Submitted by pgraber on April 09, 2006

Apple Computer has long been known as the most innovative personal computer company on the planet. What began as a revolutionary foray into personal computing with the Apple II, the company is largely credited with helping to shape how people use computers with its implementation of the graphical user interface in its famous Macintosh (beginning in 1984). All content © Peter T Graber, 2004

Situation Analysis
Apple began in 1976 and was founded by current CEO Steven Jobs, Steve Wozniak and Ron Wayne. After a successful start with the Apple II in 1977, the company continued to pursue innovation and went on to introduce the Apple Macintosh in 1984. The Macintosh featured a new and revolutionary operating system with a series of easy to understand metaphors like "trashcan", "note", etc. The Macintosh became a milestone in the development of computer industry, leading companies like Microsoft to incorporate many of its features. Since then, Apple has continually designed and manufactured innovate personal computer hardware and software.

The company serves all markets that use personal desktop computers and related devices and software. This includes schools, corporations, governments and general consumers. Of these markets, Apple currently maintains the strongest share within the multi-media and creative industries. Increasingly, however, the company has begun to serve general consumers desiring access to products and services related to digital multi-media delivery. A linchpin of this is Apple's portable MP3 player - the iPod - and their related software services, namely iTunes and the iTunes Music Store. The iTunes Music Store is one of the only commercially successful legal online music download services on the market with over 70% market share and over 70 million songs sold. This has been a huge success for the company.

Peter Graber – Week 2

In terms of market share, Apple currently maintains the smallest worldwide user base of any operating system, estimated to be a mere 2.5%. The Microsoft Windows platform is dominant worldwide, estimated to run on between 92% - 96% of all personal computers. Beyond Windows, Apple also is competing with a relatively new option in operating systems, this being open-source derivatives of the UNIX operating system like LINUX. This sector is expected to surpass Apple in terms of market share by the end of the decade. In addition to their operating system, the company also produces a number of applications that serve the media creation industries, as well as the professional office market. Apple produces software products like Final Cut Pro (digital video editing), Logic Pro (digital music editing) and FileMaker Pro (database, productivity).

Taking this into account, what makes Apple unique is its ability to offer both innovative and reliable hardware, along with trend-setting and user-friendly software. No other dominant personal computer company does this. Surprisingly, this had enabled the company to creatively combine its strengths in these areas to present new solutions to consumers.

SWOT Analysis
Considering these factors, the following strengths (S), weaknesses (W), opportunities (O) and threats (T) have emerged.

Strengths
? Innovative Design Heritage-
Apple has long been known as a leading innovator of both hardware and software. Since its founding in the mid-seventies, the company has taken a leading role in defining cutting-edge personal computing. It all started with the graphical user interface and mouse.
? High Quality Software /Powerful Hardware -
Apple has relied on stringent quality specifications of its physical hardware (CPU, peripherals, etc) and its operating system is considered stable, reliable and easy-to-use. The current hardware lineup is geared towards high-need professional creatives.
? Fashion-conscious Product Appeal -
Apple leads the way in industry design and makes ‘cool’ and fashion conscious products. What started with the Macintosh 512K (circa 1984) continues today with its iPod. Form follows function.
? Ease-of-Use-
Starting with the Lisa/Lisa 2 (circa 1983) and the first commercial implementation of the graphical user interface, Apple has pioneered in engineering easy-to-use software. This concept is consistent through all products.
? High Reliability-
Among its current users, Apple products are known for a high degree of reliability and stability.
? Loyal user base-
Apple loyalists have been built over the last quarter century and remain committed to supporting the company’s products, even in a ‘Windows world’. This critical for the company and they must maintain this base.

Peter Graber – Week 2

Weaknesses
? Marketshare /Users-
Apple’s current world OS marketshare is slowly eroding. They must continue to maintain their core user base.
? Compatibility with Windows Platform-
This is gravely misunderstood by consumers.
? Costs of Products-
? Concentrated Leadership and Vision-

? Limited sales and distribution channels

Opportunities
- Increased multimedia demand by consumers
- New/Expanded Distribution channels
- Emerging multi-media usages trends
- MS Windows ubiquity
-

Threats
- Microsoft Windows OS
- Open-source Systems/platforms
- Copy cats/knock-offs
- Steve Job's Health

---