A STRATEGIC MANAGEMENT OF APPLE CORPORATION

A Project Submitted to

University of Mumbai for partial completion of the degree of

Bachelor of Management Studies

Under the Faculty of Commerce

By

Muniruddin Shaikh

Under the Guidance of

Sonia Mohit Pant

MGM College of Commerce Kamothe Navi Mumbai

CHAPTER NO. 1

INTRODUCTION
 INTRODUCTION

The word “Management” defined as four major steps, Planning, Organizing, Leading,
and Controlling, those four steps defined if corporations manage itself in the right
way, but those steps don’t define the real management completely because the
management include the activities and decisions taken by the CEO‟s or leaders that
affect the way of managing a corporation. And as we know also, the management
includes in it the marketing and innovations.
But also, we cannot say that we are completely defined the management because it’s
include the “Global Management” that is define how the global companies or the
Multi National Corporation (MNC) managed because it’s not the same way that we
manage a small corporation we can use it to manage a Global company, everything
will change when we talk about the International Management. The International
Management or Global Management is referring to the way an organization manages its
business internationally and it will be completely different from the local companies
because of the many differences available between countries. And to manage a
corporation locally or globally they must have a Strategy to keep them in the front and
always differentiated from their competitors.
The Strategies or Strategic Planning are the plans that putted by a CEO or BOD and
affect positively the performance of the corporation in the future, so we can conclude
that the strategic plans are a long-term plan that they must putted to manage a
corporation on the long-term and they must contain expectation about future
competitions, sales growth, unexpected problems that may face the corporation in the
future such as crisis, inflation, deflation etc… also the strategic planning defined as “a
set of managerial decisions and actions that determine the long-run performance of a
corporation”. It includes environmental scanning, strategy formulation, implementation,
and evaluation and control.
 Apple Inc.

Apple Inc. is an American multinational technology company headquartered in Cupertino,

California, that designs, develops, and sells consumer electronics, computer software, and
online services. It is considered one of the Big Four of technology along with Amazon, Google,
and Facebook.

The company's hardware products include the iPhone smartphone, the iPad tablet computer, the
Mac personal computer, the iPod portable media player, the Apple Watch smartwatch, the Apple
TV digital media player, and the Home Pod smart speaker. Apple's software includes the macOS
and iOS operating systems, the iTunes media player, the Safari web browser, and the life and
iWork creativity and productivity suites, as well as professional applications like Final Cut Pro,
Logic Pro, and XCode. Its online services include the iTunes Store, the iOS App Store and Mac
App Store, Apple Music, and iCloud.

Apple was founded by Steve Jobs, Steve Wozniak, and Ronald Wayne in April 1976 to develop
and sell Wozniak's Apple I personal computer. It was incorporated as Apple Computer, Inc., in
January 1977, and sales of its computers, including the Apple II, grew quickly. Within a few
years, Jobs and Wozniak had hired a staff of computer designers and had a production line.
Apple went public in 1980 to instant financial success. Over the next few years, Apple shipped
new computers featuring innovative graphical user interfaces, such as the original Macintosh in
1984, and Apple's marketing advertisements for its products received widespread critical
acclaim. However, the high price tag of its products and limited software titles caused problems,
as did power struggles between executives at the company. In 1985, Wozniak stepped away
from Apple, while Jobs resigned and founded a new company—NeXT—with former Apple
employees.

As the market for personal computers increased, Apple's computers lost share to lower-priced
products, particularly ones that ran the Microsoft Windows operating system, and the company
was financially on the brink. After more executive job shuffles, CEO Gil Amelia in 1997 bought
NeXT to bring Jobs back. Jobs regained leadership within the company and became the new
CEO shortly after. He began to rebuild Apple's status, opening Apple's own retail stores in
2001, acquiring numerous companies to create a portfolio of software titles, and changing some
of the hardware used in its computers. The company returned to profitability. In January 2007,
Jobs renamed the company Apple Inc., reflecting its shifted focus toward consumer electronics,
and announced the iPhone, which saw critical acclaim and significant financial success. In
August 2011, Jobs resigned as CEO due to health complications, and Tim Cook became the new
CEO. Two months later, Jobs died, marking the end of an era for the company.

Apple is well known for its size and revenues. Its worldwide annual revenue totaled $265 billion
for the 2018 fiscal year. Apple is the world's largest information technology company by
revenue and the world's third-largest mobile phone manufacturer after Samsung and Huawei. In
August 2018, Apple became the first public U.S. company to be valued at over US$1 trillion.
The company employs 123,000 full-time employees maintains 504 retail stores in 24 countries
as of 2018. It operates the iTunes Store, which is the world's largest music retailer. As of
January 2018, more than 1.3 billion Apple products are actively in use worldwide. The company
also has a high level of brand loyalty and is ranked as the world's most valuable brand. However,
Apple receives significant criticism regarding the labor practices of its contractors, its
environmental practices and unethical business practices, including anti-competitive behaviour,
as well as the origins of source materials.

Apple Computer’s 30-year history is full of highs and lows, which is what we would expect in a
highly innovative company. They evolved throughout the years into an organization t h a t i s v e r y m u c h a
r e p r e s e n t a t i o n o f i t s l e a d e r , S t e v e n J o b s . A p p l e m a d e s e v e r a l h u g e l y successful product
introductions over the years. They have also completely fallen on their face on several occasions. They
struggled mightily while Jobs was not a part of the organization. Apple reached a point where
many thought they would not survive. When asked in late 1997what Jobs should do as head of Apple,
Dell Inc.'s (DELL) then-CEO Michael S. Dell said at an investor conference: "I'd shut it down and give the
money back to the shareholders.” (Burrows, Grover, and Green) Well, times changed. Less than 10 years
later,
Business week.
Ranked Apple as the top performer in its 2006 BusinessWeek 50. Apple attributes their recent success to
robust sales of iPod music players (32 million in 2005). They are optimistic about the economies of scope with
media giants, such as Disney and Pixar. (BusinessWeek)Apple rarely introduces a new type of product. Thus,
instead of being the pioneer, they a r e a n e x p e r t “ s e c o n d m o v e r ” b y r e f i n i n g e x i s t i n g
p r o d u c t s . P o r t a b l e m u s i c p l a ye r s a n d notebook computers are examples. Apple increases the appeal
of these products by making them stylish and more functional. They now appear poised to make
significant strides in the home computer market and to creating a total digital lifestyle whereby the home
is a multimedia hub.
 HISTORYOFAPPLE

Steve Jobs and Steve Wozniak founded Apple on April 1, 1976. The two Steve’s,
Jobsa n d W o z ( a s h e i s c o m m o n l y r e f e r r e d t o – s e e w o z . o r g ) , h a v e p e r s o n a l i
t i e s t h a t p e r s i s t throughout Apple’s products, even today. Jobs was the consummate salesperson and
visionary while Woz was the inquisitive technical genius. Woz developed his own homemade
computer and Jobs saw its commercial potential. After selling 50 Apple I computer kits to Paul Terrell’s Byte
Shop in Mountain View, CA, Jobs and Woz sought financing to sell their improved version, the Apple II.
(Linzmeyer, 7-9) T h e y f o u n d t h e i r f i n a n c i e r i n M i k e M a r k k a a , w h o i n t u r n h i r e d M i c h a e l
S c o t t t o b e CEO. The company introduced the Apple II on April 17, 1977, at the same time
Commodore released their PET computer. Once the Apple II came with
VisiCalc, theprogenitorof themodern spreadsheet program, sales increased dramatic
a l l y.

I n 1 9 7 9 , A p p l e i n i t i a t e d t h r e e projects to stay ahead of the competition: 1) the Apple

III – their business-oriented machine, 2) the Lisa – the planned successor to the Apple III, and 3)
Macintosh. (Linzmeyer, 14-5) In 1980, the company released the Apple III to the public and was a
commercial flop. It was too expensive and had several design flaws that made for less-than-stellar
quality. One design flaw was a lack of cooling fans, which allowed chips to overheat. In late
1980, Apple went public, making the two Steve’s and Markkaa wealthy – to the tune of nine
figures. By1981, the Apple III was not selling well, and Scott infamously fired 40 people on Feb 25
(“Black Wednesday”).

Scott’s direct management style conflicted with the culture Jobs and Markkaa preferred, and Scott
resigned in July. Markkaa stepped into his position as CEO. (Linzmayer,15-6)

In August 1981, IBM released their PC. Unimpressed and unafraid, Apple welcomed IBM to the
PC market with a slightly smug full-page ad in the Wall Street Journal. It would not be long before IBM’s PC
dominate the market.
The Xerox Alto was the inspiration for Apple’s Lisa. Apple employees could examine the Alto in
exchange for allowing Xerox to invest in Apple before Apple’s initial public offering (IPO). Apple
released the Lisa in January 1983 and was notable for being the first computer sold to the public
that utilized a Graphic User Interface (GUI). Unfortunately, the Lisa was not compatible with existing
computers, and therefore came bundled “with everything and alit price to match.”
At $9,995 (over $21,000 in 2005 dollars), the Lisa misedits target market by a wide margin.

Jobs attempted to control the Lisa project. Scott, unimpressed with the performance of Jobs on the Apple III
project, had Jobs head up the dog-and-pony show for the pending IPO Jobs, looking for a project to lead,
inserted himself into the Macintosh development team. Using his considerable influence, Jobs could procure
the resources to produce a computer that was faster than Lisa, used a GUI, had a mouse, and sold for the of
Lisa’s price. Apple introduced the Macintosh with great fanfare during the 1984 Super Bowl. Orwellian
themed commercial (directed by Ridley Scott, of ‘Alien’ fame) portrayed IBM as Big Brother and embodied
Macintosh and Apple as freedom-seeking individuals breaking away from this oppressive regime. The
commercial was largely successful and sales for the Mac started strong. However, Mac sales later faded.

John Sculley left PepsiCo to join Apple in April 1983. He was famous for engineering the “Pepsi Challenge”,
in which blinded testers tasted both Coke and Pepsi to unveil the ‘truth’ of the taste of Pepsi. In response to
lagging Mac sales, sculled contrived the ‘Test Drive a Macintosh’ campaign. In this promotion, prospective
users could take home a Macintosh with only a refundable deposit on their credit card. While lauded by the
public and the advertising.

Industry, this campaign was a burden on dealers and significantly impeded the availability of Macs to serious
buyers. In 1985, Apple tried to have lightening strike twice with their ‘Lemmings’ commercial during the
Super Bowl. In what was becoming Apple’s typical patronizing fashion, this commercial insulted current PC
users by portraying them as witless lemmings, unthinkingly doing harm to themselves. Although Jobs
attempted to overthrow Sculley, the board backed Sculley. Jobs left Apple to form NeXT computer.
After Jobs left in 1985, sales of the Mac “exploded when Apple’s LaserWriter met Aldus PageMaker.” Apple
dominated the desktop publishing market for years to come. Under Sculley, Apple grew from $600 million in
annual sales to $8 billion in annual sales by 1993.

Apple introduced Mac Portables in 1989 and the first PowerBooks in 1991. By 1992, PC competition ate into
Apple’s margins and earnings were falling. Sculley was under pressure to have Apple produce another
breakout product. He focused his energy on the Newton – Apple’s introduction of the Personal Digital
Assistant (PDA). Despite Sculley generating substantial demand for Newton, it did not live up to the hype due
to it being severely underdeveloped. Sculley resigned in 1993 and Michael Spindler replaced him.

Spindler spent most of his time and energies on regaining profitability, with the end goal of finding a buyer
for Apple. Over the next several years, Spindler shopped Apple to Sun Microsystems, Eastman Kodak, AT&T,
and IBM.

Meanwhile, Apple was unable to meet the growing demand for its products due to supplier problems and
faulty demand predictions. To add insult to injury, Microsoft released Windows 95 with great fanfare in 1995.
After significant quarterly losses in 1996, the board replaced Spindler with Rd. Amelio, CEO of National
Semiconductor.

Dr. Amelio tried to bring Apple back to basics, simplifying the product lines and restructuring the company.
One of Apple’s most pressing issues at the time was releasing their next generation operating system (code
named “Copland”) to compete with Windows 95. Amelio and his technology officers found that Copland was
so behind schedule that they looked outside the company to purchase a new OS. Ultimately, and somewhat
ironically, they decided to purchase NeXT computer from Jobs. Naturally, Apple welcomed Jobs back into
the fold. The board became increasingly impatient with Amelio due to sales not rebounding quickly enough.
Apple bought out Amelio’s contract after just 1 ½ years on the job.

Jobs eventually claimed the CEO position. Then, he cleaned house by revamping the board of directors and
even replacing Mike Markkula (who had been with the company since the beginning). Jobs simultaneously
put an end to the fledgling clone licensing agreements (which created a few Mac clones) and entered into
cross-licensing agreements with Microsoft. On May6, 1998, Apple introduced the new iMac, a product so
secret that most Apple employees had never heard of it. (Linzmeyer, 289-95) The new iMac was a runaway
success with its translucent case, all-in-one architecture, and ease of use. It brought Apple to a new market of
users – those who had never owned a computer before. Jobs further simplified the product lines into four
quadrants along two axes: Desktop and Portable on one, Professional and Consumer on the other. Apple
completed the matrix with the introduction of the consumer-based iBook in 1999.

The year 2001 was an important year for consumers of Apple products. Apple opened their first 25 retail stores
(totalling 163 stores in 4 countries as of May 2006). In September 2001, Apple introduced the new iMac
featuring a screen on a swivel.
The new iPods (portable music players) were a tremendous success. Apple sold so many that Apple’s
dependence on Mac sales was significantly less. This was no small feat considering that the 2001 iMac became
Apple’s best-selling product “by a long shot”.

Apple offered iTunes (a free application) to help their consumers organize music on iPods and Macs.

In 2003, Apple expanded iTunes by 1) opening the iTunes music store to allow Mac users to purchase music
online and 2) expanding iTunes to Windows users. Sales of iPods skyrocketed and currently provide the bulk
of product sales to Apple. (Apple)In 2005, Apple announced that it would start using Intel-based chips to run
Macintosh computers. In April 2006, Apple announced Boot Camp, which allows users of Intel-based Macsto
boot either Mac or Win dowse OS. This functionality allows users who may need both OSs town just one
machine to run both, albeit not simultaneously.
 APPLE’S ORGANIZATIONAL CULTURE TYPE AND CHARACTERISTICS

Apple Inc. has an organizational culture for creative innovation. The company’s cultural features focus on
maintaining a high level of innovation that involves creativity and a mindset that challenges conventions and
standards. The business depends on cultural support and coherence, which are determinants of competitiveness
and industry leadership, especially in addressing aggressive and rapid technological innovation and product
development. The following are the main characteristics of Apple’s corporate culture:

1. Top-notch excellence

2. Creativity

3. Innovation

4. Secrecy

5. Moderate combativeness

Top-notch Excellence.

Apple’s organizational culture comes with a policy of hiring only the best of the best in the labour market.
Steve Jobs was known to fire employees who did not meet his expectations. This tradition continues under
Tim Cook. Such a tradition maintains and reinforces a corporate culture that promotes, appreciates, and
expects top-notch excellence among employees. This cultural trait is institutionalized in Apple’s organization.
For example, the company has programs that recognize and reward excellence among workers. Excellence is
emphasized as a critical success factor in the business, especially in product design and development, which
is a major growth strategy (see Apple Inc.’s Generic Strategy and Intensive Growth Strategies).

Creativity

This cultural characteristic pertains to new ideas that help improve the business and its products. Apple’s
management favours creativity among employees’ knowledge, skills, and abilities. This characteristic of the
corporate culture enables the company to ensure enough creativity, especially among employees involved in
product design and development processes. Such creativity is observable in the design and features of iPhones,
Macs, and iPads, among other products included in Apple’s marketing mix or 4Ps. In this regard, the
organizational culture helps maintain the company’s capacity to satisfy customers’ expectations and
preferences.
Innovation

Apple’s organizational culture supports rapid innovation. The company is frequently appraised as one of the
most innovative companies in the world. Based on this cultural trait, the firm trains and motivates it employees
to innovate in terms of individual work performance and contributions to product development processes. The
corporate culture facilitates rapid innovation, which is at the heart of Apple Inc.’s business. Rapid innovation
ensures that the company continues to introduce new products that are profitable and attractive to target
customers.

Secrecy

Steve Jobs developed Apple to have an organizational culture of secrecy. This cultural characteristic continues
to define the company’s human resource development. Secrecy is part of the company’s strategy to minimize
theft of proprietary information or intellectual property. It is also a strategic management approach that enables
Apple Inc. to maximize its leading edge against competitors. Through the corporate culture, employees are
encouraged and expected to keep business information within the company. This cultural trait is reinforced
through the company’s policies, rules, and employment contracts. In this context, Apple’s organizational
culture helps protect the business from corporate espionage and the negative effects of employee poaching.

Moderate Combativeness

Apple’s organizational culture has moderate combativeness. This feature is linked to Steve Jobs and his
combative approach to leadership. He was known to randomly challenge employees to ensure that they have
what it takes to work at Apple. However, under Tim Cook’s leadership, the company has been changing its
corporate culture to a more sociable and a less combative one. Nonetheless, combativeness remains a major
influence in the business. Apple’s corporate culture exhibits a moderate degree of combativeness that presents
challenges that aim to enhance employees’ output.
The Future of Apple

Personal Computers – A Shift in Strategy

Apple has historically taken a far different path than the traditional Windows and Intel combination. Microsoft
provides the Windows operating system to separate downstream hardware producers such as Dell. Apple
vertically integrated both the operating system software and hardware completely under Apple. A consumer
running Microsoft Windows can choose from a myriad of systems based on the Intel processor, while a
consumer running Apple’s OS Must purchase Apple hardware.

Apple is adjusting this strategy by migrating their microprocessors from IBM and Motorola PowerPC to Intel.
Analysts believe that the Intel-based Macintosh may be able to run Microsoft Windows applications by the
end of 2006. (Burrows)In addition to switching processors, Apple positioned their computers as an immediate
option for the traditional Microsoft Windows user. With Apple Boot Camp, users may now use Mac OS X or
Windows on an Apple computer. (Sutherland)

Apple Boot Camp – Allowing Mac OS X or Windows

By allowing users to run Windows on an Intel Mac, Apple reduced the switching costs for traditional PC users.
Apple may steal away customers that are willing to pay a premium for a system that runs both Windows and
Mac OS X

IBM PowerPC Processor, Intel Processor Core Duo / Pentium M

Apple continues to retain a strategic option to license its technology to clone makers such as Dell. Past attempts
at licensing Apple technology (to IBM, Gateway, and others) failed on accord of Apple’s rigid demands. Many
technology leaders (such as a 1985 letter by Bill Gates to Apple CEO John Sculley) criticized Apple for
keeping a closed architecture. Apple cofounder Steve Wozniak criticizes this strategy, “We had the most
beautiful operating system, but to get it you had to buy our hardware at twice the price. That was a mistake.”
Whether Apple would be willing to pursue this reversal of vertical integration is unclear. Although such a
move would cannibalize a portion of Apple’s own hardware sales, it would also provide royalty-based revenue
that could approach $1 billion annually. (Burrows) Jobs traditionally sided against licensing Apple technology.
He referred to Mac clone producers as “leeches” and he personally killed Power Computing (a Mac clone
producer) by terminating their license in 1997.
Apple in the Living Room

Apple’s iPod and iTunes are a powerful combination that fosters a network style of increasing returns. (Barney,
124) By selling iPods, Apple increases the consumer demand for music from iTunes. By placing more musical
choices on iTunes (including less popular songs that appeal to niche audiences), there is more demand for
iPods. Apple had 70% of the legal music download market in early 2005. (Yoffie)Apple is shooting for the
digital living room of the future. For example, Apple just released a “boom box” portable version of the iPod.
This iPod (the iPod Hi-Fi) comes with a remote control. Instead of forming a strategic alliance, Apple
engineered the iPod Hi-Fi and designed it with high-fidelity features. (Burrows) Apple is clearly trying to
develop a stronger core competency in the entertainment area.

The Apple Hi-Fi

Apple may also release an Apple-branded cell phone and iPod combination device by the end of 2006.
(Burrows) This product would again position Apple as a “second mover “responding to Palm’s Treo and
Verizon’s VCAST technology.

Strategic Alliances and Entertainment

Jobs had the early strategic vision to complement computing with movie entertainment. After founding NeXT,
he personally acquired a majority interest in the young movie company Pixar in February 1986. Jobs went on
to invest ¼ of his personal wealth into Pixar. In 1995, Pixar solidified its position within animated movies
with the debut of Toy Story.

Grossing $358 million worldwide, it became the 3rd-largest grossing animated movie in history. After this
success, Jobs took Pixar public and negotiated far better terms with Disney. Later successes included Toy
Story 2, Monsters Inc., and Finding Nemo, Ironically, Jobs stated in the November 23, 1998

BusinessWeek, “I Think Pixar has the opportunity to be the next Disney – not replace Disney – but be the
next Disney.” The alliance between Pixar and Disney has tremendous potential for economies of scope. As
CEO of Apple and Disney’s largest shareholder, Jobs is the strategic link between Disney.
Apple, and Pixar. Opportunities include combining the animated movie expertise of Disney and Pixar, as well
as sharing the content of Disney’s ABC or ESPN networks over Apple’s digital offerings. (Burrows, Grover,
and Green) A current example of the fusion between Disney, Jobs, Apple, and technology is video on the iPod.
Disney’s Desperate Housewives was one of the first television programs available for purchase and download
to the newer video-enabled iPod. There are concerns about whether these synergies will come to fruition.
There are fears that the personality and style of Jobs may conflict with Disney, and that Disney CEO Igor
could be “Amelioed” -- driven out of office by Jobs in a manner like how Jobs drove Amelio out of the CEO
post at Apple. (Burrows, Grover, and Green)
 EXTERNAL ANALYSIS

Technological Environment Brand

Awareness – Style at a Premium

Apple’s products are trendy and stylish. After Jobs returned in 1997, Apple retained designer Jonathan I’ve to
differentiate their computers from the typical beige box. Ive’s design of the iMac included clear colourful
cases that distinguished Apple computers. Apple’s iPod (with the trademark white ear buds and simple track
wheel) commands a 15%-20% premium over other MP3 players. (Yoffie)Apple and Pixar limit the number of
computer products and movies that they sell. Product differentiation with focused quality and style also extend
to the Jobs Pixar – “Pixar’s executives focus on making sure there are no ‘B teams,’ that every movie gets the
best efforts of Pixar's brainy staff of animators, storytellers, and technologists.” (Burrows, Grover, and Gree.

The Stylish Design of the iMac and Mac Mini

Apple positions its Macintosh computers as higher quality and higher price. HP, Dell, and other PC
manufacturers are pricing many systems under the $1,000 threshold. “Apple is struggling to meet demand for
its new MacBook Pro laptop despite a $1,900 price tag that is nearly twice that of garden-variety rivals.”
(Burrows)Apple has only recently entered the low-end (below $500) consumer market with the Mac Mini.
Although the Mac Mini is a base model with few features, it comes encased in a very small and distinctive
package. Apple portrays this computer as “Small is Beautiful”. (Apple)Likewise, the iPod Shuffle was Apple’s
first entry into the lower-end ($100 range) of flash-memory-based portable music players.
Interoperability

Although Apple competes directly with Microsoft for operating systems, the release of iTunes for Windows
in 2002 was a key strategic move. This decision expanded the potential customer base to nearly all personal
computer owners, even though Apple only has 2%-3% of all personal computer sales. Conversely, Apple
depends on Microsoft for a version of Microsoft Office. As the most widely used office suite of applications,
Macintosh users rely on Office to correspond with companies that standardized on Windows. This is from a
strategic alliance between Apple and Microsoft after Jobs returned in 1997.

Apple’s iTunes service has a technological hook (asset specificity) to Apple’s iPod. Although versions of
iTunes exist for both Apple and Microsoft operating systems, the iTunes AAC file format prevents other
portable music players (such as river or Samsung) from playing purchased songs.

Technology and the Digital Lifestyle

Apple not only dominates the music player market, its iLife suite provides consumers with easy-to-use
software for music and video composition. With “podcast” a household word, Apple’s Garage Band
application makes the recording of podcasts and music very easy.

The GarageBand Music and Podcast Application

Environment Regulatory

While introducing new technologies, there is a persistent threat of legal action by competitors. For example,
Apple sued Microsoft in 1988 (settled in 1997 for an undisclosed amount) for perceived similarities between
Microsoft Windows and Macintosh audio visual works. Microsoft has generally been the focus for government
antitrust charges (such as U.S. v. Microsoft) (US DOJ, 2006). Both federal and state governments assert that
Microsoft ‘dominance blocked fair competition within the software industry. This is an advantage for Apple,
because its operating systems are a viable substitute for Windows. Furthermore, Microsoft’s continued support
for Office for Macintosh reduces the perceived level of market monopoly and abuse. Manufacturers will
continue to trespass on Apple’s intellectual property. For example, the company tex9 released an open source
music program called xtunes that was very similar to iTunes. In 2002, Apple took legal action against tex9,
who then altered the program and renamed it sumi (pronounced, “sue me”). Legal threats can surface from
somewhat unusual sources. Apple Corps Ltd. is the London-based company that owns the rights to the music
of the Beatles. Paul McCartney and Ringo Starr recently sued Apple over the use of the Apple logo in iTunes,
claiming that it violated Apple’s agreement not to produce music under an apple-based logo. (Associated
Press) Research and development is a key component to Apple’s sustained competitive advantage. Apple is
currently taking legal action against several popular technical web sites for releasing proprietary product
research. Sites such as appleinsider.com have allegedly posted verbatim content from documents protected by
employee non-disclosure agreements.

(McCullagh) Release of critical insider information could give Apple’s competitors a jump in producing rival
products.
 CHAPTER NO. 2

RESEARCH METHODOLOGY
 OBJECTIVES

This study focuses on the strategic management of Apple Inc. This involves the analysis of apples
strategies; the corporation operates in portable personal computer industry as well as mobile phones and
software. The company sells its products internationally through a mix of direct sales, online and retail stores
as well as wholesale and retail sales. The company pursues a differentiation strategy that is broad. This study
will evaluate its strategies that have led to its success in market leadership.

The main objectives of the project are following:

1. To study the Apple’s advertising strategy its competitors

2. To see how effective the promotional and positioning strategy of Apple’s is.

3. To find out the problems faced by dealers in selling the Apple’s products.

4. To find out the market share of products of Apple’s.

5. To find out the most preferred brand in the market.

6. To know the awareness level of consumers about the products of Apple’s.

METHODOLOGY

Methodology is the specification of the method for acquiring the information needed to structure the study.

Universe

Universe for dealer survey was Delhi.

Universe for consumer survey was Delhi.

 SCOPE OF THE STUDY

Apple’s entered in Indian consumer electronic and home appliances industry when the price war was bitter
and exchange offers were ruling the Indian market. In such scenario, high quality premium product was a
foolish step. But over a time, span of 2 yrs. Apple’s has proved to be a great gun.

But as we know that consumer taste and preference is fast changing and don’t follow any rules and regulations
if any company wants to be a leader it should be well informed about the changes taking place in market
consumer’s mind and taste and formulate strategies to counter these changes.

A successful company is that which changes itself with preferences and needs of consumers as well as create
need for their product not letting others to take the initial step.
 LIMITATIONS

Every study has its own limitations in terms of methodology and the resources available for its conduct. This
study has no expectation to it and has been carried under following limitation:

1. Some of the dealers as well as the customers were not forthcoming with information as they thought it to
be a waste of time. Some customers were not able to respond due to lack of awareness.

2. Several dealers were biased towards a brand which was giving them better returns.

3. Some of the shop owners were not available so, contacted person was not able to present a fair view.

4. Respondent’s lack of time to give information and their casual attitude was a big hindrance in the study.

5. The dealers were biased by some recent experiences which they had with a distributor regarding the service
or distribution.

6. Respondent’s lack of time to give information and their casual attitude was a big hindrance in the study.
 SIGNIFICANCE OF THE STUDY

Apple’s is currently selling its products in 1800 towns and cities with population of one lakh and above. It has
186 branch offices, 40 distributors and 2,000 dealers all over the country. By the end of 2006, the company
plans to reach another 8000 towns with a population of 50,000 or more. In this process it will add on to 100
distributors and 1500 dealers.

To achieve this, the company engages eight vans to feed the country covering 5000 km every month, to
familiarize the trade and the customers with Apple’s products.

In every city, Apple’s approached the best dealers but, in a scheme, ridden market, it refused to offer any
schemes. It positioned itself as an ethical company, instead of discounts. Apple’s wanted dealers to pay an
advance for Apple’s products. This ensured that the dealer would push the brand in the market place, even if
it was just to keep his oven cash from staying blocked. In the long run this created a pent-up demand for the
brand.

Apple’s since its inception laid stress on Proper Channel Merchandising and Management. Due to a very
calculated network expansion plan, Apple’s has the fastest dealer network expansion in the industry and the
highest dealer productivity.

Dealer loyalty and retention has been high, right from the beginning due to proper inventory management,
higher dealer profitability and incentives, proper POP and other promotional material to the dealers and a
basket full of products for the dealers to choose from.

Following are the promotion tools used by Apple’s electronics to promote the company as well as its products:

1. Advertising

2. Public Relations

3. Sales Promotion

Apple’s has devised an effective advertising and promotional strategy. By using appropriate media vehicles,
strong concepts and USPs were developed. Also, various aspects about the brand performance, the products
and strategies to the media, has been communicated very well with its excellent public relations. Today,
Apple’s stands as the No. 1 PR Company in the industry.
Advertising

The company started with advertising on print and outdoor media in 1997.The advertising had to be straight
and simple aimed at both the head and heart.

For e.g. To advertise for refrigerators the ad - line went “From today all other refrigerators will become
history”. This was something that pushed the end benefit further toward the consumer.

Also, the company has started with web advertising over the site.

SAMPLING TECHNIQUES:

 For Consumers survey “Convenient Sampling” techniques were applied.

 For Dealer’s survey “Systematic and Random Sampling” technique was used.
 COLLECTION OF DATA

1. SECONDARY COLLECTION

INTERNAL DATA:

 Went through some previous market studies provided by the guide.

 Previous summer training reports to grasp knowledge about white goods market.

 Study of product manual and salesman training report to get product knowledge.

EXTERNAL DATA:

 Scanning of various business magazines.

 Collected relevant information from the newspaper.

2. PRIMARY DATA:

 Interview Method:

Some of the employees of Apple’s from Sales & marketing department and a few dealers of Apple’s were
interviewed for the purpose of exploratory study. The response obtained from them was very helpful in
preparing the questionnaire for dealers and deciding upon various classificatory and data variables. Two
questionnaires were designed one for the consumers and the other for the dealers. I visited 70 dealers and sub
dealers and 100 consumers.

 Observation Method: Observation about the consumer behaviour at dealer counter gave us lots of
knowledge about the customer expectations regarding products, counter preferences for brand and after sales
service.
 CHAPTER NO. 3

LITERATURE REVIEW
LITERATURE REVIEW

In today's very competitive marketplace a strategy that insures a consistent approach to offering your product
or service in a way that will outsell the competition is critical. However, in concert with defining the marketing
strategy one must also have a well - defined methodology for the day-to-day process of implementing it. It is
of little value to have a strategy if you lack either the resources or the expertise to implement it.

There are two major components of marketing strategy:

 How the enterprise will address the competitive marketplace

 How will it implement and support day-to-day operations?

In the process of creating a marketing strategy one must consider all the relevant factors. Each strategy must
address some unique considerations, it is not reasonable to identify 'every' important factor at a generic level.
However, many are common to all marketing strategies. Some of the more critical are described below.

In general, this falls into one of four categories:

 Where the market is very attractive and the enterprise is strong, one will invest the best resources in
support of the offering.

Where the market is very attractive, but the enterprise is weak, one must concentrate on strengthening the
enterprise, using the offering as a stepping stone toward this objective.

 Where the market is not especially attractive, but the enterprise is strong then an effective marketing
and sales effort for the offering will be good for generating near term profits.

 Where the market is not especially attractive and the enterprise is weak, one should promote this
offering only if it supports a more profitable part of the business. Otherwise, one should determine the
most cost-effective way to divest the enterprise of this offering.
Now, the next step is to choose a strategy for the offering that will be most effective in the market. This means
choosing one of the following 'generic' strategies -

 A COST LEADERSHIP STRATEGY: -

It is based on the concept that one can produce and market a good quality product or service at a lower cost
than its competitors. These low costs should translate to profit margins that are higher than the industry
average.

Some conditions that should exist to support a cost leadership strategy include an on-going availability of
operating capital, good process engineering skills, close management of labour, products designed for ease of
manufacturing and low-cost distribution.

 A DIFFERENTIATION STRATEGY

It is the one which creates a product or service that is perceived as being unique "throughout the industry".
The emphasis can be on brand image, proprietary technology, special features, superior service, a strong
distributor network or other aspects that might be specific to the industry. This uniqueness should also translate
to profit margins that are higher than the industry average. Some of the conditions that should exist to support
a differentiation strategy include strong marketing abilities, effective product engineering, creative personnel,
the ability to perform basic research and a good reputation.

 A SKIMMING STRATEGY

Where the offering has enough differentiation to justify a high price and one desires quick cash and have
minimal desires for significant market penetration and control, then one sets the prices very high.

 A MARKET PENETRATION STRATEGY

Where near term income is not so critical and rapid market penetration for eventual market control is desired,
then one must set the prices very low.

 A COMPARABLE PRICING STRATEGY

Where one is not the market leader in the industry then the leaders will most likely have created a 'price
expectation' in the minds of the marketplace. In this case one can price the offering comparably to those of its
competitors.

It requires direct interface with the end user of the offering. Use of channels of distribution is minimized during
the first stages of promotion and a major commitment to advertising is required. The objective is to "pull" the
prospects into the various channel outlets creating a demand the channels cannot ignore.

Distribution
One must also select the distribution strategy(s) which should get the offering into the hands of the customer.
These include:
 On-premise Sales involving the sale of the offering using a field sales organization that visits the
prospect's facilities to make the sale.
 Direct Sales involves the sale of the offering using a direct, in-house sales organization that does all
selling through the Internet, telephone or mail order contacts.
 Wholesale Sales involves the sale of the offering using intermediaries or "middle-men" to distribute
product or service to the retailers.
 Self-service Retail Sales involves the sale of the offering using self-service retail methods of
distribution.
 Full-service Retail Sales involves the sale of the offering through a full-service retail distribution
channel.
 CURRENT PRODUCTS
HARDWARE
See also: Timeline of Apple Macintosh models, List of Macintosh models grouped by CPU type, and List of
Apple Macintosh models by case type

The Mac mini, Apple's low-cost desktop computer.

iPhone is Apple's multi-touch smartphone, released on June 29, 2007 for AT&T Mobility.

Apple introduced the Apple Macintosh family in1984 and today makes consumer, professional, and
educational computers. The Mac mini is the company's consumer sub-desktop computer, introduced in January
2005 and designed to motivate Windows users to switch to the Mac computer platform. The iMac is a
consumer desktop computer that was first introduced by Apple in 1998, and its popularity helped save the
company. The iMac is similar in concept to the original Macintosh in that the monitor and computer are housed
in a single unit. It is now in its third major design iteration and has been upgraded many times (including a
switch to Intel processors) using the same design. The Power Mac brand was replaced in 2006 with the Mac
Pro, featuring two 64-bit dual-core Xeon "Woodcrest" processors, available in speeds of 2, 2.66, and 3 GHz.
The Mac Pro is capable of supporting up to four 750 GB hard drives for a total of 3 TB of internal hard disk
space and has 8 DIMM slots for up to 16 GB of RAM. On its promotional website, Apple says that the "Mac
Pro not only completes the Mac transition to Intel processors but delivers advanced performance, workstation
graphics, and up to 4.9 million possible configurations." Apple's server range includes the Xserve, a dual core,
dual processor 1U server, and the Xserve RAID for server storage options.

Apple introduced the iBook consumer portable computer as a companion to the iMac; it is Apple's lowest-cost
portable computer. The iBook brand was replaced on May 16, 2006 with the MacBook featuring the Intel Core
Duo processor, 13 inch widescreen, and available black colour on the high-end model. The MacBook Pro is
the professional portable computer alternative to the MacBook. The MacBook Pro is marketed as being
intended for professional and creative users and replaced the PowerBook models, which were introduced in
1991.

On October 23, 2001, Apple introduced the iPod digital music player. Initially equipped with a 5 GB hard
drive and a monochrome screen, models today can store up to 160 GB and display video, play games, and
support a wide range of third-party add-on devices. As of September 2007, Apple currently sells the iPod
shuffle. iPod Nano, iPod classic and iPod touch, as well as the iPhone which includes iPod functionality.

On July 13, 2006, Apple partnered with Nike to introduce the Nike iPod Sports Kit enabling runners to sync
and monitor their runs with iTunes and the Nike+ website. The 100 millionth iPod was sold on April 9, 2007.

At the Macworld Conference & Expo in January 2007, Steve Jobs revealed the long anticipated iPhone, a
convergence of an Internet-enabled smartphone and video iPod. The iPhone combines a 2.5G quad band GSM
and EDGE cellular phone with features found in hand held devices, running a scaled-down versions of Apple's
Mac OS X, with various applications such as Safari web browser, e-mail, and navigation. The iPhone features
a 3.5 inch touch screen display, Bluetooth, Wi-Fi (both "b" and "g"), and comes in 4 and 8 GB models. The
iPhone first became available on June 29, 2007.

Additionally at the conference, Jobs demonstrated the Apple TV, (previously known as the iTV), a set-top
video device intended to bridge the sale of content from iTunes with high-definition televisions. The device
links up to a user's TV and syncs, either via Wi-Fi or a wired network, with one computer's iTunes library and
streams from an additional four. The Apple TV incorporates a 40 GB hard drive for storage, includes outputs
for HDMI and component video, and plays video at a maximum resolution of 720p. It was later updated to
include a 160 GB drive for even more space for media.

Apple sells a variety of computer accessories for Mac computers including the AirPort wireless networking
products, Apple Cinema HD Display and Apple Displays computer displays, Mighty Mouse and Apple
Wireless Mouse computer mice, the Apple Wireless Keyboard computer keyboard, and the Apple USB
Modem. The Apple wireless mouse was replaced by the wireless Mighty Mouse.

The current iPods, Apple's most successful product line. Shown here, (left to right) the iPod shuffle, iPod
Nano, iPod classic and iPod touch.
Environmental issues

Since 2004, Greenpeace has attacked Apple for not setting a timeline to remove PVC and BFRs, which still
exist in recent products such as the iPod Nano and MacBook; and for not promoting a global end-of-life take
back plan for Apple hardware (although it does within Europe and Japan where this is required by law); as
well as for not having reusable components. As of December 2006, Greenpeace ranked Apple last out of ten
electronics companies in dealing with toxic substances in their products, mostly due to a lack of relevant
documentation and timelines. On May 2, 2007, Steve Jobs released an open letter named A Greener Apple,]
responding to some of the allegations. In his letter, Jobs stated:

In one environmental group’s recent scorecard, Dell, HP and Lenovo all scored higher than Apple because of
their plans (or “plans for releasing plans” in the case of HP). Apple is ahead of all these companies in
eliminating toxic chemicals from its products.

A study in January 2006 by the United States Environmental Protection Agency found that Apple's hardware
compares favourably with that of its major competitors on environmental friendliness. On June 5, 2007, Apple
updated their Mac Book Pro product line. This hardware update is environmentally notable because LEDs
fully replaced cold cathode lamps in the 15 inch Mac Book Pro's display backlighting, a first for Apple laptops
(the iPod has had LED backlighting since its creation in 2001). This ameliorates Apple's environmental stance,
as cold cathode lamps do contain mercury, whereas LEDs do not. Former Vice President of the United States
and environmentalist Al Gore is a member of Apple's board of directors.
Software

Mac OS X "Leopard" is the current version of one of Apple's major software products.

Apple develops its own operating system to run on Macs, Mac OS X. Apple also independently develops
computer software titles for its Mac OS X operating system. Much of the software Apple develops is bundled
with its computers. An example of this is the consumer-oriented iLife software package which bundles iDVD,
iMovie, iPhoto, iTunes, GarageBand, and iWeb. For presentation and page layout, iWork is available, which
includes Keynote, Pages, and Numbers. iTunes, QuickTime media player, and Safari web browser are
available as free downloads for both Mac OS X and Windows.

Apple also offers a range of professional software titles. Their range of server software includes the operating
system Mac OS X Server; Apple Remote Desktop, a remote systems management application; WebObjects,
Java Web application server; and Xsan, a Storage Area Network file system. For the professional creative
market, there is Aperture for professional RAW-format photo processing; Final Cut Studio, a video production
suite; Logic, a comprehensive music toolkit and Shake, an advanced effects composition program.

Apple also offers online services with .Mac which bundles .Mac Homepage, .Mac Mail, .Mac Groups, .Mac
Disk, .Mac Backup, .Mac Sync, and Learning Centre online tutorials.

Mac OS X v10.5 "Leopard" was released on October 26, 2007.

 Apple Computer

Company Info

STOCK AAPL
INFO

REVENUES* $11.1 BILLION

Revenue 54.7%
Growth

RETURN 11.8%
ON EQUITY
 Total Return 183.4%

PROFITS* $752 MILLION

Industry COMPUTERS AND PERIPHERALS

CORPORATE WEB SITE

All figures are for the most recent available 12 months.

* Latest available data for the 12-month period ended Dec. 31, Jan. 31, Feb. 29,

Mar. 31, or Apr. 30. For companies that do not report quarterly, the most

recent annual data were used.

Company Snapshot

Apple Computer, Inc. engages in the design, manufacture, and marketing of personal computers and related
software, services, peripherals, and networking solutions. It also designs, develops, and markets a line of
portable digital music players along with related accessories and services, including the online distribution of
third-party music and audio books. The company's products and services include the Macintosh line of
desktop and notebook computers; the Power Mac line of desktop personal computers; the iPod digital music
player; the Xserve server; Xserve RAID storage products, a portfolio of consumer and professional software
applications; the Mac OS X operating system; the online iTunes Music Store, a portfolio of peripherals that
support the Macintosh and iPod product lines; Power School software product, a Web-based student
information system for K-12 schools and school districts; and a variety of other service and support
offerings. It also offers various associated Apple-branded computer hardware peripherals, including iSight
digital video cameras, and a range of flat panel TFT active-matrix digital colour displays. In addition, the
company sells a variety of third-party products, including computer printers and printing supplies, storage
devices, computer memory, digital video and still cameras, personal digital assistants, iPod accessories, and
various other computing products and supplies. The company offers its products to education, consumer,
creative professional, business, and government customers. Apple Computer sells its products through its
online stores, retail stores, direct sales force, as well as through third-party wholesalers, resellers, and value-
added resellers. The company operated 84 retail open stores, as of September 25, 2004. These stores sell
hardware, software, and peripheral products, as well as a variety of third-party hardware and software
products. Apple Computer, Inc. was founded in 1976 by Mr. Steven P. Jobs and is headquartered in
Cupertino, California.
ADVERTISING

Since the introduction of the Macintosh in 1984 with the 1984 Super Bowl commercial to the more modern
'Get a Mac' adverts, Apple has been recognized for its efforts towards effective advertising and marketing for
its products, though it has been criticized for the content of more recent campaigns.

The original Apple logo featuring Isaac Newton under the fabled apple tree.

The rainbow Apple logo used from late 1976 to early 1999.

The white Apple logo, used from 1999 to present

Apple’s first logo, designed by Jobs and Wayne, depicts Sir Isaac Newton sitting under an apple tree. Almost
immediately, though, this was replaced by Rob Janoff’s “rainbow Apple,” the now-familiar rainbow-colored
silhouette of an apple with a bite taken out of it, possibly as a tribute to Isaac Newton's discoveries of the
gravity (the apple), and the separation of light by prisms (the colours). This was one of several designs Janoff
presented to Jobs in 1976.

accepted to have been in reference to Isaac Newton, some believe that the bitten apple is a homage to the
mathematician Alan Turing, on whose deathbed an apple was found which was poisoned by himself. Turing,
one of whose favourite films was Disney's Snow White, is regarded as one of the fathers of the computer.

In 1999, Apple began enforcing the use of a strictly monochrome logo—supposedly at the insistence of a
newly re-inaugurated Jobs—nearly identical in shape to its previous rainbow incarnation. However, no
specific colour is prescribed; for example, it is grey on the Power Mac G5, Mac Mini, and iMac, black on the
Aluminium iMac, blue (by default) in Mac OS X, chrome on the 'About this Mac' panel and the boot screen
in Mac OS X 10.3 and 10.4, red on many software packages, and white on the iBook, PowerBook G4,
PowerBook G3 (late models), MacBook, and MacBook Pro. The logo's shape is one of the most recognized
brand symbols in the world, identifies all Apple products and retail stores (the name "Apple" is usually not
even present), and notably included as stickers in nearly all Macintosh and iPod packages through the years.

Apple's first slogan, "Byte into an Apple", was coined in the late 1970s. Once Apple started selling more than
just computers, slogans were created for each individual product, rather than for the company itself. For
example, the slogan "iThink, therefore iMac", was used in 1998 to promote the iMac. Several company-
directed slogans are marketed today; however, Apple tends to focus mainly on marketing its products
individually.

Apple's earliest court action dates to 1978 when Apple Records, The Beatles-founded record label, filed suit
against Apple Computer for trademark infringement. The suit settled in 1981 with an amount of US$80,000
being paid to Apple Corps. As a condition of the settlement, Apple Computer agreed to stay out of the music
business. The case arose in 1989 again when Apple Corps sued over the Apple IIGS, which included a
professional synthesizer chip, claiming violation of the 1981 settlement agreement. In 1991 another settlement
of around US$26.5 million was reached. In September 2003 Apple Computer was sued by Apple Corps again,
this time for introducing the iTunes Music Store and the iPod, which Apple Corps believed was a violation of
the previous agreement by Apple Computer not to distribute music. The trial in the UK ended on May 8, 2006
with victory for Apple Computer. The judge ruled the company's iTunes Music Store did not infringe on the
trademark of Apple Corps and ordered Apple Corps to pay the legal costs. A new settlement was announced
on February 5, 2007 giving Apple, Inc. control over the Apple mark with Apple Corps licensed to use it.
Portions of the settlement are confidential, but each side will pay its own legal costs. As the Beatles' songs are
not available for download from any legal music download sites, including the iTunes Music Store, Jobs'
highly public nod to the Beatles (playing "Lovely Rita" on the iPhone) during his January 9, 2007 Macworld
keynote fuelled widespread speculation about a deal to sell Beatles songs on iTunes. A spokeswoman for
Apple Corps said the settlement had no bearing on any such matter.

Of the matter, Steve Jobs said "We love the Beatles, and it has been painful being at odds with them over these
trademarks. It feels great to resolve this in a positive manner, and in a way that should remove the potential of
further disagreements in the future.

In a more recent previously unrelated lawsuit, Apple entered into a class action settlement, upheld on
December 20, 2005 following an appeal, regarding the battery life of iPod music players sold prior to May
2004. Eligible members of the class are entitled to extended warranties, store credit, cash compensation, or
battery replacement.

Creative also recently filed a patent dispute alleging that Apple infringed on one of Creative's patents for their
Zen player with the iPod and iPod Nano. On August 23, 2006, Apple and Creative settled their patent disputes
by paying Creative US$100 million On January 10, 2007, Cisco sued Apple for the iPhone, since Cisco has
held the trademark on the name "iPhone" since 2000. Cisco had refused rights to use the name "iPhone" on
multiple occasions. Apple and Cisco had been in talks for a while about use of the name, though Apple had
been denied the use of the name on several occasions leading up through January 9. Cisco alleged that Apple
created a front company to attempt to acquire the name through other means but failed also. During the 2007
Macworld Expo, Apple used Cisco's "iPhone" name anyway. On February 22, 2007 Cisco and Apple
announced an agreement under which both companies would be allowed to use the iPhone name worldwide.

In July 2007, Colorado-based photographer Louis Psihoyos filed suit against Apple for allegedly ripping his
"wall of videos" imagery to advertise for Apple TV. According to Psihoyos, Apple had been negotiating with
Psihoyos for rights to the imagery but backed out and promptly used the imagery anyway.

On June 29, 2006, Apple announced that an internal investigation "discovered irregularities related to the
issuance of certain stock option grants made between 1997 and 2001."[72] A Special Committee reported the
findings of the stock backdating investigation three months later on October 4, 2006, stating "the investigation
found no misconduct by any member of Apple's current management team", … "the most recent evidence of
irregularities relates to a January 2002 grant", and "stock option grants made on 15 dates between 1997 and
2002 appear to have grant dates that precede the approval of those grants". The Special Committee also
reported that "in a few instances, Apple CEO Steve Jobs was aware that favourable grant dates had been
selected, but he did not receive or otherwise benefit from these grants and was unaware of the accounting
implications."] Documents were subsequently faked to indicate a special board meeting had occurred and that
the options had been granted on that day. The backdating gave Jobs a potential net gain of more than US$20
million had he exercised his options.

On April 24, 2007, the SEC announced it had filed charges against former Apple chief financial officer Fred
D. Anderson and former Apple general counsel Nancy R. Heinen for their alleged roles in backdating Apple
options.[76] Anderson immediately settled the charges for a payment of a civil penalty of US$150,000 and
disgorgement of "ill-gotten gains" of approximately US$3.49 million. Heinen was charged with, among other
things, violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of
1934, lying to Apple's auditors, and violating prohibitions on circumventing internal controls, based on the
options awarded to Steve Jobs (dated October 19, 2001 but allegedly granted in December 2001) and also
option grants awarded to top company executives, including Heinen (dated January 17, 2001, but allegedly
granted in February 2001. The SEC is seeking injunctive relief, disgorgement, and money penalties against
Heinen, in addition to an order barring her from serving as an officer or director of a public company.[76] The
charges against Heinen remain pending.

In late April 2007, the SEC announced that it would not bring action against Apple due to its "swift, extensive,
and extraordinary cooperation in the Commission's investigation." Most analysts took this statement to mean
that Apple was in the clear, and Steve Jobs personally read the statement to concerned shareholders at a
meeting.
 CULTURE

Apple was one of several highly successful companies founded in the 1970s that bucked the traditional notions
of what a corporate culture should look like in terms of organizational hierarchy (flat versus tall, casual versus
formal attire, et cetera). Other highly successful firms with similar cultural aspects from the same time period
include Southwest Airlines and Microsoft, and the relative success of these firms (whether a result of their
cultural differences or not) resulted in the widespread adoption of informal corporate culture within the
technology industry. Originally, the company stood in opposition to staid competitors like IBM more or less
by default, thanks to the influence of its founders; Steve Jobs often walked around the office barefoot even
after Apple was a Fortune 500 company. By the time of the "1984" TV ad, this trait had become a key way
the company differentiated itself from its competitors.

As the company has grown and been led by a series of chief executives, each with his own idea of what Apple
should be, some of its original character has arguably been lost, but Apple still has a reputation for fostering
individuality and excellence that reliably draws talented people into its employ, especially after Jobs' return.
To recognize the best of its employees, Apple created the Apple Fellows program. Apple Fellows are those
who have made extraordinary technical or leadership contributions to personal computing while at the
company. The Apple Fellowship has so far been awarded to a few individuals including
 USERS

According to surveys by J. D. Power, Apple has the highest brand and repurchases loyalty of any computer
manufacturer. While this brand loyalty is considered unusual for any product, Apple appears not to have gone
out of its way to create it. At one time, Apple evangelists were actively engaged by the company, but this was
after the phenomenon was already firmly established. Apple evangelist Guy Kawasaki has called the brand
fanaticism "something that was stumbled upon". Apple has, however, supported the continuing existence of a
network of Mac User Groups in most major and many minor centres of population where Mac computers are
available.

Mac users meet at the European Apple Expo and the San Francisco Macworld Conference & Expo trade shows
where Apple introduces new products each year to the industry and public. Mac developers in turn gather at
the annual Apple Worldwide Developers Conference.

Apple Store openings can draw crowds of thousands, with some waiting in line as much as a day before the
opening or flying in from other countries for the event. The New York City Fifth Avenue "Cube" store had a
line as long as half a mile; a few Mac fans took the opportunity of the setting to propose marriage The Ginza
opening in Tokyo was estimated in the thousands with a line exceeding eight city blocks.

John Sculley told The Guardian newspaper in 1997: "People talk about technology, but Apple was a marketing
company. It was the marketing company of the decade."

Market research indicates that Apple draws its customer base from an unusually artistic, creative, and well-
educated population, which may explain the platform’s visibility within certain youthful, avant-garde
subcultures.
 CRITICISM

Apple has received criticism for not notifying users of system vulnerabilities until a fix is released,[89] and has
been accused of pressuring journalists to release their sources, with regards to leaked information about new
Apple products. Apple also has received criticism for its iPhone and iPod integration with iTunes for not
facilitating creation of software to run and maintain those devices using different applications tools besides
iTunes. Apple also has been investigated and criticized for possible sweatshop conditions in factories in China
where contract manufacturers make its iPod . Apple also has received criticism and two class-action lawsuits
at both state and federal level about its iPhone product only allowed service through AT&T and the recent
software update that made the iPhone useless if it was to be unlocked using a different tool that cited
monopolistic and antitrust allegations between the two companies The Apple Newton was Apple's first foray
into the PDA markets, as well as one of the first in the industry. A financial flop, it helped pave way for the
Palm Pilot and Apple's own phone in the future.

By the mid-90s, Apple realized that it had to reinvent the Macintosh in order to stay competitive in the market.
The needs of both computer users and computer programs were becoming, for a variety of technical reasons,
harder for the existing hardware and operating system to address.

In 1994 Apple surprised its loyalists by allying with its long-time competitor IBM and CPU maker Motorola
in the so-called AIM alliance. This was a bid to create a new computing platform (the PowerPC Reference
Platform or Prep), which would use IBM and Motorola hardware coupled with Apple's software. The AIM
alliance hoped that Prep’s performance and Apple's software would leave the PC far behind, thus countering
Microsoft, which had become Apple's chief competitor.

As the first step toward launching the Prep platform, Apple started the Power Macintosh line in 1994, using
IBM's PowerPC processor. This processor utilized a RISC architecture, which differed substantially from the
Motorola 68k series that had been used by all previous Macs. Apple's OS was rewritten so that most software
for the older Macs could run on the PowerPC series (in emulation).

Throughout the mid to late 1990s, Apple tried to improve its operating system's multitasking and memory
management. After first attempting to modify its existing code, Apple realized that it would be better to start
with an entirely new operating system and then modify it to fit the Macintosh interface. Apple did some
preliminary work with IBM towards this goal with the Telligent project, but that project never produced a
replacement operating system. A new internal effort, Copland, ran afoul of Apple's now uncontrollable
engineering and became a massive failure. A fresh attempt was made with the Gershwin operating system.

In 1995 Apple tried to break into the gaming industry with the Apple Pippin. Despite the success of competing
game consoles like Sony PlayStation, Nintendo 64, and Sega Saturn, Pippin experienced very limited success
and as little as 5000 units were sold worldwide[27] and there was a very small variety of games available for
those who did own a console. Overall this was a failure for Apple; its scope was more general in purpose than
serious gaming, leaving the console expensive and underpowered compared with its rivals.
Next, the company considered its options for an operating system, investigating Be Inc.'s BeOS, NeXT's
NeXTSTEP OS, and also Microsoft's Windows NT. NeXTSTEP was chosen, and this supplied the platform
for the modern Mac OS X. On February 7, 1997, Apple completed its purchase of NeXT and its NeXTSTEP
operating system, in the process bringing Steve Jobs back to Apple.[28] On July 9, 1997, Gil Amelio was ousted
as CEO of Apple by the board of directors after overseeing a 3-year record-low stock price and crippling
financial losses. Jobs stepped in as the interim CEO and began a critical restructuring of the company's product
line.

At the 1997 Macworld Expo, Steve Jobs announced that Apple would be entering into partnership with
Microsoft. Settlement discussions regarding Apple's "Look and Feel" lawsuit and the QuickTime piracy
lawsuit resulted in a five-year commitment from Microsoft to release Microsoft Office for Macintosh as well
as a US$150 million investment in non-voting Apple stock. (This event is often inaccurately described as a
"bailout" of Apple by Microsoft. At the time Apple had a little over US$1 billion in cash and cash equivalents
according to their 10-Q statement.[29] Microsoft later sold its shares for a tidy profit.) Jobs also announced that
Internet Explorer would be shipped as the default browser on the Macintosh. Microsoft chairman Bill Gates
appeared at the expo on the large screen, explaining Microsoft's plans for the software they were developing
for the Macintosh, and saying that he was very excited to be helping Apple. This was met with a less than
positive response from the audience. Steve Jobs said:

If we want to move forward and see Apple healthy and prospering again, we must let go of a few things here.
We must let go of this notion that for Apple to win, Microsoft must lose. We must embrace a notion that for
Apple to win, Apple needs to do a really good job. And if others are going to help us that's great, because we
need all the help we can get, and if we screw up and don't do a good job, it's not somebody else's fault, it's our
fault. So, I think that is a very important perspective. If we want Microsoft Office on the Mac, we should treat
the company that puts it out with a little bit of gratitude; we like their software.

So, the era of setting this thing up as a competition between Apple and Microsoft is over as far as I'm
concerned. This is about getting Apple healthy, this is about Apple being able to make incredibly great
contributions to the industry and to get healthy and prosper again.[30][31]

On November 10, 1997, Apple announced a new online retail store, based upon the WebObjects application
server the company had acquired in its purchase of NeXT. The new direct sales outlet was also tied to a new
build-to-order manufacturing strategy and announced at the same time as new machines using the G3 PowerPC
processor.

On August 15, 1998, Apple introduced a new all-in-one Mac computer reminiscent of the original Macintosh
128K: the iMac. The iMac design team was led by Jonathan I’ve, who would come later to design the iPod
and the iPhone. While not ground-breaking from a technological standpoint, the iMac featured an innovative
new translucent plastic exterior, originally in Bondi Blue, but later many other colours. The iMac proved
phenomenally successful, selling close to 800,000 units in its first five months and significantly boosting the
company's revenue and profitability. Thanks in part to the iMac; fiscal 1998 was Apple's first profitable year
since 1993. Some consider the iMac an industrial design icon of the late 90s, and its designer, Jonathan I’ve,
has won awards for its innovation.

At the National Association of Broadcasters convention, Apple purchased the Final Cut software from
Macromedia, beginning its entry into the digital video editing market, and signalling a return to application
development after a decade long policy of delegating non-system software to its Claris subsidiary. iMovie was
released in 1999 for consumers, and Final Cut Pro was released for professionals in the same year. Final Cut
Pro has gone on to be a significant video-editing program. Similarly, in 2000 Apple bought Astarte's DVD
rector software, which morphed into iDVD (for consumers) and DVD Studio Pro (for professionals) at the
Macworld Conference and Expo of 2001.

In 2001, Apple introduced Mac OS X, the operating system based on NeXT's OPENSTEP and BSD Unix.
Aimed at consumers and professionals alike, Mac OS X aimed to marry the stability, reliability and security
of the Unix operating system with the ease of use afforded by a completely overhauled user interface. To aid
users in moving their applications from Mac OS 9, the new operating system allowed the use of OS 9
applications through Mac OS X's Classic environment. Apple's Carbon API also allowed developers to adapt
their OS 9 software to use Mac OS X's features often with a simple recompile.

Company headquarters on Infinite Loop in Cupertino, California.

On May 19, 2001, after much speculation, Apple announced the opening of the first official Apple Retail
Stores, to be located in major U.S. consumer locations. These stores were designed for two purposes: to stem
the tide of Apple's declining share of the computer market and to counter a poor record of marketing Apple
products by third-party retail outlets. The company faced challenges to balance the deployment of its own
retail stores with its dependence on, and the demands of, its existing channel partners and dealers. Apple slowly
built up the number of stores in the U.S., (now totalling 183 as of June 2007) later opening stores in Canada,
Japan, United Kingdom, recently Italy, and has plans for a France location. These efforts in retail succeeded
and proved to be very profitable, averaging annual returns of US$4,032 per square foot of every store, the
most in retail. These returns bested retail favourites such as Best Buy at $930 and Tiffany's at $2666.

On October 23, 2001 Apple introduced its first iPod portable digital audio player and released it on November
10 of that year. The product has proven phenomenally successful; over 100 million units have been sold.
Apple's iTunes Store was introduced soon after, offering online music downloads for US 99¢ a song and
integration with the iPod. The service quickly became the market leader in online music services, with over 3
billion downloads by August 2007.

In 2002 Apple purchased Nothing Real and their advanced digital compositing application Shake, raising
Apple's professional commitment even higher. In the same year they also acquired Magic, and with it, obtained
their professional-quality music productivity application Logic, which led to the development of their
consumer-level GarageBand application. With iPhoto's release in 2002, this completed Apple's collection of
consumer and professional level creativity software, with the consumer-level applications being collected
together into the iLife suite.

Apple's design team progressively abandoned the flashy colours of the iMac G3 era in favour of white
polycarbonate for consumer lines such as the iMac and iBook, as well as the educational eMac, and metal
enclosures for the professional lines. This began with the 2001 release of the titanium PowerBook and was
followed by the 2001 white iBook, the 2002 flat-panel iMac, the 2003 Power Mac G5, and the 2004 Apple
Cinema Displays. Divergent to this consumer/professional identity, the low-cost Mac mini has an aluminium
case while featuring the distinctive white polycarbonate top.

Targeted at a professional audience, the MacBook Pro (15.4" widescreen) was Apple's first laptop with an
Intel microprocessor. It was announced in January 2006 and hit the shelves around March. The less expensive
MacBook (13.3" widescreen) caters to the consumer market.

In the Worldwide Developers Conference (WWDC) keynote address on June 6, 2005, Steve Jobs officially
announced that Apple would begin producing Intel-based Mac computers beginning in 2006. Jobs confirmed
rumours that the company had secretly been producing versions of its current operating system Mac OS X for
both PowerPC and Intel processors for the previous five years and that the transition to Intel processor systems
would last until the end of 2008.

On January 10, 2006, Apple released its first Intel chip computers, a new notebook computer known as the
Mac Book Pro (with a 15.4" screen) and a new (though cosmetically identical) iMac with purportedly two to
three times faster performance compared with its predecessor. Both used Intel's Core Duo chip technology.
Later in February, Apple introduced the new Intel-based Mac mini, running up to four times faster and also
featuring Front Row, available with a Core Duo or Core Solo (single core) processor. In February 2006, the
Apple Online Store sold its last 17" iMac G5, Apple ended the life of its 15" PowerBook G4 on February 22,
2006, and the G4 Mac mini was removed from the Apple online store on February 28, 2006 and replaced with
the Intel Core Mac mini. On March 10, 2006 Apple retired the iMac G5 and on May 16, 2006, replaced the
iBook G4 and the 12" PowerBook G4 with the Mac Book. On August 7, 2006, the PowerMac was replaced
with the Mac Pro, completing the transition of all Mac computers, well in advance of their original prediction.
On September 6, 2006, Apple updated its iMac line to include new Intel Core 2 Duo processors, and adding a
model with a 24" screen to the line-up, as well as quietly bumping the speeds of their Mac mini. The Xserve
was transitioned in mid-November 2006. On October 24, 2006 the MacBook Pros were fitted with Intel Core
2 Duo processors as well, running up to 39% faster than the original Intel Core Duo MacBook Pros. The
MacBook’s were fitted with the Core 2 Duo processors on November 8, and run up to 25% faster than the
Core Duo ones according to Apple's tests.

Apple's current operating system, Mac OS X v10.4 "Tiger", runs natively on the new Intel machines, as do the
Darwin open source underpinnings. Many applications, such as iLife '06, also run natively on Intel chips.
Other applications (including Microsoft Office) which have not been updated to run on the Intel architecture,
run using a technology known as Rosetta. Because Rosetta is translation software that allows PowerPC
programs to run on Intel processors, these PowerPC programs run slower than native applications. Programs
compiled only for the PowerPC must be recompiled to run at full speed on the new Intel machines. Programs
that have been designed to run on both PowerPC and Intel chips can be certified by Apple as "Universal".[41]
The Intel-based machines also do not support Classic, which allows Mac OS X to run applications written for
OS 9 and earlier, so applications that require this environment will not run on these machines. Apple currently
has no plans to bring Classic support to the Intel platform.

The Intel chip also allows the new machines to run the Windows operating system. On March 16, 2006 a boot
loader CD image and a how-to for getting XP on your Mac Book Pro, iMac, or mini was released to the Internet
as an entry into a US$13,000 contest. Many hackers attempted over three months to win the prize by becoming
the first to run Windows natively on a new Intel Mac. The Intel-based Macs are now the only computers
officially capable of running both Mac OS X and Windows without emulation (a pre-release version of Mac
OS X for Intel was patched to run on non-Apple PCs through the OSx86 community; however such procedure
is not permitted by the Apple EULA). Further, on April 5, 2006, Apple announced a new piece of software
called Boot Camp that helps users install Windows XP on their Intel Mac alongside Mac OS X. Apple has
said that Boot Camp will be included, as standard, in Apple's next OS release (10.5, “Leopard”).

The first Intel-based Macintosh desktop: The iMac

The Apple/Intel partnership coined several catch phrases among Apple fans and technology reporters. Some
of the most widespread ones include "Mactel" and "Macintel", a response to the phrase "Wintel", which is an
informal moniker that describes all Intel-powered systems running the Microsoft Windows operating system.
Another is "ICBM", for "Intel-chip-based Mac." Apple itself has not publicly used these terms.

Apple's success during this period, beginning in 1997 (the first year the company turned a profit after losses
through 1995 and 1996), but accelerating between 2003 to 2005, was evident in its skyrocketing stock.
Between early 2003 and January 2006, the price of a share of Apple's stock increased more than tenfold, from
a little more than US$6 per share (split-adjusted) to more than US$80 per share. On January 13, 2006, Apple's
market cap surpassed that of Dell. Nearly ten years prior, in 1997, Dell's CEO, Michael Dell, had asserted that
if he ran Apple he would "shut it down and give the money back to the shareholders.

Delivering his keynote at Macworld 2007 (January 9, 2007), Steve Jobs announced a change of name: Apple
Computer Inc. would from that point be known as Apple Inc. The event also saw the announcement of the
iPhone, and the Apple TV. The following day, Apple shares hit US$97.80, then an all-time high. In May 2007,
Apple's share price passed the US$100 mark.

On February 7, 2007, Apple indicated that it would be willing to sell music on the iTunes store without Digital
Rights Management (DRM) protection (allowing tracks to be played on any compatible player) if major record
labels would agree to drop that anti-piracy technology. On April 2, 2007, Apple and record label EMI jointly-
announced the removal of anti-piracy technology from EMI's catalogue in the iTunes Store, effective in May.

The company’s investment in R&D, measured as a percentage of revenues, has declined over the past few
years. Though Apple investment in R&D has increased from $446 million in 2002 to $712 million in 2006, its
R&D investment as a percentage of total revenues has declined from 7.8% in 2002 to 3.8% in 2006. Microsoft
Corporation — one of the major competitors of the company — has invested 16.1% of its total revenues on
R&D, in the fiscal year 2007.

Apple introduced the Apple Macintosh family in 1984 and today makes consumer, professional, and
educational computers. The Mac mini is the company's consumer sub-desktop computer, introduced in January
2005 and designed to motivate Windows users to switch to the Mac computer platform. The iMac is a
consumer desktop computer that was first introduced by Apple in 1998, and its popularity helped save the
company. The iMac is similar in concept to the original Macintosh in that the monitor and computer are housed
in a single unit. It is now in its third major design iteration and has been upgraded many times (including a
switch to Intel processors) using the same design. The Power Mac brand was replaced in 2006 with the Mac
Pro, featuring two 64-bit dual-core Xeon "Woodcrest" processors, available in speeds of 2, 2.66, and 3 GHz.
The Mac Pro is capable of supporting up to four 750 GB hard drives for a total of 3 TB of internal hard disk
space and has 8 DIMM slots for up to 16 GB of RAM. On its promotional website, Apple says that the "Mac
Pro not only completes the Mac transition to Intel processors but delivers advanced performance, workstation
graphics, and up to 4.9 million possible configurations." Apple's server range includes the Xserve, a dual core,
dual processor 1U server, and the Xserve RAID for server storage options.

Apple introduced the iBook consumer portable computer as a companion to the iMac; it is Apple's lowest-cost
portable computer. The iBook brand was replaced on May 16, 2006 with the Mac Book featuring the Intel
Core Duo processor, 13 inch widescreen, and available black colour on the high-end model. The Mac Book
Pro is the professional portable computer alternative to the Mac Book. The Mac Book Pro is marketed as being
intended for professional and creative users and replaced the PowerBook models, which were introduced in
1991.

On October 23, 2001, Apple introduced the iPod digital music player. Initially equipped with a 5 GB hard
drive and a monochrome screen, models today can store up to 160 GB and display video, play games, and
support a wide range of third-party add-on devices. As of September 2007, Apple currently sells the iPod
shuffle. iPod Nano, iPod classic and iPod touch, as well as the iPhone which includes iPod functionality.

On July 13, 2006, Apple partnered with Nike to introduce the Nike iPod Sports Kit enabling runners to sync
and monitor their runs with iTunes and the Nike+ website. The 100 millionth iPod was sold on April 9, 2007.

At the Macworld Conference & Expo in January 2007, Steve Jobs revealed the long anticipated iPhone, a
convergence of an Internet-enabled Smartphone and video iPod. The iPhone combines a 2.5G quad band GSM
and EDGE cellular phone with features found in hand held devices, running a scaled-down versions of Apple's
Mac OS X, with various applications such as Safari web browser, e-mail, and navigation. The iPhone features
a 3.5 inch touch screen display, Bluetooth, Wi-Fi (both "b" and "g"), and comes in 4 and 8 GB models. The
iPhone first became available on June 29, 2007.

Additionally at the conference, Jobs demonstrated the Apple TV, (previously known as the iTV), a set-top
video device intended to bridge the sale of content from iTunes with high-definition televisions. The device
links up to a user's TV and syncs, either via Wi-Fi or a wired network, with one computer's iTunes library and
streams from an additional four. The Apple TV incorporates a 40 GB hard drive for storage, includes outputs
for HDMI and component video, and plays video at a maximum resolution of 720p. It was later updated to
include a 160 GB drive for even more space for media.

Apple sells a variety of computer accessories for Mac computers including the AirPort wireless networking
products, Apple Cinema HD Display and Apple Displays computer displays, Mighty Mouse and Apple
Wireless Mouse computer mice, the Apple Wireless Keyboard computer keyboard, and the Apple USB
Modem. The Apple wireless mouse was replaced by the wireless Mighty Mouse.

The current iPods, Apple's most successful product line. Shown here, (left to right) the iPod shuffle, iPod
Nano, iPod classic and iPod touch.

Since 2004, Greenpeace has attacked Apple for not setting a timeline to remove PVC and BFRs, which still
exist in recent products such as the iPod Nano and MacBook; and for not promoting a global end-of-life take
back plan for Apple hardware (although it does within Europe and Japan where this is required by law); as
well as for not having reusable components. As of December 2006, Greenpeace ranked Apple last out of ten
electronics companies in dealing with toxic substances in their products, mostly due to a lack of relevant
documentation and timelines. On May 2, 2007, Steve Jobs released an open letter named A Greener Apple,
responding to some of the allegations. In his letter, Jobs stated:

In one environmental group’s recent scorecard, Dell, HP and Lenovo all scored higher than Apple because of
their plans (or “plans for releasing plans” in the case of HP). Apple is ahead of all these companies in
eliminating toxic chemicals from its products.

A study in January 2006 by the United States Environmental Protection Agency found that Apple's hardware
compares favourably with that of its major competitors on environmental friendliness.

On June 5, 2007, Apple updated their MacBook Pro product line. This hardware update is environmentally
notable because LEDs fully replaced cold cathode lamps in the 15 inch MacBook Pro's display backlighting,]
a first for Apple laptops (the iPod has had LED backlighting since its creation in 2001). This ameliorates
Apple's environmental stance, as cold cathode lamps do contain mercury, whereas LEDs do not.

Former Vice President of the United States and environmentalist Al Gore is a member of Apple's board of
directors.
Apple develops its own operating system to run on Macs, Mac OS X. Apple also independently develops
computer software titles for its Mac OS X operating system. Much of the software Apple develops is bundled
with its computers. An example of this is the consumer-oriented iLife software package which bundles iDVD,
iMovie, iPhoto, iTunes, GarageBand, and iWeb. For presentation and page layout, iWork is available, which
includes Keynote, Pages, and Numbers. iTunes, QuickTime media player, and Safari web browser are
available as free downloads for both Mac OS X and Windows.

Apple also offers a range of professional software titles. Their range of server software includes the operating
system Mac OS X Server; Apple Remote Desktop, a remote systems management application; WebObjects,
Java Web application server; and Xsan, a Storage Area Network file system. For the professional creative
market, there is Aperture for professional RAW-format photo processing; Final Cut Studio, a video production
suite; Logic, a comprehensive music toolkit and Shake, an advanced effects composition program.

Apple also offers online services with .Mac which bundles .Mac Homepage, .Mac Mail, .Mac Groups, .Mac
iDisk, .Mac Backup, .Mac Sync, and Learning Centre online tutorials.

Critics of Apple commonly point to their vertically-integrated business model, where all the hardware and
operating system software comes from one company. Although the Apple II was very open, the Macintosh
was originally closed and proprietary, and during the Mac's early history Apple generally refused to adopt
prevailing industry standards for hardware, instead creating and implementing their own (for example, ADB
and NuBus).

This trend was largely reversed in the late 1990s beginning with Apple's adoption of the PCI bus in the
7500/8500/9500 Power Macs. Apple has since adopted USB, AGP, Hyper Transport, Wi-Fi, and other industry
standards in its computers and was in some cases a leader in the adoption of such standards. FireWire is an
Apple-originated standard which has seen widespread industry adoption after it was standardized as IEEE
1394.

However, the iPod remains a mostly closed and vertically-integrated platform. Although Apple provides
documented interfaces for hardware accessories, developers have no supported way to add features to the
software (such as decoding of additional formats). Although the iPod supports the mainstream MP3 and AAC
formats, there is not support for other proprietary formats, like Windows Media (this can be converted to AAC
with iTunes on Windows), RealAudio and the open Ogg Vorbis format. Apple has refused to license its Fair
Play DRM system to other online music vendors.[46] The company added Windows PC support with their
second generation iPod series.

Ever since the first Apple store opened, Apple has wanted third parties to sell their products and software
inside their stores. This allows, for instance, Nikon and Canon to sell their Mac-compatible digital cameras
and camcorders inside the store. Adobe, the largest Apple software partner, also sells its Mac-compatible
software, as does Microsoft, who sells Microsoft Office for the Mac. A notable exception are books published
by John Wiley & Sons. The publisher's line of books were banned from Apple Stores in 2005 because Steve
Jobs disagreed with their editorial policy.

"Apple is committed to bringing the best personal computing experience to students, educators, creative
professionals and consumers around the world through its innovative hardware, software and Internet
offerings."

Modified Mission Statement

"Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal
computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its
award-winning computers, OS X operating system and iLife and professional applications. Apple is also
spearheading the digital media revolution with its iPod portable music and video players and iTunes online
store and has entered the mobile phone market this year with its revolutionary iPhone.

Apple Inc.'s world corporate headquarters are located in the middle of Silicon Valley, at 1 Infinite Loop,
Cupertino, California. This Apple campus has six buildings which total 850,000 sq. ft (79,000 m²). and was
built in 1993 by Sobrato Development Cos. In 2006, Apple announced its intention to build a second campus
on 50 acres assembled from various contiguous plots. The new campus, also in Cupertino, will be about one
mile east of the current campus
 CHAPTER NO.4

DATA ANALYSIS, INTERPRETATION AND PRESENTAION

 DATA ANALYSIS, INTERPRETATION AND PRESENTAION

To study the promotional strategies of various brands only newspapers were studied due to practical
limitations. Four newspapers were studied for a period of one month from 5th May to 15th June 2007. 2 of them
were English Newspapers i.e. Times of India and Hindustan Times and 2 Hindi Newspapers i.e. Dainik
Bhaskar and Rajasthan Patrika.

(Assumption: Advertisement published by individual dealers was not taken into consideration, only the
advertisements given by the branch offices or Head office were studied.)

Comparison based on type of advertisements:

Graph of different type of advertisement of various brands is plotted below. From the graph it can be concluded
that LG has maximum variety in advertisement. Over a period of one-month LG published 15 different types
of advertisement, followed by Samsung having 10 type of advertisement.

GRAPH 1:

Different types of advertisment of various brands

16 15
Types of advertisment

14
Dell

12
microsoft
10
10
Lenovo

8 7 Apple

6
Samsung
4 4
4 3 HP
2 2
2
Sony

0
Gateway

Brands
Comparison based on total number of advertisements:

Graph of total number of advertisements of various brands is plotted below. From the graph it can be concluded
Apple published a total of 32 advertisements, which is maximum in number. After Apple other brands are left
far behind with Samsung and Gateway having 19 and 18 advertisements respectively.

Graph 2

Brand - wise classification of advertisment

35 32

30
Total advertisments

25
19 HP
20 18
Sony
15
Dell
10 7 8
6 Apple
5 4
5 Samsung

0 Gateway

Brands Microsoft

Lenovo
comparison of advertisement based on Newspapers:

Total no. of advertisements of individual brands in different Newspapers is noted percentage-wise. DB

publishes total 34 advertisements of the total 99 advertisements published in all 4 newspapers, i.e. 34%.

DB is preferred by Samsung and Lenovo, which gives 60% and 45% of its total advertisement in DB
respectively.

HT is preferred by Microsoft, Gateway and Sony as they all give 50% of their advertisement in HT.

RP is preferred by HP and Apple as each of them gives 40% of their advertisement in RP.

TOI is preferred by Dell and Lenovo, which gives 55% and 45% of its total advertisement in TOI respectively.

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0% TOI RP HT DB
1 2 3 4 Chart5Title 6 7 8
Graph 3

comparison of advertisements based on days:

Graph of total number of advertisements of various brands published on different days is plotted below. From
the graph it can be concluded that 13 advertisements are given on Fridays, which is maximum in number.

Apple prefers giving its advertisement on Saturdays and Sundays, it gives 21% of its advertisement on each
of these days.

Samsung prefers Friday for giving its advertisement as it gives 26% of its advertisement on Fridays.

Lenovo prefers Wednesday for giving its advertisement as it gives 22% of its advertisement on Wednesdays.
 80
70
EFFECTIVE ADVERTISEMENT
60 BETTER VARIETY

50 TAKE CARE OF HEALTH

BETTER QUALITY
Points 40 GOOD BRAND EQUITY
BETTER AFTER SALES SERVICES
30 EASY TO USE
DURABLE
20 MORE FUCTIONS
BETTER APPEARANCE
10 HIGH COST

0
Factors
Perception towards products of LG:
Consumers were asked to rate various factors of Apple products and their response was measured and plotted.
From the figure it is observed that Apple products were perceived to have high cost, better quality and have
high brand equity.
Apple Inc. SWOT Analysis & Recommendations

An Apple Wireless Keyboard (German language) and Magic Mouse. A SWOT analysis of Apple Inc. shows
that the business is strong but must address the threats of competition and imitation in the computer
technology, cloud services, digital content distribution, and consumer electronics industries. (Photo: Public
Domain)

Apple Inc.’s success is linked to the ability to use business strengths to overcome weaknesses and threats, and
to exploit opportunities in the industry environment. A SWOT analysis of the company gives insights on the
strategic actions of the business, especially in maximizing its growth based on its strengths and opportunities.
The SWOT analysis framework is a strategic management decision-making tool that determines the most
pressing issues facing the company, based on the internal business conditions and the external environment.
In this case, the SWOT analysis of Apple Inc. scans the business for relevant strengths, weaknesses,
opportunities, and threats (SWOT variables), with reference to various industries and markets. The company
is involved in the computing technology (hardware and software), consumer electronics, cloud computing
services, and online digital content distribution services industries. This condition necessitates that Apple
develop a diverse set of strategies to ensure its competitiveness and business growth.

This SWOT analysis of Apple Inc. presents the strategic factors that influence the decisions of CEO Tim Cook
and managers in developing the business. With its operations in various markets around the world, the
company deals with different sets of SWOT factors based on regional situations. Also, the Porter’s Five Forces
analysis of Apple Inc. establishes that the company faces the strong force of competition linked to the
aggressiveness of other technology firms, such as Google, IBM, Amazon.com, Samsung, Sony, Lenovo, Dell,
and PayPal. This competitive landscape requires innovative strategies and tactics to achieve continuous
business growth and development, and to fulfil Apple’s corporate mission statement and corporate vision
statement.
Apple’s Strengths (Internal Strategic Factors)

This aspect of the SWOT analysis framework identifies the strengths that enable the company to overcome
weaknesses, take advantage of opportunities, and withstand threats in its business environment. These
strengths are internal factors specific to the conditions within the business organization. In this case, the
following are the most notable strengths of Apple Inc.:

1. Strong brand image

2. High profit margins

3. Effective rapid innovation processes

Apple is one of the most valuable and strongest brands in the world. In the context of this SWOT analysis, the
company can introduce profitable new products by its strong brand image. In addition, Apple’s marketing mix
or 4P involves the premium pricing strategy, which comes with high profit margins. This internal strategic
factor is a major strength because it maximizes profits, even when sales volumes are limited. Moreover, the
generic competitive strategy and intensive growth strategies of Apple Inc. involve effective rapid innovation,
which enables the business to keep abreast with the latest technologies to ensure competitive advantages.
Based on this aspect of the SWOT analysis of Apple Inc., the company’s strengths are difficult to compete
with, thereby supporting continued leadership in the global industry environment.
Apple Inc.’s Weaknesses (Internal Strategic Factors)

In this aspect of the SWOT analysis, the emphasis is on the weaknesses or inadequacies of the company.
Weaknesses are internal factors that are obstacles to business growth. The following business weaknesses are
the most notable in the case of Apple:

1. Limited distribution network

2. High selling prices

3. Dependence of sales on high-end market segments

Apple Inc. has a limited distribution network because of the company’s policy of exclusivity. For example,
the company carefully selects the authorized sellers of its products. The SWOT analysis framework considers
this exclusivity strategy as a factor that limits market reach. This weakness exists despite exclusivity’s
advantages, such as Apple’s strong control on the distribution of products. In addition, because of its premium
pricing strategy, the company has the weakness of the dependence of sales on high-end market segments. High
prices attract customers from the middle- and high-income brackets, while preventing customers from low-
income brackets to easily purchase the company’s products. This internal strategic factor is a considerable
weakness because high-end market segments represent only a minority of the global market. Based on the
internal factors in this aspect of the SWOT analysis, Apple Inc.’s pricing and distribution strategies impose
limitations or weaknesses in the business.
Opportunities for Apple Inc. (External Strategic Factors)

This aspect of the SWOT analysis of Apple Inc. pinpoints the most significant opportunities that are available
to the business. Opportunities are external factors based on the industry environment. These factors influence
the strategic direction of business organizations. In Apple’s case, the following are the most significant
opportunities:

1. Expansion of the distribution network

2. Higher sales volumes based on rising demand

3. Development of new product lines

Apple Inc. can expand its distribution network. Such opportunity directly relates to the weakness of the
company’s limited distribution network. This SWOT analysis emphasizes the need for the company to change
its distribution strategy. An expanded distribution network can help Apple reach more customers in the global
market. In relation, the company can increase its sales volumes through aggressive marketing, especially for
mobile products. This opportunity is linked to the rising demand for mobile access, as illustrated in the
PESTEL/PESTLE analysis of Apple Inc. Furthermore, the company can explore new product lines. Its current
product lines are highly successful. However, with further innovation, the company can develop and introduce
new products, like what it has already achieved with the Apple Watch. Developing new product lines can
support business growth in the international market. Thus, this aspect of the SWOT analysis of Apple indicates
that the business has major opportunities for further growth despite aggressive competition.
Threats Facing Apple Inc. (External Strategic Factors)

In this aspect of the SWOT analysis, the focus is on the threats that the company experiences from various
sources, such as competitors. Threats are external factors that limit or reduce the financial performance of
businesses. In Apple’s case, the following threats are the most significant:

1. Aggressive competition

2. Imitation

3. Rising labour cost in various countries

Tough competition in the industry is partly because of the aggressiveness of firms. Apple competes with firms
like Samsung, which also uses rapid innovation. In the context of this SWOT analysis, aggressive competition
has a limiting effect on Apple Inc. Because of the aggressive behaviours of competing firms, it is necessary to
have strong fundamentals for maintaining competitive advantages. In addition, the company faces the threat
of imitation. This threat is significant because of the large number of local and multinational firms that imitate
the design and features of Apple’s products. Moreover, rising labour costs involving contract manufacturers,
such as those in China, reduce profit margins or push selling prices even higher. Based on the external strategic
factors in this SWOT analysis, Apple Inc.’s performance could suffer because of aggressive competition and
imitation of product design.
 CHAPTER NO. 5

CONCLUSIONS AND SUGGESTIONS

CONCLUSION

The result of success in today’s highly charged competitive market depends not only in product innovation
and level of productivity but also in hands of efficient service network with technological advancements and
more adaptability towards information edge.

It has been seen that companies are trying to lower the cost of production and trying to give more emphasis in
creating value added customer base and customer service. It has led to extreme innovation and cost reduction
to the marketer. It is also seen during last few years that the companies, which have more, efficient, and
meaningful service network and the companies who have controlled the cost of distribution have eventually
controlled the market. Companies are finding that they can attract more customers by giving better service or
lower prices through better physical distribution. On the other hand, companies may lose customers when they
fail to provide service to its customers at the right time because a satisfied customer brings five new customers
while a dissatisfied customer takes away fifty.

In order to multiply sales volume, only an efficient dealer and retail network can widen the geographical reach
of a company’s products. There is substantial over capacity in the industry. A shakeout is most likely, and
survival will depend upon technology, pricing power, efficient after sales service and to a limited extend
branding power.

One thing has become quite clear now, strategic marketing is critical for survival and growth. Assessment of
environmental information and determining the relative significance of threats and opportunities is an
important aspect carried by all the major players. For this preparation of a profile of threats and opportunities
is done:

Environmental Threats:

 Competition- Indian market is becoming highly competitive after the globalization; MNC’s are giving
very high competition to the Indian domestic brands.

 Value for money- Indian market is very price sensitive, customer’s value for their money.

 Distribution channel- Every company concentrates on its strong distribution.

Environmental Opportunities:

 Building Brand- Company’s image and brand name plays a great role in the purchasing behavior of
consumers. Every company tries to increase their brand name.

 Untapped rural market- Certain market surveys show that market is growing at the rate of around 25%,
so company’s in this category and are trying to tap this big market.

 Technology- These days the customer preference is taking a shift to technological awareness, they do not
any more rely on the technology heard, rather they have the potential to get aware, and analyze the same and
adapt them.
 Socio Economic Condition is a major aspect which is giving a boom to the Consumer durable industry,
the purchasing power and the expenditure in entertainment of the customer is increasing day by day.

 CRM- Customer Relation Management is another area where all companies are trying to make their
imprint.
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