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Apple Computer Inc. Apple Computer Inc. is one of the leading computer companies in the world. This corporation is one of those defining the IT marked and which is supposed to be dominating at least in the forthcoming decade. Apple Computer Inc. was established in 1977 in California.
The main objectives of the company are designing, manufacturing and marketing the personal computers, software, related goods such as peripherals and the networking equipment. The company is among founders and the leaders of the world IT market. Apple Computer Inc. develops and manufactures various digital devices, notebook computers, information storage devices. Apple produces and markets its own OS Mac as well as a number of products under Macintosh, iPod and Xserve brand names. Company manufactures a number of digital devices like players, computer memory, cameras and others.
The Company has been the world leader in computer relating goods and services. The main strategy of Apple Computer Inc. is to bring the best personal computing and music experience to students, educators, creative professionals, businesses and consumers around the world through its innovative hardware, software, peripherals and Internet offerings 1. The main objective of the corporation is to bring the High Tech solutions to the people involved in various activities. Company invests considerable finance into innovating technologies.
Being the first in the market Apple Computer develops reliable software that is sometimes preferred to it main competitor, MS products. The company is expanding its activity all over the world. It is operating in all the continents. Apple Computer Inc expanding its range of products and the partnership with other recognised companies. In July 2004 it introduced the new generation of iPod, a device combining the digital music player and data storage.
It may be placed by means of USB into either Mac or PC computer. The company cooperates with BMW in terms of providing the digital music devices for the world recognized cars. Apple Computer Inc. was the first company which introduced simple point-and-click technology more than 20 years ago (January 24, 1984) that succeeded to turn upside down the approach to computing devices.
Though Microsoft occupies wider segment of the personal computer market, Apple Computer Inc and its Macintosh remains the example of quality and elegance 2. The computer world market has been structured in a way that it is shared between the two giants, Microsoft and Apple. Microsoft takes much greater segment of the world computer market than Apple Computers. At the same time Apple Computers invests a lot of money onto retail programs worldwide. One of the main objectives of Apple Computers Inc. is serving the educational programs.
Company pays great attention to development of the education related products and equipment. Company develops a wide range of the hardware products. Regarding the quality Apple Computer was the first and remains the best. The main hardware products of the corporation are Power Mac desktops, Xserve RAID Storage Systems, PowerBook line of portable computers, iMac line of desktop computers targeted to consumer and education markets and many other digital devices.
Apple Computer invests a lot of money into software development. In June 2004, the Company previewed Mac OS X version 10. 4 (code-named Tiger), the fifth major version of Mac OS X that is expected to ship in the first half of calendar 2005. The software products of Apple Computer are, no doubt, of much higher quality than those of competitors. Thus only Windows XP are considered to be a good final product.
The quality of the previous versions of Windows was low. Apple Computer produces wide range of consumer software. Company mainly focuses on the consumer, business, education and computer related professional markets. If we take the major factors for computer equipment and related market they include usability, reliability, software support, and availability of peripherals and a reputation of the company. Usability of Apple Computers is of high quality because company was the first to introduce click and open technology thus making the communication of the user with computer friendly. Apple Computer has its own recognized hardware design style the peripheral hardware is available all over the world due to its own system of distribution.
Apple Computer invests a lot of assets into innovation researches. The company is increasing its revenue gradually. During fiscal 2004, net sales increased 33 % or $ 2. 1 billion from fiscal 20033. One of the main market indicators is the Return on Equity. ROE is a measure of how well a company used reinvested earnings to generate additional earnings, equal to a fiscal year's after-tax income (after preferred stock dividends but before common stock dividends) divided by book value, expressed as a percentage.
It is used as a general indication of the company's efficiency; in other words, how much profit it is able to generate given the resources provided by its stockholders 3. The Return on Equity of Apple Computer was 8. 8 % 4 at February, 3 rd. The Return on Equity of Microsoft was 21. 2 % 5. The difference is considerable, but it is worth noting that Microsoft occupies more than 90 % of the market. Considering such difference the indication is quiet positive for Apple Computer. The main strategy of Microsoft started turning to the quality factor not long ago.
Apple Computer has been manufacturing high quality products since its incorporation. Total revenue of Apple Computer is 8, 279 $Mil, which is 1. 85 % of industry revenue 6. Microsoft with 37, 809 $Mil, which is 44, 59 % of industry revenue is the leader according to this indication. 7 This indication is less favorable for Microsoft considering the share of the market it occupies (more than 90 %). According to the stock analysts Apple Computer is one of the strongest stocks in the market. They Company is one of the most stable in the market of computing equipment. It indicates Return on Assets (ROA) 7, 40 % in industry 8.
ROA is a measure of a company's profitability, equal to a fiscal year's earnings divided by its total assets, expressed as a percentage 9. Gross Margin of Apple Computer Inc in 2004 was 27, 3 % compared with 27. 5 % (2003) and 27. 9 % (2002). 10 This decline of the Gross Margin may be explained by the low margin on the new products. Company anticipates that throughout 2005 the prices will be under the pressure. Correct management plays an important role in the profitability of the enterprise. The expenses on Research and Development were 6 % of net sales. This is considerable amount of money and it shows the companys concern of its reputation as company manufacturing Hi Tech equipment.
These expenses provide the highest quality of the computers. Company remains competitive due to its innovation policy. During 2004 Company conducted aggressive expansion in both domestic and foreign markets that caused the increase of selling, general and administrative expenses, which are natural considering the fact that Apple Computer is represented insufficiently on the foreign markets. At the same time demand on the quality products is growing in the whole world. The sector where Apple undoubtedly wins the competition is the sector of media solutions. Apple is oriented to the development of the hardware solutions as well as appropriate software.
The task of Microsoft in this sector is just creating the software products that could be integrated with the existing or newly developed software. This policy of Microsoft may be compared with the car builder that manufactures a good body and then develops a number of standards for other parts aimed to integrate those parts with the car body. The parts are supposed to be developed by other manufacturers. Such car will never run. Why?
Because in this approach no one is defining the main functions and associated performance levels of the car and no one ensures that all the elements not only fit together from a connectivity point of view, but also from a functional, user oriented point of view 11. The same thing is with Microsoft. When machine using Windows breaks down user sometimes can not define what is the main reason, software, hardware, incompatibility or all. Apple Computer is no doubt develops high quality software. The software developed by Microsoft is used by people when there is no alternative. Thus, for example Microsoft integrated own CD burning software into Windows XP, but this program is less usable than other alternative software, e.
g. Nero Burning Rom. Apple develops really usable software and hardware. The attempts of Microsoft to integrate various devices into one fail to create good products. Theoretically Microsoft has developed software for specific tasks, but practically they all are of poor quality.
This situation may be compared with the camera integrated into mobile phone. They are developed the selling price has been increased, but very few people while buying the mobile phone think of taking the pictures. The same situation is with the Microsoft applications. The software has been developed and that means the company has the right to declare that they meet more requirements of the users by expanding the range of application. Similar situation was with the Microsoft Media Centre. Apple Computer succeeded to develop really good media products and this direction in the Corporations activity is supposed to be one of the most promising.
The Company has entered into a strategic alliance with Hewlett-Packard Company (HP), which provides for a HP-branded digital music player based on the iPod, the pre installation of iTunes software on HPs consumer PCs and notebooks and access to the iTunes Music Store 12. The success of Apple Computer is in the comprehensive usable solutions. Yield Magazine compares the performance of Apple Computer with that of Microsoft and Amazon. com. According to its evaluation Apple Computer has 9 grade rating in Product Management compared with 5 of Microsoft and 7 of Amazon. com.
In terms of strategy companies have the same ratings. In terms of Alliance Management companies have 6; 6 and 8 accordingly. If we analyze the main activity of Microsoft we realize that this company is aimed to the integration of both own and outer products and solutions. Microsoft, due to the lack of own quality...
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