Case Study & Analysis - Apple
A note on history of disruptive technology and Apple Computers:
Apple computers (Inc.) has been a pioneer in successfully introducing one disruptive technology after another. Beginning in the 1980’s, Apple introduced the first “personal computer” to the market. Although IBM would soon take over this market, Apple still gave birth to idea, and looking 20 years down the road to the introduction of the MacBook, we can see that Apple was able to finally restore its position as a competitor in the PC market. In the case of the PC, the technology was not seen as a direct threat by the main frame and mini computer manufacturers at first, but as the PC grew at a ...view middle of the document...
Apple products (a combination of semiconductor product and software) lie under the ‘falling cost’ curve, which means that as the sales volume of Apple products increases, the cost will diminish and the returns will increase. This is true for the iPod, whose sales figures are impressive (Exhibit 1b) even after introduction of iPhone in 2007. As an organization, this means that Apple is getting more revenue from iPod since, its sales volume is so large that it manufacturing cost is diminished whereas the sales price is still competitive compared to other market players. Moreover, Apple has been successfully been able to leverage their customer base from one product to another by periodic market refreshments in form of iPhone in 2007 and iPad in 2010. Apple followed a typical ‘S’ curve during this period. A major contributor to its sales and revenue has been apps and music which Apple sells at virtually no cost to it.
Overall, Apple Inc. has clearly benefited from disruptive technology. As seen in the production of the “all-in-one” PC’s, the iPod, the iPhone, and most recently the iPad, Apple has been able to keep ahead of the competition by grabbing unique areas of technology and staying ahead of the curve. With the iPod, Apple was clearly benefited as a company because they were able to enter a relatively new market and within several years, nearly dominate the entire market share of the MP3 business. With the introduction of the iPhone (and the iPad as discussed below), Apple once again benefited from disruptive technology, which ended up placing Apple as the leading producer of touch screen phones and now the tablet PC market. While there have other competitors entering each of these markets over time, there have been few “disruptive” technologies that have been able to hurt Apple; as a whole, Apple Inc. has clearly benefited from this trend of technological innovation.
iPad as a distruptive technology against the PC:
iPad can be considered as a disruptive technology when compared to PC. iPad introduces a factor of ‘mobility’ and ease of use that is not present with PCs. iPads can also be focused to a particular segment of users which require ‘smart’ devices on-move. Moreover, according the Moore’s law, will only keep increasing the performance of the iPad. This can be compared to the situation when the personal computers started coming into the market to replace the mainframes and emerged as disruptive technology against them. (figure 1)
Figure 1: Our view of iPad future growth as a disruptive technology