Why The World
loves Apple Inc.
Many experts consider Apple as the text book case on achieving niche market leadership primarily through product and service differentiation.
Circa 1976: An engineer by the name of Stephen Gary Wozniak and a marketing maven by the name of Steven Paul Jobs decided to bring computers from the realm of hobbyists and scientists to households at affordable prices. They decided to prove to the corporate world that a company could be fun and innovative as well. With the launch of Apple I and Apple II computer, Woz and Jobs practically invented the personal computer. And the company in spite of traversing through unforgiving competitive terrain has never looked back since. Some say that Apple Inc. is the reason computers today have become smaller, faster and more feature rich than ever. While there are others who comment that Apple has dominated the consumer electronics industry which was started by Sony. But all agree that Apple has forever changed the way we listen to music, watch TV and now even use a phone. What makes the company so endearing to its consumers? Why does Apple Inc. command such a rabid fan base which lines up near its stores nearly 72 hours before a new product launch? Many believe that the reason lies in its creative and intuitive product design. But that doesn’t seem to be the only factor as this can be easily replicated by the competition. And Apple has spawned numerous imitator companies which churn out wannabe iMac and Ipod devices. Yet they could not come anywhere in replicating the success story of the pioneer. The answer lies in the way Apple has strongly integrated all its products and services ranging from the product itself to the end-user experience when they walk into an Apple store. Every aspect is in perfect alignment with the company mantra of simplicity and value to the customer. The company’s catchphrase “Think Different” has brilliantly instilled this motto in the minds of the masses.
But the journey was not easy in any way for the two entrepreneurs. In fact Woz and Jobs had to borrow, scrounge and even sell their personal effects to complete the first shipment of Apple I computer. What was thought of by Wozniak as a prototype to show off his engineering prowess at the local club was quickly recognized by Jobs and other hobbyists as an innovation that had tremendous potential. Jobs saw Apple I as a personal computer that could challenge the likes of computer industry behemoths like IBM, Atari and Commodore. Wozniak, in the spirit of a true engineer, diligently sought for improvements in the Apple I. And thus came Apple II which was a resounding hit. People loved the Apple II for its small form factor and color display. Also appreciable was the inclusion of a cassette drive for loading additional programs. Apple II sold millions of units and eventually took credit for what we now know as the personal computer. The success of Apple II spurred the company to come out with its next iteration the Apple III which unfortunately turned out to be a dud. Undaunted, Jobs worked on the next project codenamed Lisa which also ran into a lot of technical snags although it incorporated many industry firsts. Many people attributed the failure of Lisa to its hefty price tag of nearly $9,999. Steve Jobs was kicked out of the company and went on to find Next which focused primarily on operating systems. Meanwhile, Apple went on a downward spiral due to inefficient management until Jobs regained the reins in 1997. Steve Jobs almost single-handedly brought about the turnaround of a company written off even by its fans. Jobs quickly realized that Apple was committing a series of detrimental errors and thus was losing customers. Apple had licensed its technology to “clone-makers” in hopes of increasing its market share. These companies eventually became competitors and started taking Mac sales away from Apple. The license was discontinued and the brightest talent was called to work with Apple. One of the most influential person in the Apple renaissance was Jonathan Ive, principal designer of iMac, iPod, iPhone and the iPad. Ive has received numerous accolades for his innovative and robust designs and was praised by all for the eye catching iMac Steve also eliminated all unprofitable products , simplified the Mac models , beefed up the existing versions every nine to twelve months and entered only those established markets that had profit potential. With the launch of the iPod and the iTunes service, Apple has practically saved the music industry from the menace of peer-to-peer music sharing sites like Napster. Consumers were thrilled by the prospects of being able to carry their entire music collection in their pocket. Also they were able to download music from the iTunes store for as low as 10 cents per song and 1$ per album. The result was the sale of nearly 350 million units in 10 years. In contrast, Sony Walkman took 25 years to sell the same number of units.
Beautiful design, intuitive user interface with a very low learning curve, complete solutions and robust customer support has helped Apple build tremendous brand value in the eyes of the customer. The brand image has helped the company in garnering free publicity. Fans download product launch videos and post them on their own websites thus enhancing product awareness. Apple frequently tries to create a buzz around its new products by keeping mum and leaving the consumers guessing on what features the product will come with. This generates healthy hype around the yet to be released product. Frequently the company will upgrade the products for no charge. All this has contributed to long term customer loyalty for the company.
Once relegated to a niche, hobbyist computer manufacturer, Apple has rapidly diversified into a consumer electronics powerhouse with a foothold in almost every aspect of the business. Year after year it continues to churn out products with innovations so useful and simple that people wonder why nobody thought of this before. And now with the release of iPad , Apple has boldly decided to enter a segment where no one else has gone before. Apple aims to bridge the gap between the mobile phone and a computer and thus create a product that delivers entertainment as well as functionality on the go. Looking at the way the company is zooming ahead, it seems foolish to write an epitaph for Apple Inc even for the distant future.