How Apple Achieved Success

The dynamics of the PC industry from the 1980s through the 1990s saw the emergence of the personal computer, led by Apple (Jobs, Wozniak and Markkula), who produced a high-end PC that revolutionized the way people thought about computing. IBM then entered into the marketplace using Microsoft’s OS and offered the public a cheaper version of what Apple was doing—one that was more compatible across the broader market, too. Apple’s product was efficient and technologically superior, but it was also very specialized and its high price coupled with this specialization caused the company to gradually lose market share to competitors during this time.
During this time, desktop publishing was a major part of the industry, and Apple was a leader here too—but competition was fierce. Apple and IBM actually formed a joint venture in the early 1990s to produce a new OS together, and Apple also looked to leapfrog use of the Intel processor while simultaneously looking to see if it could transform the Apple OS to work with the Intel chip. In short, there was tremendous flux and fluidity in the PC industry from the 1980s through the 1990s. Companies were seeking to define themselves, set themselves apart from competitors, outdo one another, push the boundaries of technology, and produce a product that would be affordable for the mass market. This meant that a lot of push and pull, give and take, false starts and re-dos were the result. By the mid-1990s, Apple was attempting to get into “high-margin segments such as servers, Internet access devices, and PDAs” and, under Amelio, sought to “return to its premium-price differentiation strategy” (Yoffie, Slind, 2008, p. 4). This of course was par for the course, as the dynamic of the industry was such that companies could swing wildly and widely in what amounted to the Wild West of computer-electronics. These dynamics were not exactly favorable to the Macintosh business, as it cause the company to spin in circles for a good deal of time—but it was helpful in the sense that it gave Apple time to figure out which avenues worked and which didn’t—and that is why, eventually, the company brought Jobs back to guide the Mac in its tech-merger/compatibility movement with the Microsoft OS.
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Jobs did help solve the company’s long-standing problems with respect to the Macintosh business. For example, under Jobs, “the seeds of earlier efforts to engineer Macintosh products for the Intel platform at last came to fruition” (Yoffie, Slind, 2008, p. 5). Jobs also oversaw the introduction of the new Mac OS X, which allowed for a more stable product, and upgrades were made available to users every year to year-and-a-half to help keep the company in the consumer’s consciousness. Under Jobs, Apple integrated all its products (and built them in-house) but also got Microsoft to create Office products for Apple, which greatly enhanced the company’s consumer base and increased sales of the Macintosh. New sales centers were opened across the country to accommodate demand and the specialization that Apple still offered. It was now becoming a culture-product, meaning it developed a culture with its consumers that led to life-long commitment to its products, brand loyalty, and customers who felt appreciated and who in turn appreciated the good things Apple was doing for them.
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The iPod-iTunes business has indeed been a huge success. One of the main secrets to that success was Jobs’ ability to “coax music executives into supporting the initial iTunes venture” (Yoffie, Slind, 2008, p. 11) by ensuring them that piracy would not be an issue. Jobs’ FairPlay initiative, which allowed a downloaded song to only be accessible from 5 different computers, guaranteed that songs purchased from iTunes would not be spread illegally over the Internet to hundreds of thousands of fans.
To this extent, Jobs did find a new formula to create a sustainable competitive advantage for Apple. As other companies have shown, content is king for streaming services: that means whoever owns or has access to the content will see their services in demand. Jobs figured this out early on and saw that digital streaming services were the future of the music industry—and this is why the iTunes store has been such a huge hit: he worked with leaders in the industry to guarantee that their music could get to consumers without fear of consumers taking advantage of the digital technology to share it with friends at an unlimited rate. Jobs put a cap on the process and assured the industry that through its proprietary technology the music would be safe.
This allowed iTunes to grow and Jobs’ desire to see it used by a broad base ensured that Microsoft users could also gain access to the store. iTunes became a place where music was in demand, where producers felt it would be safe, and where Apple could see itself leading the industry again. Still, nothing is ever infinite in this world—and competitors have emerged to offer music without the digital rights management technology that Apple engineered. Depending on how the industry goes at this point, it remains to be seen how Apple will adjust to Amazon and other streaming services seeking to gain market share. Apple’s technology is still highly influential, but there is always another evolutionary step waiting just around the corner when it comes to digital technology.
References
Yoffie, D., Slind, M. (2008). Apple, Inc., 2008. Harvard Business School, 9-708-480,
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