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Innovation Computer Industry
The nature of the computing industry has transformed drastically since the introduction of Very Large Scale Integration (VLSI) in producing microchips. This introduction of new technology enabled the rise of several companies involved with the use of VLSI to make high performance calculating machines. Steve Jobs and Stephen Wozniak were the founders of Apple Computer in 1976. At this time they had successfully built their first computer. Their computers originally were intended for personal use, by re programming and remodelling the already existing technical machines that were mainly used in industry they had successfully formed a simplistic alternative. The company approached firms with their new designs and were rejected. Apple did not stop there; they acquired investment from a venture capitalist to produce the first practical product, Apple II. This new Model was the first computer to have a floppy disk drive, which now targeted a lager market as users could freely transfer data and information from one computer to another. It was also made more attractive and appealing thus giving Apple Computer a large competitive advantage in the market.
During Apples earlier years several problems occurred. The drastic innovation they originally created produced a surge in the company’s growth, which couldn’t be handled by its existing organizational structure. Apple also suffered finically due to a bad decision on stock options. This reflected badly on Steve Jobs who was trying to manage the situation that required a whole team to tackle. He was dismissed shortly after and replaced by John Sculley.
Apply made its self a Public Company in 1980 during which several big competitors like IBM entered the market. This increase in completion made it hard for Apple as their sales of some of their products were falling. In to this, Jef Raskin a senior engineer produced an innovative user interface that involved the use of a device called a mouse which was used to graphically incorporate the user interface. This new technology was very user friendly as compared to the original keyboard interface. This technology was also incorporated in the operating system of Apples competitors Microsoft. This now increased the rivalry between Apple and Microsoft. Apply continually suffered from bad sales which lead them to seek other markets and use other means of marketing. During the 1984 Super Bowl apple strategically placed there own opening advertisement during the event. This was an unconventional and new scheme of marketing. Apple managed to secure growth back by moving towards the education sector, by donation of one Apple II and one Apple LOGO software package to each public school. ‘The initial conquest of education environments was critical to Apple's acceptance in the home where the earliest purchases of computers by parents was in support of children's continued learning experience.’
In 1985 Jobs resigned from apple so as to found his own new firm NeXT in the same computer market. NeXT didn’t do as well as expected as Jobs would have wanted because of the highly priced products produced by NeXT. It can be safe to say that Jobs at the time over looked the business aspect of his company. In 1997 Apple acquired NeXT thus bring back Jobs back for exile. His return to Apple also meant the return of the highly innovative expertise from NeXT.
During the early 90’s Apple tried to enter the Palm top market but to no avail as they were totally out of their leagues as compared to the very fast and efficient products from Palm. Jobs made a big change at this time so as to try and recover from the large losses. The production line was reduced and bonuses were eliminated. Jobs launched the ‘Think Different’ Champaign in order to spark innovation, which ultimately lead to the introduction of the G3 in 1999. This high performance computer took Apple from Losses to soaring profits in the first year of release. This high profitability made Apple expand by building retail stores all across the United States. All these positive aspects made Jobs a CEO of Apple in 2000. With his appointing and his vast knowledge of the industry he was able to predict that the market will be flooded with new competitors and therefore he branched of into newer sectors. At this time the CD, as a medium of compact data storage was now being over run by new technologies of data compression like the mp3CDs and devices. This made Apple produce there first mp3 player in 1997. The first iPod was introduced in 2001 which practically dominated the digital audio market because of its minimalist user interface and with its very large storage capacity. This domination hungered Apple to go into the telecoms market and dominate there, which they did with the long awaited and very successful iPhone.
Position
Today Apple is literally an iconic company within the electronic industry. Look at the iPod: the company name appears only in the small print. Some of the power of its brand comes from the extraordinary story of a computer company rescued from near-collapse by its co-founder, Steve Jobs, who returned to Apple in 1997 after years of exile, reinvented it as a consumer-electronics firm and is now taking it into the billion-unit-a-year mobile-phone industry. Companies within the computer industry tend to focus on the manufacture of hardware but not both hardware and software. They believe that it is not economically viable to go into both and remain profitable.
Apple finds it very important to vertically integrate the firm on the basis of both software and hardware; this can be seen in the self-sustained machine Mac PC which can only run with Apple software. This gives Apple full control forcing users to buy software only produced by Apple and thus creating product loyalty. The Mac’s competitive position was enhanced as it responded to a real market opportunity via Apple making it more user-friendly than the existing DOS-based PCs at the time. Apple had strong competitive advantage that lasted, because as with the Mac, all hardware and software was produced in-house. Most other firms did one or the other. It was difficult to imitate the level of integration, therefore impossible imitate such things as the user-friendliness of their design.
Jobs and Wozniak in the past always made computers including its functionality that suited them personally. It portrayed how they want to use them and for what reasons. They originally made these computers as hobbies to see if they could make it work as a form of entertainment, and now make computers for basic users. At that time IBM were their main competitors of Apple manufacturing highly complex computers mainly used for industry that required technical expertise to operate them, they did not think of the basic user market. This gives evidence that Apples management mindset was innovative in itself and that IBM were not interested in manufacturing for the general public use. The basic user market was far greater than thin industrial market. IBM then tried to join the market but was shadowed by Apple because they simple moulded their already existing machines to suite the general user market new to them, were as Apple with its experience and research had understood the market far more better and produced more appealing and user-friendly PCs. This did not stop other competitors to try and capture the market so Apple strategically lowered prices when a new firm would enter so as to completely dominate that market. Apple also formed strategic alliances with the competitors like Microsoft so as to maintain a competitive advantage. For example Apple used some Microsoft software in the Apple II, Word the Microsoft based word-processing program is adapted to the iMac as a different version called Word:Mac which is basically the same but made to run on the iMac. In the new gaming consol the X Box, Microsoft used the exact processor from the Mac, which made the gamming consol a high performing machine that brought Microsoft instant success in the gaming market.
Apple has accidentally standardized various things on the PCs today. Like the original “Bondi Blue” iMac featured a 233 MHz PowerPC 750, a maximum of 256mb of Ram, 2 USB ports. These USB ports being the only device inputs on the iMac were revolutionary at the time. The iMac’s success really helped popularize the interface among third party peripheral makers, which is evidenced by the fact that many early USB peripherals were made of translucent plastic to match the iMac design, and are the general input ports for keyboards, mousses and a wide variety of devices. One of their biggest and oldest parts suppliers and factories of Apple is Foxconn/Hon Hai situated in China providing the highest quality products like the iPod. Apple has developed an entire ecosystem of suppliers who support their business operations. Their goal is to obtain stellar products and services within tight timeframes, at a cost that represents the best possible value to customers and shareholders.
As of September 2007, the company operates about 200 retail stores in five countries and an online store where hardware and software products are sold. The iTunes Store provides music, music videos, television programs, movies, podcasts, iPod games, and audiobooks, which can be downloaded using iTunes on Mac or Windows, and also on the iPod touch and the iPhone. Apple has established numerous patents that range from the new innovative displays and the scroll wheel on the iPod; these are but a few of the intellectual property rights they use to protect their products and innovations.
At present Microsoft is considered as the market leaders because of their very successful operating system which has been accepted as the global standard. But Apple has managed to be at the top with Microsoft and is making the public aware that an iMac is an alternative to a PC. ‘The history of Apple has been littered with brilliant innovations which were ruined by poor marketing strategies. It has often been commented that Apple Computer has brilliant design and lousy marketing, while Microsoft has lousy design and brilliant marketing. Apple's "hippie" legacy, which gave Apple its casual dress code and incredible development enthusiasm, may have also played a major role in retarding its success in the market. By rejecting the importance of the bottom line as a "heartless" capitalistic cruelty, Apple may well have lost its ability to compete successfully because it is unable to respond to the realities of the market.’
Process
Apple has adopted a closed business model as compared to competitors in the market.
All of Apples products and services are only accessible with software or hardware they have manufactured. Like the iPod were you can only input song thought the iTunes program. It can also be seen about the Apple operating system OS X which can only be installed in the iMacs and not the DOS-based PCs. This is a very strategic aspect as Apple can benefit for the sales of both there software and hardware. By make preventing users, users have no alternative but to stick with Apple, this rakes in profits as well. Apple has targeted a very specific market and could have been able to be a monopoly of the industry but due to mishaps and bad decisions in the past it has now focussed to target the market of consumers who use high performance, stylish and innovative products. The iPhone is a good example as this revolutionary cellular phone contains most of what you would find on your computer but delivering it with a high performing user-friendly interface. The iPhone is tide with one specific mobile subscriber which they chose on the basis of its high performance and excellent network coverage. Like AT&T in the US and o2 in the UK.
Apple in the last few years developed the iPod and the iPhone. These were very large shifts for Apple. Apple had now entered a completely new industry and market which was very different compared to the PC market. The iPod was an instant success which spilled over to the iPhone before it was even realised. Apple sparked interest in the market by making their stores a place were the actual PCs and products could be touched and used freely. This gives the customer something tangible to use in terms of decision making. This is how many innovations are discovered. Apple uses analogies and metaphors to create new understandings and conceptualizations. Apple continually takes other innovations and makes them into better products by re-innovating and asking themselves and the market different questions. Steve Jobs is a big believer in the All-In-One solution for computers. Apple has almost always had an All-In-One of some sort on the market since the very first model, the Lisa, hit the shelves in 1983. The 20th Anniversary Macintosh another extremely expensive addition to the All-In-One legacy. The 20th Anniversary Mac cost $10,000 but for that $10k you not only received an amazing machine with a BOSE sound system and unique design - the Mac was also delivered to your house by a man in a tuxedo, who would then set the system up for you. This Mac also recently made an appearance in the film “Children of Men”.
By 1996 usage of the word Internet and the World Wide Web had become commonplace, and this had now opened an extremely large market. Selling and buy not was done electronically. Apple identified a key market of selling media, software, and hardware online. At about the same time when the iPod was realised iTunes hit the market. iTunes has jointly benefited with the iPod and is now the largest media store online. The fact that iPods can only function with the iTunes player, the firm has been able to retain its competitive advantage. There are a few competitors emerging in the online media market like Amazon, who provide the same service and at competitive prices like iTunes. But Amazon is targeting the market that uses other means of media data storage like Sony mp3 players. These other media players take up the small percentage of the market due to the fact that the iPod has been given the image that it is the best means of playing music and now even moved towards watching movies on the high definition screens. Apple has made it hard for competitors to shine through with new innovation because they have incorporated it all ready in their products.
Apple uses several dynamic marketing and pricing strategies for all their products and services. Good examples of their marketing are its adverts which sometimes use a famous person to promote the product which in itself sparks demand for the product and the Apple stores that allow first hand experiences with the products are a form of marketing. Their pricing strategy can be seen when the iPod was first launched. It was an extremely good seller which reflected the high demand for the media player. Further into the months it was on the market, Apple reduced the prices of the iPods so as to completely eradicate the competition this boosted its already large market share of the market.
In the very competitive market of innovation Apple has always not shared its secrets and has kept it employees involved with the innovative possess by employing the smartest and most creative engineers, programmers and designers. The only time the firm dose publicizes their innovation is when trying to create hype for the product before it hits the market, so as to build up the demand to a high level that Apple could set a very outrageous price and it would still sell well. This can be seen with the iPhone and iPod Nano. Apple wants to be at the cutting edge of innovation within the industry.
Get help with your essay from our expert essay writers...Apple was in the past an inventive company that has now transformed into an innovative company. Apple has firmly placed its self at the forefront of the innovative industry. This is ensured by the way Apple looks at every stage of it s production process and makes sure that they remain innovative with a precise understanding of what the market actually wants and demands. Although the innovation processes of the firm have seemed to be progressive and creatively productive, the actual management of innovation has, at times been a threat to the company itself. Steve Jobs has been a key player in the running of Apple because he had the vision of where and how the industry is going towards and tries to be the first into the market. His technical expertises were greatly required to bring Apple to today. As compared to other firm who try to get a product into the market faster, leading to problems and defects arising from within the products, Apple take into account the problems before they arise. For example the Microsoft operating system has know to generate an error that is called ‘ the blue screen of death’, Apple Mac PCs never crash or freeze up. Apple think of original ideas were as firms like Microsoft don’t create culture into their products. If it wasn’t for the Mac there would never have other products. Apple is aimed at a consumer market were as Microsoft is aimed at an enterprise market. Apple will be continually investigating where the next generation of innovation may lie. Every day Apple in engaged with new personnel who bring in all sorts of valuable input into Apple, these fresh minds is where the next innovation Apple will pioneer.
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