Apple iPad in 2010 - Case Study Example

?Apple, Inc. in Apple’s Competitive Advantage From the earliest incarnations of Apple Computer the company sought to carve out a competitive advantage through horizontal and vertical integration that restricted external product licensing. While this approach had been implemented early in the era of the Apple II and Macintosh the organization had gotten away from it until Steve Jobs returned in 1997. Another prominent advantage was Apple’s attention to design elements. Building products from the ground up allowed Apple to implement innovative design elements that created a loyal customer base. One considers the iMac released in 1998 with its eggshell design as prominently implementing this technique. This design advantage also extended into Apple’s image. Apple, Inc. would increasingly cultivate an image that presented itself as the alternative choice to mainstream computer producers. This allowed Apple to become a cultural force resulting in significant market advantage. Another prominent competitive advantage is Apple’s iTunes store. This store implements technology limiting the amount of computers the songs can be played on, further solidifying Apple’s hold on the MP3 market. In terms of the iPhone, Apple’s App Store and inclusion of its unique operating system provide the organization a strong competitive advantage. Are the dynamics in the personal computer industry favorable or problematic for Apple? The dynamics of the personal computer industry present both favorable and problematic situations for Apple. One problematic consideration is that by the late 1990s, “home and SMB customers started to buy PCs through superstores (Wal-Mart, Costco), electronics retailers, (Best Buy, Circuit City), and Web-based retailers” (Kim & Yoffie, 2010, p. 4-5). This is problematic for Apple as the organization retains its own distribution channels and the increase of electronic sales in mainstream retail outlets goes against the company’s business model. In addition, increasing amounts of cheaply made generic computers have become a prominent dynamic of the personal computer industry. Still, trends in the computer industry progressed in-line with advances in technological applications. In this context of understanding, the Apple Macintosh, in functioning in a hub capacity, places Apple at a competitive advantage to outside computer vendors. How sustainable is Apple’s competitive position in PCs? Apple’s competitive position in PC’s currently is strong, but could experience challenges in future contexts. The Apple Macbook has gained a reputation for quality and contains Apple’s unique operating system. The Macbook has carved out a competitive position through its compatibility with art, design, and music software, making it the industry-computing standard. In addition, the computer has garnered a loyal customer following that views the Apple computer more than simply a product, but also a lifestyle statement. In these regards, Apple’s competitive position in PC’s remains strong. Still, one notes that this industry is highly competitive and with the recent death of company founder and CEO Steve Jobs the future of the organization may experience a position of flux. In addition, increasing competition from generic manufacturers threatens Apple’s position. It’s noted that, “White-box” PCs reportedly represented about 30% of the overall market in 2009, and were most frequently sold into the small office and home office markets” (Kim & Yoffie, 2010, p. 5). One considers that with rapid advances in technology, the future could witness these generic manufacturers encroaching on Apple’s claims to quality and art and design efficiency. In these regards, Apple’s ultimate PC sustainability rests on its ability to remain ahead of the curve in both quality and image. How sustainable is Apple’s competitive position in MP3 players? There are a number of considerations in terms of Apple’s competitive advantage in MP3 players. One of the difficulties in future contexts will be challenges posed by Apple’s high cost relative to other MP3 player manufacturers. In these regards it’s noted that, “While iPods were available in all price segments, iPod ASPs generally ran $50 to $100 higher than the competition (Kim & Yoffie, 2010, p. 8). Still, through the Macintosh operating system, Apple has been able to gain and sustain a competitive advantage through its iTunes software that uniquely syncs with the Apple iPod. One of the prominent functions of iTunes is that only a limited number of computers are able to play the song technology, as such individuals seeking to take advantage of Apple’s online music store will increasingly purchase the iPod. This indicates that Apple competitive position in MP3 players is highly sustainable. Still, increasing amounts of outside retailers including Walmart, Amazon, and Napster are involved in the sale of online music. These organizations represent potential future threats to Apple’s sustainability. How do you assess Apple’s competitive position in smart phones? There are a number of considerations regarding Apple’s competitive position in smart phones. One consideration is that the iPhone contains Apple’s unique operating system, allowing it significant quality advantage over competitors. In addition, the Apple App Store provides the organization with a unique advantage over other smart phone suppliers. Still, the Android Marketplace has begun developing a number of competitive applications as a means of threatening Apple’s smart phone sustainability. It’s also noted that, “RIM’s BlackBerry smartphones delivered one of the best mobile e-mail experiences and was a popular choice among corporate consumers. BlackBerrys were offered through approximately 550 carriers in 175 countries” (Kim & Yoffie, 2010, p. 11). While RIM recently announced their newest smart phone model will be delayed, the industry remains highly competitive and if Apple is unable to maintain constant innovation their competitive advantage will quickly fade. What are the prospects for the iPad? There are a number of considerations regarding Apple’s prospects for the iPad. One of the great prospects is the understanding that upon the device’s release, “software developers had already released over 1,000 applications specifically developed for the iPad at the time of its launch” (Kim & Yoffie, 2010, p. 12). Perhaps the greatest prospect for the device is the potential it has for capturing a new segment of the market that had previously been divided between smartphones and netbooks. In these regards, the iPad could be a truly visionary device, functioning as a portable computer for individuals looking to avoid the sometimes cumbersome burden of a laptop or netbook. Still, Apple will ultimately need to continue innovation, as the device currently lacks the functionality of these larger devices. References Kim, R., & Yoffie, D. (2010). Apple inc. in 2010. Harvard Business School Read More