Apple Computer: The Twenty-First Century Innovator

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Table of Contents

Apple Company Technology Industry
Apple’s Market Structure
Challenges and Opportunities
References

Apple Company Technology Industry

Brief History of the Industry

Computers were invented due to man’s quest to tinker on many things. Calculators as counting machines were the first to be invented. Early humans used manual calculators to help in counting and calculation. Early tools used pebbles and sticks to help in the counting process.

The method of calculation uses algorithm to count or manipulate numbers. A manual calculator needs an operator to help in the process of tracking the algorithm. The Greeks and the Romans, and later the peoples of China, Japan and India, used the abacus in counting. The abacus is a rectangular wooden frame consisting of beads that represent certain quantity or numbers.

More inventions came in that improved the calculator. An example is the Napier’s Bones. John Napier made improvements through his discovery of logarithms. The logarithms became the basis for the discovery of the slide rule. The slide rule is a perfect aid and tool for engineers and students of engineering even up to today.

Without an electronic circuit, an electronic computer cannot function. Therefore, the first computers functioned manually. With the invention of electricity and electronic circuits, inventions in computer engineering became more advanced.

It is not certain who invented the first electronic computer. But with the invention of the vacuum tube, a professor of Iowa State University, named John V. Atanasoff, and a student named Clifford E. Berry, were successful in using an electronic circuit to function on an electronic computer. (Parsons & Oja, 2010, p. 489)

History of Apple Inc.

Working in a garage to produce products isn’t extraordinary. But working in a garage to create a company that is considered one of the greatest innovators in the age of globalization and information technology is something extraordinary.

Jobs and Wozniak were young and aspiring computer hobbyists. They were merely looking for new things to boast about. But at the back of their minds, they were trying ways to invent and make a fortune out of it. This was the start of Apple Computer.

They first named their small company Apple Computer but later changed it to Apple Inc.

From selling PCs, Apple grew into an organization specializing in multi-media products and services.

The success of Apple can be attributed to a clever and successful management of human resource. As music, movies, and photography were becoming digital, Jobs introduced elegant and simple devices which attracted millions of customers, particularly the young. Apple also focused on counterculture themes.

Current status of the industry and the company

Computer technology and the information revolution have dominated our lives and our businesses. Without a computer, an organization cannot function well. Organizations have their respective databases which contain information or organizational knowledge that has been accumulated through the years.

Organizational knowledge is a part of the resources of an organization. Another important development in the new business arena is the emergence of the Internet. Communication has been enhanced through the Internet. Almost all organizations have their own websites connected via the Internet. Fast and effective communication is an outcome of the Internet.

The company Apple Inc. has been headed by Steve Jobs through the rough and tumble ways of the technology craze business. He has led it to its success and leadership in the industry. Recently, he has announced that he is leaving the company for reasons of health (Robertson, 2011). But he is leaving with many products already introduced to the market, such as iPods, iPhones, iTunes, and iPads, and many more products with mobile technology application.

Apple Inc. was awarded by the Guinness World Record for being the most popular technology marketplace in the world today. It is now the leading company in the manufacture of mobile gadgets. Apple’s App Store has also been awarded innovator beating other manufacturing companies of mobile gadgets. (International Business Times, 2011)

In 2009, Apple’s 275 stores around the world had a net operating income of $1.4 billion. The Apple Store has become the best place for anyone wanting to experience music, games, or video. (Copeland, 2011)

Apple’s Market Structure

Apple has many retail stores throughout the United States and in many parts of the world. It also uses the Internet in selling its products. The Retail Stores are part of the retail strategy of Apple.

There was the popularity of Gateway Country Store but which later waned down and all the stores were closed. Apple has now reached quite a number of countries in propagating its retail stores, and this includes the United States, Canada, the United Kingdom, Japan, and the emerging countries of Asia, the so-called “Tiger Economies” – Singapore, Taiwan, and now China and India.

Compared to other retail giants, including high-end luxury goods, Apple’s Stores have maintained an impressive performance. (Bernstein Research, 2011, p. 91)

In 2006, Apple’s manufacturing profit of its products alone attributed $663 million, while the rest (non-Apple products) accounted for only $200 million. Manufacturing profit is solved by calculating the difference between the cost of sales of that retail sector and Apple’s cost of sales.

Supply and demand for Apple products

The supply and demand for Apple products, such as iTunes, iPods, iPads, is something other competitors in the mobile technology industry are envious about. Whenever Steve Jobs announced that he was going to present a new product, the customers, especially the young technology users and enthusiasts, would wait overnight in front of Apple Stores. (Robertson, 2011)

Apple products are so in demand nowadays. The iPad alone sold 300,000 units on its first launching, surpassing other competitors. (Schermerhorn, 2011, p. 23)

Iphones and Ipods can download thousands of songs through the Internet. Apple mobile gadgets are also in demand but Apple is trying to keep the supply up while demand continues.

The download actions emanate from approximately 160 million owners of iPhone, iPod and iPad. The App Store has more than 350,000 downloadable apps available to 90 countries. There are more apps added. Categories range from games to business, news, sports, travel, and so on. (M2 Communications, 2011)

Price elasticity of demand for Apple products and services

Prices of Apple products react to the demand of the products. The downloadable songs have quite a steady price with respect to the other products. Other product prices have been maintained by Apple, despite the high demand from local and foreign customers.

In 2006, iPods contributed to about one-third of Apple revenues from the Apple Stores. Bernstein Research states that the Apple Stores have added reputation to the Apple products.

Apple competitors

Graph shows a comparison of Apple Stores’ sales, Best Buy and other luxury retailers

SOURCE: Corporate reports and Bernstein estimates and analysis

Apple’s performance in the PC market retailing has been quite an astonishing performance. Compare to Gateway’s performance, Apple’s unique style of marketing of PCs has made it a leader in the PC market. Apple has beaten Gateway and Best Buy, two competitors in electronic retail.

Competitor Sony will continue to dominate the electronics sector but Apple’s dominance in the mobile technologies will be retained even after the economic crisis and when the U.S. has battled the Standard & Poor’s credit downgrade.

Trends of the 3 major macroeconomic indicators over 3 year period in Apple

Despite Steve Jobs’s resignation as CEO, Apple will continue to dominate the mobile gadgets’ market. Apple has announced that Jobs will remain as Chairman and consultant.

The downgrade of the U.S. credit rating by Standard & Poor’s will affect GDP for the next three years. This in turn will affect the mobile communications sales, especially for Microsoft and Apple. Apple will continue to dominate the sales of mobile gadgets, but not on PCs. The PC sales will decline for the next three years.

Unemployment is nothing to be feared of by employees (associates of Apple). The company is sure to retain their employees despite economic crisis. This was shown in their experience during the 2008 financial crisis.

Challenges and Opportunities

Sony has its own style of ‘store-keeping’. It has been hitting the malls, particularly the kiosks, and tapping the women demographic. Sony showcased some of its features such as turning home movies into DVDs, taking of Sony video footage and uploading it on a PC then playing it on a TV. Sony however picked the higher income demographic or those earning $90,000 and above. (Anderson, 2008)

The Mac family, the iPod family, iPhone, and iTunes, will continue to be relevant for the next ten years. The target market is also important for Apple. These kinds of products are important to the so-called ‘new generation’ and beyond who value music with accompanying video. Apple has tapped the emerging market with emerging technologies coupled with the Internet. There is no other more important innovation than this. It has given Apple billions in profit.

References

Anderson, D. (2004). Microsoft, Gateway, Sony Heed the Call of the Mall. Adweek Magazines’ Technology Marketing, 15362272. City University London.

Bernstein Research (2011). Apple Stores: Clearly Successful, But What is Their Real Impact? Apple Computer: Not Ready To Bet on the Unknown. Black Book – Apple Computer, 2007. Web.

Copeland, M. (2011). The Apple Ecosystem. Fortune, 00158259, 11/23/2009, Vol. 160, Issue 10. Web.

International Business Times (2011). Apple’s App Store Awarded the Biggest App Store by Guinness World Records. Sun.

M2 Communications (2011). Ten Billion Apps Downloaded from Apple’s App Store Worldwide Computer Products News. M2 13639889. Web.

Parsons, J. J. & Oja, D. (2010). New perspectives on computer concepts 2011. United States of America: Cengage Learning.

Robertson, J. (2011). Jobs at Apple: master inventor, master marketer. Web.

Schermerhorn, J. R. (2011). Management. United States of America: John Wiley & Sons, Inc.

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