Apple's historical origins and early development

Apple

The computer industry is characterized by rapid technological change, intense rivalry and an increasing trend towards commoditization of key inputs. Apple has succeeded in this industry by adopting a differentiated strategy based on vertical integration, proprietary product development and intensive marketing campaigns. This paper will analyze the driver's of Apple's success over the years.

The company's early strengths were in innovation, marketing and differentiation. Apple gained early software success with products such as VisiCalc, a spreadsheet program. The company became a computer innovator with the Macintosh. This product was supported with a famous high-concept commercial "1984" that aired during the Super Bowl, the first of many marketing successes for Apple that helped created awareness among consumers of the Macintosh product. After the ouster of Steve Jobs, the company's ability to bring top new products to market waned, and a series of new product introductions failed. The company had also at this point struggled to differentiate itself from emerging players in the industry, both in software and hardware.

At the time, Apple had tremendous opportunity. The company believed that it had a superior product, and continued to believe this for many years, which led it to a focus differentiated strategy while its competitors courted the mass market. During the company's dark years, it simply failed to innovate, was forced to reduce its marketing expenditures and was unable to create value from its differentiation. The inability to innovate was not for lack of trying. Apple launched dozens of new products during the 1990s but many of those products seemed intended for niche audiences and as a result the company missed out on a significant portion of the growth in the mass market. The products that it did create were differentiated, but ultimately failed to convey to the consumer an appropriate value proposition. Windows products, marketed on increasingly commoditized personal computers, brought the benefits of technology to end users. Consumers wanted to use surf the web, send email and write their school term papers; Apple courted niche audiences instead.

The Apple strategy shifted when Steve Jobs returned to the company in 1997. The company began to introduce more successful products, including stylish versions of mp3 players and smartphones. The company has courted the mass audience and supported its efforts with extensive advertising campaigns that supported its differentiation strategy. Apple, simply put, returned to its roots as a company that succeeds based on product innovation and high-powered marketing.

The shift towards products with mass market appeal has coincided with an attempt to move Apple's PCs into the mass market category as well. In attempting to leverage the popularity of the iPod and iPhone, Apple has sought to bring those new customers towards its personal computer products. This represents a shift in corporate strategy. The company for most of its existence operated as a niche player, essentially utilizing a differentiated focus strategy. The current strategy, however, has been to downplay the exclusivity it long sought to cultivate and focus on a broad differentiation strategy instead (Burrows et al., 2007).

Apple has continued in recent years with this strategy. The company has continued to release different iPhone version and has introduced the iPad in order to revitalize the moribund tablet computer market. The company has continued to garner success in the mainstream, and that has translated into substantial gains in revenue, profit and stock price. In most products, this has also translated into market share, though conspicuously the company still holds a single digit share in the personal computer market.

The company still faces intense competition in most of its product lines, and competes against different firms in these lines. However, Apple still has opportunity, particular in growth in personal computers. The company is also well-poised to capitalize on new modes of computer technology usage. While its present product line consists essentially of Apple-fied versions of pre-existing products, the company has also built a couple of new strengths for itself that will help it to pursue a mass market strategy. The first is that it has learned much about the ways in which consumers use their technology and in doing so is in a better position to be a true innovator going forward. In addition, Apple has built its brand considerably over recent years. As the result of this, the company has moved its brand from niche to mainstream and bolstered both brand recognition and reputation substantially.