1. FOUNDATION UNIVERSITY LALAZAR
RAWALPIDNI
REPORT ON: APPLE INCORPORATION
SUBMITTED BY: MOHAMMAD SALEEM
TO: SIR AHMAD GHIAS
DATE: 30/5/2013
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2. Introduction and History:
Steve Jobs and Steve Wozniak founded Apple on April 1, 1976. The two Steves, Jobs and Woz
(as he is commonly referred to – see woz.org), have personalities that persist throughout Apple’s
products, even today. Job’s was the consummate salesperson and visionary while Woz was the
inquisitive technical genius. Woz developed his own homemade computer and Jobs saw its
commercial potential.
The company introduced the Apple II on April 17, 1977, at the same time Commodore released
their PET computer. Once the Apple II came with the modern spreadsheet program, sales
increased dramatically. In 1979, Apple initiated three projects in order to stay ahead of the
competition: 1) the Apple III – their business oriented machine, 2) the Lisa – the planned
successor to the Apple III, and 3) Macintosh.
In 1980, the company released the Apple III to the public and was a commercial flop. It was too
expensive and had several design flaws that made for less-than-stellar quality. One design flaw
was a lack of cooling fans, which allowed chips to overheat.
Apple released the Lisa in January 1983 and was notable for being the first computer sold to the
public that utilized a Graphic User Interface (GUI). Unfortunately, the Lisa was not compatible
with existing computers, and therefore came bundled “with everything and a list price to match.”
At $9,995 (over $21,000 in 2005 dollars), the Lisa missed its target market by a wide margin.
Apple introduced the Macintosh with great fanfare during the 1984 Super Bowl. The Orwellian-
themed commercial (directed by Ridley Scott, of ‘Alien’ fame) portrayed IBM as Big Brother
and embodied Macintosh and Apple as freedom-seeking individuals breaking away from this
oppressive regime. The commercial was largely successful and sales for the Mac started strong.
However, Mac sales later faded. Apple introduced Mac Portables in 1989 and the first
PowerBooks in 1991. On May 6, 1998, Apple introduced the new iMac, a product so secret that
most Apple employees had never heard of it. The new iMac was a runaway success with its all-
in-one architecture, and ease of use. It brought Apple to a new market of users – those who had
never owned a computer before. Jobs further simplified the product lines into four quadrants
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3. along two axes: Desktop and Portable on one, Professional and Consumer on the other. Apple
completed the matrix with the introduction of the consumer-based iBook in 1999.
The year 2001 was an important year for consumers of Apple products. Apple opened their first
25 retail stores (totaling 163 stores in 4 countries as of May 2006). In September 2001, Apple
introduced the new iMac featuring a screen on a swivel.The new iPods (portable music players)
was a tremendous success. Apple sold so many that Apple’s dependence on Mac sales was
significantly less. This was no small feat considering that the 2001 iMac became Apple’s best-
selling product “by a long shot”. Apple offered iTunes (a free application) to help their
consumers organize music on iPods and Macs.
In 2003, Apple expanded iTunes by 1) opening the iTunes music store to allow Mac users to
purchase music online and 2) expanding iTunes to Windows users. . In 2005, Apple announced
that it would start using Intel-based chips to run Macintosh computers. In April 2006, Apple
announced Boot Camp, which allows users of Intel-based Macs to boot either Mac or Windows
OS. This functionality allows users who may need both OSs to own just one machine to run
both, albeit not simultaneously.
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4. Vision Statement:
"Man is the creator of change in this world. As such he should be above systems and structures,
and not subordinate to them."
Mission Statement:
“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”
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5. Logos over the Years:
1976 1976-1998 1998-present
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6. Leadership Structure:
Apple Inc was founded by Steve Jobs and Steve Wozniak. Mike Markkula was the financier, and
Michael Scott was the CEO at that time.
Mike Markulla stepped into his position as CEO in August 1981. John Sculley left PepsiCo to
join Apple in April 1983.
Jobs left Apple to form NeXT computer in 1985.and in 1997 he joined Apple again.
And the present CEO of Apple Inc is Timothy D. Cook.
Ranking in Fortune 500:
Apple leapt nine spots to become the 6th rank company in the Fortune 500. In 2012's rankings,
Apple was ranked 17th, but revenues grew to US$156.5 billion, enough to rank it just behind
fifth ranked Berkshire Hathaway.
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7. Product Line:
Apple's core product lines are the
• iPhonesmart phone,
• iPad tablet computer,
• iPod portable media players,
• Macintosh computer line.
Competitors:
Sony is an example of a competitor with a unique position against Apple. Sony Music supplies
Apple with many of the songs for iTunes. Sony also creates a version of the Walkman portable
music player that is a direct competitor to the iPod.
Dell is also a competitor in personal computers and laptops.
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8. SWOT Analysis
Strengths:
 Technical savvy – Product lines are easy to use and stable. Recent integration with
Microsoft products lines and Intel processors demonstrate ability and willingness to adapt
to a diverse customer base. (Mossberg) Such innovation, however, would not be
sustainable without a learning environment tolerant of mistakes. While the pure technical
expertise alone is not a valuable or rare resource, it becomes very costly to imitate when
it exists within the socially complex, entrepreneurial culture of Apple.
 Financial vitality – Cash reserves remained robust and stable despite stagnant market
share growth in the computer hardware and software arenas. Apple exploited this by
resisting market pressures to reduce costs, tightly integrating product packages, and
forming strategic alliances (i.e. securing the backing of all major music distributors in the
support of iTunes).
 Brand loyalty – The only way that Apple could maintain the financial vitality described
above is via a fanatical, almost cult-like, affair with its customer base. Such brand
loyalty is extremely costly and time-consuming to imitate.
 Steve Jobs – As discussed earlier, Jobs proved to be a vital component to Apple’s
success. During his absence (1985-1996), Apple experienced the most turbulent
(financial and innovative) timeline in its history. Immediately upon his return, he
replaced most of the Board of Directors, pruned and focused the new product ideas, and
delivered seven consecutive quarters of positive earnings to shareholders. As such, Jobs
is certainly a valuable, rare, and hard to imitate resource that Apple fully exploits.
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9. Weaknesses:
 Steve Jobs – Jobs was a big strength for apple inc but after his death apple will face lots
of difficulties.
Opportunities:
 Consumer electronics – With the startling success of the iPod and iTunes, Apple entered
the consumer electronics market. By expanding the iTunes concept to downloadable
mobile phone features and movies (podcasts), the door is now open to develop new and
potentially profitable strategic alliances with peripheral component manufacturers
(speaker, home stereo, etc.) and media transmission giants (Disney, TBS, Verizon, etc.).
 PC hardware and software market growth – With cross-licensing of operating system
platforms in place, Apple entered the high-volume business environment traditionally
dominated by Windows-based PCs. The introduction of Intel-based processors prompted
businesses to replace PCs with iMacs. They did this to gain a level of stability and
reliability in their business applications that PCs failed to provide. An example is Japan’s
Aozora Bank Ltd., who is replacing 2,300 PCs with iMacs. (Wingfield) Apple must
establish themselves as a credible player in business desktop applications to overcome the
“desktop publishing” stereotype.
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10. Threats:
 Legal risks – In a market that literally changes at the speed of thought, patent and
copyright infringement risks remain high. As long as operating systems and support
software packages continue to converge and remain relatively easy to imitate, present and
future lawsuits are inevitable. The Apple records claim against iTunes remains
unresolved.
 Competition – This threat occurs primarily on two fronts: PC hardware/software and
consumer electronics. For the same reasons discussed in the opportunities section, the
threat of imitability (cloning, pirating, etc.) increases. As relative newcomers to the
consumer electronics arena, will Apple retain a competitive advantage as they diversify
their offerings (speakers, home entertainment systems, etc.).
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11. Financial Analysis:
Financial
period
Net sales (Mil
USD)
Net profits (Mil
USD)
Revenue growth
Return on net
sales
FY 2008 38,200 8,139 35% 16%
FY 2009 45,356 9,455 42% 18%
FY 2010 65,225 14,013 52% 21%
FY 2011 108,249 25,922 66% 24%
FY 2012 156,508 41,733 45% 27%
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