How Apple Changed our Lives - Essay Example

How Apple Changed Our Lives 2007 1: How the platform was formed The California-based Apple Computers was an early entrant in the computer market. Founded in 1976 by Steve Jobs and Steve Waxniak, the company introduced the Apple II microcomputer way back in 1977. It was the first company developed to use the graphical user interface (GUI) in the product that it launched in 1983, the Lisa. However, its phenomenal success came with the launch of Macintosh (popularly known as Mac) in 1984 that changed how personal computers would look like in years to come. Different from the dull black screen with green or white letters of the typical computer of the time, the Mac became a user-friendly computer. The GUI operating system became the standard for all personal computers since then. 2. Why did Apple fail in the past? Apple Computers was the first company of bringing computers to the masses. With its user-friendly technology and customer-oriented marketing strategy, Apple soon became a household name in the early 1980s. However, by the late 1980s, it was faced with stiff competition first from IBM and then from other new hardware and software developers, most notably Microsoft that changed the operating platform that all computers would adopt soon after. Although Apple Computers has gone through many ups and downs since then and it has not really been able to face up to competition with Windows-based computers in the 1990s that packaged together many applications. The original mission of Apple Computers was to offer sleek computers aimed at the home user segment. The launch of the graphical user interface technology did just that. It changed the entire way that the personal computer would be looked at. In fact, Microsoft gave Bill Gates a number of prototypes of Mac to design the Windows operating system that revolutionized the world of computers in the late 1980s. However, Apple failed to keep up with industry competition in the late 1980s and 1990s and its innovative breakthroughs came across a roadblock. Apple Computers, always the creative innovator in the computer industry, introduced the Macintosh Portable, a bulky precursor to today’s laptop computers, in 1989. Although it bombed in the market, Apple took to industrial designing with a vengeance. Once again, like IBM and Microsoft robbed the GUI model in PCs. 3. How Apple Bounced Back The company has over the years launched many new products, including the Powerbook, that was the precursor to the laptop computers, digital cameras, video recorders and the ipod that has now become synonymous with Apple. Over the years, Apple Computers have tried various strategies in product development and marketing to gain lost ground. It has been successful in some product segments and failed in others. Sony used the specs of the Mac Portable and designed the Powerbook 100 for Apple, which had a two-hour battery, a twenty megabyte hard drive that was physically much smaller than Mac Portable. This model was a hit in the market and revived Apple’s reputation as a creative technological innovator. The same year, Apple also introduced System 7, a new operating system that was easier to use and had more attractive color graphics. Apple’s revenues spiraled and the computer press called the years 1989 to 1991 the “golden years” for Apple Computers, Inc. In 1997, Steve Jobs, who had left the company in the mid-1980s was recalled by the then CEO John Sculley to take over at the helm of affairs. Jobs restructured the company, strengthened the research operations and in 2001 and diversified into consumer electronics. The first consumer product that Apple introduced was the digital camera – called Apple QuickTake, once again a trend that Apple introduced soon to be lapped up by competitors. Soon to follow was the PDA, the term coined by Sculley, which was a precursor to the Palm Pilot and Pocket PC. The company released iMovie for home video users. In 1999, Apple bought the Final Cut Software, the digital video editing software, from Macromedia. The DVD market came in, soon to be a popular mass market. In 2001, it launched the Apple ipod, which revolutionized the digital music market like it did the PC market two decades ago. 4. Apple’s audio-related products Apple has a market share of 70 percent in digital music, which is expected to be $12 billion by 2009. Apple has continued its spectacular hardware innovations also in the digital music sphere. Its ipod has the best hard drive based MP3 player while its closest competitor, Toshiba, has not been as popular. Further, Apple has learnt from its previous mistakes with the PC and has leveraged on collaborating with industry leaders in the ipod’s components. Most of the parts of the product are made by big names like Toshiba, Sony, Portal Player, Samsung, Texas Instruments, Wolfson Microlectronics, Cypress Semiconductor, Synaptics and others. 5. What Apple has done right Much of Apple’s success has hinged on its advertising. Its 1984 television commercial has been a landmark. Its use of its logo and print and online marketing campaigns have also been remarkable. Its current ad is also distinctive. It show a smart guy called Mac insulting a sloppy loser named PC with the slogan "Think different." The undertone of bashing its largest competitor, Microsoft, is obvious. According to Business Week-BCG (2006), Apple has been a “creative king” in marketing. For the ipod, Apple used several types of marketing innovation, like agreement with music companies to sell their songs, pricing songs as low as $1 per piece, branding of accessories like ear buds and wires and most of all, the simple software platform of iTunes on the MP3. The computer industry is becoming commoditized. The lack of differentiation of one model from another has meant that it spends more to support the variety of models that have not earned the company as much. Besides, in the era of commoditization of the computer market, it is the selling efficiency and cost control that typically gives a competitive edge than Apple’s redundant advertisement-driven multi-model strategy. Although the advertisement-driven strategy may not work for the computer segment, it is a sure winner in the consumer electronics. Apple has always bucked the trend in marketing. At a time when direct selling has become more popular, Apple began to open glitzy stores. Apple now has 147 stores that sell computers as well as its other products where customers can test its products themselves before buying. 6. How is Apple different from the Microsoft and the other competitors Despite Apple’s success in the digital music market, it is a much smaller market than that for PCs. Mac PCs contributed 29 percent to Apple’s revenues even in 2005 although it had a small market share in the PC market at 5 percent of the $75 billion home PC market globally. An increase in 1 percent in Apple’s market share of the PC market would earn it an additional $750 billion in revenues. In a bid to leverage on the current industry trends, Apple, which already uses IBM’s PowerPC processors, is now converting to Intel processor. For long, Apple strove to remain an independent company while its competitors like IBM and Microsoft formed strategic alliances with other players to capture a large part of the market. In 1994, Apple at last gave up its strategy of independence and aligned itself with IBM, its staunch competitor earlier, and Motorola. The group – called AIM – wanted to set up a new computing platform by using IBM and Motorola’s hardware and Apple’s software that would be called the PowerPC Reference Platform, or PreP. By then, Microsoft’s operating system was considered the company main enemy in the market that it aimed to beat. In 2006, Steve Jobs announced that the company will launch Intel-based PCs, something that the company has avoided doing over its three-decade long history. It has been developing its operating system for both the Power PCs as well as Intel processors. By 2007, Apple computers would make its transition to Intel processors. This has provoked intense response from avid Mac fans who term the Apple-Intel collaboration as the ‘Macintel’, like the ‘Wintel’ – the Windows-Intel collaboration. 7. Change of name from Apple Computer Inc. to Apple Inc. The change of name from Apple Computers Inc. to Apple Inc. in 2007 is symbolic of its transformation from a computer company to a consumer electronic one. With the iconic ipod, Apple has entered the music market big time and, following its entry into audio, video and streaming music, it now plans to invade the living room as a consumer electronic giant. While ipod represented 50 percent of revenues in 2006, the company plans to add another 10 percent by 2008. Besides the success of the itune music stores and Apple TV introduction of iphone is expected to change the composition of Apple’s product composition. 8. Apple’s move into the mobile phone market? The iphone is expected to change the mobile phone market, making it the most talked about mobile phone in the market. Although it will not really be a next generation mobile phone technology, with its 2.5G memory when the industry has already moved to 3G, the iphone is projected as a “network cellular”. While operating a mobile phone is a new area, it is a logical next step since the company is already in digital music. It has tied up with Motorola and Cingular. Apple’s mobile strategy will be more like handheld computer to combine music, communication and entertainment. Since one in ten mobile users have phones that have music players, Apple’s move seems logical. 9. What makes Apple special? Through the 1990s, Apple tried to rewrite its operating system, upgrading it while at the same time trying to make sure that its old systems could remain in the market. In 1998, the iMac was launched after a series of failures with earlier models. Although its technology was unimpressive to the market, the attractive design of the iMac in the translucent plastic case, originally white and blue but later in many other colors, became a trendsetter in industrial computer designs. About 800,000 Imacs were sold in 1998, giving the company a profit of $309 million – the first profit for the company since 1993. A large section of Apple customer base is composed of repeat customers of Mac. Over the last 5-6 years, however, Apple’s appeal has been more in the audio and video markets. Following the phenomenal success of ipods, Apple TV, the itune music stores and streaming video markets have also picked up. The iphone that is expected to hit the market will combine the various products – computer and entertainment with communication. Read More