Midterm Case Study
Apple was founded in 1976. The company began by selling personal computers, in what could be considered now a days the tech capital of the world Silicon Valley. With humble beginnings in personal computers and development of Macintosh computers the market growth had slowed in the early 80’s, Steve Jobs, one of the founders of Apple, began doubt the direction of the company and worked to out the CEO, John Sculley. Jobs attempt to oust Sculley was unsuccessful and he resigned in 1985. Jobs was later rehired by Apple as part of an acquisition and later named as interim CEO in 1997.
In 2000, Jobs was named permanent CEO. In 2001 the iPod was released, which increased in popularity in 2003 with the release of iTunes. iTunes accounted for 70 percent of the market share for downloaded music online. In 2007, the first iPhone was introduced. The iPhone had features that seemed unimaginable – touch screens with no buttons, capabilities of an iPod, internet access and more. Brand loyalty was on the rise with the new emerging electronics Apple was producing.
With the popularity of the iPod, iTunes, and the iPhone customer loyalty increased and Apple saw market growth in their personal computers sector, from 4.4 percent in 2004 to 8.8 percent in 2010.
In 2010, Apple released the iPad. This was not the first tablet on the market, but like the iPhone was innovative with a touch screen versus competitor’s tablets that the consumer had to have a stylus to use. Again, brand loyalty and advances in technology put Apple on top of the mountain when it came to market share.
Brand loyalty is one of Apple’s biggest strengths. Other strengths to Apple’s credit are their retail stores. Unlike other cell phone companies that rely heavily on vendors to sell their product, Apple has retail chain stores that not only offer their cell phones, but other Apple products. “Apple is also a strong financial performer with over $10 billion in cash, no debt, and a gross profit margin of 43.9%.”
Apple does shy some customers away because of their high prices. Some consumers have expressed disappointment with the operating systems in the new version of the iPhone. These are both not only a weakness of Apple but also an opportunity. Another thing to consider is Apple has a large market share in downloaded music, smart phones, and tablets. When a company is on top with such a large market share, it can be harder to stay on top and competitors are always looking to take your piece of the pie.
Being on top like Apple is, there are lots of threats to such a large target. Android operating system is the largest threat to Apple and the iPhone; and Android was the number one seller in 2011. Apple’s opportunity to combat Android is to keep up with changing technology ahead of their competitors. Failures to adapt to technology will leave any competitor, not just Apple, in the dust. Apple knows this first hand, and spent time in the court room battling Samsung over their patented technology and won. But