This report investigates the current state of Apple Inc. which an American corporation that specializes in consumer electronics and software and examines the predicted future advancements of Apple Inc. Brief history of Apple Inc. and its current profile is initially outlined. The discussion then focuses on the founder (Steve Jobs), Products, Competitors and Strategic alliances of apple Inc. The performance of Apple Inc. is examined in relation to two main criteria: external (Porter’s Five Forces Model) and internal analysis (SWOT). It is recommended that they must scale up its production capabilities and Build or buy a cellular carrier for further continuation and growth. It also suggests that continuing a stable commitment to licensing, pushing for economies of scope between media and computers, and becoming a learning organization will help to succeed and will continue to outperform their peers. You can have the presentation regarding this report from my profile.

1. APPLE INC.

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Abstract
This report investigates the current state of Apple Inc. which an American corporation that
specializes in consumer electronics and software and examines the predicted future
advancements of Apple Inc. Brief history of Apple Inc. and its current profile is initially
outlined. The discussion then focuses on the founder (Steve Jobs), Products, Competitors and
Strategic alliances of apple Inc. The performance of Apple Inc. is examined in relation to two
main criteria: external (Porter’s Five Forces Model) and internal analysis (SWOT). It is
recommended that they must scale up its production capabilities and Build or buy a cellular
carrier for further continuation and growth. It also suggests that continuing a stable commitment
to licensing, pushing for economies of scope between media and computers, and becoming a
learning organization will help to succeed and will continue to outperform their peers.

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Introduction
Apple Computer’s 30-year history is full of highs and lows, which is what we would expect in a
highly innovative company. They evolved throughout the years into an organization that is very
much a representation of its leader, Steven Jobs. Apple made several hugely successful product
introductions over the years. They have also completely fallen on their face on several occasions.
They struggled mightily while Jobs was not a part of the organization. Apple reached a point
where many thought they would not survive. When asked in late 1997 what Jobs should do as
head of Apple, Dell Inc.'s (DELL) then-CEO Michael S. Dell said at an investor conference: "I'd
shut it down and give the money back to the shareholders.” (Burrows, Grover, and Green).
Well, times changed. Less than 10 years later, Business Week ranked Apple as the top
performer in its 2012 Business Week 50. Apple attributes their recent success to robust sales of
iPod music players (79 million in 2011). They are optimistic about the economies of scope with
media giants, such as Disney and Pixar.
Apple rarely introduces a new type of product. Thus, instead of being the pioneer, they are an
expert “second mover” by refining existing products. Portable music players and notebook
computers are examples.
Apple increases the appeal of these products by making them stylish and more functional. They
now appear poised to make significant strides in the home computer market and to creating a
total digital lifestyle whereby the home is a multimedia hub.

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History of Apple Inc
Apple Inc formerly known as Apple Computer Inc which provides corporate Server, MAC OS
Systems and Operating System. Apples core product lines are the iPhone, iPod and Macintosh
System. Steve Jobs and Steve Wozniak, The founder of Apple has created the Apple Computer
on 1st
April 1976 and integrated in the company on 3rd
January 1977, in Cupertino California. It
has driven the Computer manufacturing market for more than two decades. Mr. Steve Jobs who
was expelled in 1985 was return as CEO of the APPLE Inc in 1996 with new Ideas and corporate
philosophy. With introduction of successful IPod Player in to 2001 Apple has again proved itself
as a Market leader in consumer electronics. Latest era of extraordinary success of the company
is in iOS based Apple products like I Phone, IPod slim, I Pad and now I Pad 2. Now a day’s
Apple is a biggest technology corporation in the planet with the profits of more than $156 billion
for the fiscal year if 2013. It has about 80,000 employs all over the world. Fortune Magazine
most Admired Company in United State in 2012 and in the world in 2012, 2009 and 2008.
Vision Statement of Apple
“Man is the creator of change in this world. As such he should be above systems and structures,
and not subordinate to them.”
Explanation of Vision Statement
Apple lives this vision through the technologies it develops for consumers and corporations. It
strives to make its customers masters of the products they have bought. Apple doesn’t simply
make a statement. It lives it by ensuring that its employees understand the vision and strive to
reach it. It has put systems in place to enable smooth customer interaction. It has put objectives
in place to continuously move forward; implemented strategies to fulfil these objectives; and
ensured that the right marketing, financial and operational structures are in place to apply the
strategies.
Mission Statement of Apple
“Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented
the personal computer in the 1980s with the Macintosh. Apple is committed to bringing the best
personal computing experience to students, educators, creative professionals and consumers
around the world through its innovative hardware, software and Internet offerings.”

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Profile of the Organization
 Founded: April 1, 1976
 Founder(s): Steve Jobs
: Steve Wozniak
: Mike Markkula
 Type: Public
 Industry: Computer Hardware: Computer Software
: Consumer Electronics
: Digital Distribution
 Headquarters: Apple Campus, 1 Infinite Loop, Cupertino California, U.S.
 Number of locations: 406 retail stores
 Area served: Worldwide
 Key people(s): Tim Cook
: Arthur D. Levinson (Chairman)
: Steve Jobs (Founder, former CEO)
 Revenue: US$ 156.508 billion (2012)
 Operating income: US$ 055.241 billion (2012)
 Net income: US$ 41.733 billion (2012)
 Total assets: US$ 176.064 billion (2012) Employees: 80,000 (2013)
Logos
Apple's first logo, Wayne, depicts Sir Isaac Newton sitting under an apple tree. Almost
immediately, though, this was replaced by Rob Janoff's "rainbow Apple", the now-familiar
rainbow-colored silhouette of an apple with a bite taken out of it. Janoff presented Jobs with
several different monochromatic themes for the "bitten" logo, and Jobs immediately took a liking
to it. While Jobs liked the logo, he insisted it be in color to humanize the company. The Apple
logo was designed with a bite so that it would be recognized as an apple rather than a cherry. The
colored stripes were conceived to make the logo more accessible, and to represent the fact the
monitor could reproduce images in color.
The logo is often erroneously referred to as a tribute to Alan Turing, with the bite mark a
reference to his method of suicide. Both the designer of the logo and the company deny that there
is any homage to Turing in the design of the logo.
In 1998, with the roll-out of the new iMac, Apple discontinued the rainbow theme and began to
use monochromatic themes, nearly identical in shape to its previous rainbow incarnation, on
various products, packaging and advertising. An Aqua-themed version of the monochrome logo
was used from 2001–2003, and a Glass-themed version has been used since 2003.

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Slogans
Apple's first slogan, "Byte into an Apple", was coined in the late 1970s. From 1997–2002,
Apple used the slogan Think Different in advertising campaigns. The slogan had a lasting impact
on their image and revived their popularity with the media and customers. Although the slogan
has been retired, it is still closely associated with Apple. Apple also has slogans for specific
product lines — for example, "iThink, therefore iMac", was used in 1998 to promote the iMac,
and "Say hello to iPhone" has been used in iPhone advertisements. "Hello" was also used to
introduce the original Macintosh, iMac ("hello (again)"), and iPod when they were announced by
Steve Jobs
CEO- Steve Jobs
Born February 1955 and passing away in October, 2011, Steve Jobs was co-founder, chairman
and CEO of Apple Inc. His impact on the technology industry, entertainment, advertising and
pop culture was vast, and he leaves behind an empire that is changing the way we all live and
work
It all started with three men - Steve Jobs, Steve Wozniak and Mike Markkula - who together in
the late 1970's designed and marketed the Apple II series of computers. It was the first
commercially successful line of personal computers, and led to the Apple Lisa in 1983 - the first
computer to use a mouse-driven GUI (graphical user interface). One year later, the Apple
Macintosh was born (launched by one of the greatest ads of all time, 1984), and with it, the
Apple legend began to grow.
In 1985, after a long and drawn-out fight with the Apple board, Steve Jobs "left" the company
that he helped create. Some say he was pushed or ousted, others say he left simply to pursue
other projects. That being said, his next move was NeXT, a tech company he founded that
specialized in higher education and business
It was a master stroke for Steve, who instantly saw the potential for the company (which we now
all know as one of the greatest movie-making studios of our time). After many small projects and
lots of trial and error, Pixar released Toy Story in 1995 (crediting Jobs as the executive producer)
and the rest is history.
One year after the release of Toy Story, in 1996, Apple bought the NeXT Company that Jobs
owned, and asked him to come back in a leadership role. He was interim CEO from 1997 to
2000, becoming the permanent CEO from that point until his eventual resignation in August of
2011.
When Jobs came on board in 1996, Apple was still very much a niche computer platform
However, that all changed when the iPod came along in November of 2001. Out of nowhere,
Apple was suddenly on everyone's lips. The idea that thousands of songs could be stored

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digitally on one small device much smaller than any Walkman or CD player was mind-blowing.
Steve Jobs had spearheaded a product that literally changed the way music was played and
shared.
Within a few years, Apple was the technology that everyone wanted to own. And then came the
iPhone in 2007, which took Apple from a major player to the company everyone was trying to
emulate.
In 2010, after many variations of the iPhone, the iPad was launched to an initially luke-warm
reception. People didn't see the need for it, but Steve Jobs knew it was going to have a big
impact. And it did. By March of 2011, over 15 million iPads were on the market.
The health of Steve Jobs had been in question since around 2006, when his gaunt, frail
appearance and lackluster delivery were the focus of his WWDC keynote address. In actuality,
Jobs had announced his condition (pancreatic cancer) to his staff in mid 2004. Between 2003 and
his death in August 2011, Jobs underwent many procedures and therapies to try and beat the
cancer, but it was too aggressive. He stepped down as CEO of Apple in August 2011, and died
just a few weeks later in September.
Apple Products
Apple sells its products worldwide through its retail stores, direct sales force, online stores and
third party wholesalers. They also sell products of third parties that are compatible with Apple
products. Apple has five main product lines:
1. Desktops
- iMac
- eMac
- Mac mini
- Power Mac
- Mac Pro
- Xserve
2. Portables
- MacBook
- iBook
- MacBook Pro
- PowerBook
3. iPod products
- iPod Shuffle, Nano, Classic and Touch
- iPhone
- iPod accessories
- iTunes Store
- iPod services
-

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4. Other music related products and services
- hardware accessories of Apple
- hardware accessories of third parties
- wireless connectivity
- networking solutions
5. Software
- operating system and application software
- AppleCare
- Internet services
Strategy
Firm can describe apple’s strategy in terms of product differentiation and strategic alliances. In
each of these strategies, we examine what apple did historically and then discuss alternatives for
apple’s future.
Strategic alliances
Apple’s strengths can be attributed to many factors. First, Apple’s premium-price or product
differentiation strategy as well as their retail strategy have proven to be essential to Apple’s past
and will continue to play a vital role in Apple’s future. As a result of their past success as
recognition as innovators, Apple has attracted the attention of many companies whom have
recognized Apple’s potential for successful strategic alliances For example, Apple’s successful
alliance with AT&T, provided Apple with the opportunity to improve their IPhone’s technology.
Apple was able to the lower the IPhone’s price to consumers, as well as, up-grade the Iphone’s
network coverage. In addition, Apple entered into partnerships with YouTube and Google in
order to provide their IPhone users with cutting edge “search, mapping, and video features”.
These partnerships allow Apple to further differentiate their products and add value to their
users. Similarly, Apple’s reputation as an innovator and creator of easy-to-use cutting edge
products continues to strengthen apple by keeping Apple on the radar of the technologically
savvy consumer, as well as providing support for Apple’s product differentiation strategy.
Still, there have been some drawbacks or weakness as a result of Apple’s choosing to employ a
product differentiation strategy. First, Apple’s selection of a premium price or product
differentiation strategy also limits Apple’s market share. Some customers do not recognize the
value that Apple’s attempts to create for their customers. Price sensitive consumers are reluctant
to buy Apple’s products. Similarly, customers seeking highly customized computers may not
choose Apple. For example, Dell, one of Apple’s biggest competitors and one of the top four
P.C. producers, offers customers array of bundling options when purchasing a computer. This
allows customers to choose hardware and software components as well as somewhat control the
price of the computer. Instead, Apple offers their computer customers packages with very few
customization options.

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Secondly, a problem for Apple exists in their reliance on Apple’s C.E.O., Steve Jobs. Jobs has
been a guiding force at Apple, acting as Apple’s savior when the company saw their lowest
financial numbers in 2002. Steve Jobs was responsible for Apple’s expansion and the
introduction of one of Apple’s most profitable products, the IPod. There is a question as to if
Apple could continue to operate as they do currently in the absence of Steve Jobs.
Still, there are alternatives to Apple’s current problems. In regards to Apple’s low market issues,
an alternative would be to add a product with a lower price point to Apple’s current product
line. Similarly, an alternative to Apple’s reliance on Steve Jobs, would be to create another
executive position for someone act as liaison between Apple’s top executives and Jobs. Thus,
preparing Apple for the post Steve Jobs era.
In lieu of their drawbacks, Apple is still presented with opportunities to experience growth and
success. Apple has established itself as a continuous innovator in the ever changing electronics
industry. Apple’s commitment to employing the latest technology and providing their customers
with cutting edge, stylish, sleek product designs have provided them with a sense customer
loyalty. Apple’s customers are willing to pay Apple’s premium prices because they are satisfied
with Apple’s products. Apple is continually working to produce products with improved
compatibility, allowing their customer more flexibility and increasing the ease-of use of their
products. By continuing with their premium price or price differentiation and retail strategies
Apple can continue strive and uphold their reputation as an innovator in the electronics industry.
Competition
1. Google: -
o Google Inc. is an American multinational corporation specializing in Internet-
related services and products.
o Google was founded by Larry Page and Sergey Brin while they were Ph.D.
students at Stanford University.
o
2. Microsoft: -
o Microsoft Corporation is an American multinational software corporation
headquartered in Redmond, Washington that develops, manufactures, licenses,
and supports a wide range of products and services related to computing.
o The company was founded by Bill Gates and Paul Allen on April 4, 1975.
Microsoft is the world's largest software maker measured by revenues. It is also
one of the world's most valuable companies.

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3. Samsung: -
o Samsung Group is a South Korean multinational conglomerate company
headquartered in Samsung Town, Seoul. It comprises numerous subsidiaries and
affiliated businesses, most of them united under the Samsung brand, and are the
largest South Korean chaebol (business conglomerate).
o Samsung was founded by Lee Byung-chul in 1938 as a trading company. Over the
next three decades the group diversified into areas including food processing,
textiles, insurance, securities and retail.
Notable Samsung industrial subsidiaries include Samsung Electronics Samsung Electronics (the
world's largest information technology company measured by 2012 revenues, and 4th in market
value)
Internal Analysis - SWOT Analysis
Strengths
1. Customer loyalty combined with expanding closed ecosystem. While at first Apple’s closed
ecosystem was a weakness for the business, this has now changed. First, Apple now has a
full range of apps, software and products that are interlinked and support each other. Second,
new products and supplements will be released soon (it), hence expanding the ecosystem.
Third, Apple has a strong customer loyalty, which increases due to Apple’s closed
ecosystem, which, in turn, is supported by customer loyalty. So the combination of Apple’s
expanding closed ecosystem and customers’ loyalty increases firm’s competitive advantage.
2. Apple is a leading innovator in mobile device technology. Apple has been chosen as the most
innovative business in the world for the 3rd time in 2012. Company’s core competency of
producing innovative products is the strength the company builds upon and is able to bring
the most innovative products to the market.
3. Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no
debt). Apple’s financial performance is one of the best among many companies. Currently
Apple has no debt and is not directly affected by interest rates or credit markets.

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Weaknesses
1. High price. Apple’s products cost much more than its competitors devices. Some critics
argue that the price is not justified. When there’s such a fierce competition, Apple products
price becomes a weakness because consumers can easily opt for similar quality but lower
price products.
2. Incompatibility with different OS. The ions and OS X are quite different from other OS and
uses software that is unlike the software used in Microsoft OS. Due to such differences, both
in software and hardware, users often choose to stay with their accustomed software and
hardware (Microsoft OS and Intel hardware).
3. Decreasing market share. The less market share Apple has, the less it can influence its
potential customers and persuades them to jump into using Apple’s closed ecosystem
products.
Opportunities
1. High demand of iPod mini and phone 5. IPod mini sales will increase Apple’s market share
in the tablet market and, will strengthen firm’s competitive advantage.
2. iTV launch. iTV launch will support Apple TV sales and the products’ ecosystem.
3. Growth of tablet and Smartphone markets. Growth of tablet and Smartphone markets is a
good opportunity to expand firm’s share in these markets.
Threats
1. 2013 tax increases. Tax increases in USA in 2013 will negatively affect Apple.
2. Rising pay levels for Foxconn workers. Pay levels for Foxconn’s workers already rose 3
times from 2010 to 2012. Foxconn is the main manufacturer of Apple products and the rising
pay level for Foxconn’s workers will likely raise the prices for Apple products.
3. Breached IP rights. The companies that breach Apple patents might not be discovered soon
and may benefit from it, while weakening Apple at the same time.

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External analysis - Porter’s Five Forces Model
Apple operates in two primary industries:
 Computing - Hardware and Software
 Delivery of Entertainment and Media
Apple has always been under intense competition within the computer, software, and
entertainment industries. “Looking to 2012...Every time that Apple had jumped into the lead in a
product category during the past two decades, it had had difficulty in sustaining its leadership
position.” We use Porter’s Five Forces Model to understand why Apple’s industries are so
competitive.
Figure: Summary of Industry Threats (Computer Equipment and Entertainment Distribution)
Type and
Severity of
Threat
Organization
Entry –
High Threat
Verizon Streaming audio and video with V CAST.
Amazon On demand online services to purchase music (similar to
iTunes).
Google They make everything.
The “Next
Google”
New entrants with disruptive technology.
Rivalry –
High Threat
Microsoft Windows Operating System, Windows Media Player for
playing music and video.
Linux Competition to Mac OS X Operating System.
Napster,
Rhapsody
Online music sources – alternatives to iTunes Music Store.
Dell, HP, Lenovo Alternate sources for computer hardware.
iRiver, Samsung,
Creative
Small, stylish MP3 Players.
DreamWorks Animated movies.

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YouTube.com Online video.
Substitutes –
Moderate
Threat
XM, Sirius Satellite Radio for music.
XBox, PS2 Entertainment Media, Media and Music.
Various Internet Streaming Radio and Podcasts.
Music CDs,
DVD-Audio and
SuperAudio CD
Alternative means to acquire music.
Broadcast, Cable,
Satellite, NetFlix,
TiVo, Theatres
Alternative sources for video.
Suppliers –
High Threat
Motorola, IBM,
Intel, Samsung
Suppliers of Processors and computer memory.
Microsoft Strategic Alliance / Supplier of Office for Mac.
The Big Five -
BMG, EMI,
Sony, Universal,
and Warner
Sources of music. Will they raise prices and break the dollar
per song model? Some in the record industry resent Apple’s
distribution model. “Apple reaps billions from selling its hit
music player, but there are sparse profits from the songs
being sold over the Net.” (Burrows, Grover, and Green)
Disney, ABC,
NBC, CBS, Fox,
Pixar, Sony
Suppliers of Television and Movies. Will they sign
exclusive contracts with other online services? Note that
this threat is reduced for Disney / Pixar.
Buyers –
Moderate
Threat
Consumers and
Illegal peer-to-
peer file sharing
Consumers share music using peer-to-peer networks
without paying for music.
Distributors Apple retailers may pressure for lower prices or better
terms. For example, the release of the Apple Store in 2001
“infuriated longtime independent Apple retailers that didn’t
appreciate Cupertino cannibalizing their sales.” (Linzmayer,
300)

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Consumer
Attitudes and
Behaviors
Consumers or businesses may reduce spending on personal
computers or non-essential (potentially high elasticity of
demand) music players if they fear economic downturns.
Consumer
Refresh Cycles
Consumers and businesses may continue to use previous-
model iPods and Macs rather than upgrade to current iPods,
iMacs, or OS
The total industry threat for the industry space that Apple occupies is a high threat industry.
Apple must continue to pursue product differentiation (i.e. the style and ease-of-use of an iPod)
and economies of scope (i.e. offering ABC television shows on iTunes) to maintain their
sustained competitive advantage in this industry.
Core Competencies
The core competencies of Apple are robust. It is very hard to imitate the Apple products and this
gives it the edge over its competitors. It has a closed proprietary system, which makes sure for
Apple that there is no evasion of its skills and its secret recipe. On the other side Apple is very
consistent in its product portfolio development. If any company no matter how successful is,
divert its business altogether or try to diversify too much in product line than there are chances
that it will lose its core competency
it is really strong in its core competencies as well as in dynamic capability. It has always been
responsive to any changes brought in by its competitors. Let us take an example of Dell
introduced its tablet in the market and Apple launched its iPad 2. As Samsung developed Galaxy
S3 and Apple launched it iPhone 5.
Apple offers a complete range of its products to its customer. If we take an example of Nokia, its
user has to use android market to download music, where an iPhone user doesn’t need to go
anywhere apart from iTunes. Similarly in Nokia you have to create your own backup where as in
iPhone the iCloud is there for the backup.

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Key Strategic Marketing Issues (KSMI)
It is clear that Apple Inc. has strong appeal in the market with regards to the majority of its
products however; the iPod brand has suffered in recent years. There have been many articles
such as PC World, and many other gadget shops that are warning customers that a “death upon
the iPod” is near. This is because many outlets are now showing limited stock availability of the
iPod. Also the pattern in consumer spending has been diverting to new gadgets such as the iPad
and iPhone, as there has been a large increase in sales across the years and in the last quarter it
was up 76% . Many people also feel that Apple need to re-develop the iPod as all other product
ranges have received a “fresh look” where as there is nothing being done to the iPod .
It is clear that people are demanding a new revelation of the iPod. The iPod has not been given a
new image since 2009. People also doubt as to what Apple can change with the iPod as many
feel that it had developed to its potential as the only way it can get better is by increasing
memory size. Or is a brand new direction what Apple need? There have also been talks and
discussion amongst papers that Apple may be doing this on purpose in order to test consumers
and see where they would spend their money if the iPod Classic was to be taken of the market .
As the iTouch is now Apples biggest seller from the iPod range there has also been insights that
the company should maybe focus on developing this further.
1. So how would Apple communicate to people that iPod is still a must have?
2. How would Apple do this?
3. Why should consumers new and existing pick Apple over other retailers?
Due to apples high profile in the industry they already have a major brand name that people
know ad are aware of. Apple knows its gadgets such as the iPhone, iPad and Mac are a nation
must have, however this was achieved through hardcode marketing and advertising. For example
Apples advertising campaign for the new iPhone 4 were “This changes everything. Again” this
alone drew customers in as they knew that Apple have yet again launched a must have product
even though they may own something similar. However on the other hand with the iPod nothing
as such has occurred, instead Apple have only focused on the fact that it fits 40’000 songs, this
fact is not something that would make people want to buy the iPod Classic, as there are may
other products on the market that can do the same.
Apple need to first invest into re-freshen the iPods image, buy giving it a new look and offering
customers more, be it various colour range like they do with the Nano range. Another thing they
need to consider is a major advertising campaign as clever as the iPhone and iPad’s making
consumer feel that this a gadget they cannot live without. It’s called the iPod Classic for a
reason, so they need to focus on the fact that it used to be and still the nations favourite music
device, after all it is what got Apple to where it is now.

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Although their market share is increasing and profits are going up year on year, Apple need to
focus on promoting to customers the importance of returning again and purchasing new products
by promoting their value for money, not as in cheap for crap quality, but the fact that you get
what you pay for. They need to promote that their products are the best of the best and that their
quality is sure to last longer than the rest. This can be seen with the way Apple’s products do not
depreciate in price immediately such as other products.
The Future of Apple
Personal Computers – A Shift in Strategy
Apple has historically taken a far different path than the traditional Windows and Intel
combination. Microsoft provides the Windows operating system to separate downstream
hardware producers such as Dell. Apple vertically integrated both the operating system software
and hardware completely under Apple. A consumer running Microsoft Windows can choose
from a myriad of systems based on the Intel processor, while a consumer running Apple’s OS X
must purchase Apple hardware.
Apple is adjusting this strategy by migrating their microprocessors from IBM and Motorola
PowerPC to Intel. Analysts believe that the Intel-based Macintosh may be able to run Microsoft
Windows applications by the end of 2009. (Burrows)
In addition to switching processors, Apple positioned their computers as an immediate option for
the traditional Microsoft Windows user. With Apple Boot Camp, users may now use Mac OS X
or Windows on an Apple computer. (Sutherland).By allowing users to run Windows on an Intel
Mac, Apple reduced the switching costs for traditional PC users. Apple may steal away
customers that are willing to pay a premium for a system that runs both Windows and Mac OS
X.
Apple continues to retain a strategic option to license its technology to clone makers such as
Dell. Past attempts at licensing Apple technology (to IBM, Gateway, and others) failed on accord
of Apple’s rigid demands. Many technology leaders (such as a 1985 letter by Bill Gates to
Apple CEO John Sculley) criticized Apple for keeping a closed architecture. Apple cofounder
Steve Wozniak criticizes this strategy, “We had the most beautiful operating system, but to get it
you had to buy our hardware at twice the price. That was a mistake.”Whether Apple would be
willing to pursue this reversal of vertical integration is unclear. Although such a move would
cannibalize a portion of Apple’s own hardware sales, it would also provide royalty-based
revenue that could approach $1 billion annually.

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Recommendations
 Scale up its production capabilities.
Every time Apple releases a hot new gadget, customers can't get it. This is a consequence of
Apple's legendarily precise just-in-time manufacturing system. Apple never wants to make more
devices than it will sell, so it ramps up manufacturing in lock step with demand. That reduces its
inventory costs and thus boosts its profit, but Apple's production is still too slow to keep up with
instant spikes in demand. Is it possible for Apple to build products any faster than it does now? If
money is no object, sure: It could set up factories in many different countries and it could invest
in next-generation production capabilities that might pump out iPhones even faster (for instance,
robotic assembly lines, which have the added benefit of not raising any concerns about factory
conditions).
 Build or buy a cellular carrier.
The iPhone is Apple's biggest product, but Apple sells almost all of its phones in partnership
with carriers whose prices it doesn't control. Those costs are the biggest piece of a smartphone
purchase, and, in the U.S. and many other places around the world, they have remained relatively
stable for years. Your cellular carrier's technology and customer service also leave a lot to be
desired. Steve Jobs once said that Apple's goal is to "own and control the primary technology in
everything we do." Cellular data service is a key such technology, and Apple should make it a
goal to own and improve that service. It could start small, building infrastructure that boosts
iPhone service in congested cities, but with enough investments it could build a network of its
own, thus improving current carriers' service and prices through competition.
 High demand of iPad mini and iPhone 5
iPad mini sales will increase Apple’s market share in the tablet market and, will strengthen
firm’s competitive advantage.
 iTV launch.
iTV launch will support Apple TV sales and the products’ ecosystem.
 Growth of tablet and Smartphone markets
Growth of tablet and Smartphone markets is a good opportunity to expand firm’s share in these
markets.

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MF/2012/3246 Page 18
Conclusion
This report indicates that Apple must focus on several key aspects to continue to grow and
succeed. They must continue a stable commitment to licensing, push for economies of scope
between media and computers, and become a learning organization.
Although it should continue, Apple may want to consider other forms of strategic alliances. An
equity strategic alliance may offer Apple the opportunity to obtain additional competencies. An
effective way for a company like Apple to accomplish this would be in the form of a joint
venture.
Apple should continue pushing the new line of media-centric products. Meanwhile, Apple should
not lose focus on its computers. Macintosh computers were 59% of Apple’s sales in 2012.
(Burrows)This very innovative company exploits its second-mover position. In the future, they
will need to continue innovating to expand the boundaries of both media and computers.
Apple apparently made a commitment to licensing. Although it should continue, Apple may
want to consider other forms of strategic alliances. An equity strategic alliance may offer Apple
the opportunity to obtain additional competencies. An effective way for a company like Apple to
accomplish this would be in the form of a joint venture. Apple should continue push for
economies of scope between media and computers, and become a learning organization, pushing
the new line of media-centric products. This very innovative company exploits its second-mover
position. In the future, they will need to continue innovating to expand the boundaries of both
media and computers. This will allow the company to withstand a departure by Jobs. Based on
the actions of the organization, we feel that the mid-term performance of Apple will be strong.
This period allows Apple time to overcome their challenges if they move swiftly. For this reason,
we feel that they will continue to succeed and will continue to outperform their peers.

19. K. R. Dulakshi
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References
1. http://en.wikipedia.org/wiki/Apple_Inc.
2. http://www.forbes.com/companies/apple/
3. http://www.strategicmanagementinsight.com/swot-analyses/apple-swot-analysis.html
4. http://www.nasdaq.com/symbol/aapl/financials?query=ratios#ixzz2Vv2kKj
5. http://www.nasdaq.com/symbol/aapl/financials?query=income-
statement#ixzz2Vv1MZyY4
6. http://www.nasdaq.com/symbol/aapl/financials?query=cash-flow#ixzz2Vv2cutjL
7. http://www.nasdaq.com/symbol/aapl/financials?query=balance-sheet#ixzz2Vv2F6q7x
8. Apple Inc. SEC filings at SECDatabase.com
9. http://www.pcworld.com/article/219205/ipod_classic_is_dead_rumors_are_back.html
10. http://www.prefixmag.com/news/is-apple-thinking-of-killing-off-the-ipod-
classic/49227/
11. http://www.apple.com/pr/library/2011/01/18results.html
12. 1
http://www.prefixmag.com/news/is-apple-thinking-of-killing-off-the-ipod-
classic/49227/
13. http://www.prefixmag.com/news/is-apple-thinking-of-killing-off-the-ipod-
classic/49227/

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