AL-FALAH SCHOOL OF ENGINEERING.

&
TECHNOLOGY

SUMMER TRAINING REPORT

ON

A STUDY OF THE MARKETING STRATEGIES AND

SCOPE OF APPLE COMPUTERS
Submitted to department of management studies in
Partial fulfillment of the requirements for the Award of Degree
of

Bachelor of Business Administration

UNDER THE SUPERVISION:

SUBMITTED BY:

MOHD. KHALID KHAN

(Asst. Professor)

RAFAKAT
CLASS: BBA 5TH SEM.(2011-2014)
ROLL No. BBA/10/43

AL-FALAH SCHOOL OF ENGINEERING. & TECHNOLOGY

DHAUJ, FARIDABAD

DATE OF SUBMISSION:2013

DECLARATION
I Rafakat, Roll No. BBA/10/43 of Bachelor of Business Administration of the Al falah
School of Engineering & Technology hereby declare that the Summer Training project
report entitled A STUDY OF THE MARKETING STRATEGIES AND SCOPE OF
APPLE COMPUTERS is an original work and the same has not been submitted to
any other institute for the award of any other degree. A seminar presentation of the
Summer Training Project Report was made on and the suggestion as
approved by the faculty duly incorporated.

Presentation Incharge

Signature of the Candidate

(Faculty)
Countersigned
Director/principal of the Institute

ACKNOWLEDGEMENT
I would also like to thanks college faculty for cooperating with me and be there when
ever I needed their kind support and help.
Last but not the least I would like to thank all the respondents who took out time from
there busy schedules to help me in my project, this project could not have been a success
without them.

TABLE OF CONTENTS
PAGE NO.
1) Introduction To The Industry

2) Introduction To The company

3) Research

13

a) Objective

13

b) Scope Of The Study

13

c) Significance of the study

14

d) Sampling Methodology

15

e) Limitations

16

4) History Of Apple Computers

18

5) Fact , Findings , Data Analysis& Interpretation

19

6) Literature Review

25

A DIFFERENTIATION STRATEGY

A SKIMMING STRATEGY

A MARKET PENETRATION STRATEGY

A COMPARABLE PRICING STRATEGY

7) Current Products

28

8) Advertising

36

9) Culture

40

10) Users

41

11) Criticism

42

12) Conclusion

55

13) Bibliography

57

14) Annexure

58

a. Questionnaire

INTRODUCTION TO THE INDUSTRY

Apple Computer is an American multinational corporation with a focus on designing
and manufacturing consumer electronics and closely related software products.
Headquartered in Cupertino, California, Apple develops, sells, and supports a series of
personal computers, portable media players, computer software, and computer hardware
accessories. Apple also operates an online store for hardware and software purchases, as
well as the iTunes Store, which sells digital downloadable music, audio books, games,
music videos, TV shows, and movies. The company's best-known hardware products
include the Macintosh line of personal computers, the iPod line of portable media
players, and the iPhone. Apple's software products include the Mac OS X operating
system, the iLife suite of multimedia software, and Final Cut Studio, a suite of
professional audio- and film-industry software products.
Apple had worldwide annual sales in its fiscal year 2007 (ending September 29, 2007) of
US$24.01 billion.
The company, incorporated January 3, 1977, was known as "Apple Computer, Inc." for
its first 30 years. On January 9, 2007, the company dropped "Computer" from its
corporate name. The change followed Apple's announcement of its new iPhone
Smartphone and Apple TV digital video system and reflects the company's ongoing
expansion into the consumer electronics market in addition to its traditional focus on
personal computers.
Apple also operates 183 (as of June 2007) retail stores in the United States, and more in
the United Kingdom, Japan, Canada, and Italy. The stores carry most of Apple's products
as well as many third-party products and offer on-site support and repair for Apple
hardware and software. Apple employs over 20,000 permanent and temporary workers
worldwide.

For a variety of reasons, ranging from its philosophy of comprehensive aesthetic design
to its countercultural, even indie roots, as well as their advertising campaigns, Apple has
engendered a distinct reputation in the consumer electronics industry and has cultivated a
customer base that is unusually devoted to the company and its brand, particularly in the
United States. Consumer durable industry is one of the most lucrative industry and is
rapidly growing. The Indian economic industry witnessed proliferation of global
companies in the national scene, liberalization of Indian economy coupled with the media
explosion ushered in a new era of consumerism, increased purchasing power and leads to
the creation of budding consumer durable market.

INTRODUCTION TO THE COMPANY

Computers are still an important part of its mix, but these days music-related products are
at the top of Apple's playlist. The company scored a runaway hit with its digital music
players (iPod) and online music store (iTunes). Apple's desktop and laptop computers all
of which feature its OS X operating system -- include its Mac mini, iMac, and MacBook
for the consumer and education markets, and more powerful Power Mac and MacBook
Pro for high-end consumers and professionals involved in design and publishing. Other
products include mobile phones (iPhone), servers (Xserve), wireless networking
equipment (Airport), and publishing and multimedia software. Its FileMaker subsidiary
makes database software.
PHILOSOPHY:

To compete in international market with a global mindset.

Maximize value for customers, employees and shareholders.

Pursue the best in the class through management by principle.

Contribute to society through good corporate citizenship.

Apple Computer Company History

Apple Computer is one of the pioneers of the technology industry. Headquartered in
Cupertino, CA, with development facilities and retail locations worldwide, Apple has
over 10,000 employees.
The original Apple product line consisted of computer hardware, mostly Macintosh
Computers and accessories. Since then, Apple has crafted an image of itself as the
ultimate in cool, with a focus not only on powerful computer hardware and software
but also on entertainment media as well. The iPod line of MP3 players is the world
leader, and the iTunes music store provides an easy shopping interface for legal music
downloads.

10

Apple Computer Company Culture

Known as a fun yet demanding place to work, Apple employees should expect a casual
dress environment, as well as a work hard, play hard attitude. Apple employees
consider themselves among the best. The interview process can be a challenge. Expect to
be grilled on any technical skills you list on your resume, as well as many behavioral
attributes. See tips on interviewing for more information. To see a list of current Apple
Computer, Inc. job openings, visit their Jobs page. Apple welcomes applicants of all
levels, including interns and new graduates.
Compensation is known to be very competitive. Benefits include stock purchase program,
401k and flexible health and wellness programs. In addition, Apple gives generous
employee product discounts, a great paid vacation program and many educational
opportunities. For salary comparisons, see the online salary calculators.
Some of the common technical openings include:

Mechanical Design Engineer

Electrical Engineer

Firmware Developer

Quality Assurance

Documentation

Object Oriented Programmer

Unix Engineer

Network Engineer

Human-Computer Interface Design

Project Management

Software Architecture

Database Administration

Technical Support.

11

Overview The Apple Computer Company (usually referred to simply as Apple) began
designing and marketing personal computers more than 25 years ago. Apple originally
focused on do-it-yourself computer kits aimed at computer hobbyists, but with the
introduction of the Apple II in 1977 the company became known for its powerful and
easy-to-use computers. Apple computers differed from IBM's first x86 machines as much
back then as they do now. Today, Apple computers are considered some of the most
stable, innovative, and user-friendly computers available. Visit this website for additional
detailed information about the Apple Computer company.
History and Development of Apple Computers With the release of the Apple 1 in 1976
by Steven Jobs and Steven Wozniak, Apple was born. This computer was designed for
computer hobbyists, and originally sold for $666.66. Subsequent releases of the Apple
computer (Apple II series and Apple III) added such technologies as floppy drives for
storage and the first color display on a personal computer. With the release of the Lisa 2
in the early part of the 1980s and the original Macintosh on January 24, 1984, Apple
began building its reputation as the manufacturer of the most user-friendly computers on
the market. The Macintosh series of computers revolutionized the personal computer by
introducing what-you-see-is-what-you-get (WYSIWYG) displays, and the mouse. The
Mac OS was the first widely used graphical user interface on the market. In the early
1990s, Apple began to lose its market share to Intel-based Windows computers.
Today, the Apple manufactures and sells some of the most powerful, modern-looking
computers on the market in their "iMac" and "PowerPC" lines. More information about
Apple's current line of computers can be found by going to www.apple.com (or
www.apple.com/ca/, the Apple Canada site).
The Apple iMac is an inexpensive and less powerful Mac that is sold in a variety of
trendy colors. It is a commercially successful product designed to perform simple text
and graphics editing, easy Internet access, and e-mail applications. The site iimac.com
deals specifically with iMacs. It provides links to iMac resources, updates, software,
books and MP3 music files.

12

Difference between Apple Computers and PCs Apple pioneered the personal PC
industry in the 1970s, and popularized the first GUI (graphical user interface) with the
introduction of the Mac. The company has gone on to develop both hardware and
software independently of IBM and Microsoft. Microsoft began work on Windows 1.0 in
the early 1980s, but it was not until the release of Windows 3.1 that Microsoft began to
seriously compete with the Mac OS. The Windows operating system and Apples Mac
OS have competed for market share since their inception. Both technological advances,
and available features from one camp, affected the development of the other as they tried
to match each other's capabilities. Visit the About.com Mac vs. Windows page which
provides a good comparison of Mac OS and Windows platforms. Read the article History
of Microsoft Windows found at the Wikipedia encyclopedia site about early versions of
Windows and Windows history.

13

RESEARCH
OBJECTIVES
The main objectives of the project are following:

To study the Apples advertising strategy its competitors

To see how effective is the promotional and positioning strategy of Apples.

To find out the problems faced by dealers in selling the Apples products.

To find out the market share of products of Apples.

To find out the most preferred brand in the market.

To know the awareness level of consumers about the products of Apples.

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

Apples 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 seen as a foolish step. But over a time span of 2 yrs
Apples has proved to be a great gun.
But as we know that consumer taste and preference is fast changing and dont 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 consumers mind and taste and formulate
strategies to counter these changes.

14

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.

Significance Of The Study

Apples 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 Apples products.
In every city, Apples 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. Apples wanted dealers to pay an advance for Apples 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.
Apples since its inception laid stress on Proper Channel Merchandising and
Management. Due to a very calculated network expansion plan, Apples 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 Apples electronics to promote the company as
well as its products:

Advertising

15

Public Relations

Sales Promotion

Apples 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, Apples stands as the
No. 1 PR Company in the industry.
i. 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 was applied.

For Dealers 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.

16

Collected relevant information from the newspaper.

2. Primary Data:

Interview Method:

Some of the employees of Apples from Sales & marketing department and a few dealers
of Apples 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 behavior at dealer counter

gave us lots of knowledge about the customer expectations regarding products, counter
preferences for brand and after sales service.

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. A number of dealers were biased towards a particular 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. Respondents 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 particular
distributor regarding the service or distribution.

17

6. Respondents lack of time to give information and their casual attitude

was a big hindrance in the study.

18

HISTORY OF APPLE COMPUTERS

The company introduced the Apple II microcomputer in 1977. A few years later, in 1983,
it introduced the Lisa, the first commercial personal computer to employ a graphical user
interface (GUI), which was influenced in part by the Xerox Alto. Lisa was also the first
personal computer to have the mouse. In 1984, the Macintosh was introduced, which
arguably advanced the concept of a new user-friendly graphical user interface. Apple's
success with the Macintosh became a major influence in the development of graphical
interfaces elsewhere, with major computer operating systems, such as the Commodore
Amiga, and Atari ST, appearing on the market within two years of the introduction of the
Macintosh. In 1991, Apple introduced the PowerBook line of portable computers. The
1990s also saw Apple's market share fall as competition from Microsoft Windows and the
comparatively inexpensive IBM PC compatible computers that would eventually
dominate the market. In the 2000s, Apple expanded its focus on software to include
professional and prosumer video, music, and photo production solutions, with a view to
promoting their products as a "digital hub". It also introduced the iPod, the most popular
digital music player in the world
HISTORY

1976 to 1980: The early years

1981 to 1989: Lisa and Macintosh
1989 to 1991: The Golden Age
1994 to 1997: Attempts at reinvention
1998 to 2005: New beginnings
2005 to present: The Intel partnership

19

FACTS , FINDINGS , DATA ANALYSIS &

INTERPRETATION
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 5 th
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 on the basis of 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:

Type of advertisements

Different type of advertisements of various brands

15

16
14
12
10
8
6
4
2
0

Dell

10

Microsoft
7

4
2

Lenovo
Apple
Samsung
HP
Sony
Gateway

Brands

20

Comparison on the basis of total number of advertisement:

Graph of total number of advertisement 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.

21

GRAPH 2:

Brand-wise classification of advertisement

Total advertisements

35

32

30
25
19

20

18

15
10
5

7
4

HP
Sony
Dell
Apple
Samsung
Gateway
Microsoft
Lenovo

Brands

Comparision of advertisement on the basis of Newspapers:

Total no. of advertisements of individual brands in different Newspapers is notted
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.

22

GRAPH 3:

Brand-wise Classification on basis of

Newspapers

Percentage

100%
80%
60%
40%
20%
0%

1
2
1
1

1
1
2

1 2

12

3
2
2
12

11

3 4 5 6 7
Brands

TOI
RP
HT
DB

1 = HP (5), 2 = Sony (4), 3 = Dell (7), 4 = Apple (32), 5 =

Samsung (19), 6 = Gateway (8), 7 = Microsoft (6), 8 = Lenovo
(18)

Comparison of advertisements on the basis of days:

Graph of total number of advertisement 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.

23

EFFECTIVE ADVERTISEMENT

80

BETTER VARIETY

70

TAKE CARE OF HEALTH

60

BETTER QUALITY

50

GOOD BRAND EQUITY

Points 40

BETTER AFTER SALES

SERVICES

30

EASY TO USE

20

DURABLE

10

MORE FUCTIONS

0
Factors

BETTER APPEARANCE
HIGH COST

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.

24

SWOT ANALYSIS
Strengths

Weaknesses

Premium pricing, no discounts

Lack of transparency with dealers

Focus on technology and quality

Focus on niche segments

Strong commitment from parent

Dominance of Korean work culture

In house manufacturing capability

Little presence in A&B class towns

Products localized to suite Indian

tastes
Threats

Opportunity

Way behind market leader

Convert image into market share

Stagnant urban demand

Wide product portfolio

Nothing unique about strategy

Positive rub-off due to high quality

Highly competitive market

Healthy resource generation

The strategy adopted by the company of premium pricing could turn out to be its
weakness in the long run. It would enable it to remain a low volumes player only. Even a
company like Sony, which believes in selling premium products globally, has decided to
introduce cheaper washing machine models to increase its volumes in small towns. The
reason for doing this is because future demand will come from the small towns and the
rural areas where consumers are extremely price sensitive.
However, within the past three years the marketing efforts of Apples has paid fruits but
now the company must move ahead with better proposals and ideas to survive in the
competitive market. The key to survive in a competitive market place is the ability to
launch models with innovative features at regular intervals. Currently Apples has a wide
range of products but it needs to aggressively introduce more models..Also the support
that the company is getting from the parent company that is willing to invest in more
money, the companys growth is assured.

25

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.

26

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 ongoing availability of operating capital, good process engineering skills, close
management of labor, 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

27

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 "middlemen" 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

28

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 subdesktop 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,

29

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 color 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, WiFi (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 WiFi
or a wired network, with one computer's iTunes library and streams from an additional

30

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 groups 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). In
reality, Apple is ahead of all of 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 favorably 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

31

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

32

Apple Computer

33

For Apple, the question is how much longer will its Golden Age last? After being
dismissed as a computer industry has-been, Apple is once more the icon of
innovation. CEO Steven P. Jobs has breathed new life into the company with a snazzy
line of iPod music players. Some 16 million have been sold so far, creating a halo
effect for Apple's Macintosh computers. The combination has boosted Apple's sales
72%, to $6.7 billion, in the past two quarters, from the same period a year ago.
But some analysts worry that iPod sales could slow now that so many music-lovers
have purchased one. And Mac lovers will soon be done upgrading to Apple's new
Mac OS X operating system software. Moreover, Apple's five-month-old Mac mini
hasn't been a major hit, despite being the cheapest Mac ever at $499. And, as if that
weren't enough, Apple is now embarking on a tricky transition from IBM's PowerPC
Oh sure, Apple has warned Wall Street to lower its expectations and look for growth
of 15% or so a year. But given the scorching performance of recent years, bullish
investors may not be satisfied
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

34

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.

35

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 color
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.

36

37

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
Apples first logo, designed by Jobs and Wayne, depicts Sir Isaac Newton sitting under an
apple tree. Almost immediately, though, this was replaced by Rob Janoffs 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 colors). 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 favorite 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 logosupposedly at
the insistence of a newly re-inaugurated Jobsnearly identical in shape to its previous
rainbow incarnation. However, no specific color is prescribed; for example, it is grey on
the Power Mac G5, Mac Mini, and iMac, black on the Aluminum 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.

38

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 fueled widespread speculation
about a deal to sell Beatles songs on iTunes. A spokewoman 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.

39

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 favorable grant dates had been selected, but he did not
receive or otherwise benefit from these grants and was unaware of the accounting

40

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.

41

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

42

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 centers 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 platforms visibility
within certain youthful, avant-garde subcultures.

43

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
Preps 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).

44

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 Taligent 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

45

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 have to let
go of a few things here. We have to let go of this notion that for Apple to win, Microsoft
has to lose. We have to 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 Ive, who
would come later to design the iPod and the iPhone. While not groundbreaking from a
technological standpoint, the iMac featured an innovative new translucent plastic exterior,
originally in Bondi Blue, but later many other colors. 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 Ive, has won awards for its innovation.

46

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
signaling 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 totaling 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 favorites such as Best Buy at $930 and Tiffany's at
$2666.

47

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 Emagic, 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 colors of the iMac G3 era in
favor 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 aluminum
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 rumors 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.

48

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 MacBooks 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,

49

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 prerelease 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.

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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 catalog in the iTunes Store, effective in May.
The companys 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 subdesktop 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

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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 color 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, WiFi (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 WiFi
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

52

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 groups 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). In
reality, Apple is ahead of all of 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 favorably 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

53

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 Center 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,
HyperTransport, Wi-Fi, and other industry standards in its computers and was in some

54

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 FairPlay 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

55

850,000 sq ft (79,000 m). 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.

56

CONCLUSION
The result of success in todays 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
lead 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 also 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 companys 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;

MNCs are giving very high competition to the Indian domestic brands.

Value for money- Indian market is very price sensitive, customers value for their

money.

Distribution channel- Every company concentrates on its strong distribution.

57

Environmental Opportunities:

Building Brand- Companys 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 companys in this category and are trying to tap this big market.

Technology- These days the customer preference are 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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BIBLIOGRAPHY
1. Johnson & Scholes, "Exploring Corporate Strategy", Text and Cases. Prentice
Hall of India, 5 th Edition, 2002
2. Kotler Philip, "Marketing Management", Prentice Hall of India, 2004.
3. Wilson & Gilligan, "Strategic Marketing Management", Viva Books Private
Limited.
4. Economic Times, July 2005, "Apples Unplugged", Romi Mukherjee.
5. Business Today, April 2006, "Will Apples be Lucky Enough to Strike Gold",
George Skaria.
6. A&M 2006, February, "Apples Push & Pull Strategy".
7. www.apple.com .

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ANNEXURE
CONSUMER ELECTRONICS MARKET STUDY
(Questionnaire for Consumers)

1. Full Name:

2. Which of the following Age group do you belong ?

< 20 yrs (TERMINATE) 20yrs to 35 yrs 35yrs to 50 yrs >50yrs

3. Sex:

Male

Female

4. Monthly Income:
Less than Rs 3000

Rs 3000 to 9000

Rs 9000 to 15000

>Rs15000
5. Are you planning to buy any Computer Or Laptop item within a year?
YES (CONTINUE)

NO (TERMINATE)

6. Are you or someone else in your family working for a consumer electronics
company?
NO (CONTINUE)

YES (TERMINATE)

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7. What is your total monthly household income?

Less than Rs 3000

Rs 3000 to 9000

Rs 9000 to 15000

>Rs15000
8. What all products of Laptops Or Computers are there in your house?
CTV: Apples Samsung

Dell HP Lenovo

Microsoft
Other ______
9. Rank the following factors in the way they affect your buying decision of a
consumer electronics product? ( Rank 1 being least important and 5 being
most important )
Price ___ Appearance ___ Durability ___ Functions __ Easy to use ___
After Sales Service ___ Brand Name ____ Pressure of friends, relatives____
10. Which two brands first come in your mind when you talk of consumer
electronic items and Home Appliances?
Consumer Electronic Item

Home Appliances

11. What is your impression about the following on Apples products?

Fully Satisfied Partially
Satisfied

Unsatisfied

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Quality of goods
Price
After Sales Service
Function of the
component

12.

What additional features you require to become a prospective customer of

Apples ?

13. Any Recommendations and Suggestions

________________________________________________

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