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Apple Case Study - How Has Apple Performed in the Pc Industry? What Is Your Evaluation of Its Performance in the Pc Business?

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How has Apple performed in the PC industry? What is your evaluation of its performance in the PC business?

During Steve Jobs' second stint at Apple Inc.; he has helped to establish Apple has a trusted brand and a very successful company in the PC industry. Apple has found success by exploiting the differences between their operations and their competitors. Also, Apple has established their brand as what one analyst calls "the Nordstrom of technology" (Kim, p.7). Apple has such a loyal following for their brand that they are able to sell the products at a premium price to their loyal customer base. The ability to sell their products at a premium has enabled Apple to reap the benefits financially. The major financial benefit has been the company's gross margin of 40% for 2009. Compared to the biggest competitors in PC Manufacturing market Dell (18%) and Hewlett Packard (24%) (Exhibit 5). Apple's strategy to establish itself as the leader in the premium priced PC category (PC's priced over $1,000) helped Apple to become the fourth largest PC vendor in the U.S. market. Apple's strategy to shift from just a PC company to a "digital hub" whose purpose is to help bring value to consumers who are entrenched in a digital lifestyle has also aided in their PC sales. With the introduction of new products by Apple such as the iPod and iPhone and their ease of you for users and their reliability has helped to jump start the sale of Mac computers during this time. With regards to the PC industry there is one area that Apple is above all competitors and that is their investment in research and development and innovation. During Steve Jobs second go around as CEO his vision has been to establish the Apple as a cultural force. (Kim, p.4) To establish Apple as such Jobs felt that Apple must stay ahead of the curve in the PC industry, on average Apple has devoted 7.5% of their sales on research and development. Apple's competitors on average only devote 4.5% on research and development. Although Apple has the lowest market share of PC manufactures at 4.2% (Exhibit 6) there are other factors that must be taken into consideration to determine their performance in the PC industry. Such as their ability to create a market for premium priced PCs, their innovative PC products and the value that the Apple brand brings to the PC industry.

Assess Apple's iPod, iTunes, iPhone and iPad strategies and performance. How would you compare them to its Mac strategy?

Steve Jobs vision for Macintosh to a "digital hub" for consumers who were becoming entrenched in a digital lifestyle using digital cameras, portable music players, and digital camcorders, not to mention phones. The Mac could be the preferred hub to control integrate, and add value to these devices. (Kim p.6) Apple's control of both their hardware and software allowed for them to engineer the necessary innovation to create the three mentioned products. All three are the first of their kind in their respected markets. The investment that Apple has made to research and development has allowed them to engineer the software that is responsible for the iPod, iTunes, iPod and iPad. That coupled with Apple's ability to create a market for these products, we must remember that since these products were the first of their kind there was never a market for any of them. Apple has been extremely successful in developing and marketing the iPod, iTunes, iPhone and iPad products to their consumer base. Apple is the market leader in regards to the segments that all four products are marketed in.



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