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APPLE INC.
RICHA
JALAN

PROJECT REPORT ON THE DISTRIBUTION &

MARKETING STRATEGY OF APPLE COMPUTERS.
SUBMITTED BY,, RICHA JALAN
St.xaviers college,kolata
B.COM (EVENING)
ROLL NO: 982
 ABSTRACT.

The need for this project is to explore the strategies of world’s 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.

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 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.

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APPLE PRODUCTS.

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ADVANTAGES AND DISADVANTAGES OF APPLE
PRODUCTS..

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MAC..
Advantages:
1) Easy to use
2) Virus free
3) With boot camp you can run XP or Vista on your machine, and with Parallels you can run
windows programs in OS X

Disadvantages:
1) Small software base compared to Windows (without using bootcamp/parallels)
2) Not nearly as customizable
3) 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..

It’s a fact like no other- iPod has catapulted Apple into unbelievable fame and fortune, but are
iPod’s 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 iPod’s 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 that’s 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 Apple’s
gimmicks? Have a look at my list of iPod advantages and disadvantages and judge for
yourself…

1) 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
computer’s “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.

2) Only play iTunes purchases- The greatest disadvantage to Apple iPod’s is most probably its
FairPlay DRM protection. The program only allows songs purchased trough iTunes to be

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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. It’s just Apple’s 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.

3) iTunes incompatibility with other mp3 player software- Prefer to use Windows Media
Player or Winamp? Well, it’s a fact they are a lot quicker and less tiring than iTunes!
Unfortunately you can’t! FairPlay DRM protection on downloaded songs only allows for songs
to be played in iTunes or on your iPod.

4) 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 battery’s fully charged. Its also important to not that should the battery get
depleted you can’t spare change it, this should be kept in mind if functionality is essential for
long periods of time.

5) 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.

6) No storage space- Urgently need to store information but don’t 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 you’ve created for example in
MS Word. Again, iTunes interaction with the iPod, is to blame for this.

7) No voice recording function- Have an unexpected voice recording? Many mp3 players will
be able to assist in an instant, iPod unfortunately not.

8)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. It’s 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.

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9) Expense- In general iPod’s 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.

10)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 I’ve mainly given consideration to iPod’s disadvantages and not its advantages. I am
sure there are tons of positive aspects about iPod including battery charge duration and its
incredible selection of accessories. When compared to other mp3’s players, iPod most certainly
has more accessories than any other mp3 players on the market.

IPHONE..
iPhone Advantages.

1) Brand Elevation. The iPhone home page establishes one central on-device portal for
accessing all of Apple’s 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.

2) 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.
That’s a huge usability hindrance as most people abandon such activities after six clicks.

3) Easy 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.

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4) 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.

5) 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 door-to-door directions to the restaurant, then get current traffic conditions.) Okay, maybe
it’s not called an “action bar” – that’s what we call ours – but it’s cool. Nice job Apple!

6) 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 Gotcha’s

Despite its engineering and design capabilities, Apple still needs to address a number of key
issues:

1) Cellular Internet Trap. Sure, the Safari mobile browser may be the best mobile browser
ever. But unless users are near a WiFi hotspot, Safari doesn’t solve the fundamental problem
facing Apple – and everyone else – namely, every click is a connection over the cellular
Internet. Worse, the iPhone uses AT&T’s slower EDGE network rather than a 3G network.
While the slow speeds are not Apple’s fault, they reflect poorly on Apple’s brand – making the
quick-click widgets an even more important part of the iPhone experience.

2) Keypad Data Entry. Apple’s 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 screen’s user-friendliness and scratch resistance. Touch screens have,
historically, proved to be good in concept but often flawed in execution.

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3) Limited Widget Integration. Beyond its PIM integration, widget integration on the iPhone is
limited. For example, after looking up a city’s weather in the weather widget, that city should
appear for mapping in the map widget. It should, but it doesn’t. 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.

4) 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 wasn’t 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.

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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.

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.

INTERNATIONAL AND DOMESTIC SCENARIO OF APPLE.

India: Why Apple Walked Away

Plans for an Indian tech support center have been scrapped. A cautionary tale

Apple CEO Steve Jobs has long had a thing for India. After working at game developer Atari
(ATAR ) in the mid-'70s, Jobs took a break and backpacked around the subcontinent in search
of spiritual enlightenment. Upon his return to the U.S., his more capitalistic instincts took over,
and he and Steve Wozniak launched Apple. Today, of course, the seeker-turned- billionaire
enjoys a reputation as one of the most successful entrepreneurs and savviest marketing minds
on the planet.

Yet he is also a tough-minded executive who knows when to cut and run. That's why Apple
Computer Inc. has shelved plans to build a sprawling technical support center in Bangalore,
even as IBM (IBM ) and other tech powers are ramping up. Just three months back, Apple
appeared to be on the same trajectory, and there was talk of the company hiring 3,000 workers
by 2007 to handle support for Macintosh computers and other Apple gear. Many in India even
speculated that Jobs might travel there this year to publicize Apple's commitment to the
country.

It wasn't meant to be. In late May, Apple dismissed most of the 30 new hires at its subsidiary in
Bangalore. (A handful working in sales and marketing will stay on.) Spokesman Steve Dowling
would say only that Apple had "reevaluated our plans" and decided to provide support from
other countries. Another source familiar with the situation, though, says the decision was cost-
driven. "India isn't as inexpensive as it used to be," the source says. "The turnover is high, and
the competition for good people is strong." Apple feels it "can do [such work] more efficiently
elsewhere."

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The shutdown highlights concerns about the sustainability of India's fast-track economy. True,
India grew 9.3% last quarter and is still home to the world's largest and fastest-growing offshore
outsourcing sector, which last year generated some $17.3 billion in revenues and employed
nearly 700,000 people, according to the McKinsey Global Institute. Yet India's benchmark
Sensitive index, or Sensex, has dropped by 20% in the past month as global investors have fled
emerging-market stocks. And the outsourcing sector is now plagued by concerns about rising
wages. Entry-level pay at tech and outsourcing companies climbed by as much as 13% annually
from 2000 to 2004, while salaries for midlevel managers jumped 30% a year during the same
period, to a median of $31,131, according to McKinsey and Nasscom, India's software industry
association.

INTERNATIONAL SCENARIO OF APPLE COMPUTERS.

Advertise. Webster defines it to “make publicly and generally known: to call public attention to
especially by emphasizing desirable qualities so as to arouse a desire to buy or patronize.” The
advertisement business has reached extreme highs in the last decade thanks to the extended
communication we now have through technology. It has now become so simple, even to the
average individual to promote what ever is desired. If this task has become so effortless for a
single person, then why would a huge corporation not be able to do this? Apple Computer, a
competitor in today’s world of PC’s, has not succeeded in advertising their product as well as
their opponents such as Gateway, Hewlett Packard and their oldest rival, IBM.
Despite disastrous losses in the 80s and 90s to their main competitor, IBM, Apple recently re-
vamped the entire company. They have focused on marketing and product development. They
even introduced the iMac in 1998, which turned out to be the most successful personal
computer launch ever. Despite this success, the rapid rate of development within the computer
industry indicated that Apple must analyze their previous marketing techniques in order to
maintain the high level of success and to keep up with the competition.

In order for a product to be successful, especially on the scale of PC’s, people around the world
must have it on their mind. People need to be exposed to the idea in many different ways. There
are several methods to accomplishing this. The internet, television, movies, radio, billboards,
ads and countless other ways are all roads into the advertisement world. Compaq, HP, Gateway
and Dell have dominated these fields for years, and Apple has just now in the last couple of

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years been able to scrape the surface of these ideas. In the last year, cable has been able to
televise the first successful set of Apple commercials which showed them to be better and more
efficient than their competitors. Capitalizing on major opportunities, Apple stepped up and took
over the movie world too. In any movie coming from Hollywood, the only PC logo that is now
seen is Apple, whether it is on a laptop or desktop computer, software, iPod or even a sticker.
By doing this they have successfully promoted high level of graphics and “easy use.” Apple
strove for beauty this year and they achieved this through the iMac and iPod. The iMac is an
affordable, hassle free, plug and surf, personal computer that competes with other firms in the
market. Another part of the marketing technique Apple used for the iMac was through the
individuality of people. They produced the computer in different colors. People were able to
customize their personal computers for the first time in any way they wanted. They extended
this idea to the iPod products. Once again, this method of reaching out to the people’s
individuality caused a boom in sales across the world.

Their updated software has been another step in the business world for Apple. MacOS and
MacOSX has been a wonderful transition for people use to using the Windows operating
system. It has proven to be much faster and easier to use. Tthe new MacOS is equipped with
one feature that no other operating system has, and that is speech recognition. An addition to the
great new technologies being introduced and supported is the continued excellence for the
graphics in the industry. These Apple produced computers are the fastest personal computers on
the market today, beating other computers such as the Gateway 550-MHz Pentium III PC.
Finally, the new Macintosh operating systems are showing great support for the futurist
programming language of Java. This is a wireless networking system that lets you travel up to
150 feet away from the base station.

Apple’s ad campaign is based on the two words of “Think Different”, and I believe they are
beginning to take their own advice. Apple has always supported graphical software and
hardware but the continued vision of where the industry is going with software titles like Adobe
PhotoShop and Apple’s new FinalCut Pro surpasses anything the rest of the other computer and
software makers have to offer. With this, I believe Apple is likely to become a major player,
again, in the industry of personal computing.

I personally have only used an Apple computer, such as the iMac, for small assignments before,
but enjoyed what I saw. The graphics that were produced were very clear and crisp. The iPod

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on the other hand, I have been able to use for several things. It is capable to hold thousands of
songs, pictures and other data. It is very convenient. I do believe though that in order for Apple
to continue to produce such products they will have to step it up even more to get their name
out. I’m sure that the computers produced by this company are worth the price people pay for
them, which can range from $800 to over $3000, but they may be more successful in
advertisement if they offered a low-end computer that would be able to compete with Dell’s
low-end computer of $299.

In past years, Apple was on a downward spiral, but now the Mac is back on the right track. The
interim CEO Steve Jobs has brought them from expected quarterly loses to now, first quarter
net income of some 150 millions dollars. The question still remains, is Apple back to stay? With
the Windows driven world of today, can Apple assert them self to claim market share? Apple’s
stunning new hardware, user-friendly operating system, and drive for incredible new
technology, will not only compare Apple to traditional PC and software maker but will stun the
rest of the computer world along the way.

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.

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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 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

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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

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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

17
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

18
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

19
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.

20
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 CD-RW 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.

21
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 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.

22
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, no-nonsense 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.

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.

23
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.

APPLE’S 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

24
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 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

25
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 marginsµ why 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.

"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 worldwide—going 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,

26
and the reduction of barriers to entry, it becomes all the more important to benchmark a
company’s 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.
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

27
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?

How? : The Methodology:

Most vertical analyses merely focus on benchmarking against domestic ratios, often published
by government agencies or commercial sources. In contrast, the report calculates thousands of
industry norms by looking at firms at the global level, pooling statistics on tens of thousands of
companies across over 40 countries, and applying a seven-stage methodology: (1) identification
of industry classifications, (2) firm-level data collection and aggregation, (3) standardization of
raw statistics, (4) filtering outliers, (5) calculation of global norms, (6) projection of deviations
and gaps, and (7) projection of ranks and percentiles. For each part of the financial statement,
the larger structural differences and gaps between Apple Computer Inc. and the global
benchmarks are provided with summary tables of ranks and percentiles.

SWOT ANALYSIS OF APPLE CO..

28
29
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 APPLE’S MARKETING STRATEGY..

Apple has been so successful in these last year’s 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 $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

31
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
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.

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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 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.

33
 APPLE’S 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 ClubMac. "But the this time they had clear
lines of distribution. When you wanted more, they had more."
Under Apple's recent changes to its distribution system, MacCenter 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 MacCenter's Carol
Frame.
Mac resellers, along with Creative Computers, the company that operates MacMall, 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.

ClubMac generated $5.5 million in Apple sales in December, of which 40 percent came from
the G3 computers, McNeill said. Frame noted that MacCenter 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 first-
quarter results on January 14.

34
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.Apple's 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.

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.

PRODUCT MIX..
One of the main reasons that I have chosen Apple computers as my topic is that in my opinion,
Steve Jobs (founder of Apple Computer Inc.) is undoubtedly a genius in the marketing sector.
Apple Computers Inc started with the production of 2 computers in the garage at the side of
Steve’s house. With very limited education Job’s has managed to build his empire to be what it
is today. His marketing strategies are well thought out and always up to date,

Job’s has expanded his marketing techniques to reach a wide market (something some
companies would consider insane, having to take a risk that no one has took before).

He has used his persuasiveness and clever marketing techniques to build an ideal world of
white, abstract, shiny , arty and most importantly expensive surroundings that everyone wants.
Luckily for the consumer, Steve Job’s loves to sell you his premium priced electronics, which,
are of course “superior” to that of the competitor.

35
Job’s ability to sell products, market them successfully and always come up with something
new and unique is reflected in the company logo

To cut a long story short Apple is a huge success story from the point of marketing. Now, on to
the product.
THE PRODUCT I will be focusing on a selection of Apple’s products. I have chosen the most
successful from a marketing point of view. Here they are:

THE POWERMAC

The Powermac is Apple’s flagship desktop “Power PC”. The Powermac is aimed at
professional users and is used worldwide as industry standard in web design, graphic design,
movie production, music production, print and art (the list goes on).
Apple’s marketing technique places strong emphasis on the importance of design, packaging
and atmosphere. I could list the specifications of the computer, how big the hard drive is, how
fast it is…. But wouldn’t this be pointless?
These computers have been designed to sell on looks alone. The consumer wants the computer
once they see it, before they even know anything about it. For a long time Apple have looked at
what the competition is doing and then thinking…. How could we improve this? A fine
example of this is the Powermac. Other computers boast up to a “jaw-dropping 20inch monitor”
as an extra bonus. Apple have taken this idea and included a slightly bigger 40inch widescreen
monitor as standard.

Apple ask why should the consumer use any product that doesn’t have the Apple logo on it?
Let’s make it work as a TV and a DVD player and copier at the same time, why should you
need a TV? And, seeing as this is an unbelievable, out of this world product we’ll charge the
consumer eight times what it costs to make, that’s right 8,000euro.

The idea of the high “Premium pricing strategy” leads the consumer to believe that it is better.
But is it really?

As a result the Powermac has played a huge role in helping Apple up the ladder to success.

THE iBOOK and the iMAC.

The iBook is a laptop designed by Apple. Again, a lot of time and consideration have gone in to
the design and the eye-pleasing factor of the iBook. Why should we make a laptop like all
others ? Why not create something new and unusual, drop the price, sell more and make another
fortune?

Here is an extract from Apple’s website about the iBook:

“Surf the Web, chat with friends, do homework, play games, even burn DVDs and CDs to
create your own video or musical masterpiece. In your favorite café. At 2 a.m. With built-in
wireless capability and 512MB of memory standard, the iBook G4 delivers today’s digital
lifestyle to your backpack, starting at $999.”

On the website apple boasts “Rave-worthy performance”, “Durable space age construction” and

36
conclude by saying “Its your life” and then “Live wirelessly, spend wisely”. They also mention
that it is the smallest consumer laptop available on today’s market.

The iBook is aimed at College students, Apple’s marketing strategy takes advantage of travel
and college life. “The iBook is small enough to bring to your lectures to take notes”, “Store all
of your photos in one place”, “Ultimate portability for students”

The iMac is basically the desktop equivalent of the iBook and is based on the same slim-line,
abstract design. Of course this only comes in white (Something Apple is well known for). For
simplicity, the iMac incorporates all parts of the computer into the 20inch monitor. This would
encourage to consumer to buy it – As Apple put it a powerful, inexpensive computer, which
saves desk-space and will do anything a PC will do only better.

APPLE’S DISTRIBUTION STRUCTURE

37
38
APPLE’S MARKET SHARE..

39
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 Apple’s U.S. market share in fourth place among computer manufactures
at 7.4%, down slightly from 8.0% in Q4 of 2008. It’s 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.

40
Apple’s 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 beleived that the entire computer
industry performed better than expected due to the serge in popularity of the netbook 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 netbooks. Although Apple’s
market share has slipped, its gross revenue and profits appear as if they are going to be largely
unaffected.
I’m 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
netbook arena. That said, they also believe the reason (or at least one of them) for the popularity
of the netbook is the economic crisis.

DIRECT COMPETITOR COMPARISON

Company Symbol Price Change Market Cap P/E

International Business Machines Corp. IBM 128.25 0.00% 166.60B 12.81

Hewlett-Packard Company HPQ 53.24 0.17% 124.85B 16.05

Dell Inc. DELL 15.05 0.20% 29.46B 20.62

Cisco Systems, Inc. CSCO 25.83 -0.77% 147.89B 24.86

41
Xerox Corp. XRX 9.99 2.46% 8.69B 18.07

Sun Microsystems, Inc. Private - View Profile

Seagate Technology STX 18.11 -0.82% 9.04B 23.04

Apple Inc. AAPL 235.97 0.41% 213.98B 22.99

NCR Corp. NCR 14.08 2.03% 2.25B N/A

EMC Corporation EMC 18.18 0.78% 37.32B 34.43

COMPUTER HARDWARE (NON-US) RANKED BY SALES

Company Symbol Price Change Market Cap P/E

TOSBF.PK 5.25 1.94% N/A N/A

Canon Inc. CAJ 46.97 1.64% 57.98B 39.81

NIPNF.PK 2.40 0.00% N/A N/A

FJTSY.PK 33.20 1.75% N/A N/A

Hitachi Ltd. HIT 39.47 6.13% 17.66B N/A

RICOY.OB 81.15 3.11% N/A N/A

Seiko Epson Corporation Private -

Fujitsu Technology Solutions (Holding) B.V. Private -

Oki Electric Industry Company, Limited Private -

Acer Inc. Private -

APPLE’S SALE’S FORECAST FOR 2004-2011.

42
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 $1.328 billion

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

stores during year * 27 13 25 21 38

capital expenditures - retail $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

2006 2007 2008 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 segment’s cost of sales over the Company’s 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.

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

43
"1984" Super Bowl commercial, the 1990s Think Different campaign, 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.

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 figures—including artist John

Lennon and freedom fighter Mahatma Gandhi.

Apple has been criticized] for its sometimes questionable use of modern art as an inspiration for its marketing

campaigns—at times re-creating a short film or music video shot-by-shot for its commercials. Some artists have

documented entering into rights-negotiations with Apple, only to have Apple pull out of the discussions, then use the

artistic imagery anyway. 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.

In 1997 the Think Different campaign introduced Apple’s 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 the Apple 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 Power Mac G5.

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).

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.

"1984" television commercial: launching the Macintosh

Main article: 1984 (television commercial)

"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

44
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.

[edit]1985–1990

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 the Macintosh Plus and the Performa followed.

In 1988 Apple released a short film titled Pencil Test to showcase the Macintosh II's animation capabilities.

[edit]1990–1995

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]1995–2000

[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 Golub with a voiceover narrated by Richard Dreyfuss.

45
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]2001–present

[edit]"Switch"
Main article: Apple Switch ad campaign

"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.

[edit]iPod
Main article: iPod advertising

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 bright-colored 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,

and Wynton 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

46
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.

"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 Japan and 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 Kentarō Kobayashi as the Mac.

47
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]

Sponsorships

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 Marclay denied 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 for Apple 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]

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

48
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.

Ask the millions of people who use and love their Macs why it’s become such an integral part of their
lives, and most will tell you that it’s because it just works. Letting them do what they want to do, the
way they want to do it. Intuitively. And there’s good reason for that. Only with a Mac do you find
absolutely flawless integration of hardware and software. Only with a Mac do you get an operating
system built by the same people who built the computer it runs on. Take a Mac out of its box, and you
experience that hand-in-glove fit from the word go. Plug it in, turn it on, and you’re ready for anything.
That’s because with a Mac, you’ll find all of the essentials built in: USB, FireWire (IEEE 1394), Ethernet,
Modem. Macs even come with built-in antennae for wireless networks. And every Mac comes with drivers
for most of the printers, joysticks, DV camcorders, keyboards, storage devices, digital cameras, input
devices, MP3 players and game pads you’ll be connecting to those ports. So when you plug them in for the
first time, they’ll just work, too.

Are you just a tad too well acquainted with the notorious “blue screen of death”? Well now you can bid it
a fond farewell. With Mac OS X, you’ll become accustomed instead to industry-leading stability. In this
elegant new operating system, memory is fully protected and applications can’t conflict with the OS or
one another. And, oh yes, Mac OS X is built on the industrial strength of UNIX. Most Fortune 500
companies, governments and universities rely on UNIX for their mission-critical applications. And now, so
can you.

The critics all agree (and how often does that happen?) — not only does iTunesturn the Mac into an
unequalled digital jukebox, but iPod has no peer among MP3 players on the market today. iTunes makes
it easy to convert the music from your CD collection into MP3 files. Lets you make playlists to match

49
your every mood. Offers one-button burning of audio CDs. And seamless integration with MP3 players. Like
iPod. Which fits in your pocket, weighs just 6.5 ounces, holds up to 2,000 songs, features lightning-fast
music transfers via FireWire, plays for up to ten hours and lets you take your music wherever you go.

Everyone loves iPhoto, which revolutionises the way you save, organise, share and enjoy digital photos.
Included with every Mac, iPhoto lets you easily download, organise, find and share your photos — as
prints, in a slide show or on a Web site it will even help you build. Simply drag your mouse, and iPhoto
magically grows or shrinks your photo thumbnails. So you can view individual shots in detail or see
hundreds of photos on the screen at once, and quickly scroll through thousands to find the one you’re
looking for. You may never go back to using a film camera again.

Designed and built for today’s digital lifestyle, the Mac offers a complete ensemble of digital tools. In
addition to iTunes and iPhoto, Macs come withiMovie and, on all systems equipped with a
SuperDrive, iDVD, as well. Like the Mac itself, they’re easy to use and work together flawlessly. You’ll
use iMovie to turn raw video footage into polished films — complete with soundtracks, titling and effects
— that friends will actually ask to watch over and over again. And iDVD will let you burn your photos
and movies onto DVDs that can be played on most commercially available DVD players.

We think computing on the go should always be a first-class experience. That’s why we design
our PowerBook and iBook computers the way we do. Light and thin, and with displays so bright and
clear, you’ll think you’re working on a desktop system. And they come standard with what some
other laptops consider “extras”: capacious hard drives, built-in optical drives, USB,FireWire,
Ethernet, modem, video out, audio in and WiFi compatibility. Consider this: can your PC laptop go for
six hours on just one battery? Can you put the system to sleep just by closing the lid? Does it wake
up instantly? Can your PC laptop automatically switch between Ethernet, dial-up and wireless
connections on the fly? Without a restart? Ours can.

When did you last configure a PC for the Internet? Take you long? It won’t on a Mac. The fact is, most of
our customers are up-and-surfing within 15 minutes. And that includes people who never touched a
computer before in their lives. What will your experience be like? You’ll find moving
your favorites, email contacts and email messages to the Mac mere child’s play. And just wait until
you try the software. Microsoft built features into Explorer and Entourage found nowhere else,
features that make browsing and email on a Mac an absolute joy. Feel like chatting? AOL Instant
Messenger, Yahoo Messenger, MSN Messenger — all your favourites are available. In fact, you’ll find
tons of Internet tool options. That includes QuickTime. When it comes to world-class streaming video,
no product offers a better digital media experience. (And with QuickTime 6, we just upped the ante).
Of course on a Mac, it’s just as easy to stream video, chat, read email and surf wirelessly. That’s
because every Mac is ready for WiFi (802.11) — we call it AirPort — right out of the box.

50
The transition to a Mac is easy in part because you’ll continue using the same applications you already
know. Microsoft Office v. X for Mac OS X gives you Word, PowerPoint and Excel, all with the same familiar
features and shortcut commands. And thanks to exclusive features, the Mac versions improve on their
Windows counterparts. Office documents are all fully compatible between Mac and Windows, so you can
share everything from spreadsheets to presentations. Beyond Office, you’ll find you can run more than
3,000 applications designed specifically for Apple’s new operating system, Mac OS X. You can do anything
you’d dream of doing on the Mac — from CAD to databases to finance.

St
andards let everyone work together harmoniously. That’s why Apple has adopted so many of them. Take
networking. Networking on a Mac is built on the same technologies used by PCs. As a result, the Mac is at
home on PC networks (or just about any other kind), making the business of sharing files and printers with
PCs entirely painless. And with Mac OS X you don’t have to be a network administrator to make it all work.
What’s more, Gigabit Ethernet is built in. As is support for 802.11 wireless, so you can network without
cables inside your house using AirPort or another wireless access point. Of course, you can also swap files
via data CD, floppies or Zip disks. And most new peripherals connect via USB or FireWire (two other
industry standards), so you can use them with either PCs or Macs.

Our designers and engineers agonise over every millimetre of every new Macintosh model, and
every pixel of the user interface. The result: ergonomic products that are the toast of the design
world. iMac,PowerBook, iPod, iBook — you can see obsession with design and detail wherever you
look: the spring-loaded screws that secure the bottom plate of the new iMac, laser-etched text
where others would put a sticker, the tough colourfast polycarbonate cases of the iMac and eMac,
the swing-away door on the Power Mac G4, the elegant optical mouse included with all desktop
Macs, the instructions on the back of the door you open to add memory to an iBook or PowerBook.
They’re objects that would be striking even if they weren’t computers. Tools that are, on every
level, a pleasure to use.

We think you owe it to yourself to experience a Macintosh first-hand. Check out the high-
performance PowerBook. The ultra-fast Power Mac G4. The oh-so-portable iBook. And the beautiful new
iMac. Check them out at one of our Apple Authorised Resellers soon. You’ll find the Mac can answer most of
your questions itself.

51
 APPLE’S FUTURE PLANS AND PRODUCTS.
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

52
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.

Thinner, lighter and full of great ideas.

Once you pick up iPad 2, it’ll be hard to put down. That’s the idea behind the all-new design. It’s
33 per cent thinner and up to 15 per cent lighter, so it feels even more comfortable in your
hands.1 And it makes surfing the web, checking email, watching films and reading books so
natural, you might forget there’s incredible technology under your fingers.

53
 Dual-core A5 chip. It’s fast, times two. Two
powerful cores in one A5 chip mean iPad can do twice the work at once. You’ll
notice the difference when you’re surfing the web, watching films, making
FaceTime video calls, gaming and going from app to app to app. Multitasking is
smoother, apps load faster and everything just works better.

Super-fast graphics. Go, gamers, go.

With up to nine times the graphics performance, gameplay on iPad is even smoother and more
realistic. And faster graphics help apps perform better — especially those with video. You’ll see
it when you’re scrolling through your photo library, editing video with iMovie and viewing
animations in Keynote.

Battery life keeps on going. So you can too.

Even with the new thinner and lighter design, iPad has the same amazing 10-hour battery
life.2 That’s enough juice for one flight across the ocean, or one film-watching all-nighter or a
week’s commute across town. The power-efficient A5 chip and iOS keep battery life from fading
away, so you can get carried away.

54
 Two cameras. And a big hello to
FaceTime for iPad.
You’ll see two cameras on iPad — one on the front and one on the back. They may be tiny, but
they’re a big deal. They’re designed for FaceTime video calling, and they work together so you
can talk to your favourite people and see them smile and laugh back at you.3 The front camera
puts you and your friend face-to-face. Switch to the back camera during your video call to share
where you are, who you’re with or what’s going around you. If it’s worth filming, let the back
camera roll. It’s HD, so every movie you shoot is a mini-masterpiece. And you can take wacky
snapshots in Photo Booth. It’s the most fun a face can have.

Apple Inc., formerly Apple Computer Inc., established in Cupertino, California on April 1,
1976, has revolutionized personal computers and the electronics market. For a variety of
reasons, Apple has engendered a unique reputation in the consumer electronics industry. This
includes a customer base, particularly in the United States, that is unusually devoted to the
company and its brand name.

According to surveys from J. D. Power, Apple has the highest brand name and epurchases
loyalty of any computer manufacturer. While this brand loyalty is considered unusual for any
product, it doesn’t seem as though Apple has gone out of its way to create it. In 2006, more than
200,000 companies have signed on to create Apple-compatible products, a 26% increase from
the previous year including software makers (Info Tech, 2007). A cottage industry of iPod
accessories continues to blossom into something far more substantial.Apple's online iTunes
Music Store has become the world's third-largest music retailer after Wal-Mart Stores Inc. and
Best Buy Co.

Apple seems poised to extend its reach even further by launching its new Apple iPhone. But
phonemakers such as Nokia and Motorola are quite nervous to see if Apple can remake the U.S.
cellular business by determining what services consumers get and leaving the carriers out of the
loop.

55
In this paper, we will analyze Apple’s pricing strategies in the United States and Europe which
include a combination of skimming and versioning, also called price discrimination.

Apple’s iPhone Strategy

Price

The initial price of the iPhone was set at:

Price

Model Price

4gb model $499

8gb model $599

Introduced in June 2007 at a top price of $599 in the United States, the iPhone was one of the
most anticipated electronic devices of the decade. Despite its high price, consumers across the
country stood in long lines to buy the iPhone on the first day of sales. Just two months later,
Apple discontinued the less-expensive $499 model and cut the price of the premium version
from $599 to $399.

. Target Group

A study conducted by Rubicon (2008) on iPhone users indicates that 50% of the surveyed users
are age 30 or younger. Most of the users described themselves as technologically sophisticated.
In general, iPhone users were over represented in the occupations that are usually early adopters
of technology: professional and scientific users, arts and entertainment, and the information
industry.

Moreover, the iPhone user base consists mainly of young early adopters: about 75% of whom
are previous Apple customers. Now, the challenge for Apple is to get their product beyond the
youthful technophiles and into the hands of mainstream users in order to maintain sustained
growth. While the early adopters are a great group for launching a product, without mainstream
use, the early success would not be lasting. This is why Apple has decided to use different
pricing strategies such as the skimming and versioning.

56
II. Skimming

Skimming is referred to as selling a product at a high price; basically companies sacrificing

sales to gain high profits. This is employed by companies in order to reimburse their cost of
investment put into the original research of the product. This strategy is often used to target
early users of a product/service because they are relatively less price sensitive than others. Early
users are targeted either because their need for the product is more than others or they
understand the value of the product better than others. In any case, this strategy is employed
only for a limited period of time as a way to recover most of the investment of a product. is
employed only for a limited period of time as a way to recover most of the investment of a
product.

In the graph below, we compared iPod sales with the price of iPod classic from 2002 to 2006.
According to the data, the iPod classic model seemed to have either reduced its price or
maintained the same price from one year to the next. In 2002, iPod classic price was the
highest; as a result, it was also shown as the year with the lowest sales. For example, the Apple
iPod classic costs over the years include: 399$ (2002), 299$ (2003), 299$ (2004) and 249$
(2005).

57
 PROBLEMS FACED BY APPLE.INC.
The problems, in the order he delivered them:

58
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.

59
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."

60
 SCOPE OF STUDY..
The scope of the study is very vast Scope of Marketing is to influence buyer's decision directly
or indirectly for generating business to make the flow of goods from producer to consume or
user.

Marketing is a philosophy that leads to the process by which organizations,groups and

individuals obtain what they need and want by identifying value,providing it, communicating it
and delivering it to others. The core concepts of marketing are customers’ needs, wants and
values; products, exchange,
communications and relationships. Marketing is strategically concerned with the direction and
scope of the long-term activities performed by the organization to obtain a competitive
advantage. The organization applies its resources within a changing environment to satisfy
customer needs while meeting stakeholder expectations.

Implied in this view of strategic marketing is the requirement to develop a strategy to cope with
competitors, identify market opportunities, develop and commercialize new products and
services, allocate resources among marketing activities and design an appropriate organizational
structure to ensure the performance desired is achieved.There is no unique strategy that
succeeds for all organizations in all situations. In thinking strategically about marketing many
factors must be considered: the extent of product diversity and geographic coverage in the
organization; the number of market segments served, marketing channels used, the role of
branding, the level of marketing effort, and the role of quality. It is also necessary to consider
the organization’s approach to new product development, in particular, its position as a
technology leader or follower, the extent of innovation, the organization’s cost position and
pricing policy, and its relationship to customers, competitors, suppliers and partners.The
challenge of strategic marketing is, therefore, to manage marketing complexity, customer and
stakeholder expectations and to reconcile the influences of a changing environment in the
context of a set of resource capabilities.It is also necessary to create strategic opportunities and
to managethe concomitant changes required within the organization. In this world of marketing,
organizations seek to maximize returns to shareholders by creating a competitive advantage in
identifying, providing, communicating and delivering value to customers, broadly defined, and
in the process developing long-term mutually satisfying relationships with those customers.

The diversity and innovation of new products in the world of technology play an important role
in the growth and success of the Gizmo Giants in the world of advanced technology.The scope
of this study is to know how the techy master minds like Steve Jobs continue to provide us with
lot of their beautiful innovations and help us to know their marketing strategies in this
competitive scenario. The objective of the study is to draw out lessons for current and future

61
leaders from the analysis of Steve Jobs’ leadership approach. The most clear lessons that
leaders can learn from Steve Jobs is his deep passion for his work, his extreme focus and
unwavering resolve in his decision making.

As one observes Steve Jobs’ marketing approach, it is easy to see his passion for the work of
his company. He admits, himself, in a speech to a group of graduating students from Stanford
University, that he found what he loves to do early in life (Jobs, 2005). He continues to
capitalize on this passion even to this day.

62
 RESEARCH METHODOLOGY..
The purpose of the project is to know the current position of Apple Inc. and demand of
their products in the market.

1. The first step is to collect the data’s concerning the sale and requirement of apple
products in last 10 years.
2. Next step is calculating the sales growth from the simple formula:

Current Sales – Previous Sales

_______________________ x 100 = Percentage
Growth Previous Sales

3. The third step is to Calculation of market share after collecting the relevant
statistics. There are two ways to calculate y market share, each of which may
give us a different result. The first calculation would be based on number of
products. For example, if there were 147,000 microchips sold in the United States
last year and company sold 11,200 of them, market share would be equal to
11,200 divided by 147,000 or 7.6%. That means that the company sold 7.6% of
all the microchips sold in the United States last year. The second method of
calculation is based on revenues. If the total spent by consumers on lawn care
services in the county last year was $312,000 and the revenues last year were
$43,600, then company’s market share would be $43,600 divided by $312,000 or
14%. Calculating based on units and revenues will give us different results where
competitors are selling their goods and services for different prices.In this
research I have used both the methods to analyse the growth and sales of the
company.

63
 COLLECTION OF DATA..
Data are the basic input to any decision making process in a business.The processing of
data gives statistics of importance of study.The reliability of managerial decisions
depends on the quality of the data.The quality of data can be expressed in terms of its
representative feature of reality,which can be ensured by the usage of an appropriate
data method.Data can be classified in primary data and secondary data.

The data which are collected from the field under the control and supervision of an
investigator,is known as Primary Data.

The different methods of collection of primary data are :-

 Observation Method.

 Personal Interview.

 Television Interview.

 Mail Survey.

After executing the survey , it is highly essential to review the answer of respondents
provided in the questionnaire from the angle of eligibility,consistency and homogeneity.

Secondary data is data collected by someone other than the user. Common sources of
secondary data for social science include censuses, surveys, organizational records and
data collected through qualitative methodologies or qualitative research.

Secondary data analysis saves time that would otherwise be spent collecting data and,
particularly in the case of quantitative data, provides larger and higher-quality databases

64
than would be unfeasible for any individual researcher to collect on their own. In
addition to that, analysts of social and economic change consider secondary data
essential, since it is impossible to conduct a new survey that can adequately capture past
change and/or developments.

In this research collection of primary data through survey is difficult because the
headquarters of the company is not located in India and local franchisees and shops are
only able to provide the region wise data and not the overall data.The whole work was
done on secondary data and only a part of it like customer survey was done on the
primary data.The information was provided from the office records which are very much
genuine.

ANALYSIS OF DATA..

App Stores

With regards to the popularity of different app stores, Nielsen's data isn't that interesting, as most
users don't really have a choice. Apple's App Store is the most used mobile app store and has
captured 25% of the market, followed by Blackberry's App World Store (16%). Carrier stores run by
AT&T, Sprint, T-Mobile and Verizon are also still very popular and have a market share between
8% (T-Mobile) and 15% (Verizon). The Android Market only had about a 2% market share by the
end of 2009, but given the small number of devices on the market at that time, this number will
surely grow in 2010 as more device manufactures add Android devices to their lineup.

65
Customer Satisfaction
When it comes to customer satisfaction, Apple's App Store and the Android Market are far
ahead of their competitors. 84% of Apple's users are satisfied with the user experience
in the iTunes store and 81% of Android users are happy about their experience. All the
other stores, however, still have a lot of catching up to do. In Nielsen's survey, the
Windows Marketplace ranked the lowest (56%), followed by the Blackberry App World
store (58%).

66
 SURVEY REPORT.
Analysis of the survey made on the samples and preparing the charts showing the
growth of the company’s profile.

67
1. Have you ever purchased a product or service from Apple Inc.?

a. Yes-70% b. No-30%

2.Which product of Apple Inc. are you using currently?

a. MAC – 10% b. I POD – 60%

c. I PHONE – 25% d. I PAD – 5%

3. No. of People satisfied with the product they are currently using.

a. Yes – 80% b. No – 20%

68
4. What attracted you to buy the product you are currently using?

a. Design-20% b. Reliability-50%

c. Performance-20% d. Price-10%

69
5. How would you refer your level of satisfaction with Company Apple in regards to
price?

a. Very Good. b. Good.

c. Fair. d. Poor

6. Would a high price point prevent you from buying an Apple Product?

a. Yes. b. No. c. Don’t know.

70
7. Are you planning to buy any products of Apple in the next few months?

a. Yes. b. No.

8. How would you mark your level of satisfaction with your Apple product in regards to
reliability?

a. Excellent. b. Very good.

c. Fair. d. Poor. e. Don’t know/No

answer.

71
 CONCLUSIONS AND RECOMMENDATTIONS..

1>. Driving Apple’s growth strategy has been the desire for the company to increase its
distribution and availability through the introduction of clones. Unfortunately, this
strategy has not provided the company with a strategic fit with its major strength which
is the company’s innovation. Apple’s reputation is that of reliability and quality and
should look to exploit these characteristics. Its pure performance is partly attributed to
this failing of not matching its strength with its strategy.

2>. First and foremost, Apple is faced with the continuing challenge of growing user
base, and analysts say they will be looking for an update on whether the company's ad
campaign featuring Windows computer-users has had any effect on gaining new
customers.

3>. Due to the pricing strategy of Apple’s products and due to its low compatibility
with products other than Apple’s, it suffered low market share constantly.

RECOMMENDATIONS.
1>. "Before they introduce any improved products, they need to make sure that they
have no excess inventory in their channels. They don't want to have something that's
obsolete holding up something new that's coming along."

2> One of the most innovative moves Apple could make would be to, finally, release an
iPod digital music player that is compatible with Windows-based PCs. The consensus is
that with the overwhelming majority of PC owners using Windows-based computers,
Apple could mine a rich vein of consumers that have never before used an Apple
product.

3>."The only things to focus on are going to be new products and software," "I want to
know if they are doing enough to get their professional products going.

72
 BIBLIOGRAPHY.

• Detailed of the journal used.

Title : WALL STREET JOURNAL.

YEAR OF PUBLICATION : FEBRUARY -MARCH 2010.

• SOURCES OF INFORMATION.

1. APPLE SERVICE PROGRAMS AND SUPPORT.

2. WEBSITE NAME: www.vertygoteam.com

http://www.apple.com

http://metainsights.com

http://www.wired.com

• BOOKS.

1.MARKETING MANAGEMENT-PHILIP KOTLER,MILLENIUM

EDITION.

2.STEVE JOBS WIZARD OF APPLE COMPUTER.(SUZAN WILSON)

3. Advanced Marketing Strategy: Phenomena, Analysis, and Decisions

(Textbook Binding(Author), Steven H. Star (Author)

73
 CUSTOMER PROFILE.
NAME :

GENDER :

DESIGNATION :

ADDRESS :

NAME OF THE COMPANY :

TEL NO :

MOBILE NO :

E-MAIL ID :

PLEASE TICK THE RIGHT OPTION

1.Have you ever purchased a product or service from Apple Inc.?

a. Yes. b. No.

2. Which product of Apple Inc. are you using currently?

a. MAC. b. I POD.

c. I PHONE. d. I PAD.

3. On a scale of 1 to 5 where 1 is Very Unsatisfied and 5 is Very Satisfied, How satisfied

are you with regarding the following items?

Purchase experience
Installation experience
Usage experience
After purchase service

4. Are you satisfied with the product you are currently using?

74
 a. Yes b. No

5. What attracted you to buy the product you are currently using?

a. Design. b. Reliability.

c. Performance. d. Price.

6. Are you planning to buy any products of Apple in the next few months?

a. Yes. b. No.

7. How would you refer your level of satisfaction with Company Apple in regards to
price?

a. Very Good. b. Good.

c. Fair. d. Poor

8. Would a high price point prevent you from buying an Apple Product?

a. Yes. b. No. c. Don’t know.

9. How would you mark your level of satisfaction with your Apple product in regards to
reliability?

a. Excellent. b. Very good.

c. Fair. d. Poor. e. Don’t know/No

answer.

75