harvard case apple

Topics: Apple Inc., IPhone, ITunes Store Pages: 5 (1780 words) Published: November 5, 2013
Case summary

Apple Inc. in 2012

Apple and its History
Steve Jobs and Steve Wozniak founded Apple in California in 1976. Their mission was to introduce an easy to use computer to market, which led to a computing revolution and quickly became the industry leader by selling more than 100,000 Apple IIs in 1980. After IBM entered PC market, IBM PCs, which used Microsoft’s DOS (OS), gained more market share and became the new standard for the PC industry. At the same time, Apple introduced the Macintosh in 1984. However, Apple’s net income fell 62% due to the Mac’s slow processor speed and lack of software limited sales. In 1985, Steve Jobs was forced out and John Sculley took charge of the Mac. Under the direction of Sculley, Apple found its new market in desktop publishing. Despite Sculley’s efforts, Apple’s gross margin dropped to 34% and Sculley was replaced by Micheal Spindler. Over 2,500 jobs were cut, almost 16% of Apple’s workforce and the company was totally reconstructed. After losing a $69 million for developing a revolutionary OS, Gilbert Amelio was appointed as another new CEO. Amelio announced that Apple should develop a new OS based on NeXT, however the company was still in chaos. Finally, Steve Jobs got the title of CEO in 1997 to save Apple. Unlike previous CEOs, Jobs focused on Apple’s strength, ‘closed door policy’. In addition, he wanted Apple to have a culture influence in a way of innovative, new thinking, and creative. In 1998, he introduced the iMac and the line became a sales smash. Steve Jobs brought iTunes, iPod, MacBook and iPhone to the public and change the way people download music and use laptop computers. Today Apple became one of the largest and most profitable companies in the world. After Job’s death, Tim Cook was assigned as a new CEO and faced challenge in a way to take Apple to the next level.

The Personal Computer Industry
The history of personal computer industry fell into two main companies; Apple and IBM. Apple pioneered the first personal computing devices while IBM introduced PCs into market in the 1980s. In the 1990s, “Wintel” (Windows OS combined with an Intel processor) became a new standard and dominated the industry. The overall industry continued to increase and more than 2 billion PCs would be used worldwide by 2015. However, the revenue and the volume got lowered due to the appearance of new subproduct category of netbook and Laptop computers. In terms of buyers, PC buyers divided into five categories: home, small and medium sized business, corporate, education and government. The distribution of PCs were changed from the early 1990s since customers have chance to buy PCs through superstores such as Best Buy, Walmart, and other electronics retailers. There are four top PC manufacturers: Hewlett-Packard, Dell Lenovo and Acer. Today, HP is the most recent leader with worldwide shipment market share at 17.7%. The Mciroprocessors, CPUs, the brains of a PC was dominated by Intel. Intel has 80% of the PC CPU market share with brand power, innovative technology and manufacture scale. In terms of OS (software that managed a PC’s resources), Microsoft had dominated the market while more than 90% of all PCs use some version of Windows. Microsoft was the largest vendor of Wintel PCs. These days number of new and innovative PC applications and productivity software had decreased since software companies tried to develop on new devices such as tablets, phones and etc. The alternative technologies appeared since the early 2000s from smart phones to TV set-top boxes. Today people use smart phones to check email, visit websites and so on. Therefore these alternative devices influenced user’s lifestyle and changed manufacturers’ strategy as to have well integrated one.

The Macintosh and Apple’s “Digital Hub Strategy”
In 2001, Jobs presented his vision for the Macintosh and called it the “digital hub”. Jobs believed that the Mac would become the “hub” to...
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