Apple Team Case Analysis
Apple operates in the information technology sector and within the technology hardware Industry. Apple was the product of the creative and technical genius of Steve Wozniak and the visionary genius of Steve Jobs. In 1976 Wozniak created the first complete home computer. Jobs saw the potential to market the home computer and sold the first 50 based on a prototype.
In 1976 Apple Computer was created as a company and in 1977 they incorporated. In 1980 Apple issued their IPO. In 1983, disappointed with the direction of Apple, Wozniak departed to pursue entrepreneurship interests and John Sculley was brought on as CEO. In 1985 Jobs left for similar reasons. From that time AAPL hovered around $1.00.
In 1997 Apple purchased NeXT, the company Jobs founded after leaving Apple, and brought Jobs on to serve as CEO. Steve Jobs leadership of Apple was nothing short of meteoric. Apple introduced the Apple Store in 1997. In 2001 Apple introduced the iPod, an iteration on the blossoming mp3 player technology. For the next 15 years, they enjoyed a prime position as the desired brand for handheld technology.
At the time leading up to, during and after the case, the environmental trends in Technology were highly favorable to the growth of Apple. The technology market has had constantly increasing demand for more control (features) in smaller and smaller packages. Steve Jobs was legendary for being able to observe the market trends and provide the greatest thing that the consumers needed before they ever knew they needed it. The iPhone, for example, took the efforts of Palm Pilot and Blackberry and made them very sleek and much more user friendly. Palm and Blackberry focused their innovations on functionality and efficiency. Apple kept or improved on those points, while including entertainment features that made the iPhone highly effective for business purposes and highly enjoyable for personal purposes.
The five forces model really shows what struggles Apple is facing today. While Apple still sells home computers, their bread and butter products are their handheld technologies. Recently Google has joined the battle for market control of the technology hardware industry, particularly with the introduction of their smart phone the Pixel. Even though the industry is highly developed and probably nearing or in the early stages of the maturity phase, Google has been very successful with their launch. Apple also faces very stiff competition from Microsoft, Samsung, Nokia and Sony, who each have their own products that could serve as substitutes to Apple’s products. While the threat of new entrants to the market seems small, the Google case proves that the threat still exists.
Additionally, Apple does not make or manufacture most of the component parts of their products. Many parts that they purchase to manufacture their devices come from competitors such as Sony and Samsung. That is a very disadvantageous place to be in terms of negotiating position. However, they also serve as a very large revenue stream for those competitors which gives them strong negotiating power.
They are also losing negotiating power with their customer base. In the Asian markets, Nokia and Samsung are not only seen as “cooler” than Apple, they are less expensive. Apple is losing market share in the Asian market and will need to figure out a way to become relevant again, both in appeal and in price. Their latest iteration on the iPhone was also poorly received compared to previous iPhone releases.