Apple Inc. in 2010
[pic]
9-710-467
APRIL 13, 2010
DAVID B. YOFFIE RENEE KIM
Apple Inc. in 2010
On April 4, 2010, Apple Inc. launched its eagerly anticipated iPad amid great hype. The multimedia computer tablet was the third major innovation that Apple had released over the last decade. CEO Steve Jobs had argued that the iPad was another revolutionary product that could emulate the smashing success of the iPod and the iPhone. Expectations ran high. Even The Economist displayed the release of the iPad on its magazine cover with Jobs illustrated as a biblical figure, noting that, “The enthusiasm of the Apple faithful may be overdone, but Mr. Jobs’s record suggests that when he blesses a market, it takes off.”1
The company started off as “Apple Computer,” best known for its Macintosh personal computers (PCs) in the 1980’s and 1990’s. Despite a strong brand, rapid growth, and high profits in the late 1980s, Apple almost went bankrupt in 1996. Then Jobs went to work, transforming “Apple Computer” into “Apple Inc.” with innovative non-PC products starting in the early 2000’s. In fact, by 2010, the company viewed itself as a “mobile device company.”2 In the 2009 fiscal year, sales related to the iPhone and the iPod represented nearly 60% of Apple’s total sales of $43 billion.3 Even in the midst of a severe economic recession, revenues and net income both soared (see Exhibits 1a through 1c). Meanwhile, Apple’s stock was making history of its own. The share price had risen more than 15fold since 2003 (See Exhibit 2).
By almost any measure, Apple’s turnaround was a spectacular accomplishment. Yet Steve Jobs knew that no company in the technology industry could relax. Challenges abounded. In 2009, for example, iPod sales were falling. At the same time, Microsoft introduced Window 7, which led to a resurgence in PC sales. Even though Macintosh sales had grown faster than the industry in recent years, Apple’s share of the worldwide PC market had remained below 5% since 1997
9-710-467
APRIL 13, 2010
DAVID B. YOFFIE RENEE KIM
Apple Inc. in 2010
On April 4, 2010, Apple Inc. launched its eagerly anticipated iPad amid great hype. The multimedia computer tablet was the third major innovation that Apple had released over the last decade. CEO Steve Jobs had argued that the iPad was another revolutionary product that could emulate the smashing success of the iPod and the iPhone. Expectations ran high. Even The Economist displayed the release of the iPad on its magazine cover with Jobs illustrated as a biblical figure, noting that, “The enthusiasm of the Apple faithful may be overdone, but Mr. Jobs’s record suggests that when he blesses a market, it takes off.”1
The company started off as “Apple Computer,” best known for its Macintosh personal computers (PCs) in the 1980’s and 1990’s. Despite a strong brand, rapid growth, and high profits in the late 1980s, Apple almost went bankrupt in 1996. Then Jobs went to work, transforming “Apple Computer” into “Apple Inc.” with innovative non-PC products starting in the early 2000’s. In fact, by 2010, the company viewed itself as a “mobile device company.”2 In the 2009 fiscal year, sales related to the iPhone and the iPod represented nearly 60% of Apple’s total sales of $43 billion.3 Even in the midst of a severe economic recession, revenues and net income both soared (see Exhibits 1a through 1c). Meanwhile, Apple’s stock was making history of its own. The share price had risen more than 15fold since 2003 (See Exhibit 2).
By almost any measure, Apple’s turnaround was a spectacular accomplishment. Yet Steve Jobs knew that no company in the technology industry could relax. Challenges abounded. In 2009, for example, iPod sales were falling. At the same time, Microsoft introduced Window 7, which led to a resurgence in PC sales. Even though Macintosh sales had grown faster than the industry in recent years, Apple’s share of the worldwide PC market had remained below 5% since 1997