Apple Computer, Inc Business Strategies Case two Introduction

Apple was founded in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne (and later incorporated January 3, 1977 without Wayne, who sold his share of the company back to Jobs and Wozniak) to sell the Apple I personal computer kit. They were hand-built in a garage of Jobs' parents. Eventually 200 computers were built.

The Apple II was introduced on April 16, 1977 at the first West Coast Computer Faire. Despite a price higher than competitors, it quickly pulled away from its two main rivals, the TRS-80 and Commodore PET, to become the market leader (and the symbol of the personal computing phenomenon) in the late 70s due to its color graphics, high build quality, and open architecture. While early models used ordinary cassette tapes as storage devices, this was quickly superseded by the introduction of a 5 1/4 inch floppy disk drive and interface, the Disk II.

Another key to success for Apple was software. The Apple II was chosen by programmers Dan Bricklin and Bob Frankston to be the desktop platform for the first "killer app" of the business world—the VisiCalc spreadsheet program. VisiCalc created a business market for the Apple II, and the corporate market attracted many more software and hardware developers to the machine, as well as giving home users an additional reason to buy one—compatibility with the office.

By the end of the 1970s, Jobs and his partners had a staff of computer designers and a production line. The Apple II was succeeded by the Apple III in May 1980 as the company struggled to compete against IBM and Microsoft in the lucrative business and corporate computing market. Nevertheless, the principals of the company persevered with further innovations and marketing.

In the early 1980s, IBM and Microsoft continued to gain market share at Apple's expense in the personal computer industry. A fundamentally different business model evolved, once “cloners” forced-open the IBM PC hardware standard against IBM's will. The IBM compatible hardware market became highly competitive, with clones running a bundled Microsoft MS-DOS OS, or running a competing IBM-style DOS such as DR DOS.

Having learned several painful lessons after introducing the bulky Macintosh Portable in 1989, Apple turned to industrial designers and adopted a product strategy based in three portable devices. One portable was built by Sony, which had a strong reputation for designing small, durable and functional electronics devices.

During the 1990s, Apple greatly expanded its computer lineup. It offered a multitude of models ("Quadra 840av", "Performa 6116"), but many felt Apple failed to adequately differentiate one model from another and the cost of supporting so many products adversely affected profitability. Apple lost market share to Microsoft Windows, particularly Windows 95 — a major turning point in the history of the rival Windows operating system.

By the mid-90s, Apple realized that it had to reinvent the Macintosh in order to stay competitive in the market. The needs of both computer users and computer programs were becoming, for a variety of technical reasons, harder for the existing hardware and operating system to address.

In a keynote address on June 6, 2005, Steve Jobs officially announced that Apple would begin producing Intel-based Macintosh computers beginning in 2006

Headquartered in Cupertino, California, Apple develops, sells, and supports a series of personal computers, portable media players, computer software, and computer hardware accessories. The Mac mini is the company's consumer sub-desktop computer, introduced in January 2005 and designed to motivate Windows users to switch to the Macintosh platform. In 2001, Apple introduced the iPod (considered being Apple’s most successful product line) digital music player and currently sells the iPod (with video).

The company was known as Apple Computer, Inc. for its first 30 years of existence, but dropped "Computer" from its corporate name on January 9, 2007. The name change, which followed Apple's announcement of its new iPhone smart phone and Apple TV digital video systems, is representative of the company's ongoing transition into the consumer electronics market in addition to its traditional focus on personal computers. Apple has filed over 200 patents related to the technology behind the iPhone.

With its conversion to Intel processors, the so-called "halo effect" of the iPod and the availability of the Boot Camp software, Apple Computer's Macintosh will gain market share in 2007, according to one analyst.