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Case Analysis Apple Inc

1604 words - 7 pages

Unit 1 Case Analysis: Apple Inc.

Background

In January 2007, Apple Computer Inc was renamed Apple Inc. after 30 years of being a very productive organization. Apple Inc. changed from being known as strictly a Macintosh computer company into a diverse technology company that is known for its art, video, and graphics. They presented this diversity by selling new products such as; the Ipod used together with the iTunes store and the iPhone. In 2008, Apple Inc earned a profit of $1.07 billion from revenue of $7.46 billion. Over half of Apples income was generated from the sales in these new products (Yoffie &Slind, 2008).
Steve Jobs and Steve Wozniak founded Apple Computer in April ...view middle of the document...

Senior executives realized this lead would only last a while because a top-of-the-line Mac could go for as much as $10,000. This could be problematic because IBM’s prices were actually dropping so the Mac appeared to be overpriced. Sculley wanted to mainstream by offering new products every 6-12 months with a lower cost compatible with competitors. The Mac Classic was the first to be introduced, followed by PowerBook, the Newton (PDA).
A joint venture would be made between Apple and IBM to create a new revolutionary OS. Apple switched from the Motorola microprocessor to IBM’s new PowerPC chip. IBM would agree to license its technology to Motorola in order to guarantee Apple a second source (Yoffie &Slind, 2008). Even though Sculley had created new competitive products and had joined with IBM, Apple suffered a gross margin drop of 34%. In 1993, Sculley leaves Apple and Michael Spindler becomes the new CEO.
Spindler would try to boost Apple’s income by focus on education and desktop publishing. He would also end the joint venture Sculley made with IBM. Spindler was known for his international growth of Apple Inc. He would also cut 16% of Apple’s workforce and reduce R & D spending. With all of his efforts to increase net income, Apple would lose a reported $69 million in 1996 (Yoffie &Slind, 2008). Spindler would be replaced with Apple director, Gilbert Amelio.
Amelio wanted Apple to start producing high-margin segments like, servers, Internet devices and PDA’s. He also returned to selling Apple at the premium prices. In 1996, Amelio purchased NeXT software and would develop a new OS. The founder of NeXT, Steve Jobs would also return to Apple as a part time advisor. The company would go through three reorganizations and would experience several deep payroll cuts but would see a loss of $1.6 billion (Yoffie &Slind, 2008) . Amelio was forced out by the Apple board and replaced by Jobs as CEO.
Jobs worked diligently and Apple saw the revenues to start increasing. Jobs would continue restructuring efforts and start trying to create a new image and market standing for Apple. With this being said, Apple still would put a high premium on creating products that had a cutting-edge, tightly integrated user experience. Apple would eventually see this wouldn’t work without other perks from such a high prices product. Apple would start being compatible with other user products such as keyboards and offering USB ports.
Apple in the 21st Century
Apple built programs such as those in the iLife Suite (iPhoto, iTunes, iWeb), video-editing program (Final Cut Pro) and iWorks (including Pages, Keynote and Numbers). Apple’s core operations would be in the non-Macintosh part of the company including the iPod, iTunes, Apple TV, and iPhone (Yoffie &Slind, 2008).
The iPod would be launched in November 2001 and would become a very popular. By mid-2008 Apple had sold more than 150 million iPod’s (Yoffie &Slind, 2008). The initial...

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