Seminar 7
Apple – Key Points
Peter Bartlett
Peter.Bartlett@port.ac.uk
University of
Portsmouth
Business School
Prof. Paul Trott
Paul.Trott@port.ac.uk
1.
2.
3.
We explored how the iPod helped Apple achieve increased pc sales though
iTunes, an initial 9 month period of iPod only working on Apple PC, and
subsequent development of this theme, through better integration of the
Apple “family”. Approaching the Apple market first enabled an exploration of
the market, but was seen to be unnecessary by the time of iPad (3) this year.
Easier integration was seen as a benefit to promote Apple pc and laptop
sales, with the iCloud becoming an important factor for the future – although
Apple do bill the iPad as “post –pc”.
The interesting nature of the Samsung patent court cases weighed against
the strategic importance of Samsung technology to the iPad and iPhone with
Samsung expecting to make $11billion from it’s iPad contribution. Other
alliances involve the manufacture which is outsourced and of course the
routes to market – with single sources for iPhone market entry in different
countries – e.g. AT&T in US, O2 in UK
Apple are renowned for secrecy so many licensing arrangements are not
disclosed, but early licences of iTunes to HP helped to take the iPod from the
5% Apple niche into the 95% mainstream (windows) PC markets. There
seems to be no need for general iPhone licensing apart from as part of the
patent dispute armoury as that part of the market settles.
University of
Portsmouth
Business School
U09084 IM 2012
Innovation & Entrepreneurship
2
Were Apple really worried about phones taking over MP3/MP4
delivery to consumers, when they knew they would also be
entering the market. We saw that they had designed a
touchscreen phone back in 1994. They have, however,
continued to develop and enhance the iPod which still has
specific uses and user acceptance.
5. Apple were variously thought to be adopting a “BMW strategy”
(of high premium segments) for their markets, but are seen to
be broadening this.
6. In terms of futures, Sony’s strength across the range – including
the end of the Sony-Ericsson joint venture and their TV
technologies might be something to be wary of. The “cloud” may
become the battleground.
7. What will the phone look like in 2020 – answers were not really
forthcoming!
 Additional material – Device design Kramer’; Apple shares;
3
U09084 IM 2012
SWOT;Apple A4 chip; Ives;Samsung
Innovation & Entrepreneurship
4.
University of
Portsmouth
Business School
• Remember – the personal computer wasn’t even on sale then!
• Neither was the technology needed to build / deliver the procuct /
music
University of
Portsmouth
Business School
• Apple filed the iPad patent under an alias “a proximity detection
system configured to detect when a finger is in close proximity to
but not contacting the I/O surface" granted the day before launch
U09084 IM 2012
Innovation & Entrepreneurship
4
NB: 600 exceeded
6 weeks later
after iPad
announcement
University of
Portsmouth
Business School
Source: YahooFinanceU09084 IM 2012
Innovation & Entrepreneurship
5
Strengths
Weaknesses
- Strong brand image provides an edge
- Patent infringement lawsuit may affect
over Competitors
financial condition and operating results
- Robust financial performance strengthens - Product recalls may harm Apple's
investors' confidence and provides
reputation and add significant warranty
capital for future growth avenues
and other expenses
- Focused R&D driving innovation and
consolidating its market position
Opportunities
Threats
- Strong growth in smartphone and tablet
markets to boost Apple's revenues
- Robust outlook for mobile advertising
market provides growth opportunity
- Rising popularity of Google Android may
affect its market share
- Intense competition may affect revenues
and profitability
- Dependence on specific suppliers may
affect its operations
+ warnings about Apple needing iPad 3 to
“shatter records” to maintain growth 8/3/12
University of
Portsmouth
Business School
Source Datamonitor (Bus Source Premier) Oct 2011
U09084 IM 2012
6
Apple makes few acquisitions, and it baffled the industry when it splashed out
nearly $300 million on PA Semi, a processor developer, back in April 2008.
 As of 27 January 2010, Apple's reasoning suddenly became clear.
 In something of a blink-or-you'll-miss-it moment during the flurry of excitement
surrounding Apple's iPad, a single staggering slide during the presentation
offered one of the most interesting points and biggest pieces of news: the iPad
is powered by the 1GHz Apple A4 chip.
 This is a big deal, because Apple often creates closed offerings. On the
desktop, it makes its computers and the operating system that runs on them.
In the mobile space, it also, to some extent, controls the application ecosystem. Although some perceive these
things as restrictions, they also enable Apple to create more stable and usable products, and to take more
risks, given that the company's not often reliant on third parties.
Different with CPUs

Things have always been different when it comes to CPUs. Before the Intel switch, things had become quite
dire - Mac laptops had gone from being the fastest around to a joke, due to shortcomings in PowerPC
architecture. Today, Apple works with Intel on the desktop, but this is clearly out of necessity more than any
other reason. And in the more cutting-edge space of mobile, you'll find third-party ARM chips inside iPhones
and iPod touches. One might argue Apple could have taken an off-the-shelf component for iPad, but to do so
misses the point. Apple is developing its own chips because then it has the potential to get exactly what it
wants, when it wants. And while it might be a more expensive option in the short term, due to R&D costs, longterm it's a smart move. Apple will own the IP for its chips, and can adapt them as the market and its devices
require. The real question is this: how long will it be before we catch a glimpse of a slide during a Steve Jobs
keynote that features a MacBook or iPhone with an "Apple custom-designed, high-performance, low-power
system-on-a-chip“?

Read more: http://www.techradar.com/news/computing/apple/why-the-apple-ipad-chip-is-a-staggeringly-bigdeal-666591#ixzz1HckVRU6H
University of

Portsmouth
Business School
U09084 IM 2012


One important factor has been the direct influence and occasional
copying of the work of one man, Braun’s former design director
Dieter Rams, on Jonathan Ive, Apple’s senior vice president of
industrial design. Rams’ dictum ‘Weniger, aber besser’ (less, but
better) is clearly present in Apple’s range, and his 10 principles of
good design appear to have been tattooed onto the inside of Ive’s
eyelids.
Dieter Rams’ 10 principles
1. Good design is innovative
2. Good design makes a product useful
3. Good design is aesthetic
4. Good design makes a product understandable
5. Good design is unobtrusive
6. Good design is honest
7. Good design is long-lasting
8. Good design is thorough down to the last detail
9. Good design is environmentally friendly
10. Good design is as little design as possible
SOURCE Daily Telegraph Ian Douglas 21/4/11
University of
Portsmouth
Business School
U09084 IM 2012
8
University of
Portsmouth
Business School
U09084 IM 2012