Apple Computer 1999

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Apple Computer 1999

By: Group N2

Ayas Kanta Mohapatra

Bibin George VargheseChrystal Mariate Nooranha

Debmalya Paul

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Agenda

• Introduction & Chronology

• Industry Analysis

• Porter’s Competitive Force 

• Apple Turnaround

• Recommendation

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Introduction & Chronology

• 1976 – Apple Computers founded by Steve Jobs and Steve Wozniak,launched Apple I

• 1978 – Launched Apple II

• 1983 – Launched Lisa(PC with GUI and point-and-click mouse), but wasunsuccessful

• 1984 - Introduced Macintosh

• 1985 – Jobs removed from operational role, forms a new company NeXT

• 1985-93 – John Sculley appointed as new CEO

•

1990 – Launched Mac Classic – a $999 computer to compete with low-priced IBM clones

• 1991 – Close relationship with IBM, formation of Joint ventures viz.Taligent, Kaleida and switching from Motorola to IBM Power chip

• 1993-95 – Michael Spindler appointed as CEO

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Chronology Cont.• 1994 – Designated a handful of companies to make Mac clones,

launched PowerMac

• 1993 – Launched Netwon MessagePad – Apple’s first PDA 

• 1994 – Launched eWorld, an online service for Mac users

• 1995 – Apple and IBM parted away

• 1996-97 – Gil Amelio appointed as CEO

• 1996-97 – Lost $1.6 billion, share prices went 12 years low

•

1997 – Steve Jobs came back s CEO• 1998 – Launched iMac, formed a long –term cross-licensing

agreement with Microsoft

• By 1999 – Apple delivered 5 consecutive quarters of profit

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PC Industry Overview (1990s)• A $170 billion global industry by 1999

• Experienced explosive growth from mid-1970s till late 90s

• Apple pioneered personal computing but IBM brought PCs intomainstream

•

Core premium brands – Apple, IBM, Compaq, Dell• Large market share of IBM in early 1980s – almost 70% of Fortune 1000

companies

• “IBM-compatibles” noted as industry standard 

• IBM dominance fell in late 1980s, as buyers viewed PCs as commodities – resulting in IBM loosing market share

• Introduction of “Wintel”(a combination of Microsoft Windows and Intelprocessor) in early 90s – replacing IBM as the dominant industry standard

• 400 million PCs installed around the world by 1999

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PC Industry Overview Contd.

40%

25%

20%

15%

Worldwide PC Market (1990s)

USA

Western Europe

Asia/Pacific

Rest of World

• 18% Annual PC growth rate in 1990s

•Predicted growth rate of 13% - 15% by 2005

60%

8%

8%

24%

PC Buyers (1998)

Business

Government

Education

Home Market

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PC Industry Overview Contd.

• Two types of suppliers in PC industry – 

Products having many sources such as memory chip, disk

drivers and keyboards

Products from limited sources viz. microprocessor, operatingsystem

• Major players in the microprocessor industry - Intel followed by

IBM, Texas Instruments

• Microsoft dominated the OS front, capturing 90% of the newPCs through products like MSDOS, Windows 3, Windows 95

• Other OS – Unix, Mac OS

• Alternatives to personal computers – PDAs, smart phones etc.

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PC Industry Analysis

• Increasing competition to produce leastexpensive and most efficient machines

• Rapid advancement of technology

• Outsourcing to contract manufacturers

• Companies moving from build-to-stock to

build-to order strategy

• Accelerating PC demand in the developing

economies like India and China

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Porter’s Competitive Force 

IndustryRivalry

Threat of NewEntrant 

Bargaining Power ofBuyer 

Threat ofSubstitute 

Bargaining Power ofSupplier 

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…..Porter’s Competitive Force 

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Threat of New Entrant

• High initial set up cost

•

Brand value and loyalty

• Market saturation

• Investment on supply chain

• Low manufacturing cost

• Technology advantage

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…..Porter’s Competitive Force 

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Threat of Substitute

• Threat is very low

Bargaining Power of Supplier

• Component supplier – low

• OS supplier - high

Bargaining Power of Buyer

• High brand loyalty

• Price sensitive market based on economy

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…..Porter’s Competitive Force 

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Industry Rivalry

• Price competition is very high

• Quick technology innovation

• Cost minimization

• Acquisition of small industries

• Presence in International Market

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Apple Turnaround

• Structural stability in the organization

• Centralization

•

Agreement with Microsoft• Product innovation- iMac

• “Think different” promotion plan 

• New target market – Education

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Recommendation

• Making MAC software compatible with otherPCs and licensing them

• Special concessions to schools for bulk

purchase

• Long term contracts with corporates

• Increased retail presence and customerservice

• Provide option for customization beforepurchase

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THANK YOU !!

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