below 5% since 1997 History of Apple Computer today is Appel Inc, begin where Steve Jobs and Steve Wozniak, a pair of 20-something college dropouts, founded Apple Computer on April Fools Day, 1976.4 Working out of the Jobs familys garage in Los Altos, California, they built a computer circuit board that they named the Apple I. Jobss mission was to bring an easy-to-use computer to market, which led to the release of the Apple II in April 1978. It sparked a computing revolution that drove the PC industry to $1 billion in annual sales in less than three years.5 Apple quickly became the industry leader, selling more than 100,000 Apple IIs by the end of 1980. In December 1980, Apple launched a successful IPO. Apples competitive position changed fundamentally in 1981 when IBM entered the PC market. The IBM PC, which used Microsofts DOS operating system (OS) and a microprocessor (also called a CPU) from Intel, was a relatively open system that other producers could creat own PC. 'Apple Computers' as it was called prior to 2007 had primarily focused on its core computer business. In 2001, it shifted its strategy by entering the portable digital music player business with the introduction of iPod, and in 2003 entered the music business with the introduction of iTunes music store. by end of 2006, the iPod & iTunes business contributed to more than half of its revenue. In 2007, Apple Computer changed its name to Apple, Inc. at this case focuses on Apple, Inc.'s business strategy in the last five years starting from 2007 to present, when Apple Inc Entry into mobile phones with iPhone, Four years after its launch, the Phone accounted for 44% of Apple's total revenue & Walt Mossberg of the Wall Street ]ournal claimed that, "the App Store is what makes your device worth the price." After that Apple's release of the iPad on March 2,2010, defined a new device category that was described by Jobs as "even more intuitive and easier to use than a PC, and where the software and the hardware and the applications need to be intertwined in an even more seamless way than they are on a PC.".

Apple competes in the following four industries ; Computer Hardware and Software with 'Mac' line of computers, Mac OS X & iOS Portable media devices iPod, iPad & appleTV Smart Phone iPhone Music, Media and Content Service iTunes, iBook, App Store and Mac Store

A firm's business strategies are influenced by the forces in its external environment Political Threat Apple manufactures and assembles all of its products in Asia. Hence it is dependent on political stability in these countries. Any political conflict between these countries and the US can have a negative effect on Apple's operations. Legal Threat Apple is a successful company and with success comes persistent threat of litigation from any number of sources, e.g., Apple had legal disputes with Beatles on Apple trademark which was settled in late 2006. Currently Apple is fighting Antitrust lawsuit filed against its iTunes download business Economic Threat Apple is subject to global economic cycles, like inflation, GDP, interest rates and levels of disposable income. Apple products are considered premium products and puts Apple in disadvantage during economic downturns as consumers are weary of big-ticket purchases like computers, iPhones or iPads. Apple is a multinational company maintaining huge cash reserves which is not fully repatriated. Global interest rate fluctuation will have impact on Apple's income as the company earns interest on its cash reserves. Fluctuation in US dollar exchange rate will have significant effect on its profits as more than half of its revenue coming from outside US Threats from Competitors Apple's competitors are established companies with substantial resources. Any advantage that Apple gains by product differentiation is short lived as competitors have copied them immediately, e.g., mobile phone companies like Samsung, Nokia, Motorola released their version of touch screen smart phones and tablet computers within months after the introduction of iPhone & iPad.

Threat of New Entrants Even though cost can be a significant barrier to entry, some of potential competitors with substantial resources have diversified into Apple's music and smartphone businesses. New entrants to music industry like Amazon, started their own online music business. Microsoft launched the 'Zune' music player to compete against iPod. Google entered smartphone business with Android based phones to compete against iPhone & iOS.

II.

Issue.
1. Apple Competition Between earlier 2010 & 2011 Competitor that Androidbased tablets were rushed to the and by the end of 2011, Android held a 38% Market share Apple had at least three potential serious competitors for tablets , Manufacturing that using Goolges version Android, Amazon, which
used an open source version of Android & Microsoft with Windows 8

2. The patent wars, Intense competition in the smartphone industries led to numerous lawsuits on design and intellectual property. Literally, everyone in the industry sued everyone 3. In 2011 Google's competitor to Apple's App Store, called Play Store, surged in 2010-2011. The number of Android applications was rapidly approaching iPhone apps, A survey of developersin 2010 suggested that 87% were very interested in developing Phone apps; 81% for Android apps BlackBerry and Microsoft were far behind developers found it more challenging to write applications for Android. Most Android phones varied slightly, which required software developers to write numerous versions of their apps. An Apple developer only worried about one Phone 4. Among competitor in phone headset appel competitors fell into two large categories: horizontal and vertical. Horizontal : Manufacturers such as Samsung Electronics, HTC, LG Electronics, and Motorola followed a horizontal approach, where they licensed their OS and built their own hardware. Vertical : Research In Motion (RIM) , Nokia. 5. Apple dropped the price of prior generations. The combination of big subsidies, low prices on older models, and expanded distribution caused revenues and unit volumes to explode. As a result, Apple vied with Samsung for the largest market share in smartphone .

III.

Problem
1. How to maintain and keep apple inc leading in an innovation technology product 2. How can apple maintain the market share of technology product 3. with differently method & approaching, how cook make his own distinctive mark on Apple

IV.

Solution
1. To maintain the innovation products , Apple products follow a Focussed differentiation strategy. a focussed differentiating strategy seeks to provide high perceived product value to customers, justifying a price premium and aimed at a niche segment of the market. Apple has been very successful in creating innovative products targeted at higher income customers who are willing to pay premium price for superior user experience. On the surface, it could appear that Apple's competitive advantage is solely due to product differentiation. But on a closer look, Apple's success is not entirely because of its ability to consistently create innovative products. Creating innovative products gives Apple only a temporary advantage as its competitors have imitated and launched their own versions of product in a matter of months. Apple's success lies in its ability to create a platform around their products that drives and sustains growth. A platform strategy is one in which third party developers and media companies can sell their contents that runs on Apple's products. Apple is unique in that it enters a red ocean, i.e., a highly competitive market and succeeds by changing the market paradigm. Apple combines its 'Product strategy' with a 'Platform strategy' that is free of threats and sustain long term growth. Apple's Product+Platform strategy can be summarized as a two phase strategy; Product differentiation focussing on innovation and consumer experience to enter a new market; i.e., Product Strategy. Platform development to build, adopt and then consolidate the platform that is centric to its products to achieve long term growth; i.e. , Platform Strategy. In the last 5 years the most important products from Apple was the launch of iPhone in 2007 and launch of iPad in 2010. Both of these products were diversification to new industries and today constitutes about 70% of Apple's

revenue. To understand Apple's iPhone success and subsequent iPad success, its important to understand what Apple did with iPod+iTunes business. When iPod was launched it was a very innovative product that made technology easy to use. It was hugely successful among the early adopters but its long term success was primarily due to iTunes music store. The iTunes music store created a platform for online music downloads and iPod was the perfect companion for this platform. This digital music platform is the reason why the iPod dominats the portable digital player market even today, in spite of its competitors coming up with digital music players that were technologically superior to iPods. For example, Microsoft's 'Zune' music player had color screen and video capabilities even before Apple introduced them in their iterations of iPods. However Microsoft's Zune was not successful because it did not have that convenient music platform like iTunes. By 2007, iTunes had evolved considerably enough that customers were locked-in to this platform due to its convenience and ease of use. As more people buy iPods, more media houses want to sell their content in iTunes and as more entertainment are available on iTunes, consumers are more likely to buy iPods. This self-reinforcing cycle can sustain and reinforce growth by raising barriers to competitors (Lohr, 2011). Apple repeated this same Product+Platform strategy with their iPhone and iPad products