Apple Inc, formerly known as Apple Computers until this year (2007), is about to jump into a new product line. Apple Inc is known for having hit product lines. Rather than releasing multiples of little products to try and win over consumers through market saturation, Apple Inc releases higher end, high quality, and high user friendly products. From the beginning of Apple’s really popular products they’d been finding ways to increase the utility and ease of use of their products. They have never really had a very large economy, but over time they had developed a growing group of loyal users and the group have kept the company alive.

The important thing is not as much as where the company has come from, but where the company is going. People are remembered for how they’ve finished rather than where they began. This also goes for presentations, race horses, car races, and movies. It’s the ends of companies that people watch so closely to gain some insight on what to avoid. We want to see if Apple is really on the right track or if they will be seeing the trough of a business cycle sooner than later. First we will go over the Apple Inc Business functions, then we will look at where they are now, finally we will look at different futures that Apple Inc. might have.

Business Function

Apple is in two Industries which are personal computers and Consumer Electronics. They have just released the Apple iPhone, but its unclear whether this is still a part of a consumer electronic. The Apple Inc company is the only one that manufactures entire personal computer offer. They have recently upgraded all of their most popular items in the computer industry and changed their computer specifications. This upgrade has made Apple computers some of the most effective on the market. Apple Inc are also in the consumer electronic industry because they provide the top selling and top of the line portable digital music playing devices. Their product is known as the Apple iPod and is now a household name.

According to the 2006 10K report, the then Apple Computer Inc:

“[…] designs, manufactures, and markets personal computers and related software, service, peripherals, and networking solutions. Apple also designs, develops, and markets a line of portable digital music players along with related accessories and services, including the online sale of third-party audio and visual products.” Their product lines include the Macintosh “desktops” and “portable computers”, the Mac OS X operating system, the iPod line of portable music players, the iTunes store, a portfolio of peripherals that support and compliment the Macintosh and iPod lines, a portfolio of software applications, support hardware, and other service and support offerings. They also sell 3rd party material that is compatible with Macintosh and iPod products: software, printers, storage devices, speakers, headphones, etc through their online and retail stores.

They are currently focused on serving education, consumer, creative professional, business, and government customer purposes with their products. Their strategy is to bring the best personal computing and portable digital music experience to students, educators, creative professionals, businesses, government agencies, and consumers through innovative hardware, software, peripherals, services, and internet offerings. They claim to leverage unique ability to design and develop its own operating system, hardware, application software, and services as well as their products’ superior ease of use, seamless integration so that consumers do not have to relearn everything with upgrades, and innovative industrial design.

The 10K report makes mention of a “digital lifestyle” which is a metaphor for the way the consumer behaviour surrounding computers and consumer electronics are becoming more entwined and a part of the way people carry out their day to day activities. Apple wants computers and consumer electronic to be as useful and familiar to people as pencils or clothing.

Current Business Position

Apple is currently doing quite well. Their stock price has risen 15 times where it was at in January 2003 (Yahoo Finance). The first thing to look at would probably be their different product lines and how they are marketed. After that the best thing to look at is where or how the Apple stuff is distributed. Finally, we will look at the market segments that Apple is targeting.

They like to make one product that is costly for the consumer, but highly useful. Many people buy a computer and never use it, but Apple Inc. sells computers that people use. Their product lines include the Macintosh “desktops” and “portable computers”, the Mac OS X operating system, the iPod line of portable music players, the iTunes store, a portfolio of peripherals that support and compliment the Macintosh and iPod lines, a portfolio of software applications, support hardware, and other service and support offerings. They also sell 3rd party material that is compatible with Macintosh and iPod products: software, printers, storage devices, speakers, headphones, etc through their online and retail stores. First we will talk about their Macintosh Computers, then their software, the portable music players, and the iTunes service. We will not cover the peripherals, the 3rd party material, etc.

Macintosh computers fall into 2 general categories which are desktop machines and portable machines. The most recent desktop machines include the Mac Pro (Its more like a PC tower which requires a separate screen like an Apple cinema display) and the iMac. The portable computers include the Mac mini, the MacBook, and the MacBook Pro. Product specifications and their Apple website adverts will be featured in the appendix.

Macintosh computers seem to not be really rising in sales any more so they are coming to the maturity level were normal users and what would be called “catch-up” consumers just buying into Mac are still buying. The Macintosh Computers might begin gaining more light though as more of the computing world becomes more familiar with the ease-of-use, utility, and superiority of Apple products through the new Apple iPhone. Although two completely different industries, Apple’s ability to integrate consumer electronics more into computer compatible products will likely influence more people to look into buying Apple for their computer needs. Either way, the newer Macintosh Computers with the Intel processors are among the fastest processing machines on the market. However, for many novice computer users, these types of extras are unnecessary.

Most people just want to be able to send and receive emails, write and print thing, and possibly scan stuff. Now people also want to use computers for listening to music, for saving and sending photos, for keeping up with the news and researching, and for creating little videos. When people are new to or are getting used to a new computer whether they find different programs easy to use will determine whether they want to use that program. Most people get confused with their computers or they don’t know how to use them. Macintosh computers are easy to use, has multiple utilities so that people can find a lot of things to do with their computers and get the things accomplished quicker. What Apple has is a differentiation marketing technique, but more than most.

What they have managed to do is to reinvent and redistribute the same basic product, but with more utility each time. Even now, when a person goes to buy a laptop they will have several needs that the computers will have to satisfy. Some people need a bigger one and some want smaller and more mobility. The design and the software also have a lot to do with the buying choices people make. Some of the machines will have more memory etc. In either case, Mac machines will not completely mature because Apple will always release an upgrade or a new machine.

On thing that has been established is that Apple releases a few versions of one great computer and then offers new software that easily integrates with the other software. Well, Apple has a lot of software that only within the last 4 or so years began to integrate with PC things as well as hardware. For this reason Apple has only been able to gain supplies from a limited set of suppliers, leaving Apple in a vulnerable position. However, one of Apples competencies is a great designing department. They come up with fun looking machines and professional looking machines. The other important thing is the size and the colour of the machine.

Once the hardware is delivered, the other important factor is the software of the computer. The big thing Apple has is the OS X operating system. This system comes with Microsoft’s software package so that more users would e find converting to Macintosh easier and more worth their time. There are several great software products that Apple has come up with and that they’ve made available industry wide; then again some things still only run on Apple computers. For instance, over the past 4 years Apple has been developing a set of software that just comes with the computers.

The software is almost op of the line for artists, musicians, or just anybody looking to make a movie or something. The set of software is called iLife. Another very important thing to think about is their making the Apple Macintosh more accessible by integrating PC’s most popular software, the Microsoft package. The software will have a limited set of uses, but they are all self explanatory enough for consumers, but most of all it will be marketed specifically for its superior abilities over other products. It should be said that Apple computers are the best for art related tasks.

Finally, the last product line to really look at is the iPod line. This kinda of more or less includes the Apple iTunes store. Originally upon release of iPods, only dedicated apple users could use them because they were not integrated elsewhere. There are 3 different main portable music playing devices and as time has passed the sales for the ipod have only increased more and more. Now they are releasing a mobile phone which will most likely cannibalize their iPod sales because their mobiles does similar things as an ipod would. This is interesting because Apple always tests products on a few loyal customers, but this cell phone has been marketed to the masses. Apple has never had much of an economy of customers, but with these iPod numbers, the cell phone should sell well.

Distribution

Apple has many forms of distribution from their own retail outlet, to business to business selling, to their online store. First there are the Apple retail stores; most of these will be found in major cities across the US and the UK. From these or the website anything can be offered to customers and the products can be even more personalized than they already are.

Their most important deals are probably with education. For years they have been offering their computers to schools for years and have grown a large following just from the children that are familiar with Apple and comfortable with Apple interface. This also allows Apple to watch market trends since their market is also people between 20 and 30 years old. The young children will be the future so Apple simply watches what they are interested in.

Their final bit of distribution comes from other warehouse companies or help desk companies that need the Apple parts and products to fix peoples’ computers. There are also third party stores that might display the product amongst several other laptop options.

Their main manufacturing, development, designing stuff can be found in California and in Ireland. These two points must serve as umbrellas under which warehouses and retail shops would order or receive from them.

Market Segmentation

The segments break-up into education, consumer, creative professional, business, and government. These segments are probably based off of the way the different groups will be served. Education is going to be served through entire computer networks and learning devices like projectors etc. The plan of Apple Is to service education with one laptop per student if possible, because the internet and the programs on the computer are extremely valuable tools for education. The consumer market is probably the iPod market, generally faceless.

They buy randomly. The consumers will shop online, whereas the education and the government will have to be through a call service that offers business to business solutions. The consumers are in the same boat as students which do fall under education, but are different from educational institutions. Along with these are business and creative professional. These four most likely shop online. The differences between these consumers will change in the specific machines purchased, the utility functions necessary, and the way Apple reaches these people to let them know about new products.