Case Study 14 Apple Computer, INC.
July 22, 2011
Describe the key strategic challenges facing Apple Computer.
For years, the music industry saw the Internet as the digital equivalent of a dark alley, where illicit goods were exchanged and theft was out of control. So it's no surprise that music executives were resistant to the idea of online music sales. But Steve Jobs used his media-industry status as well as the controversial FairPlay Digital Rights Management technology to convince the major record labels to test the waters of downloadable music. The music-loving public in 21 countries has responded by purchasing more than 1 billion tracks since the store debuted in April 2003. (Vogel, 2005)
The revolutionary changes brought by Apple in the music industry made the Sony walkman line obsolete. Now Like the iTunes store, the Sony service--referred to internally as "Music Box"--is designed to let users download a wide selection of music (Sony intends to strike deals to get access to the catalogs of the four other major music labels). (Sheth, 2003)And like iTunes, the service is designed to work with devices made by, or that use technology licensed by, the parent company.
So why are Sony's plans more puzzling than promising? Because Sony is no Apple: When Apple launched iTunes, it had already been selling its well-regarded iPod player for a year and a half. Though Sony says its NetMD line of players will work with its service, they have yet to set the market on fire.
Describe the dimensions along which company success can be measured.
Previously, the average music consumer felt that music on CDs is expensive. Consequently many consumers go to the pirated music services. As a reaction to this the music industry is reacting in an aggressive way. With the launch of iPod Apple has understood this concept and adopted lifestyle marketing to the music consumers. The development of these services... [continues]
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