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Apple I Phone

Introduction
Apple Inc. is an American multinationaltechnology company headquartered in
Cupertino, California, that designs, develops, and sells consumer electronics, computer
software, and online services. Its hardware products include the iPhonesmartphone, the
iPadtablet computer, the Macpersonal computer, the iPodportable media player, and the
Apple Watchsmartwatch. Apple's consumer software includes the OS X and iOSoperating
systems, the iTunesmedia player, the Safariweb browser, and the I Life and iWork creativity
and productivity suites. Its online services include the iTunes Store, the iOS App Store and
Mac App Store, and iCloud.
Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne on April 1,
1976, to develop and sell personal computers.[5] It was incorporated as Apple Computer, Inc.
on January 3, 1977, and was renamed as Apple Inc. on January 9, 2007, to reflect its shifted
focus toward consumer electronics. Apple (NASDAQ: AAPL) joined the Dow Jones
Industrial Average on March 19, 2015.[6]
Apple is the world's largest information technology company by revenue,[7] the
world's largest technology company by total assets, and the world's third-largest mobile
phone manufacturer. On November 25, 2014, in addition to being the largest publicly traded
corporation in the world by market capitalization, Apple became the first U.S. company to be
valued at over US$700 billion.[8] The company employs 115,000 permanent full-time
employees as of July 2015[4] and maintains 453 retail stores in sixteen countries as of March
2015;[1] it operates the online Apple Store and iTunes Store, the latter of which is the world's
largest music retailer.
Apple's worldwide annual revenue totaled $233 billion for the fiscal year ending in
September 2015.[3] The company enjoys a high level of brand loyalty and, according to the
2014 edition of the Interbrand Best Global Brands report, is the world's most valuable brand
with a valuation of $118.9 billion.[9] By the end of 2014, the corporation continued to receive
significant criticism regarding the labor practices of its contractors and its environmental and
business practices, including the origins of source materials.

History
Steven Wozniak and Steven Jobs had been friends in high school. They had both been
interested in electronics, and both had been perceived as outsiders. They kept in touch after
graduation, and both ended up dropping out of school and getting jobs working for
companies in Silicon Valley. (Woz for Hewlett-Packard, Jobs for Atari)Wozniak had been
dabbling in computer-design for some time when, in 1976, he designed what would become
the Apple I. Jobs, who had an eye for the future, insisted that he and Wozniak try to sell the
machine, and on April 1, 1976, Apple Computer was born. Hobbyists did not take the Apple I
very seriously, and Apple did not begin to take off on April 1, 1976, Apple Computer was
born The first personal computer to come in a plastic case and include color graphics, the
Apple II was an impressive machine. Orders for Apple machines were multiplied by several
times after its introduction. And with the introduction in early '78 of the Apple Disk II, the
most inexpensive, easy to use floppy drive ever (at the time), Apple sales further increased.
With the increase in sales, however, came an increase in company size, and by on April 1,
1976, Apple Computer was born, Apple had several thousand employees, and was beginning
to sell computers abroad. Apple had taken on a number of more experienced mid-level
managers and, more importantly, several new investors, who opted to take seats on the board
of directors. Older, more conservative men, the new directors made sure that Apple became a
"real company," much to the dismay of many of its original employees.
In 1981, things got a bit more difficult. A saturated market made it more difficult to
sell computers, and in February. Apple was forced to lay off 40 employees. Wozniak was
injured in a plane crash. He took a leave of absence and returned only briefly. Jobs became
chairman of Apple computer in March

on April 1, 1976, Apple Computer was born Apples mission statement has also

changed over time. The company considers the changing business landscape, which
influences the possibilities of what Apple can do. The company recognizes the changing
market and industry. Apples current mission statement is, Apple designs Macs, the best
personal computers in the world, along with OS X, iLife, iWork and professional software.
Apple leads the digital music revolution with its iPods and iTunes online store. Apple has
reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the
future of mobile media and computing devices with iPad.
Apples mission statement is very specific in indicating what the company does and
will do. Details about certain product lines are included to show the firms current condition.
The mission statement mentions Macs, OS X, iLife, iWork, and others. These details are
important in recognizing and setting the baseline for future actions that Apple will implement.
These future actions are also provided in detail. The mission statement includes details about
what Apple intends to do in its various businesses. For example, the firm states that it is
defining the future of mobile media and computing devices. This part of the mission
statement shows that Apple plans to continue focusing its research and development on
mobile devices and related media. Such mobile media may include online media via iTunes,
which is accessible through mobile devices like iPad and iPhone. These points show that
Apples mission statement is accurate in depicting the companys situation and goals.
However, the mission statement is quite narrow in representing possibilities for Apple, which
is currently in the best position to explore a wider variety of options. It is also worth noting
that this mission statement is a departure from Steve Jobs original mission for the company:
To make a contribution to the world by making tools for the mind that advance humankind.
Apples mission statement has shifted away from a general picture of the business, toward a
specific reflection of what it wants to achieve in terms of goods and services.

Apples Vision Statement


Apples current vision statement was introduced by CEO Tim Cook, who stated, We
believe that we are on the face of the earth to make great products and thats not changing.
We are constantly focusing on innovating. We believe in the simple not the complex. We
believe that we need to own and control the primary technologies behind the products that we
make, and participate only in markets where we can make a significant contribution. We
believe in saying no to thousands of projects, so that we can really focus on the few that are
truly important and meaningful to us. We believe in deep collaboration and cross-pollination
of our groups, which allow us to innovate in a way that others cannot. And frankly, we dont
settle for anything less than excellence in every group in the company, and we have the selfhonesty to admit when were wrong and the courage to change. And I think regardless of who
is in what job those values are so embedded in this company that Apple will do extremely
well.

Marketing Segmentation
The goal of target marketing is to reach the subset of the population who are most
likely to be interested in buying a product. The strategies used to design, price, distribute,
promote, and improve products are influenced by the market being targeted. For example, if
research shows that women between the ages of 25-44, who live in the suburbs, and listen to
country music on their way to pick up their kids from soccer practice are the frequent buyers
of flavored bottled water, then a company can maximize their potential sales by designing a
marketing campaign aimed at those demographics. The company may spend more money
advertising on a country radio station than a rock station, more efforts promoting their water
at soccer games than dance classes and advertise during television shows watched primarily
by women in that age group.
Companies spend a lot of resources on precise, targeted marketing. Finding and
attracting new customers is generally more expensive and time consuming than retaining
one's current customers. Once a customer base is established, organizations often focus on
forming relationships with their current customers so they can do as much business with their
best customers as possible.
Companies categorize their buyers by classifying them into segments based on their
buying characteristics. Customers can be segmented based on their behavior, geographic
location, demographics, and psychographic characteristics. Behavioral segmentation divides
customers based on how they behave with or towards products. For example, fruitcake is
marketed near the holidays since consumer's usually associate purchasing fruitcake during
that time. The benefits consumers look for in a product such as their usage rate, brand loyalty,
and readiness to buy are possible behavioral segmentation dimensions.
Segmenting buyers by personal characteristics such as age, income, gender, ethnicity,
family sizes, occupation, and so forth is called demographic segmentation. Demographic
segmentation is one of the more common segmentation formats due to the ease of obtaining
data. Questionnaires are often used to determine some of these demographic characteristics.
**Geographic segmentation** involves segmenting buyers based on where they live.
This can be as large as a region of the world such as Europe or as small as an individual
neighborhood. Psychographic segmentation differentiates buyers based on their activities,
interests, opinions, attitudes, and values.
Type of Market Segment Characteristics
Demographic: Measurable statistics such as age, income, gender, education, ethnicity or
occupation.
Psychographic: Activities, interests, opinions, values, attitudes
Behavioral: Benefits sought, usage rate, brand loyalty, user status (first time buyer, regular
user), occasions (holidays, events)

Geographic: Location such as home address or business address, country, region, county,
city
In order to determine if a market is worth targeting, is should be 1) large enough to be
profitable, 2) a growing market which still has room for competitors, 3) easily accessible, 4)
the company has the resources to compete in the market and 5) the market is a good fit with
the company's mission and objectives. A multi-segment marketing strategy can allow a
company to respond to demographic and other changes in markets, including economic
downturns.
Determining who is most likely to buy a product is just one piece of the puzzle.
Companies must also consider the tangible and the intangible benefits of their offerings.
Some marketing strategies focus on the specific good being offered and its appealing
attributes rather than the service or price components. Others may take into consideration the
additional services customers may want with the offering. For example, customers expect
some type of warranty or guarantee when they purchase a high ticket item such as a car or a
house. Companies use branding to elicit an emotion or response to their product. When you
think of Apple computers, you probably think of an apple with a bite taken out of it. When
you think of Nike, you probably envision the Nike Swoosh. When you hear "Kellogg's
cornflakes," does Tony the Tiger pop in your mind? A brand can be a name, picture, design,
symbol, or some combination of these. It is important that the company's brand portrays the
company's image in the marketplace. Consider these three car manufactures: Volvo,
Mercedes, and Kia. How would you match those brands to these terms: Low price, Quality,
Safety? Did you associate Volvo with safety, Mercedes with quality, and Kia with low price?
Packaging a product is another way to communicate a brand. While packaging protects a
product from damage and contamination it also garners a lot of attention for a product. Next
time you are at the supermarket, go down the cleaning aisle. Notice the various colors, sizes,
shapes, and names. Who do you think the cleaning product Simple Green is targeting? Is it
the same target as Mr. Clean? Scrubbing bubbles? Some of the products are in aerosol cans,
others in spray pumps, some use bold primary colors, others pastels. Think about the effect
packaging and branding have on your opinion of a product. Look for resources that support
the relationship between packaging, branding and market segmentation and targeting and
share them with the class.

Demographics
The research was conducted by comScore on I Phone network of mobile web sites
and applications, making it representative of Ad Mob but not necessarily of the mobile
population overall.
This research highlights how important it is for marketers to understand the mobile
landscape and the characteristics of the users of a particular platform or mobile device, a
says Loftlon Worth, vice president, comScore. Putting a little extra effort into the planning
process can help a mobile campaign be significantly more successful.
The research also found that 5 in 10 consumers on both iPhone and iPod touch
devices use the mobile web more frequently than they read printed newspapers. More than 40
percent reported using the Internet on their mobile device more often than using the Internet
from their computers or listening to the radio.
Highlights from this new research include:
IPhone users are generally older. 69 percent of iPod touch users are between 13-24
years of age, while this same age segment represents just 26 percent of iPhone users. 31
percent of iPhone users are 35-49 years old, while only 12 percent of iPod touch users fall in
this age segment. In total, 74 percent of iPhone users are over the age of 25, compared to 31
percent of iPod touch users.
More than 70 percent of users on both the iPhone and iPod touch are male.
In line with the older demographic composition of iPhone users, they also have higher
incomes.
78 percent of iPhone users have an annual household income of at least $25,000,
compared to only 66 percent of iPod touch users.
IPhone users are more likely to have children than iPod touch users, most likely due
to the age difference in the two groups. 46 percent of iPhone users have children, compared
to only 28 percent of iPod touch users.
In the next six months, iPhone users plan to purchase clothing (57 percent),
entertainment (47 percent), and travel (45 percent), while iPod touch users plan to purchase
clothing (61 percent), entertainment (53 percent), and cell phones (36 percent).
ComScore and Ad Mob conducted this primary research into the demographics and
behavioral characteristics of iPhone and iPod touch users in the first half of 2009. Participants
were visitors to domains within the Ad Mob iPhone network who were shown survey
invitation banners rather than banner ads. Those who clicked through the survey banner were
presented with the mobile survey. The total sample size of iPod touch participants is 3,848,

while the total number of participants in the iPhone sample is 3,454. All results were tested
for statistically significant differences at the 95 percent confidence level.

Target marketing
Teenagers; are considered one of Apple Inc.'s target markets. Teenagers use iPods for
many reasons. Some of these reasons are to socialize with friends, listen to music and go on
Facebook, MSN, twitter etc. There are also many gaming apps that appeal to them. IPods
have become quite a trend with teenagers
College and university students are also targeted by Apple Inc. These students use
Apple Inc. products such as iPad's, MacBook's, iPhone's etc to quickly record notes. These
notes are kept organized in their devices. Also these products are light which makes carrying
devices to and from school much easier.
Business people are very intrigued by Apple products. All Apple devices (iPhone's,
iPad's, MacBook's etc.) have a business quality that is very useful. These devices are used to
finish work efficiently and to communicate with clients easily. In addition, sending
documents is easy and organized
Apple products are also useful to young children and kids. The reason for this is that
devices such as iPods and iPads are easy to use due to their touch screen quality which is
good for children. Parents can download learning game apps on Apple devices to teach young
children and kids
Adults are also one of Apple Inc.'s target markets. IPhones are useful to adults for
their everyday needs such as phone calls, map directions, internet connection, documents and
cameras. Carrying these small devices makes adults lives much easier for communicating
daily

Positioning strategy
It's widely understood in strategy that a firm that is known for delivering a certain
value may end up confusing customers (or perhaps undermining its own credibility and
reputation) if it attempts to deliver alternate value. The attempt to simultaneously deliver
inconsistent offerings will not serve a firm's strategic position. Many continue to criticize
Apple's premium positioning and pricing.

This criticism is sourced from the press, customers, and


competitors. In recent months Microsoft has unleashed a PR
campaign in which they call out an "Apple tax", that is the
premium paid by consumers who choose Apple's Macintosh
computers. This is the first post in a series that analyzes the Apple
product strategy with a specific emphasis on the Macintosh.
At its most basic level, competitive strategy is deeply
rooting in being different from rivals. For years Apple used the
phrase 'Think Different' (video), a marketing slogan that not only
shaped consumer perception but also represented the company's
internal activities. Today, these internal activities remain aligned
with that slogan despite Apple dropping it in 2002. The 'Think
Different' mindset is firmly embedded in the company's culture and is clearly evident in
Apple's approach to product and software design, integration, and ease of use. In order to
understand these activities, we need to take a look at Apple's strategic positioning.
A premium brand that meets a need It is widely recognized that Apple is a premium
brand that demands and earns a price premium. This price premium spans the entire Apple
product lineup encompassing the Macintosh, iPod, iPhone, software, and accessories.
Apple's positioning is aligned with targeting a less price sensitive customer. As a result,
Apple's culture and internal activities are structured to meet the needs of these customers,
strategists call this needs-based positioning. Apple has thus created a culture and a set of
activities to differentiate itself from rivals in order to meet the needs of their target customers.

If Apple were to attempt to compete for all customer segments, it would have to lower
product prices. The danger with such an approach is that it would not only undermine and
erode the company's premium brand image but it would also undermine the company's
culture and internal activities.
So what has Apple done in recent history to the Macintosh product line to demonstrate
this premium positioning? Each new Mac revision has either maintained or been subjected to
modest price increase while Apple has simultaneously improved product features. A few
examples include the introduction of the anybody MacBook and MacBook Pro, larger
displays on the iMac, and the replacement of the $499 Mac mini with a higher priced ($599)
model. The motive is clear, protect the brand position via a tradeoff.

Pricing strategy
When the iPhone was first released in 2007 Apple charged its customers $599 for the
8 GB version. Only 66 days after the initial offer at the end of June Apple dropped the price
to $399 for the exact same device, which led to heavy protests among the innovators and
early adoptersThe huge amount of complaints about the price drop made Apple give away
$100 store credit cards to all who bought the new device right after its launch.

Looking at this behavior from the marketing perspective, it is obvious that Apple
incorporated several different pricing strategies at the same time. Clearly there is a certain
buyers expectation linked to Apples pricing, because the company has created a high quality
image with a relatively high price level. The target group Apple addressed with their former
product line is said to have been used to this image. The selling price of $599 (which is more
about $380 higher than the manufacturing costs) turns out to be extremely well chosen,
because just fit in with the rest of the product line, met the customers expectations and
underlined the quality expectations. Considering Apples company image again, prestige
pricing obviously played an important role in the pricing decision.

4PS
Apples Products (Product Mix)
Apple Inc. has continued to expand its product mix. This component of the marketing
mix determines the outputs of the business organization. In Apples case, the following are
the main product lines:
1.
2.
3.
4.
5.
6.
7.

Mac
I Pad
I Pod
I Phone
Apple TV
Apple Watch
Software

These Apple products currently available in the market show the firms diversification
in this component of the marketing mix. However, as part of its product development
intensive growth strategy, the company continues to develop new products, such as the Apple
electric vehicle, which is under development through collaboration with firms like Tesla
Motors. This product mix shows that Apples marketing mix is extensive in terms of product
variety to address customers needs in different areas of their lives.

Distribution or Place in Apple Inks Marketing Mix


Apples marketing mix involves a holistic approach to distribution, taking advantage
of different distribution channels. In general, the company uses a selective distribution
strategy, which involves some degree of exclusivity that could limit market reach. Apple
authorizes sellers to ensure control over this component of the marketing mix. The following
places are included in Apples distribution strategy:
1.
2.
3.
4.
5.

Apple Stores
Online Apple Store and App Store
Authorized retailers
Telecom companies
Fulfillment services

Apple Stores are the most visible places that sell the companys products. The online
Apple Store and App Store are also highly visible. However, these stores are not the only
places in the firms marketing mix. For instance, Apple also uses authorized retailers, such as
Walmart, Target and Best Buy. The company also includes telecom companies like AT&T,
Verizon, and Sprint, which sell iPhone units. In addition, Apple uses fulfillment services from
companies like Amazon.com and eBay, through which third parties sell Apple products
online. Thus, Apples marketing mix is comprehensive in exploiting different types of online
and non-online distribution channels.

Apples Promotions (Promotional Mix)


Apples marketing mix includes promotion activities that emphasize the premium
image and quality of the firms products. The promotional or marketing communications mix
supports business position in reaching more target buyers. In Apples case, this component of
the marketing mix includes the following elements:
1.
2.
3.
4.

Advertising
Personal Selling
Sales Promotion
Public Relations

Apples marketing mix includes advertising through the companys website and Apple
Stores, as well as advertising through other firms, such as technology news sites. The
company also uses personal selling in the form of Apple Store employees who provide
product-specific information in the aim of convincing store visitors to make a purchase. In
addition, the companys marketing mix involves sales promotion, which usually happens at
the Apple Stores. For example, some Apple Stores offer old models at discounted prices when
bundled with larger and more expensive products. Moreover, the company uses public
relations to optimize its corporate image. For instance, Apple Events, leaks of new product
features, press releases, and exclusive interviews are carefully implemented to maximize
positive publicity. Thus, Apple has mastered the promotion component of its marketing mix.

Apples Prices and Pricing Strategy


Apple uses a premium pricing strategy. In this component of the marketing mix, the
emphasis is on how prices represent the company and its products, while meeting consumer
expectations. In Apples case, the premium pricing strategy involves relatively high prices.
This pricing strategy helps maintain the high-end image of the company and its products.
Another effect of this pricing strategy is that Apple products attract a smaller market share
composed of people from the middle and upper classes. Nonetheless, the company maintains
profitability because premium prices entail higher profit margins. Thus, Apples marketing
mix is aligned to the companys premium product development strategy

CRM (Customer Relationship Management)


MSc in Marketing Management students had a unique opportunity to learn about
customer relationship management (CRM) from former Apple executive Bruno Didier.`
CRM, noted Mr. Didier, made Apple what it is today. His talk, given to the programmes
ninety-two students of twenty different nationalities, was part of Jean-Pierre Dolaits CRM
course.
Didier highlighted Apples strategy during its revival and compared it with that of
another industry leader, IBM. Although both Apple are IBM are in good shape, the pace of
profits and sales growth at Apple underscores the different paths that the two companies have
taken. Under Steve Jobs, Apple built itself into a profit machine through a string of hit

consumer electronics products, starting with the iPod digital media player (in 2002), followed
by the iPhone (2007) and the iPad (2010). He also noted that Apple achieved all this in a
much shorter period, with just 1/7th of IBMs headcount.
Didier attributed Apples market leadership to its size in absolute terms, saying,
Absolute size matters, not volume; Apple focuses on an insanely great customer experience
with Apple products. The company has always been clear on this focus. Didier also talked
about how careful they are when it comes to managing perceptions of the brand. At Apple,
he said, we have always tried to ensure that people get the right image, the right definition of
Applewho Apple is, what its all about.
He also discussed managing the companys foreign suppliers and manufacturers. He
said that Foxconn, for example, manufactures Apple products that are beautiful and that meet
their needs. Apple trusts such suppliers, and relies on them heavily, and Apple as a company
puts huge amounts of resources into such partners. He also referred to current Apple CEO
Tim Cooks efforts to ensure that such suppliers as Foxconn complied with rules and
regulations after reports (later found to have been exaggerated) of poor working conditions at
Foxconns Chinese factories.

Come back: From Apple Computer to Apple Inc.


Didier reiterated the essence of Apples core value, which relies on the phrase People
with passion can change the world. He talked about Steve Jobsclear objective to come up
with a revival plan centred around the idea Think Different and make products Better, and
Simpler for their users. Steve Jobs, as a leader, was able to simplify the perception of the
brand. He reduced the product lines to two market segments: the public and professionals,
and to two ranges: desktop and laptop. It was clear to everyonefrom top to lower-level
management, from distributors to customers. For a high-tech enterprise to prosper, it always
takes a charismatic leader, like Steve Jobs, who provides a focused vision and attracts new
talent. He was extraordinarily creative and was both a technocrat and a manager, said Didier.

Apple IncWhat lies ahead?


During Didiers visit to EDHECs Lille campus, our in-house journalist had an
opportunity to ask him about the road ahead, especially after Jobs' untimely death in October
2011. On the question of challenges facing Apple today, Didier acknowledged the tough
competition from archrivals like Samsung that use Googles Android platform, but expressed
his belief in Apples ability to innovate, which would help Apple maintain its market
leadership. When asked whether Apple now faces any sort of leadership crisis, Didier
expressed confidence in Cook, the current CEO: Although no one can take Jobss place, Tim
knows how to carry forward with the legacy that Jobs has left. Tim is doing a great job.

About Bruno Didier


Apple appointed Air France marketing head Bruno Didier as its vice-president of
marketing for Europe, the Middle East, and Africa to replace Nigel Turner in July 1999.
Didier took charge of all marketing communications, product marketing, and vertical
marketing for the region. Before joining Air France, Didier was head of PC products for

Compaq in Europe, the Middle East, and Africa, and vice-president of marketing for Compaq
Europe.

Market share
Continued to find success with its larger screened iPhone 6 Plus. It shipped a total of
47.5 million units, which is a 22.3% decline from 2015Q1. Much of this came out of Greater
China as rapid 4G adoption, Apple retail expansion, and an increased appetite for premium
devices elevated the brand to new levels. Overall, iPhones grew 35.0% year over year and a
remarkable 51.4% in emerging markets alone. With Apple on the brink of its next device
update, IDC expects strong sales to continue for the rest of 2015.

Corporate social responsibility;


News of Steve Jobs death sent shockwaves through the technology industry, a world
that he, in large part, shaped with hiscareer. Apples executives are now left with the
challenge of how to lead a company, whose identity has been inextricably linked to Jobs for
decades. The task is formidable, especially when Apples fanatically loyal customer base is
considerably less certain about what to expect from CEO Tim Cook. That is partly because
Apple's culture of secrecy and Jobs visibility have combined to make Cook relatively
unknown to the public at large. The uncertainty is compounded by the fact that earlier
attempts to replace Jobs proved disastrous. Until now, Jobs seems to be the only one to have
had that special chemistry required for running Apple.
What makes leading Apple difficult to maintain is the fact that the company is not
selling a product as much as it is a vision, the founder's vision. Apple products are undeniably
cutting edge, well built and beautiful to look at, but ultimately they are commodities that now
face tough competition. Samsung is gnawing into iPhone sales by offering technically
superior product for comparable price.
According to recent media coverage, it would seem that Apple is interested in
developing a new vision, one which includes CSR. Jobs never showed much interest in public
do-gooding. He always maintained that equipping the public with the best technology is
worth more than cash grants to charities. But earlier this month Cook announced that Apple
would embrace a new corporate charity matching program, using a model much like those of
other major companiesa dollar for dollar match for employee donations of up to $10,000 a
year. Cook clearly wants to send the message that Apple is evolving in the way it perceives
CSR, a major differentiating factor between himself and his charismatic predecessor.
However, the decision curiously followed media allegations regarding Apples lack of CSR
activities, including a New York Times (link) article mentioning matching as a solution
employed by a considerable portion of the Fortune 500 companies.
Apple still needs to embrace the core values that make it a cool company: in short,
that owning an Apple product secures membership in a select group. While Apple is perhaps
overdue for a CSR strategy, the decision to enact donation matching is decidedly not the
"Apple Way." The sequence of events surrounding last months announcement as well as the
fundamentally uncreative quality of the program presented imply that Cook is only

responding to media pressure rather than bringing to CSR the same kind of innovative and
inspiring vision for which Apple is so highly regarded. And in that regard, the corporate
matching program is a fail.
Developing a CSR strategy around neither a sense of obligation nor calculation but
rather around certain well-defined character virtues is highly effective. In particular, integrity,
empathy and zeal, among others, are critical during times of uncertainty; they need to be well
coordinated and implemented from the inside-outnot the other way around.
Integrity: Any major organizational change is accompanied by insecurity. The

transition from Jobs approach to hiring and firing is bound to create uncertainty among
employees, and in corporate environments uncertainty inevitably creates pernicious
maneuvering and second guessing at middle management levels. The new CSR initiatives
should present both the company and its new CEO with a unique opportunity to promote an
image of integrity and to differentiate the new leadership from that of the Jobs era. However,
philanthropy is not a good place to start. It should start from inside, promoting trust and
openness, the internal integrity.
Empathy: Empathy creates emotional bonding between the company and stakeholders

allowing companies to endure a difficult time. Apple is currently embroiled in lawsuits that
are likely to restrict consumer choices in the future if it carries on. Publishers are frustrated
by Apples hammerlock over apps and magazine subscriptions on the iPad. There have been
indications that Samsung, Apple's most threatening competitor, angered by patent law suits,
will finally fight back to counter sue Apple. While from Apples point of view, taking legal
action against competitors may seem necessary as a means of protecting innovation, public
opinion works differently. For multinational companies the legal victory can often end with a
kind of zero sum game, leaving it with a reputation for arrogance and insecurity. Apple will
have to worry about its reputation all the more so if it wins the battles against competitors.
Even more telling, the suicides at China's manufacturing behemoth, Foxconn, have
created the uncomfortable impression that cool products like the iPad are being produced
by what amounts to economic slave labor. This is decidedly uncool and not the image that
Apple wants to portray.
Zeal: Zeal is perhaps the virtue most-embedded at Apples core and is represented by

their continuous innovation and excitement in terms of products and customer experience. By
emphasizing CSR, Tim Cook would need to bring that famous Apple zeal to social issues,
offering an innovative approach, as competitor Google did, when it famously began
encouraging its employees to spend 20% of their time on their own projects.

SWOT Analysis
Strengths.

Apple is a very successful company. Sales of its iPod music player had increased its
second quarter profits to $320 (June 2005). The favourable brand perception had also
increased sales of Macintosh computers. So iPod gives the company access to a whole
new series of segments that buy into other parts of the Apple brand. Sales of its
notebooks products is also very strong, and represents a huge contribution to income
for Apple. Would you like a lesson on SWOT analysis?

In 2005 Apple won a legal case that forced Bloggers to name the sources of
information that pre-empted the launch of new Apple products. It was suspect that
Apples own employees had leaked confidential information about their new Asteroid
product. The three individuals prosecuted, all owned Apple tribute sites, and were big
fans of the companys products. The blogs had appeared on their sites, and they were
forced to reveal their source. The ruling saw commercial confidentiality as more
important as the right to speech of individuals. Apple are vulnerable to leaks that
could cost them profits.

Disclaimer:

This case study has been compiled from information freely available from public
sources. It is merely intended to be used for educational purposes only.

Brand is all-important. Apple is one of the most established and healthy IT brands in
the World, and has a very loyal set of enthusiastic customers that advocate the brand.
Such a powerful loyalty means that Ample not only recruits new customers, it retains
them i.e. they come back for more products and services from Apple, and the
company also has the opportunity to extend new products to them, for example the
iPod.

Weaknesses.

It is reported that the Apple iPod Nano may have a faulty screen. The company has
commented that a batch of its product has screens that break under impact, and the
company is replacing all faulty items. This is in addition to problems with early iPods
that had faulty batteries, whereby the company offered customers free battery cases.

There is pressure on Apple to increase the price of its music download file, from the
music industry itself. Many of these companies make more money from iTunes (i.e.
downloadable music files) than from their original CD sales. Apple has sold about 22
million iPod digital music players and more than 500 million songs though its iTunes
music store. It accounts for 82% of all legally downloaded music in the US. The
company is resolute, but if it gives in to the music producers, it may be perceived as a
commercial weakness.

Early in 2005 Apple announced that it was to end its long-standing relationship with
IBM as a chip supplier, and that it was about to switch to Intel. Some industry
specialists commented that the swap could confuse Apples consumers.

Opportunities.

Apple has the opportunity to develop its iTunes and music player technology into a
mobile phone format. The Rokr mobile phone device was developed by Motorola. It
has a colour screen, stereo speakers and a advance camera system. A version of
Apples iTunes music store has been developed for the phone so users can manage the
tracks they store on it. Downloads are available via a USB cable, ands software on the
handset pauses music if a phone call comes in. New technologies and strategic
alliances offer opportunities for Apple.

Podcasts are downloadable radio shows that can be downloaded from the Internet, and
then played back on iPods and other MP3 devices at the convenience of the listener.
The listener can subscribe to Podcasts for free, and ultimately revenue could be
generated from paid for subscription or through revenue generated from sales of other
downloads.

Threats.

The biggest threat to IT companies such as Apple is the very high level of competition
in the technology markets. Being successful attracts competition, and Apple works
very hard on research and development and marketing in order to retain its
competitive position. The popularity of iPod and Apple Mac are subject to demand,
and will be affected if economies begin to falter and demand falls for their products.

There is also a high product substitution effect in the innovative and fast moving IT
consumables market. So iPod and MP3 rule today, but only yesterday it was CD,
DAT, and Vinyl. Tomorrows technology might be completely different. Wireless
technologies could replace the need for a physical music player.

PEST Analysis
Political
In 2005, 52% of sales were outside of America. Apple has no control over relations
with other countries due to America's war on Terrorism. Apple produces many of their
products outside of the USA. This includes a list such as Ireland, China, Czech Republic,
Korea. Political conflicts with any of these countries will have terrible effects on Apple INC.
Once again, Apple has no control of the wars, and lack of communication or failed public
relations with corresponding countries to the USA.

Economic
The Economic depression may have a serious impact on Apple sales and
improvements in the company. Apple's products may be viewed by some as "luxury" products
and a the inflation rate is high, while income is low and unemployment rates are increased the
company could risk a severe loss in sales. As the U.S.D (u.s dollar) has lost some value the
Apple Corporation does not risk economic breakdown as they have purchased foreign
currency. In fact, the decrease in the U.S.D has actually increased Apple's revenue on the
market.

Socio-Cultural
The people's interactions from around the world has to due with globalization. Today's
world is the way it is due to technology and a lot of it is due to Apple. It is the leader in
computers, software, and cell phones and this is due to the quality and designs of the the
products. Another large factor is the music industry, it has grown into the cyber world. iTunes
is ahead of any other competitor in its class. Web piracy is a threat but most countries punish
and have laws against this. Apple's image displays the modern person's lifestyle, they are the
leader in their class and are known around the world. Therefor sociological effects benefit the
company.

Technological Environment
The technological environment for Apple's market has grown substantially over past
years. Most specifically, phones and computers have become a hot commodity. Apple is on
top of the market for innovating products and the main thing about these products is that their
life cycles are very short, making it inevitable for more products to be sold later. The increase
in technology is encouraging competitors to improve, which then keeps Apple improving.
Overall, Apple is a very well established company with a firm grasp on all sections in
a PEST analysis. They are established politically by having a "plan B' in case something that
they cannot control happens and it is still maintaining success while the depression is
prevalent, they are knowledgeable in economics. Apple uses the modern person to depict

their product as well as create new ingenuity and design. They seem to have all bases covered
and will always be a leader in technology

Conclusion
The main conclusion that can be drawn is we found to be the most interesting about
Apple is how they are very innovative and early adapters. Apple is usually the first company
to come out with a new product line before anyone else. This is very risky but it seems to be
working to Apples advantage. This shows that taking risks can sometimes make or break you
and Apple has great potential and has a lot to improve. Currently, Apple is demonstrating
negative aspects of TNCs, contributing to international debt crisis through exploitation of
workers. In a way, Apple is promoting debt crisis in LDCs by accessing their labour and raw
materials on the cheapest possible terms. If it is willing to play the role of a beneficial TNC,
the global economy can certainly benefit. Furthermore, people in the least developed
countries, and the environment, will benefit as well. This requires a change from all
stakeholders: the company itself, the consumers, the shareholders, and the workers. It is
important for a TNC to progress towards beneficial behaviour because this can determine
people's view on progressing towards further globalization, as influenced by neo-liberalism.

Recommendation
The Board recommends that shareholders vote FOR ratification of the appointment of
KPMG LLP as the Company's independent auditors.
Sheet Metal Workers' National Pension Fund, Edward F. Carlough Plaza, 601 N.
Fairfax Street, Suite 500, Alexandria, VA 22314, owner of approximately 12,050 shares of the
Company's common stock, has submitted the following proposal:
Performance and Time-Based Restricted Shares Proposal
Resolved: That the shareholders of Apple Computer, Inc. ("Company") hereby
request that the Board of Directors' Compensation Committee adopt a performance and timebased restricted share grant program for senior executives that includes the following
features:
(1)

Operational Performance-Vesting MeasuresThe restricted share program should


utilize justifiable operational performance criteria combined with challenging
performance benchmarks for each criteria utilized. The performance criteria and
associated performance benchmarks selected by the Compensation Committee should
be clearly disclosed to shareholders.

(2)

Time-Based VestingA time-based vesting requirement of at least three years should


also be a feature of the restricted shares program, so that operational performance and
time-vesting requirements must be met in order for restricted shares to vest.

The Board and Compensation Committee should implement this restricted share
program in a manner that does not violate any existing employment agreement or equity
compensation plan.
Supporting Statement: The Company's executive compensation program should
include a long-term equity compensation component with clearly defined operational
performance criteria and challenging performance benchmarks. We believe that performance
and time-vesting restricted shares should be an important component of such a program. In
our opinion, performance and time-based restricted shares provide an effective means to tie
equity compensation to meaningful operational performance beyond stock price performance.
A well-designed restricted share program can serve to help focus senior executives on
achieving strong operational performance as measured over several years in areas determined
by the Board to be important to the long-term success of the Company. The use of operational
performance measures in a restricted share program can serve to complement the stock price
performance measures common in senior executive equity compensation plans. In addition to
operational performance requirements, time vesting requirements of at least three years will
help reinforce the long-term performance orientation of the plan.

Our proposal recognizes that the Compensation Committee is in the best position to
determine the appropriate operational performance criteria and associated performance
benchmarks. It is requested that
Detailed disclosure of the performance criteria be provided in the Compensation
Committee Report. Further, clear disclosure should be provided on the performance
benchmarks associated with each performance criteria to the extent this information can be
provided without revealing proprietary information. This disclosure will enable shareholders
to assess whether the long-term equity compensation portion of the executive compensation
plan provides challenging performance targets for senior executives to meet.
We believe that a performance and time-based restricted share program with the
features described above offers senior executives the opportunity to acquire significant levels
of equity compensation commensurate with their contributions to long-term corporate
performance. We believe such a system best advances the long-term interests of our
Company, its shareholders, employees and other important constituents. We urge
shareholders to support this important executive compensation reform.