University of PortsmouthBusiness School

Seminar 7 Apple – Key Points

Peter BartlettPeter.Bartlett@port.ac.uk

Prof. Paul TrottPaul.Trott@port.ac.uk

The IBM simon was the first of its kind it was called a SMART PHONE. Their was a demo shown as a concept in 1992. 

IBM simon picture:

University of PortsmouthBusiness School U09084 IM 2012

1. 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”.

2. 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

3. 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.

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University of PortsmouthBusiness School U09084 IM 2012

4. 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; SWOT;Apple A4 chip; Ives;Samsung 3Innovation & Entrepreneurship

University of PortsmouthBusiness School U09084 IM 2012

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• Remember – the personal computer wasn’t even on sale then!• Neither was the technology needed to build / deliver the procuct /

music

• 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

Innovation & Entrepreneurship

University of PortsmouthBusiness School U09084 IM 2012 5Source: YahooFinance Innovation & Entrepreneurship

NB: 600 exceeded 6 weeks later after iPad announcement

University of PortsmouthBusiness School U09084 IM 2012

Strengths Weaknesses

- Strong brand image provides an edge over Competitors

- Robust financial performance strengthens investors' confidence and provides capital for future growth avenues

- Focused R&D driving innovation and consolidating its market position

- Patent infringement lawsuit may affect financial condition and operating results

- Product recalls may harm Apple's reputation and add significant warranty and other expenses

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

Source Datamonitor (Bus Source Premier) Oct 2011

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University of PortsmouthBusiness School U09084 IM 2012

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, long-term 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-big-deal-666591#ixzz1HckVRU6H

University of PortsmouthBusiness 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 principles1. Good design is innovative2. Good design makes a product useful3. Good design is aesthetic4. Good design makes a product understandable5. Good design is unobtrusive6. Good design is honest7. Good design is long-lasting8. Good design is thorough down to the last detail9. Good design is environmentally friendly10. Good design is as little design as possible

SOURCE Daily Telegraph Ian Douglas 21/4/11

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University of PortsmouthBusiness School U09084 IM 2012