Apple in 2005: Moving into the Mainstream? (Page 2)

Abstract

Steve Jobs, CEO of Apple Computers has recently announced that his company might start using Intel microprocessors from 2006. Apple has traditionally stayed away from using Microsoft's Windows software and Intel's microprocessors and preferred to use IBM microprocessors for its computers. While there are rumors that the announcement might be a tactic to gain negotiating leverage with IBM, Apple maintains that its intentions are serious. Will using Intel chips mark a turning point in Apple's evolution? Will it take Apple mainstream?

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Background Note contd...

Providing connectivity to external devices greatly improved the versatility of the Apple II. When Apple became the first PC manufacturer to offer a floppy disk drive, sales jumped. Apple quickly became the industry leader, selling more than 100,000 Apple IIs by 1980.

Till 1982, Apple saw increased sales and an average growth rate of 150% a year. With IBM's entry into the PC market in 1981, the competitive landscape was altered. Apple's vertically integrated model that sought to bundle hardware and software, became increasingly vulnerable. The IBM PC, which relied on Microsoft's DOS Operating System and Intel's microprocessors, was an "open" system that allowed other manufacturers to duplicate (clone). This led to greater user acceptability for IBM and its clones.

Seeing its market share and margins erode, Apple introduced new products- Lisa and Macintosh (Mac), which targeted the business and the high-end education market respectively. After Wozniak quit in 1983, Jobs hired John Sculley (President of PepsiCo) as the CEO. Jobs remained the Chairman and oversaw Apple's product development and technical direction. Sculley was in charge of the operations.

Sculley was caught between Jobs' dual roles as the Chairman above him and as the General Manager (GM) of the Mac division below him. Jobs spent most of the company's resources on the burgeoning Mac division, thereby antagonizing the Apple II team (and Sculley) that had until then contributed about 70% to the company's sales......

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PRODUCT DEVELOPMENT

THE ROAD AHEAD

EXHIBIT 1 APPLE - FEW PRODUCTS

EXHIBIT 2 APPLE - FINANCIALS

EXHIBIT 3 APPLE'S - PRODUCT LINE (PARTIAL LIST)

BIBLIOGRAPHY

WEBSITES
 

        Case Code   BSTA118
   Case Length    13 Pages
              Period    -
 Organization     -
        Pub Date     -
Teaching Note    -
     Countries    USA
      Industry    -

Issues                 -

Steve Jobs, Apple Computers, Intel microprocessors, Microsoft's Windows software, IBM microprocessors, Intel chips, Turning point in Apple's evolution and Apple mainstream.

Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.