November 09, 2004
Apple - iPod Situation Analysis
Apple Computer has long been known as the most innovative personal computer company on the planet. What began as a revolutionary foray into personal computing with the Apple II, the company is largely credited with helping to shape how people use computers with its implementation of the graphical user interface in its famous Macintosh (beginning in 1984). All content © Peter T Graber, 2004
Situation Analysis
Apple began in 1976 and was founded by current CEO Steven Jobs, Steve Wozniak and Ron Wayne. After a successful start with the Apple II in 1977, the company continued to pursue innovation and went on to introduce the Apple Macintosh in 1984. The Macintosh featured a new and revolutionary operating system with a series of easy to understand metaphors like "trashcan", "note", etc. The Macintosh became a milestone in the development of computer industry, leading companies like Microsoft to incorporate many of its features. Since then, Apple has continually designed and manufactured innovate personal computer hardware and software.
The company serves all markets that use personal desktop computers and related devices and software. This includes schools, corporations, governments and general consumers. Of these markets, Apple currently maintains the strongest share within the multi-media and creative industries. Increasingly, however, the company has begun to serve general consumers desiring access to products and services related to digital multi-media delivery. A linchpin of this is Apple's portable MP3 player - the iPod - and their related software services, namely iTunes and the iTunes Music Store. The iTunes Music Store is one of the only commercially successful legal online music download services on the market with over 70% market share and over 70 million songs sold. This has been a huge success for the company.
Peter Graber – Week 2
In terms of market share, Apple currently maintains the smallest worldwide user base of any operating system, estimated to be a mere 2.5%. The Microsoft Windows platform is dominant worldwide, estimated to run on between 92% - 96% of all personal computers. Beyond Windows, Apple also is competing with a relatively new option in operating systems, this being open-source derivatives of the UNIX operating system like LINUX. This sector is expected to surpass Apple in terms of market share by the end of the decade. In addition to their operating system, the company also produces a number of applications that serve the media creation industries, as well as the professional office market. Apple produces software products like Final Cut Pro (digital video editing), Logic Pro (digital music editing) and FileMaker Pro (database, productivity).
Taking this into account, what makes Apple unique is its ability to offer both innovative and reliable hardware, along with trend-setting and user-friendly software. No other dominant personal computer company does this. Surprisingly, this had enabled the company to creatively combine its strengths in these areas to present new solutions to consumers.
SWOT Analysis
Considering these factors, the following strengths (S), weaknesses (W), opportunities (O) and threats (T) have emerged.
Strengths
Innovative Design Heritage-
Apple has long been known as a leading innovator of both hardware and software. Since its founding in the mid-seventies, the company has taken a leading role in defining cutting-edge personal computing. It all started with the graphical user interface and mouse.
High Quality Software /Powerful Hardware -
Apple has relied on stringent quality specifications of its physical hardware (CPU, peripherals, etc) and its operating system is considered stable, reliable and easy-to-use. The current hardware lineup is geared towards high-need professional creatives.
Fashion-conscious Product Appeal -
Apple leads the way in industry design and makes ‘cool’ and fashion conscious products. What started with the Macintosh 512K (circa 1984) continues today with its iPod. Form follows function.
Ease-of-Use-
Starting with the Lisa/Lisa 2 (circa 1983) and the first commercial implementation of the graphical user interface, Apple has pioneered in engineering easy-to-use software. This concept is consistent through all products.
High Reliability-
Among its current users, Apple products are known for a high degree of reliability and stability.
Loyal user base-
Apple loyalists have been built over the last quarter century and remain committed to supporting the company’s products, even in a ‘Windows world’. This critical for the company and they must maintain this base.
Peter Graber – Week 2
Weaknesses
Marketshare /Users-
Apple’s current world OS marketshare is slowly eroding. They must continue to maintain their core user base.
Compatibility with Windows Platform-
This is gravely misunderstood by consumers.
Costs of Products-
Concentrated Leadership and Vision-
Limited sales and distribution channels
Opportunities
- Increased multimedia demand by consumers
- New/Expanded Distribution channels
- Emerging multi-media usages trends
- MS Windows ubiquity
-
Threats
- Microsoft Windows OS
- Open-source Systems/platforms
- Copy cats/knock-offs
- Steve Job's Health
Posted by pgraber at 08:16 PM
November 02, 2004
IMC Objectives for Apple iPod
Any successful IMC plan has background objectives that serve to give the program shape, intent and a target to reach. In considering this for Apple and their iPod portable music player, the following is a short discussion on IMC objectives as I see them. All content © Peter T. Graber, 2004.
Apple has a long-standing history of product and design innovation. Since starting in 1976 they have consistently been looked to as a leader in developing both hardware and software that pushes the limits of technology and is easy to use, reliable and fashion conscious.
Given this heritage, however, Apple's overall market share in the personal computer market is tiny. When considered in the historical context in which this took place and how the market reacted, the company's early decisions regarding licensing and distribution strategies severely effected Apple's overall ability to get their product into consumers hands. While they experimented with alternative distribution and licensing strategies used in the dominant Windows platform, these were adandoned. Both of these facts limited the company's ability to penetrate the larger consumer market. Because of this, the company has increasingly sought to present solutions that enable computer users to extend the functionality and practicality.
Recently, Apple has utilized its product innovation skills and introduced its iPod portable music player with tremendous success. In doing so, the company has witnessed a huge increase in the number of new users of Apple products and in do so, has created a strong conduit that needs to be exploited to drive growth of their overall brand.
These developments also strongly suggest that the company can maintain relevance to consumers in new ways, ones not strictly centered on their core operating system - the Mac OS - and its derivative hardware.
To help build on these successes, the integrated marketing communications plan I will present will seek to fulfill two key objectives. First is to define and communicate the concept of a comprehensive "digital lifestyle" and clearly explain the value this brings to it core creative consumers. Second, is to establish the company as premier provider of value-added digital components that provide reliable, secure, and platform-neutral extensibility and integration. If successful, Apple can leverage its renewed brand-awareness to move more consumers to their operating system and related hardware products
The Digital Lifestyle
For Apple to successfully define and communicate the value of the 'digital life', everyday consumers must be educated as to what this is, the reasons why it is within their reach and the value it brings when accomplished. To accomplish this, several goals must be met, which include:
- Closely tie Apple products to solutions to digital lifestyle areas or problems.
- Communicate why Apple products enable this to be achieved faster, more reliably than competitors.
- Communicate the benefits of time, convenience and enjoyment this brings to consumers.
Platform Neutral Extensibility
Apple's success with its iPod product suggest the need for innovative, reliable and easy-to-use products that extend the value of consumers' pre-existing hardware and computer usage habits. To these ends, Apple must seek to:
- Position the iPod as an 'extension solution', not just a digital jukebox.
- Maintain domain market position in the portable media and accessories market.
- 50K New users to its iDisk web-based storage service.
Time Frames
The time frame to achieve these objectives will be 24 months. As the company works to introduce newer and upgraded products, refinements and adjustments may need to take place. The key, however, is to maintain consistency. Also, since both objectives build on one another, the company must place primary emphasis on the extensibility message in an effort to speed the understanding to the digital lifestyle concept. The objectives in this section need to be achieved in a somewhat shorter timeframe.
Measurement
To ascertain if this IMC plan is successful, measurement and evaluation of the program needs to be carried-out on many levels. Most important is for the company to determine how many of its new consumers (via the iPod) have subsequently purchased its desktop hardware and software, or other digital lifestyle products. Also important is to measure how consumers view the company before and after the campaign. A variety of qualitative and quantitative tools will be used in an effort to measure this.
Posted by pgraber at 08:20 PM