integrator of computer hardware and software Changed the computer, music, mobile and retail industries through its sleek product Commitment to understand the way people use computer and develop insanely great products Market capitalization of $550 billion, annual sales above $100 millions Apps download reached 25 billion Apple integrated music, books apps in a perfect masterpiece Under Sculley a lot of confusion emerged w.r.t Development of product Successful resolution of decisions Indecision whether to License MAC OS Compete in cloning space Enter into business market dominated by Wintel Stiff competition from IBM and Dell Entered into licensing accounting 20% of MAC unit sales Greater than 70 Macintosh Performa between 1992 1997 Confused customers and increased complexity
STRATEGIC CHANGES IN 90S STRATEGY AFTER COME BACK OF JOB Steve Jobs pivotal influence Believed processes brings efficiency Changed in strategy Stopped licensing program Eliminated 70% of new projects Product lines drastically reduced from 15 to 3 Launching website for direct sales Changing distribution system iMac debuted in August 1998 Reduced inventory from months to few days In 2006 computer line run on Intel processors
THE APPLE WAY Design Thinking Innovation, Product Development, and Execution CEO as Chief Innovator Bold Business Experimentation DESIGN THINKING Innovation powered through understanding and the direct observation of what people need and desire, like or dislike
Apple Business Opportunity: the computers used for automating business processes could also become a wide-spread personal device
Solution-based thinking that starts what is meant to be achieved instead of starting with a certain problem
DESIGN THINKING Figuring out the needs of people first Apples design sense was found to be one-of-its-kind (iPod mini) Sensibility: Taking care of every small detail Simplicity is the ultimate sophistication! Simplicity in Design and Use Going beyond superficial trends and getting to the essence of customer experience Problems were treated as moving targets Inside-out design: Result of painstaking attention to detail No compromise between simplicity of use and functionality Beyond Fashion DESIGN THINKING Early computers were only at specific locations such as company headquarters and government facilities. The goal was to create computers that fostered individual work Desired to make people fall in love with PCs Decided to make products simple
DESIGN-AS-PRODUCT-INTEGRITY This notion was driven by Steve Jobs After being ousted from Apple Jobs developed NEXT computer workstation NEXT targeted the education market The same architecture was the basis of Apples subsequent OS X There was no compromise between simplicity of use and functionality Apple faced with moving targets and not one time problem to be solved, It competed with itself
INNOVATION, PRODUCT DEVELOPMENT, AND EXECUTION Core Approach Working intimately with manufacturers and being completely attuned to customers Involvement in Material selection and manufacturing process Quest for Insanely Great Products Process Focused Excellence in Execution Strategy: Design initial product as a platform so that future enhancements are not developed from scratch Beneficial for key stakeholders, i.e. Customers, Employees and the Company Envision products, concepts at early stage Increase efficiency and re-suability; Products require less Repair and Maintenance Platform Strategy Participatory Design: Designing software with customer and usability test Customer experience, requirements, expectations considered in product design and development Smoother execution by increased user testing Appropriate user interface Iterative Customer Involvement Close attention to new materials and manufacturing processes Use of combination of designs, materials, intense colours to bring out a rhapsodic product Design as motivation for continued Innovation Strategy to get bolder than play it safe Beautiful Products INNOVATION & PRODUCT DEVELOPMENT Exemplified the way of using computing device Apples computer managed to develop Design integrity Fanatical fan base, leading to adoption of its product Developed from scratch Featured proprietary and unique hardware Beautiful object never far from mind Polycarbon plastic and snow superseded by aluminum White colour iPod to multi colour Mini Thinking out of box Integrated customer experience into the design Perceived to be new Imitation by competitors 1984 brought Macintosh in a Super Bowl advertisement Co - founded animation company Pixar studio Ready to take risk Set top boxes for TVs Personal digital assistant
INNOVATION & PRODUCT DEVELOPMENT JOBS AS CHIEF INNOVATOR Jobs imprinted Apple with his own personality characteristics Few traits of Steve Jobs making him as chief innovator are as follows: Strong influence over company Confident in his design sense Hired like-minded people Inspired others with his temperament and dictatorial attitude Jobs vision held Apple products as the solutions to individuals problems rather creating enterprise solutions Belief in presenting products to Public through periodic events that are shrouded in elaborate secrecy beforehand Jobs moved Apple to new spaces and brought evident changes with a signal that simplicity is the ultimate sophistication STRATEGY TO LAUNCH DIFFERENT STORES Decision to move into retail was a bold one: technology bubble erupted failure of similar attempts of retail stores by computer company Gateway web-based purchasing was in more demand as in the case of Dell allowing customers to configure their products online limited products available at Apple stores at the time of its launch
Benefits of retail store Attracted non Apple customers through Huge fan base Elegant surroundings in the store Inclusion of genius bar to carry out the products repair work Created music repository with launch of Apples iTunes music store Launched book store after iPad launch in 2010
EFFORT FOR PRIVACY Ignores open source movement Apple unlike in case of linux Designs its own chips for iPods, iPhones and iPads, a backward migration with respect to the computer industry Attacks websites and authors that dares to speculate on the companys plan Keep its suppliers mouth closed with the concern that a slip of tongue can forfeit business Focus web cams on landing docks to monitor the products from manufacturers Manages to create products that people want and win awards and recognition worldwide for the company and its leaders
FUTURE OF APPLE Steve Jobs remained on medical leave in 2011
Resigned from the post of CEO in August; died in October
Tim Cook appointed CEO
172 Mn post PC devices sold in 2011; 76% of fourth quarter revenue
362 retail outlets; 1 million daily footfall in 2012
Apple`s share price increased 60% since Tim Cooks rise to helm
Apple`s share price peaked to $ 705
Cash in hand $159 billion
CHALLENGES FACING APPLE Saturation in higher end smart phone market
Large screen and low cost requirement of customers Technological complications and process modification
Exodus of top management Tony Fadell God father of I-pod
Excessive focus on inside R&D I-cloud help from Amazon and Microsoft Open innovation??