2. 1. Company Overview
2. Diagnosis of Problems
3. Alternatives
4. Recommendation
5. Q & A
Team: Roller Coaster 2
3. 2006, MacBook
with intel chip
2003, iTunes
2001, iPod
1998, iMac
1996, Acquisition with NeXT, rehiring Jobs
1994, PowerMac family
1991, Powerbook
1987, MacII
1985, First ever quarterly loss, laid of one-fifth of employees
1985, Resignation of Jobs
1984, Macintosh
1983, Apple Lisa
1977, Apple II
April 1, Foundation
The early Lisa and The “golden Attempts at New The intel
Macintosh age” reinvention beginnings partnership
years
1976 1980 1985 1989 1991 1993 1995 1997 2005
Team: Roller Coaster 3
4. Unit Sales by Product Line($M) Sales and Profits($M)
Source: http://www.reghardware.co.uk/2008/11/18/apple_25_year_report_card/print.html
Team: Roller Coaster 4
5. 1. Company Overview
2. Diagnosis of Problems
3. Alternatives
4. Recommendation
5. Q & A
Team: Roller Coaster 5
6. Worldwide recorded music revenue
Symptoms
Digital download
$40,000
Napster, Wal-mart
Virgin, Sony
Device
Medion
$20,000 Smart Music Phone
Illegal hacking of DRM
Millions
RealNetwork
DRM was not infallible
$
Causes
2004 2005 2006 2007 2008 2009 2010
Attractive Market
Low Entry Barrier
Physical CDs Digital(Mobile & Broadband)
Walled Garden Strategy Source: http://www.isuppli.com/Abstract/P8183_20061127142035.pdf
(Own DRM Restriction)
Team: Roller Coaster 6
7. Opportunity & Strength
Potential growth in digital content market
Favorable brand Image, Loyal Customer
Obstacle
Content Copyright vs. Piracy
High substitution products
Lack of compatibility
Decision
What’s Apple’s Next?
Digital Music vs. Beyond iPod
Team: Roller Coaster 7
8. 1. Company Overview
2. Diagnosis of Problems
3. Alternatives
4. Recommendation
5. Q & A
Team: Roller Coaster 8
9. PRO
• Contents & Service • Broaden customer’s selection
• Benefits & Easy Access channel
differentiation
• Keep customers loyalty
• Various payment tool
CON
• Combine iPod with WIFI
• Cost Burden
• Price diversification • Possibility of profit diminish
• Agreement with music labels
Team: Roller Coaster
10. PRO
• Extension of contents • Deliver many types of contents
• Keep consumer-centric brand
• Expansion of device • Another innovation for Apple
• Higher customer accessibility
• To provide
Hardware & software
CON
& installation services
• To connect key product • Intense competition
• High cost on R&D
& services -> iLife
• Lack of experience
Team: Roller Coaster
11. PRO
• Expansion of • Direct relationship
• More control over the end-user
devices and industry
• Market imitative
• Develop a mobile phone
- iPod + Smartphone
CON
• Wireless network provider
• High entry barrier
• Uncertainty of leasing network
• No experience
Team: Roller Coaster
12. Pros Cons
• DRM is not perfect
• Prevent illegal copies or piracy • Disturbing a user cause of lack of
DRM
compatibility
• Achieving interoperability • Disclosing some secrets of tech.
License DRM
• Charging a licensing fee • How to quickly repair the
Technology
• No worry about infringing damage caused by such a leak
• Any player can play music
• The best alternative for consumers • No longer guarantee to protect
DRM free
• Apple customers not willing to buy the music
from third party services
Team: Roller Coaster
13. 1. Company Overview
2. Diagnosis of Problems
3. Alternatives
4. Recommendation
5. Q & A
Team: Roller Coaster 13
14. Criteria Alt .#1 Alt. #2 Alt. #3
• Leverage core competence
• Transit iconic brand
Strategic fit
• Create new market
• Cost for R&D, Alliance, Content Copyright
• Expected Revenue
Profitability
• Time for achieving BEP
• Market Competition
• Market initiative
Market
• Not matured Market
Growth
• Provide convenience and new experiences
Customer
• New technology acceptance
value
Team: Roller Coaster 14
Good afternoon folksAs most of you already know, I am 성진 one of the Roller coaster team member consist of 은순, 지홍Today, The title of my presentation is job’s next challengePlease save your questions until our team finish presentation.
Apple was established on April 1, 1976 by Steve Jobs, Steve Wozniak, and Ronald WayneApple grow up PC based products H/W and S/W such as Macintosh, Mac OS until 2001 After that Apple have started music related product and service.
In this slide, 2 graph contain unit sales, and sales and profitsAt Left chart, You can see dramaticallyrise of iPods unit sales since 2004It positive impact on net sales but net profits shows a gentle slopeAs you see in chart, iPods and iTunes might helpe their market share continue to steadily growbut they can’t guarantee apple’s future.Let move on to check what challenge were faced with Apple.
iPods and iTunes continued to be extremely popular and success so far, but apple is not sure of retaining theircompetitiveposition.Because many competitive device and service are threatening AppleNapster: Unlimited song with monthly charge $12.5, Wal-mart: $0.88 per song Medion: low cost and almost copycat of iPOD, Smart Music Phone by Samsung, Sony, SiemenSeond Illegal hacking of DRMReal Network: compatible with Apples’ DRMDRM was not infallibleWhy many competitors jump into digital music industryThe global market for digital recorded music is expected to grow nearly 600% from $2.7 billion in 2005 to reach $14.9 billion by 2010, according to iSuppli research.
The industry now is embracing digital distribution, and this segment has quickly grown.In the mean time, Apple is a dominant player in online music service and a portable device with favorable brand image, loyal customer, while challenged by rampant piracy.There is also a high product substitution in the innovative and fast moving IT consumables market. So iPod and iTunesrule today, but tomorrow's technology might be completely different. It is time to decide for apple’s next digital music vs beyond iPod.