Apple Computers Essay, Research Paper

Apple Computers

Apple Computer?s was founded on April Fool?s Day in 1976 by Steve Jobs and Steve Wozniak. They were two college dropouts who started selling computers through Jobs family garage. Between the two Wozniak was the technical man and Jobs had the vision, so together they created their first computer named Apple I. Jobs? mission for Apple was to provide an ?easy-to-use? computer to almost everyone. Two years later the Apple II was launched. The Apple II was extremely user friendly; so easy you could use it straight out of the box. Because of the Apple II, Apple Computer became the industry leader and eventually went public in winter of 1980.

In 1981 a new challenger entered the PC market, IBM. IBM relied on a different type of operating system and microprocessor. In comparison to the Apple II, IBM?s designs were dull, boring, and incompatible. They also had an ?open? system, which made it easy for other manufacturers to clone, where as Apple was the only one who could produce their designs. Apple?s next generation computer was the Lisa which also featured Apple?s creation of the mouse and the GUI (graphical user interface), however, the Lisa was incompatible with the Apple II and IBM standards and did not get much sales. The Lisa was eventually dropped. Apple then began to concentrate on creating a cheaper computer with the same advanced features as the Lisa. In 1984, the Macintosh was introduced.

During the 80?s the majority of people buying computers were Apple?s buyers. Apple sold more than 100,000 Apple II?s to homes, schools, and small businesses and Apple had only one main competitor at that time, IBM. Retailers carried only three major brands on their shelves: Apple, which was the user-friendly computer, IBM, which was the average priced industry standard, and Compaq, which built IBM-compatibles. By the 1990?s Apple not only had IBM as a competitor but many other PC manufacturers as well such as: Dell, Acer, HP, and Gateway to name a few. During the 1990?s computer consumers were shifting to PC?s more. Buyers viewed PC?s as a commodity. The main buyers of PC?s now are mainly big businesses and homes, but schools are also changing their systems to PC?s. Before during the 80?s consumers of PC?s were first-time unsophisticated customers. Many of them placed their buying decisions upon service, support, and compatibility. By the 90?s PC customers became more knowledgeable and were able to buy systems that were catered more towards their needs.

The main suppliers of the PC industry fell into two categories. 1) Suppliers of memory chips, disk drives, and keyboards. 2) Suppliers of microprocessors and operating systems. Suppliers of the first category were price competitive, while Intel and Microsoft dominated suppliers in the second category. Due to Microsoft?s dominance on it?s operating system federal and state attorney?s felt that Microsoft created a monopoly in order to penetrate the Web browser market. This however, did not change Microsoft?s performance and they still remained strong and viewed as most valuable company.

Apple Computer has come a long way with many struggles and reorganizations of the company. Within five years Apple had gone through four CEO?s. The first was John Sculley. Sculley came about after Steve Jobs left the company in 1985. Sculley?s first step in Apple?s turnaround was the introduction the Macintosh Plus that boosted sales and made Apple a worldwide brand. Apple never integrated over to microprocessors because they created their own products from scratch. Sculley wanted to reposition Apple by creating ?cheaper computers with mass-market appeal? and bring out new products every 6-12 months. Sculley also formed a close relationship with their rival, IBM to create an alliance in order to better Apple. This alliance included three steps: 1) a joint venture to create an operating system incorporating the latest technology advancements (Taligent). 2) Switch from the microprocessor to IBM?s PowerPC chip. 3) Create another joint venture that would collaborate a common language for multimedia applications (Kaleida). During his time, Sculley also created what he called the PDA (personal digital assistants), which was a handheld electronic organizer with wireless communication. Internally, Sculley had cut his workforce by 20% the first time and another 10% the second time in order to make Apple a low-cost producer. The board felt that with these changes were not enough to keep Apple?s profits sustainable, therefore Sculley became chairman and Michael Spindler was appointed the new CEO.

With Spindler as new CEO, he continued to roll out new products and made sure that Apple was price competitive. Spindler also wanted the company to refocus its market to schools, mainly kindergarten through high school, where Apple obtained 60% and 80% of shares. However, his main key focus for Apple was to grow internationally. Apple was doing great business in Japan, until prices were kept higher than in other parts of the world. Japan then launched a price war and Apple responded by cutting prices, but it wasn?t enough because within a year Japan went from one of Apple?s best divisions to it?s worst. China was also a fast growing computer market, therefore Spindler wanted to target them. He predicts that China will consume 50 million computers by 2010. Apple was also believed to offer Chinese characters. With innovation and new products, Spindler introduced the Newton Message Pad, but device was too far behind technology that Sculley had promised earlier and it had poor handwriting recognition. Spindler also debuted eWorld, which was an online service for Mac users, but it didn?t have a great response so it was canceled shortly after. Internally, Spindler cut costs, and laid off 16% of his workforce worldwide. However, Spindler did improve efficiency by cutting development cycles to nine months but there was a lot of poor forecasting and Apple was not able to meet the demands for it?s best-selling products.

A couple of weeks later Gilbert Amelio replaced Spindler as CEO. Amelio was faced with a big challenge because when he took over, Apple was in a terrible state. Stocks were low, and companies were interested in taking over Apple. Amelio did not want to merge with any companies but rather focus on Apple?s product line. Amelio wanted to push Apple into segments such as Internet access, and PDA?s. Amelio?s vision was to be able to sell Apple?s at a huge premium over Intel-based PC?s, but for Amelio, there was not enough time for him to make his strategy work. In 1995, Apple had trouble recovering their name after two of their PowerBooks caught on fire. Apple?s market shares were dropping quickly. Amelio decided to cancel the next generation Mac OS and instead he aquired NeXT Software, whom Steve Jobs was the founder of. Again the company was in a slump and was hoping for a new operating system to restore their technological lead. By now the Newton was being dominated by 3Com?s PalmPilot. In December 1996 Apple and their Japanese partners introduced the Pippin, which was used to play games, e-mail, and surf the Web on TV. But like all the other products that Apple launched, there was not much success and there fore the Pippin was abandoned shortly after. Internally, Amelio hired a new senior staff and reorganized the company. He cut back on employees from his payroll and later would cut some more. Apple lost 1.6 billion and the company?s shares were in a dump. A week later Steve Jobs moved back into the CEO position.

The first thing that Jobs did was hiring a new staff. Second Jobs tried to come up with a strategy to reposition Apple into the personal computer industry. Jobs invested 150 million into IBM and committed to creating products for Mac such as, Office. Jobs also did a lot of restructuring of Apple?s product range, but the biggest accomplishment that Jobs did for Apple was the launch of the new iMac. His vision for the iMac was for it to be a breakthrough like the original Mac was and bring back Apple?s brand name. Jobs wanted to create new excitement around Apple to bring developers back into the Apple platform. Internally, Jobs cut company costs by forcing his employees to fly coach and watching what they spent money on. Jobs also eliminated duplicate efforts and centralized responsibilities such as marketing in company wide groups. Jobs also continued to cut back on employees and close facilities that weren?t necessary. In November 1997 Jobs launched a new Web site where customers could bye Macs directly. After 5 quarters, Jobs ideas were paying off and Apple was coming out of its slump. Apple?s upcoming strategy is to be the ?Sony of the computer business??

I think that Jobs should have Apple?s main focus to be on audio and video components of computers. Right now a lot of homes and businesses are buying PC?s, but more are starting to get back into Apple?s. Apple computers are better than PC?s for video and audio making. I think since Mac is one of a kind and because there are no clones on Apple computers it is easier for Apple to focus on and further develop the video and audio aspect of Apple. Apple should also keep their focus on user-friendly computers. With so many technological advancements and innovations, Apple should keep their computers user-friendly since convenience is a major trend in today?s society. If Apple continues to focus on these two aspects of the company then they can specialize in those areas and become masters of both, rather then trying to come up with new hip products every six months.