By C. Flores
A technology giant and dominating industry leader, Apple Computer, Inc. achieved its market competitiveness solely on their unique ability to create affordable products of the highest quality and latest technology. One of its major successes in its comeback after a major shakeup in the early 1990’s was the creation of the iTunes Online Music Store in 2003. This product boosted the company’s revenues significantly with $3.5 billion in net income by 1997 and 70 percent of the digital music market (Chapman and Hoskisson). Pressing forward with new technology, Apple’s next line of products target the mobile phone and video-on-demand businesses with their sophisticated iPhone and Apple TV. It’s these aggressive innovations of hi-tech products combined with a marketing strategy to expand into the global market that will keep Apple at the forefront of its industry.
In the late 1990’s, CEO, Steve Jobs, pursued a transformation of the company that captured consumers interest in a digital lifestyle. Consequently, a software suite was introduced in 2002 with applications such as iPhoto, iMovie, iTunes, and eventually the iPod (Chapman and Hoskisson). The creation of iTunes was intended to boost sales of the iPod and address illegal pirating of music by providing over 6 million songs from every genre of music at an affordable price. The return on the iTunes investment was remarkably noticeable; within its first week of existence, more than 1 million downloads from iTunes occurred. Furthermore, the iPhone was introduced in 1997, a combination of a mobile phone, widescreen iPod, and internet communication device. A major hit in the market, 1 million iPhones were sold in less than three months when it became available to consumers (Chapman and Hoskisson). The outcome was entirely different for the Apple TV because it caused a concern by movie studios who feared they would lose revenues from DVD and Blue-ray disc sales. An agreement was reached in the end but it did not turn out to be as successful as originally anticipated.
Some of Apples competitors in the music, mobile phone, and the movie industries include Napster, Yahoo! Music Unlimited, Netflix, Amazon Unbox, Disney, Motorola, and Research In Motion. Despite the competition, Apple reported a 35% increase in net sales by operating segment from $7,115 million in 2006 to $9,608 million in 2007. Cash generated by operating activities increased $3,250 million from $2,220 in 2006 to $5,470 million in 2007. These impressive revenues are attributed to the branding strategy of the Apple brand over the years and their global marketing initiatives, specifically in Japan known to be the world’s largest mobile phone market (Chapman and Hoskisson).
The technology and entertainment industry is a difficult market to survive let alone lead in, due to continuous changes. Apple must continue to pursue opportunities for growth on a global scale by penetrating foreign markets. Many foreign markets are not as updated as the U.S. in terms of technology; therefore, the potential for growth awaits the arrival of Apple. Additionally, continuous innovation of technology that improves the lifestyle of consumers is a highly recommend path for Apple to pursue. Boosting the Apple TV product has much potential. Perhaps Apple should provide more incentives for the movie producers so they may renegotiate the 30 waiting period after a DVD is distributed to allow quicker access to movies by fans of the Apple TV.