The Transformation of Apple's Business Model
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Case Code: BSTR212 Case Length: 16 Pages Period: 1997-2005 Pub Date: 2006 Teaching Note: Not Available |
Price: Rs.300 Organization: Apple Inc. Industry: Information Technology Countries: US Themes: Leadership, Turnaround Strategies |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background Note
Apple was founded by Jobs, Steve Wozniak and Ronald Wayne in 1976. They started off selling the personal computer (PC) Apple I at US$ 666.66. The PC was reasonably priced and was sold mainly to individuals with interest in computers. Apple Computers was incorporated on January 03, 1977 and in the same year, Apple II was launched. Priced at US$ 1,298, it had color graphics and used a cassette drive for storage.
In 1978, the cassette drive was replaced by a floppy disk drive. Apple II became popular in 1979, after the release of VisiClac. Within first three years of its launch, Apple II raked in US$ 139 million in sales.
Apple's subsequent release Apple III in 1980 met with failure. Apple III did not have a cooling fan and several of its pieces were recalled due to overheating. In 1981, Apple released the updated version which became popular among computer professionals, with sales in one year at US$ 583 million in 1982.
In 1981, International Business Machines Corporation (IBM)8 introduced the IBM PC which was built on Intel's microprocessors and used the PC-DOS10 operating system. After IBM's entry into the market, Apple's competitive position changed as IBM PC became the common standard for personal computers. With the onslaught of IBM PCs, though Apple's revenues were still increasing, its market share decreased rapidly.
In 1983, Apple came up with Lisa, which had a graphical user interface (GUI), and Windows that allowed several programs to run simultaneously. The PC was priced at US$ 9,995 and was a commercial failure due to its high price and limited software capabilities...
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