Apple Current Situation
Background
Apple Computer Inc. is an American multinational corporation focused on designing and manufacturing personal computers, closely related software products, and other consumer electronic products such as MP3 players. Since its foundation in 1976, Apple has been a pioneer in innovation with multiple ups and downs. In 1976, Apple introduced what was to become the first highly successful mass-produced personal computer. Traditionally, Apple has done extremely well at being the first company to introduce a new product or concept but has struggled to maintain its market share in that product line. Recently, Apple has undergone a transformation from an innovative computer manufacturer to a state of-the-art consumer electronics company. In 2005, the company had $13.93 billion in sales. For the same year, they only controlled 4.2 percent of the U.S. market share in the PC industry. However, Apple’s iPod models accounted for well over 70 percent of the hard-drive MP3 player market and more than 40 percent of the flash based player market. The purpose of this paper is to evaluate Apple’s performance to determine their outlook for success by ensuring their capabilities to match the industry’s conditions and develop competencies that can be converted into a competitive advantage. This report will strive to solve questions such as: whether Apple has enough of a lead to maintain its status as the market leader in the MP3 player industry and if they are able to translate their leadership into the PC industry?
Industry Overview
Personal Computer Industry In the third quarter of 2005, the worldwide PC market experienced its 10th consecutive quarter of double digit growth and reported revenues of $260 billion for the entire year. However, experts have predicted that the worldwide PC market, except for Asia, would slow down to 8 percent unit sales growth from 2006 to 2009, with flat revenue growth. Due to these flat margins, it is predicted that marginal
Apple Computer Inc. is an American multinational corporation focused on designing and manufacturing personal computers, closely related software products, and other consumer electronic products such as MP3 players. Since its foundation in 1976, Apple has been a pioneer in innovation with multiple ups and downs. In 1976, Apple introduced what was to become the first highly successful mass-produced personal computer. Traditionally, Apple has done extremely well at being the first company to introduce a new product or concept but has struggled to maintain its market share in that product line. Recently, Apple has undergone a transformation from an innovative computer manufacturer to a state of-the-art consumer electronics company. In 2005, the company had $13.93 billion in sales. For the same year, they only controlled 4.2 percent of the U.S. market share in the PC industry. However, Apple’s iPod models accounted for well over 70 percent of the hard-drive MP3 player market and more than 40 percent of the flash based player market. The purpose of this paper is to evaluate Apple’s performance to determine their outlook for success by ensuring their capabilities to match the industry’s conditions and develop competencies that can be converted into a competitive advantage. This report will strive to solve questions such as: whether Apple has enough of a lead to maintain its status as the market leader in the MP3 player industry and if they are able to translate their leadership into the PC industry?
Industry Overview
Personal Computer Industry In the third quarter of 2005, the worldwide PC market experienced its 10th consecutive quarter of double digit growth and reported revenues of $260 billion for the entire year. However, experts have predicted that the worldwide PC market, except for Asia, would slow down to 8 percent unit sales growth from 2006 to 2009, with flat revenue growth. Due to these flat margins, it is predicted that marginal