ASSIGNMENT: Strategic Management -1

Apples Future Advice to Tim Cook

Submission by:

VISHAL GARG | 14P058 - Section A

Apple, with the declaration of the spectacular FY15 Q1 results, created history by surpassing all companies
in reaching to the highest levels of quarterly earnings. It is a record and that too surfacing in the technology
space.
The shining charisma of Apple is back! It is creating magic and redefining technology, as would have said
its Founder Steve Jobs. Revenue, Gross Profit, Net Income, and what not. Each financial metric is a record.
Such a leap by this technology giant calls for the thought of where is this ship of Apple heading to?
The lenses through which the picture of Apples future could be viewed are a plenty.
One lens brings out a brighter picture with a crisper light on Apple. Success giving birth to success. The
legacy of Apple inventing a magical device could continue with the sensational iWatch which supposedly
would have the power to reinvent the watch. iWatch will open for Apple a new product line. The possibility
of its success heavily relies on its aesthetic appeal. The technology end will, with very less doubt, not
disappoint the Apple lovers as it presumably will fit smartly into the Apple ecosystem of apps. It is almost
a worthy step towards the world of Internet of Things. iWatch will also be the very first product line
which will be launched by Tim Cook, who will in all good sense take its success credit if so happens.
Another lens depicts a darker picture with an increased contrast. The iPhone 6 Plus losing its sheen with
barely any new innovations possible and in the coming quarters the launch of iWatch getting an unhealthy
welcome from the community of Apple users. A scenario like this will put Tim Cook in a corner and will
give every reason for the technology gurus to question his leadership blaming him to follow the old Apple
way of putting all eggs in the same basket. This very ineffective strategy of Apple has got it near
bankruptcy in the past (referring to the launch of the PC model Lisa).
Third lens maintains the depth and color of the present performance. Just as in the past Christmas quarter,
when the size of the Apples pie increased as the Chinese made space for the brand in their bellies, this
quarter will have the Chinese New Year that to an extent might replicate the Christmas effect of the
quarter that just went past, given the liking of the brand among the people of China as it opened its gates
for Apple. The rumors of an iPad Pro and even a new OS expectation in the coming February event of
Apple do maintain the brand value of Apple allowing the consumers not to shift focus of Apple.
One lens brings out the view of reality that Apple has already profusely milked its product lines of iPhone
and iPad. To add to it, iPhone is already in its 6th edition and the progress in each edition has been only
slightly incremental. iPad has also got its mini version springing out all over the market. An important fact
to take note of is that Apple has almost to an extent filled its money bags by selling it to the largest
segments of the market, a landscape of the US and the European Union. Moreover, China in a quarter has
itself matched up to the sales in the European Union. On the financial front, Apple has been filling up its

cash pool overseas and primarily through its Irish subsidiary where the taxations costs merely 2% and if
all this hot cash is brought back to America where the corporate tax is 35%, Apple will lose out its tax
benefit of 33% i.e. a third of its much heavy cash. In terms of the product lines, iWatch is projected to be
the first product under the leadership of Cook, and the first since the last launch of iPad in 2010.

Possibly the secretive mill of magic at Apple could be working up a plan for Expansion in the form of
organic growth, and it seems to be the right step. The natural expectation of this organic growth, in
accordance with the philosophy at Apple, seems to be that Apple will touch the consumers lives at a
deeper level by venturing into sophisticated technology wearables. The clothes we wear, the shoes we
use for running, and the garments that cover our body: all could be infused with the overpowering magical
smart technology and introduce these consumers to a new world of internet of things. The latest
acquisition - Dr. Dre, could be one of its very initial steps towards such an objective.
Not to neglect, Apple has been the fantastic patent generating factory with the every possible
technological update in its domain of consumer electronics. Apple could very well be cooking up patents,
and as a matter of fact it is. It has been getting awarded with patents one after the other. Some being as
the possible introductions in the future iPhones, iPads and other devices. The list of patents filed for and
some awarded to Apple by USPTO (United States Patent & Trademark Office) as of now is
iPhone 7 patents: Sidewall displays, Accident-free buttons, Greater touch accuracy, Curved display,
Flexible iPhone, Your face is your password, Advanced Touch ID fingerprint sensor, Touch ID display,
Attack detection mode, Home button joystick; iPhone camera patents: iPhone 7patents: 'Superresolution' photos, 3D photographs, Interchangeable camera lenses, Refocusable photographs; iPad
patents: Advanced Sensor UI & the pull gesture, Pressure sensitive display, Vibrate feature; Future of
iOS : Clearer contacts in Messages app, Driver lock-out, Transparent text messages, Battery-saving mode,
Age-monitoring; Apple Watch: Heart ID, Liquidmetal; Macs: Advanced MacBook keyboard, Wireless
mouse/keyboard charging, Touch-sensitive MacBook chassis, Touchscreen MacBook; MacBook-iPad
Hybrid, Solar-powered MacBook, Siri for Mac; Apple accessories: Health-tracking headphones, Siri Smart
Dock, iPen smart stylus, Solar charging iPhone, MacBook accessory, Self-adjusting earphones, Advanced
Smart Cover/ Smart Case; Siri-controlled home, Virtual reality head mounted display, Virtual keyboard,
Holographic touchscreen, 3D gestures, GoPro rival.
There is even a unique patent filed for Apple Television too.
Cultivating a strong ecosystem around the devices Apple reinvents is another strong and viable strategy
that Apple seems to have in persuasion. ApplePay is the latest in this context, with its launch I October
2014. It could very well, if accepted and adopted, have a revolutionary impact by digitizing the business
of debit/credit cards. Apple will take the role of a payment bank helping its consumers deposit and
withdraw cash at will.
Lastly, considering the above highlighted possible future paths for Apple and combining it with the love
for the brand shown by its consumers, the overall value of Apple seems to be appreciating.

References
1. Spence E. Predicting Apple's Future: Tim Cook's Gentle Path To Avoid Apple's Downfall. Forbes. 2015.
Available at: http://www.forbes.com/sites/ewanspence/2015/02/07/apple-2015-prediction/.
Accessed February 6, 2015.
2. Allsopp A. Apple patents give clues to future iPhones, iPads, Macs, Apple Watch & more. Macworld
UK. 2015. Available at: http://www.macworld.co.uk/feature/apple/apple-patents-round-up-cluesfuture-iphones-ipads-macs-watch-future-tech-3468138/. Accessed February 7, 2015.
3. Appft.uspto.gov. patft Page 1 of 1. 2015. Available at: http://appft.uspto.gov/. Accessed February
8, 2015.
4. Goldman D. 'I'm deeply concerned for Apple's future,' says star developer. CNNMoney. 2015.
Available at: http://money.cnn.com/2015/01/05/technology/apple-software/. Accessed February
7, 2015.
5. Spence E. Apple Loop: Tim Cook's Nuclear War, Samsung's iPhone Surprise, Angry Users Wait For iOS
8.2. Forbes. 2015. Available at: http://www.forbes.com/sites/ewanspence/2015/02/06/applenews-digest-tim-cook-nuclear-war-iphone-7/. Accessed February 10, 2015.
6. BloombergView.com. Why Apple Has to Borrow $17 Billion. 2014. Available at:
http://www.bloombergview.com/articles/2014-04-28/why-apple-has-to-borrow-17-billion.
Accessed February 8, 2015.
7. Business Insider. Intel CFO: We're so far ahead that Apple has no choice but to work with us. 2015.
Available at: http://www.businessinsider.in/Intel-CFO-Were-so-far-ahead-that-Apple-has-nochoice-but-to-work-with-us/articleshow/46158254.cms. Accessed February 9, 2015.
8. Worstall T. Why Apple Is Borrowing $6.5 Billion And What Obama's Trying To Do About It. Forbes.
2015. Available at: http://www.forbes.com/sites/timworstall/2015/02/03/why-apple-isborrowing-6-5-billion-and-what-obamas-trying-to-do-about-it/. Accessed February 9, 2015.
9. The Verge. Apple tries making the iPad look hard and edgy just like the Grammys. 2015. Available at:
http://www.theverge.com/2015/2/9/8003887/apple-tries-making-the-ipad-look-hard-and-edgyjust-like-the-grammys. Accessed February 9, 2015.