THE GROWTH AND DEVELOPMENT OF APPLE INC


THE GROWTH AND DEVELOPMENT OF APPLE INC. AS THE TOP TECH COMPANY WORLDWIDE
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THE GROWTH AND DEVELOPMENT OF APPLE INC. AS THE TOP TECH COMPANY WORLDWIDE
Technology is one of the field of science which have greatly delivered mankind and his world from the dark past through its innovations. It has not only enlightened him with new knowledge but also eased his day to day activities of life. For instance, transport and communication is two of the fields which technologically have created quick links between different nations, easing their interaction in economy building and social relations like sports. Although the two are often intertwined in a way, Communication is the field which most corporations are investing in in innovations as it’s the one used by many globally. Microsoft, Samsung and Apple are three of the world’s largest tech companies which are struggling hard to enhance fluent communication between individuals, businesses and nations. However, of the three firms, Apple is ranked as the top player in the tech scene and a recent survey revealed it as not only the largest company in the world, but also the eighth largest company in the world on Forbes’ Global 2000 list (Stoller, 2018 Online). Following is a brief overview of the Apple company, discussing its historical background, its present performance, its destination and the environmental opportunities and threats in the tech industry.

Historical Background
Establishment and Incorporation
Apple Inc. is an American global tech company under Nasdaq stock market which was established on April 1st, 1976 by its creators Steve Jobs, Steve Wozniak and Ronald Wayne (Wikipedia, Online). The company is headed in Apple park, Cupertino, California in U.S. and it designs, develops and sell home electronics, computer software, and a range of content-based online services. During its start-up period (1976-1977), the company was known as Apple Computer Company and the trio founders were using it to develop and market Wozniak’s Apple I personal computer (Wikipedia, Online). On January 3, 1977, the company was incorporated as Apple Computer, Inc. and that was one of the firm’s throttle-up step as it marked a growth in revenue and also sales of its computers including the Apple II. Unlike the Apple I which was sold as an assembled circuit board only, Apple II became a major technological advancement with the color graphics and the tape-based storage which was later upgraded to 5.25inch floppies (Rawlinson Nik, 2017 Online). The machine came complete plus the keyboard, and NTSC display, but the only issue was that the specs alone weren’t enough to justify the $1,300 cost of it. During the incorporation period, Wayne permanently left the company but multimillionaire Mike Markkula came in and resourced the remaining creators with the required business expertise and a funding of $250,000. Between the year 1977 and 1980, Apple’s revenue skyrocketed with an annual growth rate of 533% , with the yearly sales growing from $775,000 to $118 million (Wikipedia, Online). One of the cause of this splendid growth rate was due to the introduction of VisiCalc, the first app in an Apple II computer, which was unveiled in 1979.
VisiCalc and Macintosh
VisiCalc software was the first spreadsheet and a key product which assisted greatly in bringing the hobbyist’s desk into the office (Hormby, 2006 Online), and also gave businesspeople a real reason to spend ton of money on the Apple II. The software’s idea was developed by a Harvard student, Dan Bricklin, who then recruited a veteran programmer, Bob Frankston, so as to turn his fantasy into reality (Hormby, 2006 Online). Before writing the concept to Apple, Bricklin’s intension was to feed the idea to the DEC minicomputer but a head of Personal Software pleaded with him to write VisiCalc for the Apple II instead. During the creation, the machine, Apple II, was a difficult platform to develop business software for and it prompted the programmer, Bob, to incorporate a few hacks so as to make the software usable on it. Furthermore, Bob encountered hardware challenges such as difficulty in text entry using the keyboard, and but, the machine’s limited memory posed the greatest challenge to him as no matter how hard he tried, VisiCalc could not fit in the 16 KB of RAM on the low-end Apple II (Hormby, 2006 Online). However, the software fitted and performed superbly with the 32 KB Apple II and after going on sale in 1979, many dealers started bundling the Apple II with VisiCalc, a move that turned Apple into a successful company with sales of the pricey 32KB Apple IIs to businesses which needed them only for the spreadsheet (Hormby, 2006 Online).

On January 1984, Macintosh computer was created with 128K RAM of memory but due to its insufficiency, Apple decided to update it with a new version of 512K RAM (Old computers, 2016 Online). unlike with the preceding computers which were text-based, Macintosh was more advanced such that the user ran it by activating icons on the screen with a small hand-operated device called a mouse. This machine became the first commercially successful computer to use a GUI and this uniqueness saved it from obscurity (Old computers, 2016 Online). After the development of the first Macintosh, Apple company continued advancing it and after a period of five years, the Macintosh portable, Apple’s first battery-powered portable Macintosh person computer, was announced for US$6500. However, Macintosh portable was only short-lived as it was later discontinued after two years (Old computers, 2016 Online).
Apple stores
In the 1990s, Apple sold its products through sears and CompUSA, but the market was not much of a hit as they had expected and it prompted Steve Jobs and rest of the executives to design company’s own stores. This initiative earned the Apple extra consumers as the company had plenty of space left for people to interact with the technology (Swanson, 2015 Online). In order to boost its market, Apple ensured that most of the part of the store was reserved to let people try out and learn of its products. Using its unique store strategy, Apple was able to generate sales of $5,009 per square foot in the 12 months leading up to May 2015. This enabled it to surpass U.S. brands like Tiffany & Co. in sales (Swanson, 2015 Online).
Apple’s operations since 2016 – Present
At the beginning of the year 2018, Apple Inc. announced in its Newsroom that the company have collected a revenue of $88.3 billion which was a 13% gain from the previous year quarter. Tim Cook, Apple’s CEO, claimed that that first quarter was the biggest in Apple’s history, with the growth facilitated by the highest revenue ever from the new iPhone lineup (Apple’s Press Release, 2018). According to Cook, this revenue was enhanced by iPhone X which have been their top-selling iPhone, and also through the company’s installed base of devices which reached 1.3 billion in January (Apple’s Press Release, 2018). That was a very significant milestone for the company as in 2016 the company had reported its first decline in annual sales and profits in 15 years. According to Neate, Apple’s sales declined by 9% to 46.85billion in the three months to 24 September 2016 and the results marked its third consecutive quarterly fall (Neate, 2016 Online). This sales drop was mostly caused by the reducing sales of the iPhone, which by far is Apple’s most important product which often constitute two-thirds of all its sales. However, in its following fiscal year, fiscal 2017, the company announced its unexpected quarterly earnings and revenue that topped estimates (Balakrishnan, 2017). In their Newsroom, Apple Inc. reported that the company’s fourth quarter revenue was $52.6 billion, which turned to be a 12% increase from the previous year’s quarter (Apple’s Press Release, 2017). According to the CEO, Tim Cook, the sudden growth was facilitated by the company’s new products which included iPhone 8 & iPhone 8 plus, Apple Watch Series 3, and Apple TV 4K which had joined their product lineup.

At the beginning of May, 2018, Apple announced its second – quarter of fiscal 2018 which happened to be company’s sixth consecutive quarter of revenue growth, with its latest upgrade of iPhone, iPhone X, being the most successful model since its launch (Horwitz, 2018 Online). According to Horwitz, the CEO of the company claimed that many Apple consumers chose iPhone X more than any other iPhone during the March quarter, thus the unexpected growth. The wearables, Apple watch, beats and AirPods ; Homepods, also constituted to this quarter’s growth at 90% of total growth in the category of Other Products, with the Apple watch being the top -selling watch in the world (Horwitz, 2018 Online).
Mission & Objectives
Apple is one of the leading tech company in innovation, and as such, many would expect “inspiration” and “innovation” to be the mission statement under the company’s logo (Farfan, 2017 Online). However, conversely, the stated Apple’s mission statement in the corporate’s website is more of company’s products and past accomplishments: “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad” (Farfan, 2017 Online). However, regarding Steve Jobs favorite quote of 1980’s : Man is the creator of change in this world. As such, he should be above systems and structures, and not subordinate to them”, Apple’s mission statement can be derived from it as the company is always at the frontline in innovations which are Unique and promising to its consumers (Farfan, 2017 Online). The company is committed to bringing the best personal computing experience to all of its consumers around the world through its innovative hardware, software and online services.
External Environmental Analysis
Competitive Advantage of the Company
In reference to the Porters Five Forces model, industry competition is pinpointed as one of the main aspect which have impacted Apple’s performance and profitability (Maverick, 2018 Online). Being amongst the major global tech companies, Apple faces stiff rivalry as it’s in direct competition with companies such as Samsung Electronics Co., Dell Computer Co., Amazon Inc., Google Inc., and the Hewlett-Packard company, commonly known as HP (Maverick, 2018 Online). However, Samsung and Dell company have strongly given Apple unrest with the former trailing it in the smartphones industry and the latter in the market of consumer PCs (Bhasin, 2017). As with the smartphones, most consumers substitute Samsung devices with Apple’s iPhones and this affects Apple’s sales greatly. Samsung’s Galaxy series and Note series, for instance, are two premium series which have greatly imitated Apple’s iPhones with quality features and eases. In terms of market sales, the two series of Samsung suppresses iPhones as their pricing is normally relatively lower, thus affordable for many, and yet they can fulfill some of the iPhones features to the customer. In consumer PCs’ market, Dell begun competing with Apple when it (Dell) launched a Dell DJ which was designed for entertainment, though it never matched iPod’s criteria and success (Bhasin, 2017). However, in retaining the competitive advantage, Apple has a long-established reputation and commitment to developing new products which share the same operating system, software and applications, thereby curtailing the risk, timescale and budgets of developing the product. In ensuring prices are consistent throughout the market, Apple puts premium prices to its products, and for the wholesalers it minimize discounts. Unlike other companies whose sole goal is earning new consumers, Apple aims at providing quality product with unique features so as retain its already existing consumers. The company’s high-pricing assists in reinforcing the perception of added value and also in maintaining its profitability (Linton, 2018).
Market demographics
Teens are considered as the key target market demographics of the Apple products as they are much attracted to the value of an iPod and iPhone (Gaille, 2015 Online). According to Gaille, 2 out of every 5 Mac owners is below 34years with 25% claiming that they’ve purchased the product since their friends have it. The premium brand, however, is associated with a premium income level thus, although everyone wish to have the brand, unfortunately not everyone can afford its premium price tag. This threatens the company’s profitability as those unable to afford the brand goes for the substitute, which mostly is Samsung or Dell products, so as to fulfil their smartphones and PCs desires. For instance, Samsung is also considered a premium brand in quality and desirable smartphones, and as such, a teen unable to afford the high pricing of iPhone tend to go for the Galaxy S6 which s/he can afford. Moreover, the average household income for a Mac owner is $98,500, of which unfortunately is a fantasy for many, leaving the young and wealthy as the best customers of Apple (Gaille, 2015 Online). Due to this, in years to come, Apple is likely to prefer Millennials as the next targeted demographic after the teens as they are attached into the technology more thus can exploit benefits the brand can provide, and this leads to more wealth for them and more sales for the company (Gaille, 2015 Online). To professionals, most of the brand’s customers claim that they are addicted to digital devices and thus they use an Apple product so as to maintain their professional and managerial position.

Technology
In reference to today’s dynamic technology, Apple is considered as the top innovative company in the world through its superb new products (Kotelnikov, Online). Steve job, Apple’s co-founder, believed innovation as the capability to see change as an opportunity rather not a threat, and that aspect have been noted in the company since its foundation. Apple’s research center, the Advanced Technology Group, have greatly contributed to most of the aspects of technology we use today. The grouped was founded in 1986 by Larry Tesler, a computer scientist, with a mission to breakthrough technologies that didn’t need to be products (Diaz, 2018 Online). By 1997, Apple engineers and scientists had already created breakthrough technologies such as QuickTime, QuickTime VR, HyperCard, and Apple Data Detectors, which shaped how PCs and smartphones function today. At the beginning of June 2018, Apple launched its new iOS 12 operating system which had been added a few interesting features for its consumers. For instance, with the new iOS 12; the Memoji enables its users create talking avatar for use in messaging and video chat; it enables iPhone to run faster; with the new Augmented Reality app, users can measure items using the phone; and an added Group FaceTime lets the user FaceTime with up to 32 people at the same time (Sullivan, 2018 Online). Being a top member of the Car Connectivity Consortium, Apple is planning to enable its iPhone users to replace their car keys with a new Digital Key that would allow them to download a copy of their car key to their iPhones and use them in place of a physical key (Grothaus, 2018 Online). Despite Apple being the lead in innovation, the company’s reputation was threatened in 2011 after a group of people in California sued it for sale of apps for iDevices at a high price and also for holding a monopoly during the sale of the apps (Sullivan, 2018 Online). The case was originally overlooked by a federal court in Oakland, California but unfortunately recently, in 2017, it was revived by a federal appeals court. The ruling now lies with the Supreme Court which is yet to decide on the decision of the appeals court and rule if consumers can sue Apple over app prices or not (Sullivan, 2018 Online). Also, Apple’s consumers of the newest MacBook and MacBook Pro complained for a while about the flaws with the new thinner keyboard, some claiming that the keys were easily sticking, falling off, or fails to function when pressed (Grothaus, 2018 Online). Although the company admitted of the issues and agreed to sort it out at no charge, MacBook and MacBook Pro users in areas inaccessible to Apple’s physical store were disadvantaged and it can make them shift to other PCs brand like Dell, thereby undermining its market.

Economic Development
Apple company have greatly enhanced economic development both domestically and globally. In early 2015, iPhone 6 sales were reported to constitute 10% of all US economic growth (Ross, 2017 Online). At the beginning of 2018, the company reported some of its new sets of investments which aim at supporting the domestic, American, economy and its workforce through job creation, either directly or indirectly (Apple’s Press Release, 2018 Online). In its Newsroom, the company stated that it have already created and supported over 2 million jobs across the US and it’s expecting to provide even more jobs in regard to the announced initiatives. In the next five years, Apple is expecting its direct contribution to the U.S. to be more than $350 billion exclusive of the tax payments, and sale of its products (Apple’s Press Release, 2018 Online). Furthermore, in the five years span, the company is expecting to increase jobs from 84,000 to 20,000 in all the 50 states in US, and also establish an Apple campus in a new locale for supporting its customers technically. In boosting its 40-year history in education, Apple company also have got plans to increase its funding of the coding education and also programs focusing on science, Technology, Engineering, Arts and Math (STEAM) (Apple’s Press Release, 2018 Online). This will ensure students in historically underserved communities gets to the knowledge and skills of app coding and they too relish the benefits of technology in the classroom. Internationally, Apple have heightened the economy of its global markets through job creations as retail merchants of its products and as technical workers. After iPhone, the next source of revenue for the brand is Apple’s (NASDAQ:AAPL) services business with the revenue being driven by the increasing app downloads and from digital media downloads from iTunes. However, back in 2017, the company was reported to have lost its market share to Amazon and Comcast which made the headway, while for it it dropped to 20% – 35% of the market for the digital video downloads (Levy, 2017 Online). Worst of it, companies like Netflix, Hulu and Amazon started attracting more customers to their services after they introduced streaming video instead of downloading. In order to offset its declining video downloads, Apple decided to revise its App Store revenue share policy so as to encourage Netflix and rest of the companies to sell their services through the App Store (Levy, 2017 Online). Over the last few years, Apple’s iPad sales have relatively decreased after Amazon’s line of Fire tablets and Fire TV have gained popularity due to their affordability and convenient integration with the Prime, Amazon & Comcast. Apple may still be the leading company on the market in tablets and set – top boxes, but unless it strategize anew with the evolving markets, its market share will decline as new entrants join in the industry.

Conclusion: Being amongst the most successful companies in the world, Apple Inc. develops their products with the high consistency of the aesthetics of its hardware and software, such that one will easily identify the logo once Apple’s silver Macintosh symbol is put at his/her eyes (Schild, 2017 Online). Apart from attracting its consumers globally with the sleek products, the brand precisely connects with its customers emotionally through ads that denotes progress, innovation and creativity. This connecting not only help Apple retain its existing customers but also it earns it new consumers who want to be part of the innovative and progressive world.

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