Steve Jobs and Steve Wozniak founded Apple on April 1, 1976 in Santa Clara Valley, California. The two built the Apple I out of a garage and sold it. The first Apple I computer did not include a monitor, keyboard, or casing. Due to the high demand for the Apple I, Jobs realized that there was a market for small computers. He also realized that he could market the company’s name and the computer’s user-friendly look. In 1977 Wozniak added a keyboard, color monitor, and eight peripheral device slots.
Apple sales increased from $7. million in 1978 to $117 million by 1980, which was the year that Apple went public. Wozniak left the Apple in 1983 and Jobs hired PepsiCo’s John Sculley as president. In 1984 Apple introduced the Macintosh and bounced back from failed product introductions. Jobs left Apple in 1985 and founded NeXT Software, which is a designer of applications for software development. Microsoft founder Bill Gates’ appealed for Apple to license its products and make the Microsoft platform an industry standard, but Sculley ignored his offer. In 1986 Apple introduced its Mac Plus and LaserWriter printers.
Shortly after, Apple formed the software company that later became Claris. By the 1980s Microsoft brought new competition with the Windows operating system (OS) which was similar to Apple’s graphical interface. Apple sued Microsoft but lost its claim due to the 1992 copyright protection. In 1993 Apple introduced the Newton handheld computer, but sale did not show much promise. Since earnings were decreasing, Apple had to downsize its workforce. Sculley was among the employees who left the company. By 1994 Apple started licensing clones of its OS, hoping to attract software developers.
In 1996 Apple realized Mac clones were stealing sales and hired Gilbert Amelio as CEO, formerly from National Semiconductor. In 1997 Apple purchased NeXT, but sales continued to decline. The company was forced again to downsize, cutting about 30% of its workforce. Many projects were canceled and research costs were cut, due to the downsizing of the company. Jobs and Amelio returned to Apple to work on a temporary basis. An alliance with Microsoft was formed, which was a Mac version of the Microsoft office software. Apple discontinued the cloning license from Power Computing to protect the company’s market share.
In 1998 Apple introduced the Mac OS X, which is the company’s first server software. The company also enhanced the iMacs with a colorful product line. Additional changes were made in its Claris unit by downsizing, shifting operations, and renaming it to FileMaker. That year there was a discontinued use of its Newton handheld device and printer products. In 1999 the company followed the footsteps of Dell and began to sell built-to-order systems online, specifically in the portable computing area with its iBook laptop.
By 2000, Jobs became a permanent executive for Apple. He turned the company’s website around by focusing on consumer Internet services. He also revamped the desktop lines, by adding the G4 cube. Unfortunately, due to the poor response to the G4, by the end of the 2000 quarter profits started to decline. In 2001 Apple upgraded product lines to include CD and DVD burners along with faster processors. The company also introduced the Titanium, which was an ultraslim version of the Powerbook. Apple purchased PowerSchool, which was a software maker designed for schools.
This was to regain the loss of market share in its education market. The company then opened a small chain of retail stores in the United States. That same year, Apple purchased Spruce Technologies, a DVD authoring software maker. By October, the iPod was introduced as a digital music player. In 2002 Apple redesigned the iMac look, the new look was a half-dome base and flat panel display with a pivoting arm. This new look was drastic compared to the original look since iMac’s first introduction. That same year, Apple introduced the eMac, which was a computer similar to the iMac.
The eMac was designed to regain market share from the education sector, it was only sold to students and educators. (Later the company designed a retail version) Apple continued to push new products by announcing the Xserve, which was a rack-mount server. In 2004, Apple launched another iMac design which streamlined and included the G5 processor. The company also introduced the Xserve G5, iPod mini and the iPod photo. The iPod photo was an updated iPod that included the ability to store and display digital photos. In 2005, the Mac mini was introduced into the low-end market.
Apple also updated the Xserve G5 and introduced the iPod shuffle. The iPod shuffle was Apple’s first launch into the market of low-end flash-based digital music players. Apple finally turned its attention to the low-end market, the only digital music market it had yet to dominate. The iPod shuffle was no larger than a keychain flash drive, and could be used as such in addition to playing mp3 and mp4 music files. Business Strategies Apple computer has engaged this new millennia with a sleek and eye catching iMac and iBook for consumers today. Thinking digital is the new idea behind the success of Apple.
The operating systems include the OS X operating systems designed for high-end consumers and professionals involved in designing and publishing. Once the worlds top PC developer, Apple has fallen into the niche markets in an industry dominated by “Wintel” machines (computers using Microsoft Windows software and Intel processors), compared to the Apple, UNIX-based operating system. Steve Jobs, CEO and Co-founder of Apple Computer has long championed the importance of having a visually attractive, user friendly design for all the computers they manufacture.
These features distinguish Macs from any other PC computer in the industry. Apples new corporate strategy developed in the massive slowdown of technology which was to take advantage and add value to personal electronic devices. Jobs emphasize Macs as the centerpiece for digital devices such as cameras, video recorders, and music players. The idea behind this strategy was to develop MAC only applications in hope of making the MAC the “digital Hub”, of the “Digital Lifestyle”, to revitalize sales and guarantee long-term security of the company.
In 2003 Apple created the itunes music stores that allow consumers to visit their website and purchase music from millions of titles for just 99 cents. Later the following year Apple and Hewlett-Packard announced a partnership that lets the PC giant resell HP-branded iPods; the deal calls for HP to preinstall iTunes on its consumer PCs. Apple launched iPods photo, which allows colorful photos and stores digital photos and music files. In an effort to appeal to a broad array of consumers, Apple has opened over 80 retail stores generating about 15% of the company’s revenues.
The company’s current successes have depended highly upon software development and unique hardware devices to maintain the interest and buying loyalty of the consumer. Job realizes that competition is looming around every corner, each seeking to outperform each others innovations and strategies. In response to this pressure, Apple has introduced the emac designed specifically for the education sector, and it’s G5 which addresses the high performance needs of today’s professionals. The current marketing campaign urges Window users to switch over to the Mac’s, in a battle between Windows and Apple in which Apple has seen its share of losses.
In response Apple has unleashed Tiger which has some 200 enhancements over the already existing MAC platform. Global Markets Apple manages its business internationally, which is composed of the America’s both North and South. The European segment includes all European countries except Africa and the Middle East. Each geographic segment provides similar hardware and software so that consumers in various locations are all treated equally. Americas During the fiscal year 2004, net sales in the Americas increased by 26% or 838 million compared to 2003.
This increase was largely contributed to the annual iPods sales as well as peripherals, software, and service revenues. Macintosh sales also increased by 4% from the previous year, driven primarily by portable and power Macintosh systems. During 2004 the Americas represented approximately 51% of total Macintosh unit sales. Apple also experienced an increase in the U. S. education channel net sales of 19% for fiscal year 2004 compared to its previous fiscal year. The increase for U. S. education sales were attributed to higher education initiatives that resulted in a successful back to school campaign.
This growth in net sales has resulted in a 40% higher education channel with strong demands for the Company’s portables. The K-12 market has grown by 3% during fiscal year 2004, despite budget restraints and increased competition. Europe The fiscal years 2000, 2001, 2002, have all lagged in revenue performance because of wide competition and weak advertising initiatives. In 2004 Europe sales rebounded by 37% or 490 million along with its previous year increases of 13%. Europe experienced strong net sales across all product lines, except for the IMac systems.
With advertisement fiscal year 2004 increased revenues with the Company’s Power Macintosh systems and portable Macintosh, this resulted in a year-over-year increase of 29% and 42% respectively. Net sales in Europe increased by 58 million or 5% during 2003 as compared to a sales decline of 5% for Macintosh units in 2002. In whole Europe’s results are consistent with those experienced in the Americas. Japan This segment continues to be the most challenging to Apple, with four consecutive year-over-year decline in both net sales and Macintosh unit sales. Japan’s net and unit sales were down 3% and 14% respectively.
These declines are attributable to a shift in sales from the Japan segment into the Retail segments. In addition delays from computer system upgrades like the Quark XPress 6 or Mac OS X, which did not arrive into Japan until September 2004. Net sales in Japan have decreased by 12 million or 2% during 2003 as compared to 2002, which was the weakest year-to-date performance of any Apple computer operating systems. Retail Apple has opened 21 new retail stores in 2004, including two international stores in Tokyo and Osaka, Japan, bringing the total number of opened stores to 86 as of Sept 25, 2004.
Currently Apple retains approximately 91 stores globally, hoping to reach 100 stores by the end of 2005. Half of the new stores opened in 2005 will be the “mini” store design, the Company’s smallest store format to date. Net sales in the Retail Industry grew to 1. 185 billion during 2004 from 621 million in 2003. This increase in net sales reflects the impact of new store openings for each fiscal year. The Company’s Retail segment reported profit of 39 million in 2004 compared to losses of 5 million during 2003. Competitors Hewlett-Packard Company
Hewlett-Packard is the third largest competitor of Apple in term of market cap after Microsoft and Dell. Its main business market is computing and imaging solutions for both business and home office. Hewlett-Packard business strategies are to provide customers with superior products, services and overall experiences by providing leading technologies that work seamlessly together; to deliver to business customers the best return on IT investments in the industry; to build world class cost structures and processes across the entire portfolio of businesses; and to focus on innovations and research and development.
Hewlett-Packard has four main group business segments: the Technology Solution Group (TSG) which consist of Enterprise Storage and Servers (ESS), HP Services (HPS), and Software and Corporate Investments; the Personal Systems Group (PSG), the Imaging and Printing Group (IPG), and HP Financial Services (HPFS). Its $79. 905 billion revenue in 2004 (as of October 31) came from 37. 3% Technology Solution Group, 30. 8% Personal Systems Group, 30. % Imaging and Printing Group, and 2. 3% HP Financial Services. The company total revenue increased by 9% from 2003 to 2004; and by 29% from 2002 to 2003 due to acquisition of Compaq. In 2004, its international sales cover 60% of total revenue and 40% from the United States. The company gains its market share by acquisition of Compaq in 2002. It also expands its imaging and printing group especially in printer that capable to the needs of digital printing.