Apple Computer 1999

By: Group N2 Ayas Kanta Mohapatra Bibin George Varghese Chrystal Mariate Nooranha Debmalya Paul

Agenda
Introduction & Chronology Industry Analysis Porters 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 was unsuccessful 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 lowpriced 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

Chronology Cont.
1994 Designated a handful of companies to make Mac clones, launched PowerMac

1993 Launched Netwon MessagePad Apples 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 longterm cross-licensing agreement with Microsoft

By 1999 Apple delivered 5 consecutive quarters of profit

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 into mainstream
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 Intel processor) in early 90s replacing IBM as the dominant industry standard 400 million PCs installed around the world by 1999

PC Industry Overview Contd.

Worldwide PC Market (1990s) PC Buyers (1998)
15% 24% 40% 20% USA Western Europe Asia/Pacific Rest of World 8% 25% 8% 60% Business Government Education Home Market

18% Annual PC growth rate in 1990s Predicted growth rate of 13% - 15% by 2005

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, operating system Major players in the microprocessor industry - Intel followed by IBM, Texas Instruments Microsoft dominated the OS front, capturing 90% of the new PCs through products like MSDOS, Windows 3, Windows 95 Other OS Unix, Mac OS Alternatives to personal computers PDAs, smart phones etc.

PC Industry Analysis
Increasing competition to produce least expensive 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

Porters Competitive Force

Threat of New Entrant

Bargaining Power of Supplier

Industry Rivalry

Bargaining Power of Buyer

Threat of Substitute

..Porters Competitive Force

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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..Porters Competitive Force

Threat of Substitute Threat is very low

Bargaining Power of Buyer High brand loyalty Price sensitive market based on economy

Bargaining Power of Supplier Component supplier low OS supplier - high

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..Porters Competitive Force

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 other PCs and licensing them Special concessions to schools for bulk purchase

Long term contracts with corporates

Increased retail presence and customer service Provide option for customization before purchase
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THANK YOU !!

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