Apple’s Difficulties over Time
In a word, the most serious and the most obvious problem to Apple is its weakness in its proprietary designs compared with IBM-compatible PCs. Specifically, Apple designs all the products that can only be used in Mac that other producers cannot clone. Moreover, many applications designed by other producers cannot run under Mac OS. That is a fatal problem to the company and thus cause Apple can only occupy a little market share in PC industry. The reason why although Apple has superior products, it still faces difficulties over time is that during every period, it didn’t offer the proper solution to the problem. 1.
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Steve Jobs and Steve Wozniak: 4. 1. 1976-April, 1985 Apple Computer was founded on April 1st, 1976 by Steve Jobs and Steve Wozniak. After they built Apple 1 and sold 200 copies of it in several months, they attracted Markkula as their partner. They three worked as a team in which Markkula was the experienced businessman, Wozniak was the technical genius and Jobs was the visionary. 1 Jobs’s goal was to build an easy-to-use computer to market and it was achieved with the launch of Apple 2. Actually, before 80s, Apple got superior success in PC market. But, in 1981, IBM entered the PC market and this was a big threaten to Apple.
Although the IBM PCs’ OS and CPU were not as good as those of Apple 2, they still could made Apple’s market share dropped sharply because the IBM PC was a relatively open system that other producers could clone it. Since more and more producers began to focus on producing PCs with IBM’s technology, Apple’s market share would undoubtfully decrease. As a result, although customers might still prefer purchasing Apple computer because of its better hardware and software (for that Apple’s revenue kept increasing), Apple faced a serious limitation in occupying market share.
January 24th, 1984, Macintosh was launched. Macintosh was built around the Motorola 68000 chip, which was not compatible. Though it was easier to use and had superior industrial design and technical elegance, because its speed of processing was slow and lacked compatible software,2 less customers were willing to buy it. Then Apple’s net income dropped a lot between 1983 and 1984. So Apple’s board hired Sculley to replace Jobs as it’s CEO. 2. Sculley: 1985-1993 Sculley’s goal was ensure Apple get the leadership in education and desktop ublishing. Meanwhile, he also tried to make Apple become an International brand. Apple’s superior self-designed software technologies and peripherals made it succeed in desktop publishing as well as in education. This also meant that Apple could provide customers a complete desktop solution while IBM-compatible PC users had to add hardware, software or peripherals themselves. This gave Apple the incentive and chance to sell its computers at premium-price. Then when IBM-compatible prices went down, the high charge of Macs made them overpriced.
Consequently, because of its lack of compatible ability and its extremely high price, consumers were less willing to buy Mac. What’s more, the cost structure of Apple was high. Compare with Compaq and other IBM-clone manufactures, Apple devoted much more to R&D. After realizing all these factors, Sculley, then CEO and CTO of Apple company, made great effort to pull Apple back to the leader position in PC market through providing proper products and prices, which means, the prices of Macs would be lower and the computers would be more suitable for customers according to their need. 991, Apple and IBM formed joint ventures, Taligent and Kaleida, hoping to create a new OS and multimedia applications. Then Apple agreed to use IBM’s new PowerPC chip instead of previous the Motorola microprocessor line. And meanwhile, IBM agreed Motorola to use its technology to ensure that Apple has a second source in case. Meanwhile, Apple began to corporate with Novell and Intel. Codenamed Star Trek in effort to make the Mac OS to run on Intel chips. During his period, Sculley used many methods to cut Apple’s costs, but the company, nonetheless, was less profitable than it was during the last 10 years.
Then, the Apple board changed Sculley with Spindler in June, 1993. 3. Spindler and Amelio: 1993-1997 Under Sculley, Apple used to be successful in education and desktop publishing. Spindler hoped to make the two Apple’s core markets come back to life again after its decadence. He abolished Apple’s previous project, whose purpose was running Mac OS on Intel chips and decided to license a few companies to make Mac clones. He tried to use this strategy to extend Apple’s market share. All what Spindler wanted during his duty was Apple’s worldwide growth.
Moreover, Spindler, like Sculley, also cut costs, especially R&D spending, which was definitely one of the competitive advantages of Apple company for that more spending on R&D ensure Apple to produce “hit products” all time long. What he had done was obviously useless because the good image of Apple in its customers’ minds was destroyed. It is not strange that Apple lost its momentum, strongly supported by a survey in 1995 (which showed that less and less people prefer a Mac than an Intel-based PC). Then Spindler hoped a revolutionary new OS could be helpful to change Apple’s situation.
But it failed. At the end of 1995, Apple and IBM parted away on Taligent and Kaleida. They each spent more than $500 million. It was a large amount of investment and they both unrealized that the spending was a sunk cost. They thought it was impossible to gave up after such big investment so that neither of them was willing to change to a new technology, which made them lose more money later. As a result of insistence, Apple lost $69 million during the first fiscal quarter of 1996. Again, the board hired Gilbert Amelio to replace Spindler.
Amelio wanted Apple to focus on producing high-margin segments. He thought that Apple should return to its previous premium-price differentiation strategy and he cancelled the next generation Max OS because he thought people need a new OS. In December 1996, Amelio announced Apple would develop a new OS relaying on NeXT. And Steve Jobs, the founder of NeXT, would came back to Apple as a part-time adviser. However, although Amelio led the company to reorganize for several times and cut the salaries gravely, Apple still lost $1. 6 billion. At last, Jobs replaced Amelio and again back to Apple as its CEO.
After that, with Job’s innovation strategy, Apple got out of adversity. 4. Steve Jobs Under Jobs, Apple was alive again. Actually, Jobs did not try to solute the problem that Apple is not compatible. Instead, he made efforts to offset the loss by innovation, which he regarded as core of Apple. He launched several important and successful computers whose idea were totally different from other PC producers’ computers. That made Apple be the leader in design among the PC industry and thus properly compensated what it lost in other aspects. 2 Macintosh 128k ?? CPU ??
CPU: Motorola MC68000 ?? CPU Speed: 8 MHz ?? FPU: none ?? Bus Speed: 8 MHz ?? Data Path: 16 bit ?? ROM: 64 kB ?? Onboard RAM: 128 kB ?? Maximum RAM: 128 kB ?? Video ?? Monitor: 9″ built-in ?? VRAM: 1 bit 512×342 ?? Storage ?? Floppy Drive: 3. 5″ 400 kB Input/Output ?? Serial: 2 ?? Audio Out: mono 8 bit ?? Speaker: mono ?? Miscellaneous ?? Codename: Macintosh ?? Gestalt ID: 1 ?? Power: 60 Watts ?? Dimensions: 13. 6″ H x 9. 6″ W x 10. 9″ D ?? Weight: 16. 5 lbs. ?? Minimum OS: 1. 0 ?? Maximum OS: System 3. 2/Finder 5. 3 ?? Introduced: January 1984 ?? Terminated: October 1