Apple- The Turn Around Story

Introduction
Apple Inc., together with subsidiaries, designs, manufactures personal computers, mobile communication devices, and portable digital music. The company is best known for products like I pod, I phone and MacBook. The company has expanded into a complex company that specializes in much more than just computers. Apple has established a unique reputation in the consumer electronics industry since it is flexible from its philosophy of comprehensive aesthetic design to its distinctive advertising campaigns. The turnaround of Apple has been broadly classified into three phases. Each phase details the new Apple products, marketing strategy the products and their financial impact on the market and the company.

The Initial Struggle

On 1st April 1976, Apple Computer Company was founded in a residential garage by Steve Jobs and Stephen Wozniak. They got their financial support from Mike Markkula, a semi-retired Engineer who made his fortune from Chipmaker Intel Corp.

Apple came up with their first product i.e. Apple I which was hand built by Wozniak and it was priced at $666.66. The Company then launched a new upgraded version by the name of the Apple II in the year 1977. The same was priced at $1,298 and it was a success as it was designed to appeal the mass market. In 1980 Apple sales soar to $1million-a-year and the company decided to go public at $22 a share. In 1981 IBM had launched a personal computer which had MS-DOS operating system priced at $1,565 due to which Apple witnessed a decline in sales and was forced to lay off 40 employees. In 1983 Apple launches LISA (local integrated software architecture) but it had failed to capture market due its high pricing. In 1984 Apple introduces very first Macintosh was initially sold well, but follow-up sales were not strong due to its high price and limited range of software titles. In 1985 there was a power struggle between Jobs and CEO John Sculley. The board of directors sided with Sculley and Jobs was asked to resign.

This era witnessed the launches of Apple I, Apple II , LISA and Macintosh. Even though the net sales had increased but revenue was declining due to high cost incurred on new products.

The Medieval Period

This era commenced from 1987 when Apple launched the first version Mac and went on till the year 1996. In this phase Apple tagged up with Motorola and IBM to launch the Power PC chip and also launched the worlds first PDA phone. In 1987 Apple launches the Mac II, built with expandability in mind unlike the Mac I. In 1988 Apple sues Microsoft After watching its Macintosh products steadily lose market share to Wintel clones, Apple finally sues Microsoft, claiming Windows 2.03 infringes on Lisa/Mac audiovisual copyrights.

Apple- The Turn Around Story

In 1989 Apples hope of obtaining legal redress is squashed as a judge throws out all but 10 claims against Microsoft. Executives squabble over how to boost the Macs sliding market share. In 1991 Apple teams up with IBM and MOTOROLA to create the PowerPC chip as a replacement for the Macs microprocessor. With IBM's large market share, Apple holds out hope it can become the key player of the industry. But the dreams never materialize. IBM and Apple discuss a possible merger, but talks were not fruitful. In 1994 Apple launched its first PDA phone by name of Newton Apple which was a total failure in the market as same was overpriced. In 1995 Chronic parts shortages results in huge backlogs just as the PC boom was on its full flow. Apple enters the crucial holiday shopping season with too many low-end Macs on its hands and sales suffer. Apple's board of directors, stunned by the company's sudden decline, pushes Spindler out and replaces him with outside director Gilbert Amelio, who had engineered a turnaround at chip maker National Semiconductor. Amelio slashes thousands of jobs, allowing Apple to end the year with a modest $25 million profit in the final quarter. But sales continue to slide and merger talks with Sun Microsystems break down. During this period of Apple, the company saw a series of major product flops which resulted in big losses so to cover a their loses they even had to sack their employees in great number which dropped their market share to more than 5% in this period. Moreover Sculley was replaced by Michael Spindler.

Apple Renaissance
This era witnessed the turnaround as Steve Jobs joined back; new strategies were implemented where key being product innovation and Apple stores were opened worldwide. This period brought a revolutionary change in Apple, throughout this period Apple purchased many companies and launched new products namely I Pod, I Phone and I Mac.

In 1996, Apple purchased Steve Jobs company, NeXT and its operating system. This strategic move not only brought Steve Jobs back to Apple's management, but also the NeXT technology became the foundation of the operating system of MAC. The computer world got stunned when they came to know Microsoft would be investing US$150 million in apple for development of Microsoft office for Macintosh. With this investment the war with Microsoft was over. Jobs then terminated the clones by buying MAC OS licenses from Motorola and IBM. By this time Apple had stunned the Wall Street investors by declaring it had earned a profit of $45 million in first quarter of 1998. In 1999, Apple unveiled the iBook, its first consumer-oriented product. This product brought a Wi-fi mania. In 2000 Jobs became the CEO and his first moves was to develop the I MAC, which bought Apple time to restructure In May 2001, Apple announced the opening of a line of Apple retail stores designed for two primary purposes: to stem the tide of Apple's declining share of the computer market, as well as a response to poor marketing of Apple products at third-party retail outlets. In October 2001, Apple introduced its first iPod portable digital audio player. Initially it started with 5 gigabyte player capable of storing around 1000 songs. Since then it has evolved into an array of products including the Mini (now discontinued), the Touch, the Shuffle, the Classic and the Nano. In early 2002, Apple unveiled a redesigned iMac, using the G4 processor. This new I Mac, is the world's thinnest desktop computer, measuring in at around two inches.

Apple- The Turn Around Story

Initially, the Apple Stores were only opened in the United States, but in late 2003, Apple opened its first Apple Store abroad, in Tokyo followed by a store in Osaka. Also, in an effort to court a broader market, Apple opened several "mini" stores in October 2004 in attempt to capture markets where demand does not necessarily dictate a full scale store. Later in 2005, Apple went global by opening stores in Fukuoka, Sendai, London, Birmingham, Kent, Toronto, Sheffield and Manchester. On January 10, 2006, the first Intel-based machines, the iMac and MacBook Pro, were introduced. They were based on the Intel Core Duo platform. In January 2007, Apple Computer, Inc. changed its name to simply Apple Inc and Jobs disclosed his plans of revolutionizing an industry in which Apple had never previously competed: the Apple I Phone.

Now the MacBook, I Phone and I Phone form Apples core business. As of 2009, Apple has 34,300 full time employees, 2,500 temporary full time employees worldwide and an annual sales of $42.91 billion in its fiscal year ending September 2009. In addition it has 273 retail stores, including 217 stores in United States and 56 stores spread all across the globe. Fortune magazine has named Apple the worlds most admired company consistently in year 2008, 2009 & 2010.

Conclusion
Apple Inc. has learned few vital lessons which helped to them to bounce back on the profitability track. Few of them are listed below: 1. The innovation can come from without as well as within. Its real skill lies where Apple specializes is integrating its own ideas with technologies from outside and then wrapping the results in elegant software and stylish design. For example, I Pod was originally dreamt up by a consultant whom Apple hired to run the project. It was assembled by combining off-the-shelf parts with in-house ingredients such as its distinctive, easily used system of controls. And it was designed to work closely with Apple's iTunes jukebox software, which was also bought in and then overhauled and improved. Apple is, in short, an orchestrator and integrator of technologies, unafraid to bring in ideas from outside but always adding its own twists.

2. Apple round the clock has been designing products to suit the customer needs. Too many technology firms think that clever innards are enough to sell their products, resulting in gizmos designed by engineers for engineers. Apple has consistently combined clever technology with simplicity and ease of use. The I Phone is not the first mobile phone to incorporate a music-player, web browser or e-mail software but what distinguishes it from other smart phones is its simplicity. This approach enables Apple to capture the market by attracting a larger customer base. 3. Apple always failed wisely in 1984 the Macintosh was born from the wreckage of the Lisa, an earlier product that flopped; the I Phone is a response to the failure of Apple's original music phone, produced in conjunction with Motorola. Both times, Apple learned from its mistakes and tried again. Its recent computers have been based on technology developed at NeXT, a company Mr. Jobs founded in the 1980s. The wider lesson here is not to stigmatize failure but to tolerate it and learn from it.