Apple in 2005: Moving into the Mainstream?

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?

Introduction

In May 2005, Steve Jobs (Jobs), CEO of Apple Computers (Apple), announced that Apple might start using Intel microprocessors in its PC business from 2006. With this unprecedented move, Apple surprised its competitors, customers and suppliers. Traditionally, Apple had stayed away from the Wintel model (companies that used Microsoft's Windows software and Intel's microprocessors).

Meanwhile, Apple had made a strong comeback in the recent past with its iPod music player and online music portal iTunes. Notwithstanding the success of iPod and iTunes, Apple's future in the IT industry was by no means guaranteed. In the past, Apple had squandered its lead in the PC market, despite having great products. Even in 2005, Apple was considered as a niche player, with no significant presence in the mainstream market. Many rivals considered Apple to be heavily dependent on iPod. Apple's change of heart to use Intel chips seemed to mark a turning point. Would this move pay off and finally take Apple into the mainstream?

Background Note

Operating from a garage, college dropouts Steve Jobs and Stephen Wozniak founded Apple Computer in 1976. Jobs functioned as the business manager and Wozniak as the technical expert. Their first product was Apple I, which differed from other PCs as it was sold without a keyboard or a monitor. Apple was able to generate sales of $174,000 in the first year. The following year, Apple provided a monitor, keyboard and eight peripheral device slots.

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        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.