Apple Inc Final Ppt

transcript

GROUP - 2

• Shruti Vyas – 6

• Priyanka Sarda – 30

• Sunita Sur Roy- 44

• Nitin Chinta – 48

• Tarmeen Shaikh- 53

• Savio Pillai - 93

• Megha Jain- 133

Question 1: Trace the History & Apple through

the Years

1st April 1976

Steve Wozniak & Steve Jobs

APPLE - I

A.C. “Mike” Markkula Jr.

APPLE – II1978

IPO – Dec 1980

Entry of IBM 1981

MACINTOSH 1984

John Sculley – New CEO 1985

Job found NeXT

Mac Classic 1990

PowerBook Laptop1991

Apple & IBM – Joint Venture1991

‘Kaleida’ – Multimedia applications

Newton (PDA)1993

Micheal Spindler – New CEO1993

Gilbert Amelio – New CEO1996

Apple acquired NeXT Software1996

Steve Jobs returned as interim CEO1997

Apple launches its website1997

• Jobs announced that Microsoft would invest $ 150mn in Apple

• Also develop its core products like Microsoft Office for Macintosh

Apple launches iMac1998

Apple launches project to create Final Cut Pro1998

Apple launches its 1st retail store in McLean, Virginia

Apple launches iPod2001

Apple introduced Mac OS X based on UNIX2001

Apple introduces iPod for Windows2002

Apple launched iTunes Music Store2003

Apple developed web browser – Safari2003

Apple created a video iPod2005

Apple abandoned PowerPC chips & began building Macintosh with Intel Core Duo chips

Apple entered into joint venture – for new flash memory

Apple released Apple TV2007

Apple launched iPhone2007

Macintosh sales increased by 40%2007

Ultra thin mac book Mac pro

MacBook Pro Mac mini

Jobs released ‘Apple TV, take two’2008

Apple operated 215 stores & retail divisions – 19% total revenue

Apple offered the iPod range2008

Apple launched iPhone 3G2008

Question 2: What have been the highlights of Company’s

Performance under various CEOs?

Steve Jobs & Steve Wozniak

• 1976 – Apple – I - sales of 200 pieces.• 1978 – Apple – II - sales – more than $1bn • 1980 – Apple sold more than 1 lakh Apple II• 1982 – Apple market share dropped to 6.2%• 1984 – Apple’s net income fell 17 %

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

3341902

Net Sales ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

583 604

447489

R&D ($ mn)

Net Income ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 2007

39 154310

Operating Income ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 2007

261620

Market Value ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

100000

120000

140000

160000

180000

200000

1223.7 2578.36649.9 2598.5 5539.7 4996.2

5146.4

25892.5

60586.6

72900.8

173426.9

John SculleyTenure : 1985 – 1993

Apple Inc. - Worldwide PC share

John Sculley

• 1990 – worldwide market stabilized to 8%• 1990 – share in education market more than 50% - Apple was most profitable PC company in the world.• The gross profit – 50%• R&D – 9% of sales• 1991 - Invested $ 500 mn to develop next

generation OS• 1993 – Gross margin dropped to 34%

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

3341902

Net Sales ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

583 604

447489

R&D ($ mn)

Net Income ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 2007

39 154310

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 2007

261620

Market Value ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

100000

120000

140000

160000

180000

200000

1223.7 2578.36649.9 2598.5 5539.7 4996.2

5146.4

25892.5

60586.6

72900.8

173426.9

Michael SpindlerTenure : 1993- 1996

Michael Spindler

• 1993 – Education market share 60% - Desktop publishing 80%• 1993 – $50 per copy of Mac OS - 16% cut down on work force & reduction on R&D cost• 1996 – Apple reported a loss $69 mn• Further layoffs

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

3341902

Net Sales ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

583 604

447489

R&D ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 2007

261620

Net Income ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 2007

39 154310

Market Value ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

100000

120000

140000

160000

180000

200000

1223.7 2578.36649.9 2598.5 5539.7 4996.2

5146.4

25892.5

60586.6

72900.8

173426.9

Gilbert AmelioTenure – 1996-1997

Gilbert Amelio

• 1996 – Apple incurred a loss of $ 1.6 bn• 1996 – worldwide market share fell from 6%

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

3341902

Net Sales ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

583 604

447489

R&D ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 2007

261620

Net Income ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 2007

39 154310

Market Value ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

100000

120000

140000

160000

180000

200000

1223.7 2578.36649.9 2598.5 5539.7 4996.2

5146.4

25892.5

60586.6

72900.8

173426.9

Steve JobsTenure : 1997 - 2011

Steve Jobs

• 1997 – Mac market had fallen by 11% - Mac clones market sales 20% of mac unit sales. 1998 – iMac sales - 6 mn units - R&D spending increased.2007 – Mac sales - 43% of Apple total revenue -Laptops sales - increased from 45% to 61 %of Apple’s revenue- Leopard sales – 4mn copies- Overall sales – more than $ 1bn

Steve Jobs

• 2007 – 45% of total revenue – iPod + iTunes• iTunes songs downloads:

• 2008 – iPod sold 150 mn pieces - 70% of US market share

Year No. of Songs Downloaded

(99 cents per song)

Total Revenue from iTunes

2003 1 mn 9.9 Lakhs

2008 5 bn 4.95 bn

Steve Jobs

• 2008 – Apple raised its revenue to $1 bn by introducing MS Office in Mac.

- Retail division contributed 19% of total revenue. - sales of 10.3 bn Macs - Apple’s PC share increased to 8.5% (in US) & 2 – 3% (worldwide)

Steve Jobs

• 2008 – 5 lakhs revenue from movies download per day

• 2008 – Apple iPhone market share 19.5% (US) - < 1% (worldwide)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

3341902

Net Sales ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

583 604

447489

R&D ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 2007

261620

Net Income ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 2007

39 154310

Market Value ($ mn)

1981 1986 1991 1996 1998 2000 2002 2004 2005 2006 20070

100000

120000

140000

160000

180000

200000

1223.7 2578.36649.9 2598.5 5539.7 4996.2

5146.4

25892.5

60586.6

72900.8

173426.9

PEST ANALYSIS

Political

Sociocultural

Technological

Economical

Political

• Foreign Trade Regulations

Sociocultural

• Population demographics• Income distribution• Lifestyle changes• Levels of education

Economical• Money Supply• Disposable Income

Technological• New discoveries /developments• Speed of technology transfer• Rates of obsolescence

Question 3: Do you think Job’s was effective as CEO in

crafting and executing company’s strategy?

1976 - 1985

• Proprietary Designs• Premium Pricing

1997 - 2008

• Integration of art & technology• 1998 – iMac series• Retail stores & Website• Reverse Razor – blade strategy - iPods &

iTunes• Outsourcing• Reenergize Apple’s image• Co-opetition• Upgrades in every 12- 18 months

COMPANY 1 GB- 2GB 4GB- 16GB 30GB- 160GB

8GB-32GB (multi touch)

APPLE $49-$69 $149-$199 $249-$349 $299-$499

SanDisk $40-$70

$80-$200 $350 NA

Sony $45-$60 $100-$300 NA NA

Microsoft NA $130-$180 $200-$250 NA

iPod Competitors: Comparison of models and prices for mp3 players (Aug 2008)

Net sales by products

2007($mn)

change 2006($mn)

change 2005($mn)

Desktops 4020 22% 3319 (3.04)% 3436

Portables 6294 56% 4056 42% 2839

iPod 8305 8.19 7676 69% 4540

Other musical product

2496 32% 1885 109 899

Net Sales (Product wise) ( $ mn)

Power Mac

Deskto

PowerBook

iPhones

Periphera

Software

200220032004200520062007

1997 - 2008

• iPhone & AT&T• Inventories• R&D spending

Inventories ($ mn)

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20070

Gross Margins of Apple and major competitors in %

1997 2000 2003 2004 2005 2006 20070

28 29 29 30 30

19 19 18 1719

2725 26

AppleDellHP

Still why was apple just a marginal player??

• Cost was very high in comparison to its competitors

• Incompatibility of its products and software with the other products and software

• Overestimated sales leading to unsold inventory

Worldwide PC Market Share

HP Dell Acer Lenovo Toshiba Fujitsu IBM CompaqPackard

Bell Apple

2000 7.8 11.4 3 5.1 7.1 13 4.5 3.5

2001 6.9 12.9 2.8 4.5 6.2 11.2 3.5 2.5

2002 16 15.1 3.2 4.2 5.9 3.3 2.3

2003 16.2 16.7 3.1 3.1 4.1 5.8 1.9

2004 15.8 17.9 3.6 2.3 3.6 4 5.9 1.9

2005 15.6 18.1 4.7 6.2 3.5 4.1 2.2

2006 16.5 16.6 5.8 7.1 3.9 2.3

2007 18.8 14.9 7.9 7.5 4.1 2.6

Question 4: What are the elements of Steve Jobs strategy over the period convened in the case? Compare the strategy of

other CEO’s with that of Jobs.

Name (of the CEO)

Goal / Objective Strategy Tools of Implementation

John Sculley To increase the Net Income / Reduce the Manufacturing Cost

•Taligent – Joint Venture with IBM for new OS •Kaleida - Joint Venture with IBM for multimedia Application•Horizontal and Vertical integration

To increase the Market Share

Penetrating into Educational and Corporate World

• Superior Software + Peripherals• Launch of a low priced product (face competition)•Developed its own proprietary OS•Offered new products every 6-8 months

Name (of the CEO)

Michael Spindler

To increase the Net Income / Reduce the Manufacturing Cost

Reinvigorate its core market (education and publishing)

•Cutting the Workforce by 16%•Reduction in R&D spending

To increase the Market Share Internationally

Increasing the users of Mac OS

•Licensing for Cloning Mac OS

Name (of the CEO)

Gilbert Amelio To increase Product line

Introduction of Apple into High-margin segment

•Launch of servers, Internet Access Devices and PDAs

He also acquired NeXT software and took the developed OS from them.Also bought back Steve Jobs back to Apple as a part time advisorThere were deep payroll cuts during his time.

THANK YOU

Apple Inc Final Ppt

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