Apple Inc.: the iPod, the iMac, and the Business Lessons of Closed systems
Abstract
The ambition of this paper is to provide a general description of the Apple Inc as a successful organization, unfolding its highlights (up’s and down’s) in the process of immense improvement and enormous extension. Furthermore, we will take a closer look into the challenges that Apple was faces with throughout its characteristic journey (such as closed systems with no compatible software). Finally, we will analyze the benefits of changing the previous used strategies and the future of Mac (desktop and portables)
Apple Inc.
Quick look into Apple Inc’s background
Steve Jobs and Steve Wozniak successfully founded Apple Inc in 1976.They started their business by creating and releasing a computer called “Apple II “ , which was followed by another Job’s innovation ( in 1983) known as “Apple Lisa” . This was the first time that end-users were given the opportunity to operate a computer that contained a mouse and a GUI (graphical user interface). Unfortunately for Job’s and Apple Inc, Apple Lisa” was unsuccessful in its war against its competitors. Therefore, strong-willed Apple made a very much needed assessment and wisely decided to reverse its licensing strategies. Starting from year 2000, Apple and its executives centered their attention on electronic products other than computers: 1- portable media players and 2 - mobile phones (Apple Inc, 2009).
Apple’s first big hit was iPod MP3 music player which entered the market in 2001. Only two years later (2003), Apple launched its second big unique novelty: iTunes Music Store – this contemporary innovation was going to facilitate the music downloads for end-users by making available the on-line services. Since then, Apple Inc has experienced and augmented progress and success with its Intel –chip computer, phone, MP3 and several other internet devices (Apple Inc, 2009)
Facts about Apple Inc
* - Apple’s CEO is Steve Jobs
* - Apple started with a price of $2.75 per share
* - Today Apple’s market cap is above $200billion
* - Apple’s annual revenue exceeds $50 billion
* - Macintosh became successful only after software and peripherals became accessible
* - New products made Apple the center of the digital lifestyle
* - Apple has been a successful in retail stores
* - Apple is continuously criticized for its exclusive control over developers and users (Cone, 2010).
* - Apple announces new version of iPod every year
* - In 2007, Apple sold over 90 million iPods
* - In 2007, Apple sold over 2 billion songs through iTune Music Store (O’Brien & Marakas, 2009, p. 123).
Will Apple dominate the digital music market for years to come?
As of today, Apple remains the leader of this field continuously introducing not only new products but also new ways and strategies to overcome the challenges they face in this progressive and competitive global market (Portofolio.com, 2009). . For several years Apple continues to be the driving force of the digital media leading the current revolution with its:
1-iPod portable music and video players
2- iTunes online store,
3- Ground - breaking iPhone (Portofolio.com, 2009)
4- Award-winning computers,
5-OS X operating system
6- General and specialized applications (Portofolio.com, 2009)
O’Brien & Marakas (2009), intelligently predict a possible domination of the digital music market by Job’s and its company (Apple Inc) for many years to come (p.123). Among many other reasons the above forecast is correlated to the actual fact that Apple and its executives were served with a harsh warning lesson (closed system failure), a lesson that was very prudently used to overcome the challenges secure an ultimate evolution and dominate its competitors (Nelson, 2009).
iTune, with its spectacular departed left Apple’s competitors behind with no practical anticipation to catch up anytime soon. Seemingly, Apple will dominate the digital music market as long as it continues to refuse to license “FairPlay” (the copy-protection software which is also compatible to iPod) to its competitors (Yahoo, Music, eMusic, Rhapsody) (O’Brien & Marakas, 2009, p. 123). The extremely intelligent, Steve Jobs, was capable to even manage the global pressure for loosening up on FairPlay copy-protection control, by transferring the responsibility to the music market and music industry (O’Brien & Marakas, 2009, p. 123). Simply put, Apple and Steve Jobs will continue to monopolize the digital music market for many years to a long future.
Is there a successful future for Mac (desktops and portables)?
Thanks to “hallo effect” [Transfer of a good feeling about a characteristic of a product to another possibly unrelated product (Business Dictionary.com, 2010)]. Apple has effectively used the success and accomplishment of iPod to boost the shares of desktop and portable computers. Astonishingly, the market for Apple’s Mac computer is twice over compared to its initial stages. Additionally, according to field experts’ forecasts this pattern will be absolutely favoring Apple’s Mac products (O’Brien & Marakas, 2009, p. 124).
The logic behind the analysis is associated with the increasing tendency and curiosity of iPod users to try and experience the Apple’s Mac computers. Another reason associated with the above forecast lies on the introduction of Boot Camp software by Apple. The new software enables not only the new iMac but also other Mac models (O’Brien & Marakas, 2009, p. 124). During fiscal year 2004 a total of 3.29 million Macs weresold, six years later (2010), 3.26 million Macs were sold in just four months (Hesseldahl, 2010).
Moreover, Hesseldahl, (2010) states:
“Apple’s newer products may also lure customers to consider buying a Mac, much the way consumers of the iPod did early on…It’s a symbiotic interplay……Once you get an iPhone or an iPad, and you get exposed to the entire Apple gestalt in the Apple retail stores… The iPhone’s halo effect may prove even stronger.”
Conclusion
Every debate commonly evolves two groups: one grope that is in the favor of the subject under discussion and the opposite group. Similarly, in Apple Inc’s case many see no future in long run for some products of Apple (for instance Mac computers), and many others are confident that every product produced by Apple will greatly contribute to Apple’s granted successes. But, we all have no doubt on Apple’s remarkable progress and guaranteed domination of market, (within its industry) in future, with or without Mac computers.
References
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Hesseldahl, A. (2010). Mac’s Future: Death rumors greatly exaggerated; sure, the iPhone
sells more units and the iPad grabs headlines. Apple’s Mac still has plenty of room
for unit growth and feature innovation. Business Week Online. LIRN /Gale
Nelson, A. (2009). Computer hardware / Chapter 3 Power point.
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from: docsharing.next.ecollege.com
O’Brien. A. J. & Marakas. M. G. (2009). Management Information System.
(9th edition). New York, NY: McGraw- Hill/ Irwin
Apple Inc. (2009). In The Hutchinson Unabridged Encyclopedia with Atlas and Weather
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(N.D.). (2009). Apple Inc. Portofolio.com. Retrieved September 8, 2010 from:
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