APPLE COMPUTERS

Apple Computers

Apple Computers

Apple Computer, Inc. is headquartered in Cupertino, California is a leader in the PC field for home, business and education markets. Their products include the Macintosh line of desktop and notebook computers, the Mac operating system, the iPod digital music player. The manufacturing facilities are located in Sacramento, California and Cork, Ireland. Apple produces their own keyboards and "Mouse" input devices (www.apple.com). Apple's operating segments include the Americas, Europe, and Japan. They sell their products through online stores, direct sales force, third-party wholesalers and resellers, and its own retail stores.

Apple Computers has experienced both good and bad times since it began its garage operation in 1976. Although it has been a leader in computer technology in the past, it has struggled lately with keeping pace in the rapidly developing computer industry. In this extremely competitive industry, the developing technology and evolving computer applications have contributed to this type of business environment. Over the last two decades, the popularity of personal computers has made the computer market attractive to consumers worldwide. As mentioned before, Apple developed as a major player in the computer industry in its early years.

Mission Statement

"It is Apple's mission to help transform the way people work, learn and communicate by providing exceptional computing and innovative customer service. We will pioneer new directions and approaches finding innovative ways to use computing technology to extend the bounds of human potential. Apple will make a difference: our products, services and insights will help people around the world shape the ways business and education will be done in the 21st century." Apple's mission statement details its strategic position to achieve profitability and the competitive advantage(www.apple.com).

Threat of New Entrants

There are high entry barriers in the computer hardware/software industry. The two main reasons for the high barrier are based on the high costs to enter the market, the time it will take before companies earn revenue on their investment, and product differentiation. This is due to a complex and expensive development stage, which is needed for severe product testing(Gotleib, Borodin, 2005). As for capital requirements, firms need to invest substantial financial resources before entering this competitive market. In addition, once a firm establishes itself in the industry, it may take a number of years before the company sees any profit.

With such high costs and vast competitors, product differentiation, absolute cost advantages, and economies of scale play a large part in the contestability of the market. Product differentiation promotes brand loyalty by offering different products with different characteristics to the consumer. If Apple consumers are satisfied and loyal to purchasing this brand, new entrants are less likely to enter the market. In addition, for new entrants into this market, production costs will be higher than for the existing companies in the industry(www.businessweek.com). Finally, in order for new entrants to compete on the same level with companies like Apple, Dell, Hewlett-Packard, and IBM, they will need to come up with a relatively high scale of output to compete at the same level ...