Brief History of Apple Inc
Apple Computer Company was founded by Steve Jobs and Steve Woziniak in 1976 after they had dropped out of school. They were working in a family garage in California where they decided to come up with a computer circuit board which they called Apple 1. They made more than two hundred units within a few months after starting.
In order to boost their new business, they decided to incorporate a new partner who was more experienced for them to attract venture capital. The aim of these two entrepreneurs was to introduce into the market a computer that was easy to use and they came up with Apple II in 1978. There endeavors led to a complete revolution in the PC industry raising the sales to 1$ billion in less than three years.
The company became one of the most successful dealers in computers with high sales until they launched their IPO in 1980. However, the company started experiencing problems with its sales falling in the recent years. This problem is compounded by the entry of other players in the PC market such as windows 7 which started pushing Apple further (Yoffie and Kim 2). This essay will discuss some of the problems Apple has been facing and how they could possibly be solved.
Competition and Marketing Problem in Apple Inc
One of the most serious problems that apple Inc is facing and which to a large extent contributes to the occasional failures of the company is a marketing problem due to stiff competition in the industry. Initially, Apple was dealing with Macintosh computers when it started facing stiff competition from other PC manufacturers such as IBM. Later on, Apple decided to shift from PC industry into mobile phone industry.
The company wanted to go beyond Macintosh computers and embrace a digital hub strategy. This shift was marked by the introduction of iPod in 2001 and the iPhone in 2007. Later in 2010, the company introduced the iPad. After these developments the company changed its name from Apple computers to Apple Inc. one of the distinguishing features of Apple Inc iPods is the iTunes software that they incorporated (Yoffie and Kim 9).
Despite the success of the iTunes Apple Inc has enjoyed, it has had strained relationships with content companies. These companies are in strong opposition of the fact that Apple Inc has dominated the digital music market and its structure of fixed prices.
In addition, music labels are seeing the threat posed by Apple Inc because there high priced CDs are being faced out of the market. Apple Inc faces strong competition from online music stores such as Napster, amazon.com and Walmart.com which often inconveniences the marketing strategies of company.
These online music stores have been offering music downloads at discounted prices. Some music labels have been allowing music stores to sell DRM free music. For example, MySpace which is a social network has been networking with other music labels to come up with its own music service. This increases the competition hence forcing Apple Inc to start looking for new marketing strategies in order to remain relevant in the market.
In addition to the music services provided by social networks which pose a threat to Apple Inc, the company has also experienced another challenge coming from internet radio sites such as last.fm and Pandora which offer free streaming services. Other companies like Nokia started offering music services with their phones.
The impact of this competition is that it forces Apple Inc to diversify its marketing strategies and look for new products which is costly for the company. For instance, in response to these threats the company had to buy Lala.com which is a music streaming service in 2009. This raised speculations from the competitors that Apple Inc had intentions of coming up with a new model of storing digital music.
The entry into mobile phone industry for Apple is a risky endeavor because there are strong competitors with remarkable experience in the industry. The products also have a short life span and sophistication in technology of which apple Inc has little experience in. there is also a strong challenge in distribution since some of the distributors already in the market such as Vodafone are formidable. This makes the marketing strategies for Apple Inc challenging (Yoffie and Kim 9)
Proposed Solution for the problems
The marketing problem facing Apple Inc as result of increased competition can be handled through intensive market research and analysis. Apple Inc should be very keen on identifying the strategies and moves being used by its rivals. Apart from observing the rivals, the company should conduct continued market research and identify what the customers require in order to satisfy them.
Through proper knowledge of what the customers need and the strategies being used by the competitors, the company will be able to apply the requisite innovativeness in coming bringing into the market new products. The company should also strife to invest a lot in its distribution strategies to ensure that the competitors do not take advantage of its poor distribution strategies.
Current Situation of Apple Inc
Despite the problems that have occasionally bedeviled Apple Inc causing the company to drop its sales in various times, the company is now doing well. The introduction of its latest devices like the iPhone and the iPad recently has seen the company grow tremendously. In October 2010, the shares of the company rose very high which is an indication that it is doing fine.
In the same year, the company also opened the Mac App Store for distributing digital applications. The market capitalization of the company went beyond that of Microsoft this year and it was rated as the brand with the highest value in consumer facing issues. By July of 2011, the reserves of the company had gone beyond those of the US government (Apple Press Info 10)
Apple Press Info. Apple Reports Second Quarter Results. 2011. Web.
Yoffie, David and Renee Kim. Apple Inc in 2010. 2011. Web.15 Aug 2011.