Term Paper on "Apple Computer 2002"

Term Paper 6 pages (1862 words) Sources: 1

[EXCERPT] . . . .

Apple Computer is as old as the PC industry itself, and has led that industry for a substantial portion of its history. Early Apple models made the idea of a computer in every home a real possibility. Apple's Macintosh was the first commercially successful graphical user interface and an early leader in desktop publishing. Despite its early successes, Apple suffered as competitors' products improved and computers became more commonplace. Throughout the 1990s, Apple struggled to find and keep a market. In 1997, Apple re-hired co-founder Steve Jobs as interem CEO in the hope that he could turn the company around. Jobs dramatically changed Apple's product line and has restored the company to an industry-leading role. Apple's current strategies are working quite well for the company, and should lead to continued growth.

In 1976, Steve Jobs and Steve Wozniak started a company called Apple to produce and sell the computer they had designed in their spare time. The Apple was a simple, affordable computer that anyone could use. The design was an instant success; by 1980, Apple had sold 100000 units. (Wang) the Apple was ideal for home users and schools, but failed to gain much popularity with business users. The IBM PC conquered that market, largely because it was easily cloned, a detail IBM had not planned.

Apple needed something new in order to remain competitive. In 1983, Apple introduced the Lisa, a $10,000 machine named after Jobs' daughter. The Lisa had an entirely new operating system and very powerful hardware, but its most significant feature was the graphical user interface. The Lisa introduced the style of interface used on almost all computers today; it had icons, windows and menus, all operated with the mouse. The Lisa was a revolutionary machine without a market; many people wanted such a computer, but few could afford it. Apple had to design a less expensive version.

In 1984, Apple introduced the Macintosh. The machine resembled a stripped-down Lisa, and was far less powerful, but retained the all-important graphical user interface. Relatively little instruction was required in order to use the new machine; nothing had to be memorized, because the computer displayed all the relevant options on the screen. Microsoft released its Windows graphical interface for MS-DOS the same year, but it would be six years before Windows had capabilities comparable to the Macintosh, and another five years after that before they could be considered equal. The Macintosh quickly dominated the desktop publishing market, which it helped to create. It also became popular with the education market, which already used Apple products heavily. What the Macintosh failed to do was make serious inroads in to the business market, which was dominated by IBM-compatible PCs.

Portable computers were a new market in the early 1990s. Apple's Powerbook was a revolutionary design that defined the standard for portable computers for years to come. The Powerbook Duo was one of the first lightweight portables at 4.2 pounds, and is actually lighter than Apple's smallest current Powerbook. For much of the 1990s, Apple's laptops were clearly superior to anything else on the market. Apple laptops are still the standard by which many judge the market.

When Michael Spindler took over as CEO in 1993, he set out to restore Apple's popularity. The prolifiration of clones had initially helped to propel IBM and Microsoft to positions of leadership in the PC industry. Spindler thought it might work for Apple as well.Apple licenced its operating system to several companies, who eventually captured 20% of the Macintosh market. Though clone-makers did produce some impressive hardware, such as the $10,000 quad-CPU Daystar Genisis, the program was not a success for Apple. Rather than boost the popularity of Apple's platform, Macintosh clones reduced Apple's ability to sell high-margin hardware.

Apple attempted to diversify its product-line in the mid 1990s. The Apple QuickTake was one of the first consumer-friendly digital cameras. Apple CEO John Sculley intevted the term "personal digital assistant" and created the market with the revolutionary Newton MessagePad device. (Wang) the products were initially successful, but competition quickly reduced Apple's share in these markets. Traditional camera manufacturers learned to make consumer-friendly digital cameras by looking at Apple's design. 3 Com's PalmPilot captured the majority of the PDA market with a design smaller and less expensive than the Newton. Apple was again upstaged in the markets it created.

The Internet started to become mainstream around 1995, leading to explosive growth in the PC industry. Suddenly, there was a reason for most people to have a computer, however, both Apple and Microsoft were slow to respond to the opportunity. The flood of new computer buyers brought on by the growth of the Internet were not interested in the high-end graphics the Macintosh offered, or in paying Apple's high prices. Instead, consumers were demanding lower prices and convenience. Microsoft's new Windows 95 operating system closed the ease-of-use gap enough that the average new buyer, who wanted a computer for web-browsing, email and word-processing had little incentive to buy from Apple.

By the late 1990s, Apple's future looked bleak. It had been through three CEOs in four years, and many more reorganizations. Apple's products had little to differentiate themselves from competitors other than incompatibility. Dell founder Michael Dell suggested that Apple should dissolve and distribute its assets to shareholders. Instead, Apple hired co-founder Steve Jobs as its interem CEO. Jobs aggressively eliminated anything that was not making money for Apple. The clone program was one of the first things to go. Apple refused to offer licences for new versions of Mac OS, and bought clone maker Power Computing. Jobs eliminated the Newton project, and simplified the Macintosh product line.

The first major new product of the second Jobs era was the iMac. Several years too late, Apple had a computer aimed directly at the new wave of first-time buyers created by the Internet revolution. The iMac was inexpensive, reasonably powerful and as simple and elegant as the original Macintosh. An all-in-one machine with a carrying handle provided an ideal configuration for basic home use, and also provided an excellent option for classrooms. Jobs did not repeat Apple's historic mistake of overpricing; the iMac was priced to compete with the increasingly inexpensive PCs of the era.

Jobs was not about to give up the high-end market either. In 1999, Apple introduced the Power Macintosh G4. The G4, marketed as the first "supercomputer on a chip" restored Apple's position as a leader in the multimedia production market. The G4 had a vector-processing unit that could perform the type of operations commonly used for transforming media files at several times the speed of competing PC processors. Shortly thereafter, Apple introduced several more new products, including a G4-powered laptop under an inch thick. The Powerbook G4 had the ability to do video production operations that were previously only possible in a studio with large and expensive equipment. It was a highly successful product that restored Apple's position as a leader in the laptop market.

All of Apple's impressive new hardware was still powered by an updated version of the operating system that powered the original Macintosh. That changed in 2001 with the release of Mac OS X. OS X is a modified version of NextStep, a product of NeXT, the company Jobs founded after leaving Apple in 1985. OS X is derived from Unix, the industrial-strength operating system upon which most of the Internet's infrastructure is built, but has a user-interface like that of the original Mac. Jobs accompanied OS X with a "switch" marketing campaign, which featured anecdotes from frustrated Windows users who had switched to Mac OS X.

The new hardware and operating system has restored the company's profits, but Jobs was not content to rest on his laurels. Inexpensive PC hardware had begun to catch up to the power of Apple's G4. Apple was again no longer the clear choice for content creation. In 2003, after much pressure from Apple, IBM introduced a powerful new CPU, the PowerPC G5. The G5 was competitive with anything else avialable for content creation, and cost-effective enough that Virginia Tech selected it for their budget supercomputer, which was the third-fastest in the world when it was completed. The G5 was easy to sell to Apple's core content creation market.

For home users, Jobs positioned the iMac as a "digital hub," which would be the center for all a user's multimedia content. Apple introduced a digital music player, the iPod and a compatable music download service, the iTunes Music Store. A few months later, Apple released versions of both products that worked with Windows PCs; the iPod and iTunes quickly dominated their markets. While competing products have caught up in terms of features and price, Apple is holding on to its lead in this market.

The popularity of the iPod and iTunes has lead to a resurgance in interest in Apple's Macintosh computers. In early 2005, Apple introduced the Mac Mini, a full-featured computer smaller than a typical PC's CD-ROM drive. Priced… READ MORE

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