Apple Case Study

Apple Case Study-1

On October 5th, Steve Jobs, the co-founder and the spirit of Apple died. He had been improving technologies for daily uses more than a decade. iPhone, the most profitable products of Apple, recently launched the newest version, the iPhone 4S on October 4th, which was the day before Jobs’ death. To what degree will the death of Jobs affect Apple’s operations, especially in the competitive smartphone market? In this case, we would analyze both external and internal environments, VRIO resources, and the business strategies; and also illustrate Apple’s current issues and our recommendation for Apple to solve those problems.  

Background

On April Fool’s Day, 1976, Apple Computer was founded by a pair of college dropouts whose names were Stephen Wozniak and Steve Jobs in Los Altos, California. The mission of Apple Computer was bringing an easy-to-use computer to PC market. After they gained the reputation of the successful sales on Apple II, Apple went public by issuing APPL stock at NASDAQ in 1980. However, Apple Computer faced a challenge when IBM entered the PC market in 1981. They grabbed large amount of market shares from Apple. In order to maintain its competitive position, Apple launched Macintosh in 1984. But due to its slow processor speed and lack of compatible software, the sales fell, and Steve Jobs was forced out. Apple almost went bankrupt in 1996; however, Jobs brought the firm back from the edge when he was reassigned as the interim CEO. He repositioned the company by transforming “Apple Computer” to “Apple Inc.” with the differentiated and innovative non-PC technological products.

Apple Inc. introduced the new strategy called “digital hub” after the debut of iPod in 2001. IPod was a portable music player based on the MP3 standard, and it could be regarded as an important breakthrough that successfully turned Apple into a most valuable and profitable company. IPod was the first MP3 player, which could store up to 1000 songs, and its simple interface and innovative design were attractive to customers that made Apple grab more than 70% of sales of MP3 players market in United States. In addition, the rapid growth of iPod was attributed the success to iTunes which was a desktop software and suitable for both Mac and Windows Operating System. IPod users could download music legally by paying only 99 cents per song from iTunes Store that had the significant impact on the sale of iPod.

Later, iPhone was launched and put under the spotlight as the “Invention of the Year” by Times Magazines in 2007. Apple differentiated its iPhone from other mobile phones by adding the new features like 3.5-inch touch-screen interface without a physical keyboard, and it used the new Apple’s OS X platform. Within the launch of Apple App Store in 2008, the sale of iPhone was boosted from 0% to 30% of Apple’s total revenue within two years. The Net Sale of iPhone during 3-month period ended on June 25, 2011 is about $13.31 billion.