Conner

Intro

Back in August of 2012 Apple set the record for the most valuable publicly traded company on the stock market with a market capitalization of 621 billion dollars.

A graph (from 1999 to 2012) of Apple’s and Microsoft’s market cap over the past few years. Courtesy of The Wall Street Journal

The record had been set in 1999 by Microsoft, a company that is in the same industry as Apple but has had a very different business model. Apple managed to gain this success by pioneering new ways technology companies market and sell their products. Their success has been so great that they have changed the way companies conduct business forever.

Apple Inc. was a leader in innovation when it came to how consumer technology products were marketed and sold.

 

 

Different

Apple set themselves apart from other companies by the way they developed their products. Apple believed that it was in their best interest to develop their own software and hardware. Many companies chose to develop one or the other instead. A good example would be Microsoft who, unlike Apple, Microsoft developed software with the intent of licensing it to other companies so that they could integrate it in their products. Apple decided years ago to stick with developing their own software and hardware for whatever reason. Microsoft’s model of creating the software and allowing hardware companies to develop products makes more sense from a competitive perspective. For years, this model benefited Microsoft because they were able to penetrate the personal computer market with their products at a greater rate than any other company, especially Apple. In the end, Apple’s model was better for their business because it allowed them to create a brand that could be recognized from both a hardware and software standpoint.

Apple was not the inventor of many of the original types of products they gained their success from and people are aware of that . In fact, Apple was not the first when it comes to many of their products, instead, they happened to be the ones who pioneered them successfully. David Aaker wrote in the The California Management Review about this idea and how “Apple was not the pioneer for the iPod (Sony beat Apple by two years), the iPhone (the technology was up and running in Europe years before), or the iPad (Bill Gates of Microsoft introduced the “Tablet PC” some ten years earlier). However, in each case, Apple had the timing right.” Apple was successful where other companies weren’t because they were better at marketing their products. They convinced consumers that their products were “the” products to have. They also spent years convincing consumers that they were different from other technology companies. One famous example of this is their 1984 Super Bowl ad, which is an allusion to George Orwell’s novel 1984:

http://www.youtube.com/watch?v=HhsWzJo2sN4

The advertisement was focused on contrasting Apple with IBM, positioning Apple as a company that respects consumers versus IBM who was too powerful to care what their customers thought. Apple later painted Microsoft as the new IBM and positioned themselves as the company that was not of the norm. Experts have claimed that this was directly resposible for Apple’s success with Albert Muniz of the Journal of Consumer Research claiming that Apple loyalists “have a strong moral certainty, feeling that they are doing the right thing by resisting the Microsoft tide” (420).

Apple Stores

Apple was an innovator when it came to how they sold their products. Most consumer technology companies over the years partnered with other companies to deliver their products. Whether that was through selling to an electronics store like Best Buy or Walmart, companies chose to go through a store to get their products to consumers. Apple believed that they could successfully sell their products in their own stores beginning in 2001. In that year Apple began opening stores with the first Apple stores being opened in Glendale, California and McLean, Virginia. The first international store was opened in Tokyo Japan on November 30, 2003. There are currently 395 stores world wide in 14 countries.

The following is a map of where the first Apple stores were opened for their respective Sate or Country. They are listed in chronological order and the number of stores for each State or Country is in the description.

View Apple Stores in a larger map

 

Now, companies like Microsoft are opening their own stores. Apple lead the way for this sort of behavior. They opened their stores with the hope of success and they were certainly rewarded.

 

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Consumer’s view of Apple has changed over time. Apple is largely responsible for this through their marketing and how they have developed their business model over the years. The following are examples of how people’s view of the company has changed. The main point I am trying to make here is that Apple has gone from being just another consumer technology company to THE consumer technology company.

 

 

This is a Wordle of a Time Magazine article on Apple from 2005. This year was crucial for Apple because it marked the beginning of a shift in the consumer technology industry. 2004 marked the highest recorded PC’s to Mac’s sold in the world with the ratio around 50 to 1. After that year, the ratio began to decline and it is currently sitting around 15 to 1. The Time magazine article is interesting because at the time, Apple was not a household name. However, the author is does believe that they will become a household name soon enough.

This second Wordle is from a December 2012 article on Apple that is also from Time. It focused on Apple TV and the next step for the company in the consumer technology industry. It is interesting to see the differences and similarities of these two articles. The type of articles that are being written on Apple have changed just as much as the company has.

 

How we know Apple has the “it” factor

One major component of Apple’s success has been their business in the smart phone industry. Apple has been a pioneer in this industry and their iPhone paved the way for smart phones. Somehow Apple has managed to make the majority of the profits when you look at the smart phone industry as a whole, even though their market share is not dominant.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Having the type of success that Apple has had in the smart phone industry is good. But it is even better considering their market share. Consumers have long seen Apple as a “cool” company. People have wanted to be a part of the Apple brand in a way that any company that sells products to consumers would want. Apple did this over time through marketing. They created an image that people fell in love with.

 

Presentation 

 

Time Are Changin’

In recent years, companies have had to change the way they run their business in order to compete with Apple. Even Microsoft has started developing their own hardware by selling Xboxes as well as tablet PCs. Maybe companies have come to the realization that it is easier for a consumer to identify with a product when the hardware and software is manufactured by the same company. Google has put themselves in an interesting position with the companies they partner with because of their smart phone ideas. For years they have been selling the software for smart phones to companies that make the hardware part of the phones. Now, they have decided to make both the hardware and the software. This is what Apple has been doing for years and now companies are following suit.  Apple has been a leader in innovative products and it seems as if they also have been an industry leader when it comes to business models in the consumer technology field. Still, in the ever changing world of technology, it is possible that Apple will have to reposition themselves in a few years just as Microsoft has had to.

Apple’s success has been a combination of ideas and innovations that have compiled over the years. The success they have gained did not happen overnight; it happened over years of work. In order to have continued success, Apple is going to have to continue their path of innovation.

 

References

Aaker, David A. “Win the Brand Relevance Battle and Then Build Competitor

Barriers.”California Management Review 54.2 (2012): 43-57. JSTOR. University of California Press, 2012. Web. 10 Nov. 2012.

  Elgan, Mike. “The New Business Model: Competing with Partners!” Computerworld.

ComputerWorld, 24 Nov. 2012. Web. 27 Nov. 2012.

<http://www.computerworld.com/s/article/9233924/The_new_business_model_Competing_with_partners_>

Elmer-DeWitt, Philip. “2004: The Year the Windows PC to Apple Mac Sales Ratio

Peaked.”CNN Money. CNN, 3 July 2012. Web. 12 Nov. 2012.

<http://tech.fortune.cnn.com/2012/07/03/2004-the-year-the-windows-pc-to-apple-mac-sales-ratio-peaked/>.

Elmer-DeWitt, Philip. “Pie Chart of the Day: Apple’s Share of Smartphone Profits.” Fortune Tech

Technology Blogs News and Analysis from Fortune Magazine RSS. CNN, 11 Dec. 2012. Web. 15 Dec. 2012.

Friedman, Ted. Apple’s 1984. Proc. of Apple’s 1984: The Introduction of the Macintosh in the

Cultural History of Personal Computers, California, Pasedena. Society for the History of Technology Convention, Oct. 1997. Web. 27 Nov. 2012. <http://people.duke.edu/~tlove/mac.htm>.

Ion, Florence. “ArsTechnica.” Ars Technica. N.p., n.d. Web. 18 Dec. 2012. In Brands We Trust. Perf. Jacques Helleu, Naomi Klein, and Kevin Roberts. Films for the

Humanities and Sciences – In Brands We Trust. Films Media Group, n.d. Web. 20 Oct. 2012. <http://digital.films.com.mutex.gmu.edu/PortalViewVideo.aspx?xtid=32594>.

Linzmayer, Owen W. Apple Confidential 2.0: The Definitive History of the World’s Most

Colorful Company. San Francisco, CA: No Starch, 2004. Print.

Muniz, Albert, Jr., and Thomas O’Guinn. “Brand Community.” Journal of Consumer Research

27.4 2001): 412-32. JSTOR. Web. 27 Nov. 2012. <http://www.jstor.org/stable/10.1086/319618>. Published by: The University of Chicago Press

Srinivasan, V., Chan Su Park, and Dae Ryun Chang. “An Approach to the Measurement, Analysis,

and Prediction of Brand Equity and Its Sources.” Management Science51.9 (2005): 1433-448. JSTOR. Web. 27 Nov. 2012. <http://www.jstor.org/stable/20110431>.