Analysis of Apple

As an opening to the review of Apple I will say that the most memorable moment that I have about Apple is when I was a young boy in 1985. I would see my father working on his Apple IIC in our house for his job. I remember waking up in the middle of the night to the sound of the printer making that horribly loud noise, as he was printing off his spreadsheets for work. I also remember when I was in elementary school being one of the only few kids that had a computer at home and how I was able to do my book reports on the computer as opposed to the other kids only being able to hand write their papers. The technological advancement over the years of Apple has been amazing to watch. I always wondered how they came up with the name Apple and I always associated it with the fruit. First, we will review the history of Apple, which dates back to the mid 1970s and then we will review the growth and development of Apple products from the first Apple computer to the iPhone.

In this case analysis we have learned about the company and the problems they have faced since the beginning of the company, such as their problems with management.

#1) Analyze the company's history, development, and growth.

Apple got its start from two young entrepreneurs Steve Jobs and Steve Wozniak on April 1, 1976. The name, Apple, was randomly chosen by Jobs. They couldn't think of a better name so it stuck. Jobs' was the businessman type and Wozniak was the builder or engineer of the product. Together, with their knowledge, they started a business by selling Wozniak's computer, called Apple I out of Jobs' garage. Apple I had its flaws, but they still managed to sell around 200 of them at $666. During the time that the Apple II was being developed, they took on a third partner Mike Markkula, who convinced them to hire Michael Scott as the president of Apple. The Apple II computer was released on the market in 1977 and was priced at $1,200. It included the Motorola microprocessor, keyboard, power supply, and BASIC programming software that lacked in the Apple I. One thing about Jobs is that he was always concerned with the product design. He wanted to make sure the computer looked seamless, which customers would appreciate and he knew that. "Jobs also insisted that the Apple II looked good. It had an attractive case and no visible screws or bolts. This differentiated it from most personal computers at the time that looked as if they had been assembled by hobbyists at home (as many had)." (Essentials of Strategic Management, C14)

In 1978, Apple created a model of the Apple II that included a disk drive. This was essential to the development of Apple because it allowed software companies to develop software that could be used with Apple products. Programs began to pop up on the market, such as EasyWriter and VisiCalc. "Because VisiCalc was only available for the Apple II, it helped to drive demand for the machine." (Essentials of Strategic Management, C14) By the end of 1980 over 100,000 of them had been sold. It made them the leader in the PC industry with over $200 million in sales.

In 1980, Apple developed the Apple III, which turned out to be a failure and in 1981 a revised version of Apple III was released, which still didn't sell as well as the Apple II had continued to sell. Over two million Apple II's were sold, one of the biggest buyers being educators. In 1980, Apple began working on two projects, the Lisa a high end model and Macintosh a lower end model. One important move Steve Jobs made was visiting Palo Alto Research Center, where they perform advanced research of technology. Jobs' was intrigued with what he saw that he pushed those ideas so hard that he was pulled off the project. He had a vision of his own that he wanted the engineers to recreate and wanted it done as soon as possible. His rebuttal was forcing his way onto the Macintosh project. During this time there were some structural changes, Michael Scott left the company and John Sculley, the former vice president of marketing at Pepsi, was hired as the new CEO.

Jobs' continued pushy management style led Apple down a rocky path. In 1984 Macintosh was released. It included many bells and whistles, stylish design, graphic user interface (GUI), which was seen at PARCS, and a mouse; however, it failed to have a hard disk drive and not enough memory. At this time few applications could be used on the Mac and it was difficult to build applications for computers other than the IBM and its clones.

In 1985, Apple recorded its first loss. Jobs' management role was taken away and he decided it was time to leave Apple. Under Sculley, things changed quickly. "With Jobs gone, Sculley shut down the Lisa line, which had done poorly in the market due to a very high price point of $10,000. He pushed developers to fix the problems with the Macintosh. In January 1986, a new version of the Macintosh, the Mac Plus, was introduced. This machine fixed the short comings of the original Mac, and sales started to grow again." (Essentials of Strategic Management, C16) This period turn in to what would later be known as "The Golden Years".

From 1986 to 1991, Apple was able to control all aspects of their computers because they made both hardware and software. Apple II computer sales were still selling strong in the education market and Mac Plus dominated desktop publishing. Apple was able to charge premium price for their products and in 1990 they were the most profitable PC manufacturer in the world. "Gross margins on the Mac line got as high as 5.5%. In 1990, Apple sales reached $5.6 billion, its global market share, which had fallen rapidly as the IBM-compatible PC market had grown, stabilized at 8%. The company had a strong balance sheet and was the most profitable personal computer manufacturer in the world." (Essentials of Strategic Management, C17) During this time, John Sculley was interested in licensing the Mac OS and Microsoft's Bill Gates was interesting in making a deal, but other executives disagreed and it was voted against selling the license, as they wanted to protect their product. Some also felt that Bill Gates has an ulterior motive.

In 1990, Apple spent 8% of sales on research and development and was in trouble with Microsoft selling Windows 3.1. Sculley developed a plan to help with their current competition. First, he appointed himself as the chief technology officer in addition to CEO, which is a conflict of interest. Second, he developed a low cost version of the Macintosh to compete with IBM clones. They soon introduced the Mac Classic in 1990 for $999. Third, they cut their costs, employees and salaries. He was committed to developing new hit products every 6-12 months. PowerBook Notebook was developed in 1991 and Apple Newton,