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Apple Inc
A Market Leader Overview
Assignment #3

Written By
Amjad Al - Attar
49 210 2005

Executive Summary

Apple is an innovation and differentiation driven company who

believes in its customers. Its adopted strategies of quality, simplicity
and continuous development created an army of loyal customers
around the globe. The company has introduced products that have
changed industries, like Mac computers with its built-in operating
system which have revolutionized the whole industry, iPod which
has changed and dominated the music industry, and finally, Apple’s
latest invention: the iPhone, which has changed the Smartphone

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 market segment of mobile phones, and was able to gain 18% of
.world’s Smartphone market share in just 2 years

Table of Contents

Introduction……………………………………………………………………10
………………………………….3

Company 1.1
Overview…………………………………………………………………………
…………..3

Why, When and 1.2

How?.....................................................................................3

iPhone: Launching An 2.0

Invention…………………………………………………………………………5

iPhone: Competitive 2.1

Advantage………………………………………………………………….5

iPhone: Market Share and 2.2

Competitors………………………………………………………5

3.0
Conclusion……………………………………………………………………………
……………………………6

4.0
References…………………………………………………………………………
……………………………..7

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 Introduction 1.0

The purpose of this paper is to point out the reasons and strategies
behind the success of a chosen market leader in an industry, Apple
.Inc

Since Apple Inc. operates in four different markets; it will be

extremely hard and time consuming to cover all of its markets.
Because of that, I chose one of its markets: the smartphones
industry. The paper will provide a short introductory section that
covers the company (when it started and what it produces) and
when , why and how the company changed its strategy. Then, the
Apple’s product section will follow, presenting the product,
discussing its production, marketing and promotion strategies, and
finally, the product’s market share and how it affected other
.competitors

Company Overview 1.1

Apple Inc. is an American multinational, electronics and computer
software company. The company started with the design and
production of its first personal computer, the Apple I (also known as

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the Apple-1), in 1976, and incorporated later on in 1977. For the first
30 years, it has been called “Apple Computer Inc.”, but in 2007, it
became “Apple Inc.” due to the diversification in the company’s
.portfolio

Apple Inc. started with producing only personal computers (first

market). Later on, it expanded to producing its own revolutionary
operating system (Mac OS X), which left an Apple' “footprint”, in the
OS industry (second market). It also produced creativity,
productivity, and multimedia programs, such as the “iTunes” (a
worldwide known/online music player and store). The company kept
on expanding until it came up with the “iPod” in 2001, to enter the
portable music players market and become the leader of it (third
market). In 2007, Apple Inc. entered its fourth market by launching
(its new invention, the “iPhone”. (Source: wikipedia.org

?Why, When and How 1.2

After the success of the "LC" computer in the early 90s, Apple
introduced a new line of computers called the "Centris". The line
had two different models with very specific differences in terms of
technical configuration which was confusing to the regular user. The
result was a complete failure, and Apple's market share went down
and continued to slide. At that time, Microsoft was offering a cheap
and simple configuration products directed to "any-type" consumer,
while Apple kept on producing expensive and richly engineered
computers targeting experts. Instead of changing and developing
new strategies, Apple started suing Microsoft as a defense
mechanism. All that led to destroying Apple's reputation and losing
.market share. The company thought changing the CEO would help

The new CEO of Apple, Gil Amelio, made many changes, such as
massive layoffs, new high budget projects, and he purchased the
NeXT system, for the NeXT Operating System, hoping for success.
After three years of continuous failure, Amelio was removed from

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his position and replaced by the co-founder of Apple Company, after
.a long time of absence, Steve Jobs

Jobs knew that the only solution was a completely new set of
strategies. He started restructuring the product line, targeting both
types of consumers: regular and experts, and made an extremely
smart collaboration with Apple's competitor "Microsoft" regarding
the Microsoft Office suit. In 1997, Steve Jobs introduced the Apple
Store with a build-to-order strategy. The result was an outstanding
success. Jobs realized that by targeting all types of consumers,
significant changes had to be made, changes regarding the
configuration, quality, simplicity, design and most important variety.
Concentrating on these aspects resulted in the production of the
famous and successful "Mac" computer, resulted in introducing the
world wide known "iTunes" that changed the whole music industry,
resulted in the introduction of the "iPod" that became the leader in
the audio players industry, and finally resulted in the invention of
the "iPhone", the new challenge to all competitors in the
.Smartphone industry

(Source: wikipedia.org )

iPhone: Launching An Invention 2.0

The idea of the iPhone began with Apple CEO Steve Jobs' requesting
that Apple engineers research on touchscreens. Apple created the
device during a secretive cooperation with AT&T Mobility (an
American carrier) at a development cost of US$150 million. The
iPhone went on sale in the United States on June 29, 2007. Apple
closed its stores at 2:00 pm to prepare for the 6:00 pm iPhone
launch, while hundreds of customers lined up at stores nationwide.

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 The company sold 270,000 iPhones in the first 30 hours of its
.launch

iPhone: Competitive Advantage 2.1

The market was in need of a step-ahead device which could provide
accessibility to “non voice” data, and Apple invented that device. In
2007, Apple launched the “iPhone”: a 3.5-inch multi touch screen,
music player, web browser, and larger built-in memory, features
that all existing smart phones did not have. Apple’s strategy was to
provide a phone with the smartest features and “ease of use”
.compared to already existing competitors

Apple had tremendous success in digital music market with iTunes.

They have already sold 40 million iPod, and around 2 Billion songs in
iTunes since its launch in 2003. According to a survey, 74% of
iPhone users had experienced Apple products, either in form of iPod
or Mac computers. The company has took advantage of both, the
Macintosh and iPod customer base to help with the marketing and
sales of the iPhone. Apple's large and very loyal customers’ base
made it much easier for the company to enter the new market.
Diversification strategy is considered to be risky in most cases, but
.for Apple, brand loyalty of customers was the key

(Source: canalys.com, parksassociates.com )

iPhone: Market Share and Competitors 2.2

Apple implemented a “focused-narrow strategy” by targeting only
smart phone segment of mobile phone market. The iPhone was
designed as a combination of a portable video/audio player, and a
phone with the abilities to surf Internet with speed. Apple is known
for its easy to use operating system, so they used it in iPhone. The
main focus was ease of use and smartest than any other smart
.phone at that time

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 Because of the advancement found in iPhone; RIM (Black Berry
producer) was forced to follow the same and have developed the
same software library concept. Nokia has also started to provide the
same kind of services like: Nokia Tube, Nokia map, and Nokia music
.to compete in the market

After 2 years, Apple was able to get around 28% market share of
U.S. and 13% of world
market by its
differentiation strategy.
After introducing iPhone,
Apple introduced the next
version “iPhone 3G”
because of the increase
demand of 3G and GPS
functionality with
Microsoft exchange server, which indicates Apple’s ability to deliver
.customer’s needs

(Source: canalys.com, brainstormtech.blogs.fortune.cnn.com )

Conclusion 3.0

Smart phone market is in early growth stage. Technology is

changing rapidly in the market. Nokia and Symbian are facing
challenges by Apple and RIM. There are other competitors like LG,
Samsung, Motorola who are followers in the market and able to
provide considerable competition in the market. Each user has
different priorities, Samsung's Manager said: "There will be no Swiss
“Army Knife device. You'll have more targeted solutions

References 4.0

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 .Apple Inc., http://en.wikipedia.org/wiki/Apple_Inc -

Apple I, http://en.wikipedia.org/wiki/Apple_I -

iPhone Market Share, http://brainstormtech.blogs.fortune.cnn.com -

,PARKS CITED December 2008 -

http://www.parksassociates.com/press/cited/2008_DEC.html

,Effective Strategies Apple Uses to Create Loyal Customers 12 -

http://www.bspcn.com/2007/09/14/12-effective-strategies-apple-
-uses-to-create
/loyal-customers

Smart phone market shows modest growth in Q3-But Apple and -

RIM hit record

volumes, http://www.canalys.com/pr/2009/r2009112.htm
Survey reveals extent of shift in mobile UI preferences - More than -
half want a
touch screen in their next phone,

http://www.canalys.com/pr/2009/r2009111.htm