Apple Logo taken from Apple.

com

Strategic Management of Technology Plan for Apple Desiree Carter dcarter21@my.keller.edu NETW-583 John Lambrou 9/7/2012

Strategy (TCO F)

Apple has two types of strategy technological and marketing. John Naughton in his article Apple sets out strategy to dominate mobile market talks about the first iPhone and its impact. As the mobile phone industry struggles to come to grips with Apple's iPhone, the biggest mistake it could make is to see the device purely as a phone. (Naughton, 2008) with the first iPhone its key feature of it was the fact that it was a powerful handheld computer that had the feature to make voice calls. Also in 2008 according to Naughton They also set out a technology strategy which might, one day, give Apple the kind of dominance over the mobile market that Google currently enjoys in search and online advertising. (Naughton, 2008) At the heart of the strategy was a plan to segment the market into two categories common which started in 2008 and the iPhone platform which for the first time provided access to web browsing, email, sophisticated multi-media applications (including gaming) and virtually anything else that could be run on a computer.

The common segment that was defined by Naughton has as he said become commoditized as a low-margin, fiercely-competitive zero-sum retailing game. The iPhone platform which has been extended to the iPod Touch has high margins and virtually limitless expansion and is an enticing proposition. I have a friend that I went to high school with and we used Apple products there the iMac and our IPods that were provided by the school. Now he is learning programming for iOS which is Apples operating system. Back in 2008 when the first

iPhone came out it cornered 28 percent of the US smartphone market that was previously dominated by RIM, makers of the BlackBerry phone which had 41 percent of the market. iPhone 2 which is now obsolete communicated directly with Microsoft Exchange Server the system that most of the worlds big companies use to manage their corporate email, calendar and address-book applications. The iPhone 2 was said to communicate directly with Exchange server which gave corporate users the same kind of push email service that was provided mainly by BlackBerry, together with instantly updated calendars and address books and other features. If a corporate iPhone was lost or stolen it could instantly be wiped and disabled by the company HQ. This was music to the ears of chief information officers, for whom mobile communications were a nightmare back then and are still a nightmare today. Apple's plans also represent a stiff challenge for RIM whose BlackBerry range was, until now, the only realistic way of providing access to corporate email on the move. (Naughton, 2008) In 2008 Naughton foresaw a number of large global companies switching to Apple and ordering hundreds of thousands of iPhones for their employees. The problem with this is that Apple released its Systems Development Kit (SDK) the set of software tools needed to develop applications for the iPhone. The SDK was available as a free download to anyone who wants to write software for the phone, and over 100,000 copies were downloaded upon its release. Apple was joined by programmers from several companies who demonstrated what they had been able to do in just two weeks using the SDK. Apple had started the evolution of a vigorous ecosystem of people developing ingenious applications for the iPhone. However Jobs & Apple added a couple

ingenious twists. All applications were vetted by Apple before being included on the Apps Store. That meant immoral programs such as porn were not allowed on the Apps Store making it a safe and friendly environment when it started. It also meant that every developer would have automatic access to every non-hacked iPhone on the planet, because every time its owner synchronized it with his or her PC, it has access to the online store. Apple will carry all the hosting and e-commerce costs of the operation, and split any revenues with its developers on a 70/30 basis. The other twist in was that Kohn Doerr revealed during the iPhone 2 presentation that he and his partners at Kleiner Perkins Caufield & Byers are so taken with the prospects for the iPhone apps market that they have set up a $100m investment fund to finance developers. To put it bluntly Apples strategy has been to develop good products, build a client base and then improve the products it has and introduce new ones. This strategy has been the right one because Apple has seen lots of success with it.

Core Competencies (TCO C)

Apple does have a significant source of competitive differentiation it is their operating system. Their operating system does provide a unique signature to Apple. Their operating system is used in all their products. It is used in all their products from their first computer with a graphical user interface Lisa all the way to their current products such as the Mac Book Pro and the Ipad and Ipod Touch. It does make a significant contribution to the value a customer perceives in the end product. Their operating system makes a large contribution to the value I perceive in the end product.

Without their operating system the Ipod and Mac computers wouldnt exist. Games for the Mac may have been limited before but companies are starting to realize that it is more beneficial to their profit margins and competitiveness to make their games compatible with the Macintosh computers and devices such as the Ipod Touch which is a system that carries the popular game Angry Birds. Their core competency is their operating system and line of products. It does not transcend a single business it covers a range of businesses that are current and new. Their business is global just like Microsoft. Their business covers Computers, Music Players, Tablets and The Cloud computing industry which is fairly new. Their Operating System is hard for competitors to Imitate but sadly their physical design of their products has been imitated. What saves their designs though is their operating system and their features that are made available through the programming and engineering of their products. Their other core competency is their engineering and programming it is what differentiates them from their competition. Their competency has taken years for them to build. They didnt always have the mastery of the skills they have acquired. Their first computer for example Lisa was a failure. Some of their products have taken more than one try to get right. For example the mouse for their Macintosh Color computer was originally shaped like a hockey puck. This was not a big hit with consumers. It has hard to use and did not have the ergonomic design that consumers today have been accustomed to. Over the years they have used their core competencies in engineering and programming to improve upon their products which have allowed them to design, build and introduce new ones over the years.

They have two lines of laptops the Mac Book Air and The Mac Book Pro. Their Mac Book Air is like a basic laptop. I would prefer a Mac Book Air though because it uses Intel processors and graphics cards. It uses Flash Storage which has 512 GB rather than using a solid state hard drive which was used before the Mac Book Air. It boasts being able to be started up in seconds. Another feature is Instant On. With a single charge on the 11 inch model it can stay on 7 hours. The standby mode conserves battery life for up to 30 days. Using the Mac Book Air with their newest operating system Mountain Lion in Power Nap mode youre able to continue to receive new email and calendar invitations while the MacBook Air is asleep. With their Thunder Bolt port USB devices run faster than with the previous USB 2 ports. They also have automatic wireless networking this allows the MacBook Air to find Wi-Fi networks automatically and allows connections with one click. It also works with Bluetooth devices such as speakers and headphones. It has a High-resolution display and a 720p FaceTime HD camera. FaceTime is the Apple equivalent to Skype. It has a Multi-Touch track pad which allows for easier maneuvering the mouse and enabling easier use without a portable external mouse.

Industry Dynamics (TCO A)

The strategy that Apple uses is the correct one for the industry. Their competencies have stayed current allowing them to improve on their products over the years. One of the largest trends in the computer technology industry is Cloud Computing. The music service that goes with the Ipod, iTunes a couple years ago used started using Cloud Computing to allow customers to recover previously purchased music, podcasts, shows and movies. Another Trend in the Computer Industry is Tablet Computers. The first Tablet was introduced by Microsoft, Apples rival. Apple soon followed suit introducing the Ipad. The have improved on this product twice and have released an Ipad 3 this year. Another Trend has been all in one computers. The iMac is Apples all in one computer. I used one in high school which was online. The iMacs became more popular than computers that required a tower. These trends are important because the computer industry is ever evolving innovation is required to survive in the Computer industry. Apple has proved time and time again that they can compete and are innovative. They have released products and companies have created products to support Apples products. The iHome line was designed and created to support iPods, iPhones and now iPads. The iMac mini is a substitute for the Apple computer towers and laptop lines. It has the features of the Mac in a portable and friendly size. It also is able to work with a Windows computer making it an Apple computer while the Mac mini is connected. They also have Apple TV. It enables iTunes movies and TV shows to be played in 1080p. It also allows content from

the iPhone, iPad or iPod touch to be played on an HDTV. It also stores your shows and data on iCloud. It is compatible with many TV and internet related products such as Netflix, Hulu Plus, YouTube, Vimeo, MLB, NBA, NHL and others. You can keep up with sports that you have subscriptions to such as MLB TV, NBA.com and NHL GameCenter. It also has the ability to stream your content from the Apple TV to your HDTV. This Innovation was important because it allowed Apple to stay current and expand their products and work with others such as Netflix. Apple has also been able to innovate and add signature products and services. Apple has the Product Red which part of the proceeds from each sale goes to help find a cure for AIDS. Apple also has an inexpensive Ipod for those who cant afford an iPod Touch which is like the Iphone except doesnt have the ability to make calls. The iPod shuffle is $49. The iPod classic was the first iPod design. They have improved on this through the years. They now works with Genius Playlists have 160GB capacity enables you to browse through your music collection through cover art. They also have free engraving for all their products. The most current improvements in their lines besides the iPod nano was the iPhone which is on its 5th generation. The biggest issue with the new iPhone is its connector which is now as small as my pinkie. Gone is the bulky 5 prong connector that has been apart of iPods and iPhones for years. This will cause manufactures to create more products to support the new model of the iPhone. Consumers may not like this and not rush to get the new iPhone as was the case with the first and second iPhones. This to me was poor innovation and remodeling of a product in Apples lines.

Technology Sourcing and Internal Innovation (TCO D)

You would think that Apple and Microsoft were each others biggest rivals. But as I did research for this paper I learned that Google is considered a mutual rival of Microsoft and Apple. They have been described as the slang work frenemies. The definition of this slang word is enemies with a friendship that also at times work together. These rivals have worked together and collaborated together. I have found 10 notable times when they have worked together. The most notable was that Microsoft had developed a compatible version of Word that worked with Macintosh computers. Apple had originally built the Macintosh computer in the early 1980s to compete the IBMs PC. Sadly IBMs PC outperformed the Apple II in its market. Microsoft however liked and believed in Apples new computer. Gates worked with Jobs on the Graphical user interface that we use today and agreed to help develop it. Now today Word is the most used and most known application for word processing. To quote Gates on this One of the most fun things we did was the Macintosh and that was so risky. People may not remember that Apple really bet the company. (Hiner, 2010) Going back to the enemies half of the frenemies definition the operating system we have come to use the most Windows was developed in this collaboration and has beat out Apples operating systems being the most popular and most used. In 2003 Microsoft and Apple collaborated again making the Ipod compatible with Windows. This venture has made the difference between the boom of the Ipod and its death to merely become an attempt at a product that has collected dust. Another notable collaboration was when Internet Explorer

became the default browser on Mac. Over the years in trade Windows user also now have the ability to use Firefox which used to be just an option on Macintosh Computers. Going back the the friends half of the frenemie definition in 1996 Microsoft invested $150 million in Apple and also made a multi-year guarantee that Microsoft would continue to develop software for Apple who back then still wasnt a big name in the computer world. To quote Jobs: We have to let go of the notion that for Apple to win, Microsoft has to lose. (Hiner, 2010) An interesting out sourcing of collaboration was when Apple switched the Mac platform from being proprietary PowerPC processors in 2006 to the standard Intel chips we see today. Later that year it was possible for Macintosh computers to have a dual operating systems due to Boot Camp a free utility that allowed Windows XP to be installed on the new Intel-based Mac hardware. Boot Camp has evolved since its initial release now supporting Windows Vista and Windows 7. Microsoft wasnt opposed to this because Boot Camp required a Windows license. An internal Innovation was Snow Leopard also known as Mac OS X 10.6. It integrated support for Microsoft Exchange into its built-in apps: Mail, iCal and Address Book. The issue with this however was that it required Exchange 2007 or later installed. Regardless it still made Macs more user friendly in the many businesses that run Microsoft software in the server room. Another internal Innovation was the release by Apple of a compatible version of Safari web browser for Windows and its WebKit browser engine that is the power behind Safari. Apple refined the Safari browser and it became an open source project that has been used by Google, Nokia, Palm and BlackBerry. Microsoft has released Office for Mac 2011 keeping with

the times and popularity that the Microsoft Office enjoys this keeps Mac users. I would recommend that Apple still collaborates with Microsoft when possible since it has seen so much success with partnering with them on projects in the past.

Product Development Strategy (TCO E)

Given Apples previous success by developing a line of products and improving upon them over the years to add new features or stay current in the Technology industry I would recommend that they stick with this product development strategy. They have had occasional problems with new products and updates but have always quickly remedied the situation. The launch of new products and features has made Apple fans such as me happy. The iPhone 5 has been released and is the newest improvement on the line of iPhones. The specs of the iPhone are that it is 7.6 millimeters thin, weighs 112 grams and its 3.31 cubic inches. Apple created a nano SIM card to work with the iPhones new design. It fused what used to be 2 separate chips one for voice and one for data into a singular chip. They have designed a new connector that is reversible something that makes the 30 pin connector something that us Apple fans have taken for granted obsolete which also means that our docks that we have used for years are obsolete as well something that us fans must consider. Is upgrading or buying the new iPhone 5 worth the money for the phone itself as well as the cost of all the supporting products worth it? The phones back is made out of a combination of Aluminum and glass. The lens of the phones camera is made out of Sapphire Crystal. It has a 4- Inch Retina Display that boasts 326 pixels per inch.

One of the many focuses in the Technology Industry is wireless connections. Gone is the day that dial-up and ether-net connections were common. Many people rely on smart phones my parents being two of them. One thing that makes smart phones so popular is their use of Wi-Fi and data plans. The Wi-Fi connection allows you to surf the web and check your email. The iPhone 5 has 8 hours of talk time on a single charge and 225 hours of time on standby mode. Its internet use breaks down to 8 hours on 3G 8 hours on LTE and 10 hours on Wi-Fi. It has a video play back of 10 hours. It has Audio playback of up to 40 hours. They have an adapter that allows your lightning adapter to become a 30-pin adapter. I think this Apples way of remedying the former docks and accessories that their other products enjoyed not becoming obsolete as I thought earlier in my paper. They also offer an Apple World Traveler Adapter Kit so you can still enjoy your iPhone across the globe.

iPhone 5 taken from Apple.com

Strategy to Protect Innovations (TCO B)

I would copyright the design of the iPhone 5 so that those who imitate the look of the iPhone 5 and its design could be sued. In my search for a new iPod specifically the iPod nano 6 th generation I found an imitator of the design. I know the Apple that is on Apple products has been trade marked as well as the names of their products. I would use trade secrets by having one team develop each of the parts of the product and it be assembled by a factory. I would use copy rights on its software. I would make sure that all Apple products are patented and make sure all the patents are renewed by or before the deadline for renewal. This would prevent Apple from facing the issue that BlackBerry was forced to face when their patents werent renewed.

Colby 4 GB MP800 MP3 player

Apple iPod Nano 6th generation from Apple.com

Resources
Naughton, J. (2008, March 16). Apple sets out to dominate mobile market. Retrieved from http://www.guardian.co.uk/technology/2008/mar/16/apple.mobilephones

Hiner, J. (2010, November 18). The 10 greatest moments of microsoft apple collaboration. Retrieved from http://www.techrepublic.com/blog/10things/the10-greatest-moments-of-microsoft-apple-collaboration/1953