What were Apple’s competitive advantages

During the last 70s and beginning of the 80s, apples competitive goods assured high profitability to the firm. orc toughened apple tree II and mackintoshintosh were aid (priced) harvest-times that were genuinely easy-to- usage computers with kindly design and technical elegance. Despite the slow chief(prenominal)frame speed and the lack of compatible softw argon, the combination of overlord computer softw be product and peripherals, giving unmatched capabilities in scope publishing, allowed apple to reach 8% of the institution grocery store and more than 50% of the education mart place in the US by the mid 80s.Also ace other occurrenceor strategic for the high victory of orchard apple tree in its archaeozoic days is the fact that the operating schema (OS) was a closed system, being therefore very unwieldy to cl angiotensin-converting enzyme. After whatsoever(prenominal) ups and downs during the 90s decade, the scheme of Apple continued to base on differen tiation. They declare high-quality, an exceptional design, the ease of use of their overlaps, security, high-quality bundled software and in-store individualise service. At the same time, the incorporation of some well-worn interfaces (like USB ports) made Apple computers less closed systems, allowing the Mac customer to use non Mac peripherals with his OS.In price of technical features, the total Mac gross sales change magnitude about 40% from 2006 to 2007 thanks to Intels dual-core engine room for Apples laptops. This specification allowed Apple to habitus laptops that were faster and less-power consuming, and at the same time could besides easily run Windows and other third-party OS. One of the main problems of Apple, the lack of Macintosh software, was now solved. As it was mentivirtuosod above, one of Apples recent competitive advantages is the in-store personalized service.This, of course, is directly related to the introduction of stores, important not merely bec ause those stores are sales locations, but withal because it allows Apple to control the soma of the brand and proffer an excellent customer service. The success of Apple stores is too due to the halo effect of iPod and iPhone that attracted umpteen hatful to the stores. The iTunes Music and App online store, together with the iPod and iPhone products, are to a fault one of the main reasons for the increasing of sales of Mac computers. crumble the dynamics of the PC attention. Are these dynamics affirmative or problematic for Apple?In our days computers are in close to people frequent life and business and therefore computers are adequate even more a commoditized product. It is estimated that 1 billion of PCs are in use around the adult male The PC industry has its origins in the mid-70s and it was henpecked by IBM during its first decade of existence. By the early 90s Wintels (Windows OS with Intel processors) replaced IBM computers as the industry standard. The marke t in those years already suffered some (fast) changes, as there were thousands of manufacturers (HP, Dell, Acer, Apple, and clone makers) building computers.In legal injury of buyers, also some some(prenominal) changes were observed the US was no longer the main customer of this industry. The main share of the average 15% egression of PCs goes to the emerge markets, to countries like India and China. At the same time, revenue growth didnt grow, principally due to the decreasing of prices of these products. The main suppliers in this industry are the fixings manufacturers, the OS software programmers and the Application software developers. In what component manufacturers is concerned, the industry is dominated by two instrumentalists, Intel and AMD, to win microprocessors.These microprocessors are totally different in legal injury requirements and motherboard design, so if a PC manufacturer would work out on changing the microprocessors of its products, it would also take over to guard high switching embodys. The OS software programmers are resumed to one player, Microsoft Windows (about 90% of world computers run through Window platform). The Application software developers are mainly ISVs, or Independent Software Vendors. In what buyers are concerned, we can divide them into 5 categories home, small and mediocre business, corporate, education and government.In the past years we fetch been assisting to several changes the home segment is nowadays the most important of the segments (42% of computers were acquired by this segment in 2007), followed by the business customers. In order to respond to the many needs of these customers, PC manufacturers react offering immense products. At the same time, it also must be taken into consideration that these segments meet different requirements when getting a PC the home segment is very price sensitive and has recently started to value the product design, the mobility and wireless capability.The busine ss customer makes his decision found on a combination of price an service. In monetary value of barriers of new entries, brands like Dell, Apple or HP are brand recognized and in a general way their clients are hardcore to them, creating therefore severeies for a potential new player in this market. Also the fact that most of these companies ready steady-going relationships with OEM allows them to benefit from economies of scale. The threat of substitution is high. taking in consideration that the home buyer is the outperform client, there are several products that talent be an alternative to computers, in particular laptops. organisers, smartphones, or game consoles allow the consumer to run video, respect DVDs, play games, or even breaker the web. In foothold of competitive rivalry, the market is dominated by 4 players, Dell, HP, Acer and Lenovo. Together, these companies are creditworthy for more than 50% PC shipments (2007 data). In a general way, these companies are adopting a strategy of amend design, R&D spending, and aggressive consumer marketing. According to this industry analysis, Apples position in the market might be of some concern.One of the good and positive aspects of Apples strategy is the open up of complementary products to the Macs, like the Apple TV or home data centers. The strategy of differentiation and knowledgeableness has to continue to be adopted, as well as to build exclusive agreements and partnerships and OEM. Has Steve Jobs finally solved Apples long-standing problems with respect to the Macintosh business? In 1997, when Steve Jobs became the CEO of Apple, the firm was going through some problems with the Mac business.These problems werent solved with Spindler and Amelio strategies, which were mainly the cost reduction (cutting of 16% Apple workforce and cut back R&D spending), and several deep payroll cuts. Apple was already incurring in several losses and something had to be done Steve Jobs started to restructu re the caller-up partnerships with Microsoft, development of core products such as Microsoft Office, end of licensing agreements (to avoid cannibalization of Apples computers), consolidation of the product reaching, outsourcing, changing of distribution system, and promoting the brand as a hip alternative to other brands. plainly one of the most important changes was during 2006, four years afterwards the launch of Mac OS X, when Apples computers also started to be equipped with Intel technology, allowing not further to reduce the technical specifications gaps amongst Macs and Wintel computers (Mac were slower in speed and more energy consuming) but also to use third-party applications (until then, Apple had to produce their own software because of its small market share). These measures, together with the synergies of iPod, iTunes and iPhone are responsible for the 33% increasing of Total Macintosh sales from 2006 to 2007.However, Apple still remains in the 2-3% range worldwi de PC market. As its products are premium priced, I think that some measures might have to be taken in consideration, such as to continue developing and improving the brand image in order to continue practicing premium prices in its products, to improve relationship with 3rd parties (for example, with music labels for iTunes, with NBC for the Apple TV or with 3rd party software developers) or to continue producing complementary products to Macs. The iPod-iTunes business has been a spectacular success. Has Jobs found a new manifestation to create a sustainable competitive advantage for Apple?In fact, the iPod and iTunes and their synergies with Apples computers are one of the key drivers for the success of Apple. The launch of the iPod in 2001 and specially the introduction of iPod for Windows in 2002 simply boosted Apples sales. In 2003 the sales of iPods more than bivalent in respect to the previous year. Its design, the easy to use system, its high margins (thanks to the use of flash memories instead of hard disks) and its reasonable selling price are some of the factors responsible for being such a hit. But it is in this very same year that the iTunes system is born.This online service is the main factor for iPods success (in 2004, after the first year of iTunes launch, iPods sales approximately increased 300% as of 2003 in 2007 the iPod accounts for 35% of Apples total revenue). This reveals the synergy between iPod and iTunes (and also iPhone). This competitive advantage is not difficult to maintain as Apple has in fact the best product in the market, in terms of hardware and an efficient easy to use online store. The only problem that might exist is in terms of relationships with the music companies. In order to maintain the market size, Apple has to improve on this subject.