Apple Inc. Case Study - 1
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1. Analyze the personal computer industry. Are the dynamics favorable or problematic for Apple?
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The personal computer industry is at a crossroads. At the outset, consumers desire to own and operate computers. On the other hand, the preferred personal “computers” may no longer take the form of a desktop or laptop. Indeed, a portion of the personal computer industry has already shifted their preference from a desktop or a laptop to a tablet or iPad. There are several likely reasons for this change, including cost, convenience, and mobility.
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At the outset, Microsoft and Intel products have dominated the personal computer industry, and since the 2000’s the personal computer market has exploded with growth. Indeed, almost one billion people had a personal computer by 2010. However, the significant expansion of growth resulted in increased competition. This competition drove down prices and provided consumers with more options. Between 1999 and 2005, the average selling prices for personal computers decreased by 8% per year. Portable personal computers like laptops and netbooks evolved to give consumers a more mobile and less expensive alternative to desktops. In 2009 the average selling price for a laptop was around $544, and the average selling price for a netbook was $400. Laptops and netbooks are expected to represent 70% of the personal computer industry by 2012.
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Unfortunately, the increase in competition and decrease in prices has led personal computer manufacturers to cut their own costs in order to stay competitive. Between 1999 and 2005, key personal computer parts fell in price by 30% per year. This steep decrease in price resulted in personal computer manufacturer profit margin falling by 5% annually during that same period. As a result of
1. Analyze the personal computer industry. Are the dynamics favorable or problematic for Apple?
-------------------------------------------------
The personal computer industry is at a crossroads. At the outset, consumers desire to own and operate computers. On the other hand, the preferred personal “computers” may no longer take the form of a desktop or laptop. Indeed, a portion of the personal computer industry has already shifted their preference from a desktop or a laptop to a tablet or iPad. There are several likely reasons for this change, including cost, convenience, and mobility.
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At the outset, Microsoft and Intel products have dominated the personal computer industry, and since the 2000’s the personal computer market has exploded with growth. Indeed, almost one billion people had a personal computer by 2010. However, the significant expansion of growth resulted in increased competition. This competition drove down prices and provided consumers with more options. Between 1999 and 2005, the average selling prices for personal computers decreased by 8% per year. Portable personal computers like laptops and netbooks evolved to give consumers a more mobile and less expensive alternative to desktops. In 2009 the average selling price for a laptop was around $544, and the average selling price for a netbook was $400. Laptops and netbooks are expected to represent 70% of the personal computer industry by 2012.
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Unfortunately, the increase in competition and decrease in prices has led personal computer manufacturers to cut their own costs in order to stay competitive. Between 1999 and 2005, key personal computer parts fell in price by 30% per year. This steep decrease in price resulted in personal computer manufacturer profit margin falling by 5% annually during that same period. As a result of
References: Jeff Cormier. Apple planning future iPad and iPhone with hybrid e-ink display. (April 9th , 2011). Retrieved from: http://www.theipadfan.com/apple-planning-future-ipad-iphone-hybrid-eink-display/ ------------------------------------------------- Arron. Could this be the future of Apple’s iPad. (February, 2012). Retrieved from: http://www.razorianfly.com/2012/02/29/could-this-be-the-future-of-apples-ipad-video-concept/ ------------------------------------------------- Dan Graziano. The iPad could be the future of gaming. (March 13th, 2012). Retrieved from: http://www.bgr.com/2012/03/13/the-ipad-could-be-the-future-of-gaming/ ------------------------------------------------- Damon Darlin, “The iPod Ecosystem,” New York Times, February 3, 2006.