CHAPTER 1: COMPANY PROFILE

1.1 Brief History of the Organization and current Board of directors

It all started back in 1976, when college drop-outs Steve Jobs and Stephen Wozniak,
along with their friend Ronald Wayne established a company named Apple Computer.
The association between Jobs and Wozniak, in particular, dates back to 1971, when they
first met at Hewlett-Packard - where Wozniak worked - through a mutual friend. Both of
them started a business in 1972 that saw them selling a device called “blue box” which
allowed users to illegally make free long-distance calls on AT&T’s network, and that too
without getting traced. In 1974, Woz invited Jobs - who had just come back from a
spiritual trip to India - to join the Homebrew Computer Club in Palo Alto. While initially
Woz helped Jobs - who was working with Atari at time - with his office project, soon they
started working on a PC. What would eventually become Apple ‘I’ was ready by 1976. A
company that has grown by 15000% since 2001 should be doing something that most of
the others aren’t doing.

Interested to know the name and other details of such a company? Well, it is the most
famous company that we know today, i.e. Apple Inc. There must be a long history of
Apple. Like all other companies, there would be a point where the company would have
been started, then passed numerous phases to reach to the current stage where Apple
computers and other products are known as the trademark of quality. Currently
employing 132,000 people in the company, Apple is amongst the top few companies in
the IT sector. You don’t particularly have to go through the internet to find out the
current level of success of Apple Inc. rather you can just have a look around you to find a
number of Apple products. Whether they are in the form of iPhone, iPad, MacBook, or
MacOS, each of the products has an established market. If you are wondering about the
profit that Apple Incorporation earns, then you’ll be amazed to know that Apple Inc. has
made a profit of US$59.531 billion in the year 2018. From the beginning of 1991 to the
beginning of 1998, Apple shares lost 76% of their value and investors were getting
desperate. Jobs returned to Apple as interim CEO in July 1997. After stopping the
bleeding by announcing a partnership with Microsoft and the launch of the iMac PC in
1998, the interim title was dropped. It is considered one of the Big Tech technology
companies, alongside Amazon, Google, Microsoft, and Facebook. Its online services
include the iTunes Store, the iOS App Store, Mac App Store, Apple Music, Apple TV+,
iMessage, and iCloud. Other services include Apple Store, Genius Bar, AppleCare, Apple
Pay, Apple Pay Cash, and Apple Card.

Products that the company provides to the users:

❖ Consumer electronics – IPad,
iPhone, iPod Personal Apple
Computers – MacBook Servers
❖ Computer software –
Macintosh Digital media
distribution – iTunes
The I-devices are the core products that the company provides to the users, and it is
the history of Apple that most of the consumer products of the company have the
‘I’associated with them such as IPad, iPhone, and iPod. All the new versions of these
products come with the same series, thus creating it a brand for the users. Towards
the end of the year 1976, ex- Intel manager named Mike Markkula invested $92,000
in the company. Subsequently, Apple Computer also secured a bank loan of $250,000,
and managed to get $600,000 in venture funding - suddenly things were on the track.
 The company also got its logo designed in 1977.

Current Board of Directors

• Arthur D. Levinson, Ph.D. Chairman of the Board, Apple Former Chairman and
CEO Genentech.
• James A. Bell. Former CFO and Corporate President. ...

• Tim Cook. CEO.Apple.

• Albert Gore Jr. Former Vice President of. The United States.

• Andrea Jung. President and CEO.

• Ronald D. Sugar,Ph.D.

• Susan L. Wagner.

1.2 Mission/Vision Statement and Quality policy followed/ Quality certification

attained

Apple Inc.’s mission statement and vision statement are bases for the company’s success
as one of the most valuable businesses in the world. Established in 1976, the firm has
become a symbol of innovation and elegance in design. This condition supports the
brand, which is one of the major business strengths identified in the SWOT analysis of
Apple Inc. The company’s corporate mission and vision statements motivate employees
to support and contribute to innovation for competitive advantage. Apple Inc.’s generic
strategy and intensive growth strategies define such competitive advantage, especially to
counteract the effects of competitors like Samsung, Google, Amazon.com, Dell, Lenovo,
Sony, and PayPal.

Apple has changed its corporate vision and mission statements over time, to reflect
changes in the company from the time of Steve Jobs to the current leadership of Tim
Cook. The vision statement and mission statement now represent the company’s
efforts in addressing business opportunities in the computer technology, consumer
electronics, cloud computing, digital distribution services, and semiconductors
industries. Apple Inc.’s corporate mission and corporate vision are linked in terms of
how they push for the company’s continuous growth despite challenges in the
competitive landscape. Considering the variety of industries where the business
operates, it is essential that the diversity of strategic approaches for these industries
be embodied in the corporate mission and the corporate vision. Porter’s Five Forces
analysis of Apple Inc. shows that the business deals with strong competition. The
company must ensure that its mission statement defines the strategies to keep the
business competitive. In relation, Apple’s vision statement must direct business
efforts toward a future of leadership in the global market. Also, the company’s vision
statement is abstract, inspiring, and stable to encompass the future of the business.
However, to improve this vision statement, it is recommended that Apple Inc. make it
more concise. Instead of providing a detailed list of beliefs and values, the company can
make its corporate vision more concise, to make it easier for employees to understand
and apply in their daily work activities. The resulting concise vision statement would be
easier to integrate into more aspects of Apple Inc.’s business, including new operations
in the future.

Quality Policy

A quality policy statement focused on customer needs is most often 'marketing' focused,
Apple’s tries to minimize its impact on the environment by addressing climate change
through renewable energy and energy efficiency, using greener materials and inventing
new ways to conserve precious resources. Apple Inc. is a multinational American
technology company which sells consumer electronics that have been claimed by critics
to combine stolen and/or purchased designs that it claims are its own original creations.
Section 4.1.1 of the ISO 9001 standard requires that management "shall define and
document its policy for quality, including objectives for quality and commitment to
quality. Quality Policy – Apple Syringe. Apple requires each of its suppliers to meet the
highest standards for all goods and services.
Apple A6 processor. Strategic plan and objectives in the Apple Corporation emphasise on
social and quality responsibilities through a standards of management systems that
designed to ensures successful strategic processes through internal and external
situations. The core principles in the strategic processes are mission and objectives,
environmental scanning, strategy formulation, strategy implementation, and evaluation.
Apple is the fastest growing retailer in history and has dominated the holy covet of retail
metrics, sales per square foot, almost since its inception, which currently sits at $4,551.
In addition, suppliers must be committed, as we are, to ensuring the highest standards of
social responsibility.

IPHONE 5, IPHONE 5C, IPHONE 5S 6, It goes on to say that the policy "shall be relevant to
the supplier's organizational goals and the expectations and needs of its customers." The
policy should demonstrate a commitment to continual improvement. Pair that with
rampant expansion plans that puts the technology giant at 420+ stores around the world,
and we're talking about some serious revenue numbers, approximately $170 billion
worth (2013).
The quality policy should build on corporate objectives and values and be appropriate to
the purpose and context of the organization. Quality Policy Gallery. Imagine turning on
your new iPhone 5 and finding a photo on the camera roll. Our requirements include a
commitment to rigorous quality assurance. The repair offers are the latest in a string of
product quality problems over the past year even as Apple has raised prices for most of
its laptops, tablets and phones to new heights. May 7, 2020 at 11:25 pm Viagra suppliers.
May 5, 2020 at 2:25 am Tylenol 500 mg. Tylenol 500 mg. Quality Policy – Apple Syringe.
Quality Policy – Apple Syringe. The policy must now provide a framework for the setting
and reviewing of quality objectives. Lisa Jackson is Apple’s vice president of
Environment, Policy and Social Initiatives, reporting to CEO Tim Cook. The main aim of
Apple Inc. is to offer high- quality products to its customers. The policy must include a
commitment to continually improve the QMS.
1.3 Business Process of the Organization – Product Profile

Apple, being a leading technology company in the world, follows a unique business
model of making it simple for people to use the existing technologies in the market
(Francis 2009). Apple focuses on producing the best consumer electronic products
available in the market which can be sold for the highest profit margins available in the
industry. For this purpose, Apple hires some of the world’s best designers and engineers.
Below is the brief description of business process followed by Apple:
• Apple identifies products where other producers have focused on adding more and
more features rather than making it simple for people to use the product. While the
addition of more features can create more demand in the initial days, the same can
make the product overly complicated and customers will find it difficult to use it. For
E.g. addition of new features to Microsoft’s Word created additional demand in the
initial days, but made the product more complicated for general users later. The
resulting complication in products makes it difficult to be sold in the mass market.

• The second step involves determining whether Apple can come up with a new
product which can be made dramatically simple for users and captures the
important features which were developed by other users in the industry.

• The third step involves identifying whether the product/platform to be developed by

the company can create a compelling competitive advantage to the company in the
long term. This involves checking whether any of the existing vendors provide an
integrated platform for devices and other services (Francis 2009). Does the existing
vendor provide a decent platform? Will the platform when created by the company
itself can lock-in the customers to the company in the long term? The second
question is crucial for Apple as it focuses on locking in the customers in the long term
with its products like iTunes and the iPhone. Once the product/platform has all the
pros which are listed above, Apple sets out in designing the prototypes with emphasis
on simplicity and sophistication which are the hallmarks of the Apple brand. Other
than the basic functions which are considered to be indispensable in the product,
Apple generally emphasizes on trading-off design, simplicity, and user friendliness
 over the addition of more and more additional features. For achieving this objective,
Apple employs the best product designers in the world (Heisler 2013). Focus on these
elements makes all the Apple products as potential IT lust items and fashion
accessories for the consumers. The mantra is to come up with something radically
different for which the consumers will be willing to pay a high price premium. Apple
then releases both the product and the platform at the same time, so that the
consumers can be easily locked up with each other and with the company for a long
term.

• Production of the products is mostly outsourced to the companies in countries like

China where it can do for a fraction of the cost of that of producing in the US or
Europe.

• The business process of Apple also involves revising the products at regular
intervals (mostly yearly) depending on factors like product cycle and cost. New
releases incorporate the technological advances in the market. But Apple also
ensures that updated releases also come up with some additional improvements
like improved fit- and-finish, looks, fashion, etc.
1.4 Customers of the Organization – Level of Operations
(Global/National/Regional)
Apple Inc Customers have recorded a rise in their cost of revenue by 39.16 % in the
2 quarter 2020 year on year, sequentially costs of revenue grew by 23.05 %, for the
same period Apple Inc recorded revenue increase by 10.92 % year on year,
sequentially revenue grew by 2.35 %. The Company’s customers are primarily in
the consumer, SMB, education, enterprise and government markets. The Company
sells its products and resells third-party products in most of its major markets
directly to consumers and SMBs through its retail and online stores and its direct
sales force. The Company also employs a variety of indirect distribution channels,
such as third-party cellular network carriers, wholesalers, retailers, and value-
added resellers. The Company’s net sales through its direct and indirect
distribution channels accounted for 30% and 70%, respectively, of total net sales.
The Company believes that sales of its innovative and differentiated products are
enhanced by knowledgeable salespersons who can convey the value of the
hardware and software integration, and demonstrate the unique solutions that are
available on its products. The Company further believes providing direct contact
with its targeted customers is an effective way to demonstrate the advantages of its
products over those of its competitors and providing a high-quality sales and after-
sales support experience is critical to attracting new and retaining existing
customers.

To ensure a high-quality buying experience for its products in which service and
education are emphasized, the Company continues to expand and improve its
distribution capabilities by expanding the number of its own retail stores
worldwide. The Company’s retail stores are typically located at high-traffic
locations in quality shopping malls and urban shopping districts. By operating its
own stores and locating them in desirable high- traffic locations the Company is
better positioned to ensure a high quality customer buying experience and attract
new customers. The stores are designed to simplify and enhance the presentation
and marketing of the Company’s products and related solutions. The retail stores
employ experienced and knowledgeable personnel who provide product advice,
service and training and offer a wide selection of third-party hardware, software,
and other accessories and peripherals that complement the Company’s products.
The Company has also invested in programs to enhance reseller sales by placing
high quality Apple fixtures, merchandising materials and other resources within
selected third-party reseller locations. Through the Apple Premium Reseller
Program, certain third- party resellers focus on the Apple platform by providing a
high level of product expertise, integration and support services.

The Company is committed to delivering solutions to help educators teach and

students learn. The Company believes effective integration of technology into
classroom instruction can result in higher levels of student achievement and has
designed a range of products, services and programs to address the needs of
education customers. The Company also supports mobile learning and real-time
distribution of, and access to, education related materials through iTunes U®, a
platform that allows students and teachers to share and distribute educational
media online. The Company sells its products to the education market through its
direct sales force, select third-party resellers and its online and retail stores.

❖ The Company also sells its hardware and software products to enterprise
and government customers in each of its geographic segments. The
Company’sproducts are deployed in these markets because of their
performance, productivity, ease of use and seamless integration into
information technology environments. The Company’s products are
compatible with thousands of third-party business applications and services,
and its tools enable the development and secure deployment of custom
applications as well as remote device administration.
❖ AAPL’s Stock Performance relative to its Customers
❖ Comparison Charts
❖ Customers Performance
1.5 Competitors of the Company

Technical innovations, minimalistic designs, and creative marketing, Apple Inc. has
branded itself as a game changer in the smartphone, laptop, and entertainment
technology industry. The company which was founded in 1976 by Steve Jobs
alongside his friends Steve Wozniak and Ronald Wayne started off humbly but
grew slowly as the three became more innovative and business smart.
Every product of Apple launched is a revolution. Right from the iPhone, iPod, iPad
and even the Macintosh line of computers. The later in particular made several
headlines with its very sleek designs and innovative technology. Today, Apple has
about six range of computers namely, MacBook, MacBook Air, MacBook Pro,
MacBook mini, and iMac. The company also avails accessories for all its computer
products.
Aside from the success, Apple has gained from its line of Mac computers; their
smartphones are also doing well in the global market. Apple is undoubtedly one of
the few brands that have enjoyed consistent success. Brand loyalty is the main
reason for this success together with exceptional revenue growth which spiraled
from 8 billion US dollars in 2004 to 234 billion by the end of 2015.

Top 3 competitors of Apple Company:-

1) Dell

Top Apple Competitors 1Dell is majorly known as a manufacturer of desk-

based and mobile PCs. With regards to competition, Dell majorly competes
with HP, Acer, and Lenovo. It however also competes with Apple in the
market of consumer PCs. Competition between Dell and Apple began when
the former launched a rival product Dell DJ that although brought in
significant revenue, it still didn’t match the standards and success of Apples
iPod. With a few years have passed on, these two companies even compete
fiercely with Dell’s XPS line taking Apple head-on in the PC market.

While we can’t give clear statics to show how well Dell is doing right
now, speculation indicates that the company through significant
acquisitions and partnerships has seen it double its sales and revenue
in the recent years. Unfortunately, Dell does not have smartphones
and hence it is one of the Apple Competitors only for Laptops and is a
primary competitor for Macbook.

2) Lenovo

Lenovo Group is a Chinese company that provides consumer PCs,

mobile phones, and consumer electronics as well as software systems.
Although the company enjoyed tremendous success, it was until it
acquired IBM Corporation that Lenovo gained popularity as the world
leading PCs vendor. Today, Lenovo employees over 27,000 employees
and has reported an estimated revenue of $45 billion in the financial
year of 2017. Lenovo is one of the Apple Competitors for all its
products – Smartphones, Laptops and Tablets. Lenovo has an
excellent range of laptops and has an in depth product portfolio,
although it lacks in marketing and brand equity.
3) Samsung
Samsung personal computers are a top favorite among consumers.
Their devices are well assembled and feature great configuration and
design. The quality of these products is excellent, and their prices are
affordable to all. Samsung has maintained a loyal following of users
who report great satisfaction with Samsung’s PCs. Also, brand
Samsung has a significant share of the Smartphone market. Samsung
smartphones have revolutionized and impelled imitators in the
mobile computing industry. Samsung today is one of the largest and
most profitable companies in Asia and the world in general.

When compared to Apple, Samsung can be the primary competitor to

Apple’s Smartphones – The Iphone. Samsung’s Galaxy series and Note
series are both premium series which are the major reason for dents
in Iphone sales. Although Samsung is the go to brand for Smartphones,
the same cannot be said about its laptop. Samsung does not have an
equivalent high brand equity for its laptop segment but due to the
residual branding of Smartphone, there is greater awareness and
adoption of Samsung Laptops. When we consider Samsung as one of
the top Apple competitors, we are definitely considering its
smartphone as a competitor much above their laptops.
1.6 Strategies – Business, Pricing, Management
Business Strategy

Apple deals in the designing, production and marketing of software, mobile and media
devices, accessories, personal computers, networking solutions, and portable music
players. The company most revered brands are Mac, iPad, and iPhone. As from 2013 to
2015, the company has recorded a steady rise in annual revenue. In 2013, the company
annual revenue was $170 billion, in 2014, it was $182 billion, and in 2015, it was $233
billion. From the annual revenues, one can extrapolate the effectiveness of Apple’s
business strategy and tenacity on profit making.
One of Apple’s business strategies that accord it a unique value proposition is the fact
that it designs and develops its application, software, hardware, operating system, and
services thereby enabling seamless integration among its products and services, which
also makes it easy for customers to use their related products. Through this business
strategy, Apple is able to stay ahead of its competitors such as Samsung, Huawei, LG, and
HTC, among others that rely on third-party software and an operating system such as
Android. A previous research study focusing on business model innovation noted that
Apple’s unique value proposition is credited to research and development, which enables
it to offer products and services that are designed and developed in-house. Ergo, there is
seamless integration among Apple products, which can encourage iPhone users (as an
example) to buy new versions and other related products such iPad or Mac because of
ease-of-use and integration capabilities with the iPhone they currently own.
Research study on customer’s propensity to stay loyal to a particular brand showed that
it is pegged on the quality of service that they receive. On this front, Apple already has a
competitive advantage because it accords its customers with unique buying experience
through its user-friendly online stores, revered retail centers that have grandiose setting
and design as well as knowledgeable sales and support staff who prove to be helpful.

Apple products and services have an obvious uniqueness compared to their competitors.
This uniqueness gives them a competitive advantage since they are able to carve a
market niche where there is low competition. For example, Apple only caters for
customers who are comfortable using the iOS operating system, which means it does not
have to engage in fierce competition as witnessed between phone brands that operate on
the Android platform.

Pricing Strategy
Despite of being popular in press and demand iPhone faces many challenges. Many
mobile phones are now adopting Android OS, designed by Google. The Palm Pre is the
first phone to use Palm’s new OS called WebOS. Late 2009, Apple rolled out multimedia
message (MMS) and cut and paste support to its users. With the introduction of new
features would put strain on the carrier’s networks and also affects the pricing policies
as a result (Wilson, 2010). In US the iPhone buyers require having a two-year contract
with AT&T. It won’t work without AT&T unless you hack and unlock it. AT&T packages
include a mandatory data plan of $30 per month (as of September 2009) and can never
remove even without using 3G services.

The introductory price for the iPhone’s price was $499 with space storage of 4 GBand
$599 for 8 GB storage. In September 2007, Apple changed the price strategy by lowering
the price of the 8 GB model to $399 and selling 4 GB until stock is out. Another slice in the
price came due to the AT&T subsidized hardware. The price of 8 GB iPhone further
reduced down to $199. The third price cut yet was offered after introduction of iPhone
3GS. In iPhone 3G only only one model available is the 8 GB black phone for $99. The
price of 16 GB iPhone 3GS is $199 and the 32 GB model is available at only $299. Soon
after the release, in June 29, 2007 in US market, some of the iPhone’s features were
criticized, like; slow browsing and difficult the virtual keyboard, cost of battery
replacement, and lengthy activation hundreds of pages long billing statements. However,
Apple was able to sell its millionth iPhone in September 2007 despite of above problems
(Wilson, 2010).

Management Strategy
Through strategic management, an organization can easily achieve both its long term
and short term goals. Most of the top performing companies in the global market
usually have the most effective strategic management practices. Apple Inc has well
developed effective strategic management practices. This has helped the company to
retain a high level of performance. Apple Inc has managed to offer unique products in
the market, a fact that has enabled the company to win a significant proportion of the
market share. For instance, the company has managed to provide high quality products
when compared to its competitors.
It has also managed to develop a good relationship with its customers, a fact that has
enabled the company to attract and retain a large number of customers. Apple Inc also
consults high performing companies while seeking for outsourcing services, in the
process, the company has managed to retain a significantly high level of performance.
Apple Inc has utilized its available resources maximally, a situation which has also
contributed to its success. For instance, the company has highly productive and
experienced personnel that have significantly contributed to the company’s high level of
performance.

The company also has adequate financial resources; which has supported perpetual
research activities. Continued research has enabled the organization to maintain a high
level of innovation. Through these priorities, Apple Inc has managed to develop a good
reputation for quality products hence attracting many customers.
1.7 CSR Activities
Apple Supporting Local Communities

• ‘Global Volunteer Program’ was launched in 2011 to encourage employees to

volunteer in local communities. The program has been revised in March 2015
to grant employees the right to choose the projects in their local communities
they would like to contribute.
• In 2018 more than 250.000 hours volunteered and more than USD125 million
donated to organizations around the world within the scope of ‘Global
Volunteer Program’
• The company also responds to natural disasters.These include raising USD 1
million to help the victims of Hurricane Maria and USD 2 million to help the
victims of Hurricane Harvey and Hurricane Irma in Puerto Rico.
• In China, Apple powers all of its offices and retail stores through solar
panels mounted high off the ground, so the grass can grow and local yaks
can eatit.

Apple Educating and Empowering Workers

• Apple provided educational programs to more than 3.6 million supplier

employees since 2008.
• Under the leadership of Denise Young Smith, as Apple’s vice president for HR,
Apple has expanded its employee benefits programs to a considerable extent. For
example, expectant mothers can take up to four weeks before a delivery and up to
14 weeks after a birth, while fathers and other non-birth parents are eligible for
up to six weeks of parental leave.
• 68% of people attending App Development and Swift course in 2018 had no
coding experience. After the completion of the course they were able to build an
app.
Labour and Human Rights at Apple
• Company has achieved an average 95per cent compliance among suppliers
to maximum 60-hour workweek
• Apple enforces The Supplier Code of Conduct that is claimed to be the toughest
in the electronics industry. Apple educated more than 17,3 million employees
of its suppliers on their rights since 2007.
• In 2018, Apple removed five mineral suppliers from is supply chain for failing
to pass or not being willing to participate in human rights audits.

Employee Health and Safety at Apple

• The company has launched Apple Supplier EHS Academy, an 18-month
program that aims to improve employee health and safety in the industry
throughout the globe. 240 suppliers and 270,000 workers have participated in
this program.
• Research has been conducted in Apple’s ergonomics department on about 75
jobs within supply chain to identify ergonomic risks. The research has resulted
in improved standards for managing workstation design changes.
• The multinational technology company has launched a group of health clinics
called AC Wellness for its employees and their families.

Apple and Gender Equality and Minorities

• Tim Cook is the only openly gay CEO of a Fortune 500 company and he has
been praised as a strong champion of workforce diversity
• The company reached equal pay to employees in 2016

• 36% of all employees under 30, 29% of leaders and 39% of leaders under 30
are women at Apple

• 50% of new hires in 2018 were from historically underrepresented groups in

tech such as women, Black, Hispanic, Native American, and Native Hawaiian &
Other Pacific Islander.
Energy Consumption by Apple
• Apple is often praised for its environmental records that include decrease of
total power consumption of Apple products by 57%, introduction of Mac mini
as the world’s most energy-efficient desktop computer and exceeding ENERGY
STAR guidelines
• Apple emerges as the only company that has been awarded with a clean energy
index of 100%, according to green peace’s clicking clean report.

• The company is currently powers 100% of its operations globally with

10% renewable energy
• The multinational technology company has committed to bring 4 gigawatts
of renewable power online by 2020
• Supplier Clean Energy program has motivated 23 manufacturers to power all
of their Apple operations with 100% renewable energy. The company is
aiming to achieve 4 gig watts of new clean energy online in its supply chain
by 2020.

Water Consumption by Apple

• In 2017, Apple used about 1 billion gallons of water directly, a 59 percent
increase compared to 2016
• The company launched Clean Water Program in 2013 and since more than
13,6 billion gallons of water have been saved by suppliers
• Cooling systems in company’s date centres can reuse water up to 35 times.

• Despite the initiatives above, water usage by Apple data centres, retail and
corporate facilities have been consistently increasing over the last four years,
as illustrated in Figure 1 below.
 Figure 1. Water usage by Apple Inc (in millions of gallons).

• Apple Park, a campus in Cupertino uses 75% recycled non-potable water. Apple
campus in Austin, Texas, irrigates its drought-tolerant plants using a 600,000-
gallon rainwater cistern.

Apple and Sustainable Sourcing

• All the fibers Apple uses in product packaging are 100% responsible sourced

• The company partnered with The Conservation Fund to protect 36,000 acres of
sustainable forest in North Carolina and Maine and more than 13,000 metric tons
of wood was harvested responsibly.
• Apple aims to contribute to transition up to 1 million acres of forest, across
five southern provinces, into responsible management by 2020

Apple Supplier Responsibility

• In 2017 Apple trained more than 3 million supplier employees on their rights,
including local labour laws, and Apple’s Supplier Code of Conduct

• The multinational technology company has launched a health program that aims
to empower female employees to improve their health awareness. The program
aims to train 1 million supplier female employees by 2020.
 1.8 Export/Import

Apple shipped 61 million iPhones to the US last year, data from researchers Counterpoint
and IHS Market show, spending $258 on average to make each iPhone 7 and 7 Plus. That's
also about 22% of the $70bn in mobile phones and household goods the US imported
from China.Apple payment to Qualcomm estimated at $6 billion, with $9 per iPhone sold
in royalties. Apple has started to export iPhones to some European markets.
Wistron Corp's India arm, which first started assembling iPhones in the manufacturing
operations, helping it avoid import duties. Apple Company exports their products and
services to different places including India, Ukraine, Ecuador, Vietnam, China, USA, etc.
Whereas, the importing takes place from Philippines, Bolivia, Russia, Uzbekistan, Tanzania,
Kazakhstan, etc. The products which are mostly imported from India are IPhone LCD,
IPhone leather, Apple IPhone 6plus, etc. India is set to become a major production hub for
exporting mobile phones going by the way global major Apple has reacted to the
government’s Rs 41,000-crore production-linked incentive (PLI) scheme, applications for
which were invited from beginning this month. Sources said that both Foxconn and
Wistron, the global contract manufacturers for Apple have applied for the scheme. Among
the local players, Lava, Dixon Technologies, and Karbonn have applied so far. South Korean
major, Samsung and Flextronics are also expected to submit their applications shortly.
Firms can apply till July 31 and by early August, the selected companies will be
announced. Initially, five global and five local companies will be selected to avail of the
scheme. Amid falling exports, mobile phones have emerged as a bright spot, with
shipments out of the country trebling to nearly $2.5 billion (over Rs 17,000 crore) during
April-November. Over half the cellphones were shipped to the UAE. Data accessed by TOI
pointed to a spurt in mobile exports after several assembly units came up in the country.
The list of exporters includes Apple, which is shipping iPhones, as well as other prominent
brands such as One Plus and homegrown ones such as Lava and Karbonn. The coronavirus
epidemic which has hit the Chinese economy hard is beginning to bite foreign companies
operating in that country and can potentially also hurt India with almost 14% of its
imports from China at risk.

There are now fears that any major disruption in the Chinese economy can hit supply
chains in India. China has been India’s largest source of imports since 2004-05,
according to data from the Centre for Monitoring Indian Economy (CMIE). In 2018-19,
the latest period for which annual data is available, it had a share of 13.7% in India’s
total imports. An analysis of the World Bank’s World Integrated Trade Solution (WITS)
database shows that Chinese imports had an average share of almost 40% in India’s total
capital goods imports, one-fifth of consumer goods imports; and 15% of intermediate
goods imports, according to an analysis of import data from 2014 to 2018.
 1.9 Collaborations and Expansion Plans
Collaboration in a company means developing effective business plans aligning goals,
strategies and resources by collaborating with your partners in a way that strengthens
channel relationships, improves communication and productivity and builds trust. Apple
(AAPL) is one of the most valuable companies in the U.S. with a market cap. Pegatron is
similar to Foxconn in that it provides iPhone assembly. Luxshare is also in partnership
with Apple for the production of the Air pods. With the acquisitions, Apple broadened its
patent ownership and setup a strong plan for 5G. Apple Company says that “great partners
bring great possibility”. Our partners provide best-in- class mobile strategy consulting,
app development, back-end system integration and corporate networking. So you get the
most out of Apple hardware, software and services. Few of the partners are given below:
1. Accenture creates Apple solutions to transform how businesses work.
Accenture is combining its leadership in industry and digital transformation with the
power, simplicity and security of Apple products to help businesses unlock new revenue
streams, improve customer experience, increase productivity and reduce costs.
Accenture has created dedicated Apple practices within select Accenture Digital Studios
where development experts are co-located. Working together, the team helps enterprise
clients transform how they engage with customers using iPhone and iPad.
2. Deloitte maximizes iPhone and iPad through enterprise expertise.
Enterprise Next from Deloitte is a dedicated Apple practice with over 5,000
consultants. As the leader in digital transformation strategy, Deloitte helps
businesses maximize the power of the iOS and iPadOS platforms by
providing Enterprise Next two-week solution- focused workshops and
Enterprise Next Value Maps.
3. IBM Services is transforming global business through custom mobile apps.

With more than 1, 00,000 experts and consultants, IBM is bringing digital
transformation to the world’s largest companies. From integrating multiple
back- end systems to redefining user experiences, Apple and IBM teams
work together to impact how your business works. Using the IBM Garage
methodology, Apple- dedicated Garages and Studios, IBM Solutions for Apple
 aand the latest Apple development tools, IBM is helping companies simplify
their biggest challenges.
❖ In this similar case, there are many more partners:

• Samsung

• Murata Manufacturing Ltd. (MRAAY)

• Intel (INTC)

• Qualcomm (QCOMM)

• Goertek

• Wistron

• Hon Hai Precision Industry: Foxconn (HNHPF)

Expansion Plans

Apple has got lots of future plans and predictions. The future plans of their products
are given below:
• Apple's next iPhones could be getting a boost to battery life
and wireless charging capabilities this fall. According to
reports on a new research note from well-known Apple
analyst Ming-Chi Kuo of TF International Securities, the 2019
iPhone lineup will feature larger batteries and an option for
two-way wireless charging.
• The launch of a 5G-supporting iPhone in 2020 is under
threat because Intel is behind schedule, having missed
deadlines for development on its 5G modem.
• It was a significant week in terms of worldwide price cuts at
Apple. In the U.S., the price of the Home Pod smart speaker
was dropped to $299, from $349 previously, in Apple's
online store. The cut comes as Home Pod has made little
 headway against smart speakers such as the Amazon Echo
and Google Home, according to research firm Consumer
Intelligence Research Partners.
• The list of products to be released in 2021:

->inch MacBook ->Apple Car

->Small Wireless Charging Mat ->AR Smart Glasses

->Air Pods 3 ->Apple TV Set-Top Box

->iPad mini 6
1.10 SWOT Analysis of the Company

Here is a detailed analysis of apple’s strengths, weakness, opportunities, and threats.

Apple’s Strengths
1. Most valuable brand

Apple is ranked 1 for the 7th consecutive year by Interbrand with a brand value of
$234 billion.

2. Globally Iconic

Apple is one of the most reliable company when it comes to personalized advanced
computers and smart technology devices. It had millions of loyal customers with
steady increment .
3. Top Technology
Apple was the first to introduce some of the most innovative products that have
changed the world (iPhone, iPad). Apple is still determined to build and craft
better, more proficient technology devices.
4. Brand of Choice
It isn’t big news that Apple is a demanded brand in corporate offices. Apple has a
specific business that offers top quality technology solutions for every
corporation’s needs.
5. Proficient Research
Apple puts dedication into its product designs. Careful study is initiated and further
research is performed to help understand customer needs and requirements.

Apple’s Weaknesses

1. High Priced Products

Apple’s products can be considered a luxury due to their premium prices. The products
are priced for middle and high-income consumers. Low-Income consumers can’t simply
afford Apple products. Due to their premium pricing, only middle or high-class individuals
can afford their products.
 2. Limited advertisement & promotions

Apple has solidified their grounded by establishing loyal customers, even with limited
advertising resources. Apple marketing relies heavily on its iconic and flagship retail
stores. Because of their success, Apple does not feel the need to have excessive spending
towards advertisement in comparison to other big brands such as P&G, Coca Cola and
Samsung technology.
3. Incompatibility with Other software

When a customer buys an apple product, they enter the Apple universe. Apple’s products
do not support other software or technologies making them incompatible with other
devices. Customers have to exclusively purchase Apple apps or accessories to continue
using their Apple products.
4. Unfair business practices

Apple isunder investigation for unfair business practices after receiving payments to make
Google’s search engine as the default search engine for its Safari web browser. Collusion
between the two giants makes it difficult for rivals to enter and expand into the search
engine market.

Apple’s Opportunities

1. Consistent Customer Growth

Apple has been dominating the technology sector for years now. They provide top quality
and cutting-edge technology that offers a breakthrough in customer experience. Their
customer retention rate of 92% is phenomenal. Apple can always rely on the power of the
internet for future opportunities to gain new customers and form new alliances.
2. Qualified Professionals

Apple’s researchers, developers, and product specialists are a team of highly qualified
professionals that have years of experience in branding consumer products. With the
expansion of their team, Apple can continuously build new opportunities.
 3. Lack of Green Technology

Apple is yet to launch products that are created using green technology. The company has
not yet implemented or participated in creating sustaible technology that is eco-friendly.
4. Utilize Artificial Intelligence

To increase its profit margins and have a strong market position, Apple should utilize
artificial intelligence. Recently, the company has extended its AI portfolio. In the year
2017, Apple acquired Regained, a French AI startup and DeskConnect, an AI tool. The
former acquisition helps Apple to integrate intelligent search to the photos app on the
iPhone, while the latter acquisition automates tasks by helping the consumers to arrange
apps and features with a string of commands.

Apple’s Threats

1. Coronavirus Outbreak

Apple is highly dependent on China for its manufacturing and supply chain. In addition,
about 14.5 % of its $274 billion in revenue came from China (a big market for Apple). The
outbreak has significantly affected and may continue to disrupt Apple’s sales in the fiscal
year 2021.
2. Supply Chain Disruption

The recent events have significantly affected and disrupted its operations. It reported flat
revenue in Q2 of 2020 and declined to offer annual revenue estimates for FY2020 due to
supply chain uncertainties.
3. Apple Bullied By Counterfeits
Apple has become vulnerable to third world countries illegally utilizing the brand image to
sell counterfeit products. The illegal dealers sell Apple counterfeit products at the same
value as an original Apple product. Counterfeit products can make potential customers
believe that it is a product made by Apple with low quality. big news can result in negative
reviews and bad publicity for the company.
 4. China Tariffs

US government has imposed a higher tariff on imports from China, increasing the overall
cost of the products. Consequently, it adversely affects the gross margin on the products
and may make the product more expensive for customers.
5. Backdoor Mechanism

Apple has been under constant pressure by government agencies to unlock the iPhone via
a backdoor, which means unlocking the encryption of the iPhone and giving access to its
data. In several instances, Apple has denied providing the backdoor mechanism because it
can be exploited by the bad guys, which eventually exposes the security of millions of
iPhone users.
1.11 Organization Chart
 CHAPTER 2: AN OVERVIEW OF THE INDUSTRY

2.1 Brief history of the industry

On August 2, 2018, Apple made history by becoming the world’s first $1 trillion company
measured by market capitalization. While it see-sawed in the second half of the year, losing
over $450 billion in the last quarter of 2018, it has since recovered most of that amount and
now stands at $967.87 billion as of September 2019. Since 2010, Apple (AAPL) has been one
of the most valuable companies in the world. It has occupied the top slot on an annual basis
from 2012 onwards, with some occasional jockeying for position between it and Exxon
(XOM). The reason Apple is valued so highly is simple on the surface: the company makes
popular products with generous margins. However, if the curious reader digs a little deeper,
she will find mistakes, overthrown CEOs, and much more. In this article, we’ll look at the
story behind Apple’s success.

→ From Apple I to Steve Jobs 2.0

Before understanding why Apple is so successful today, it is first useful to take a look back at
its origins and history. From the first Apple computer (the Apple I, which was just a
motherboard without a monitor or keyboard) to the latest iWatch, here is a brief overview of
the chronology of Apple's innovative products. Apple, founded by Steve Jobs and Steve
Wozniak, started out in the business of kit computers with the Apple I. This initial production
run, although popular as a collectible now, will mainly be remembered for helping the
company get enough capital to build the Apple II in 1977 – the same year Apple officially
incorporated. Wozniak primarily built both these computers and Jobs handled the marketing
side.

The Apple II drove the company’s revenue until the mid-1980s despite the hardware
remaining largely the same. Apple attempted updates like the Apple III and the Apple Lisa,
but these failed to catch on commercially. Although the Apple II was still selling, Apple as a
company was in trouble when the 80s began.

The 1984 release of the Macintosh was a leap forward for Apple, but in the intervening years
between the Apple II and the Macintosh, IBM had caught up. Disappointing revenues from the
Macintosh and internal struggles for control led to Apple’s board dismissing Jobs in favor of
John Sculley. Jobs left Apple to work on NeXT Inc. Under Sculley, Apple started growing its
product lines.

Sculley served as Apple’s CEO until 1993. During those years, Apple enjoyed strong growth as
it created new products, including laser printers, Macintosh Portable, PowerBooks, the
Newton, and much more. Apple products continued to sell at a premium, so the margins were
generous for Apple and led to strong financial results. During the same period, however,
cheap computers running Windows were serving a much, much larger middle market for
people who wanted home computers but could not afford a Mac. By comparison, Apple
seemed to be stalling even though it was making money. Two CEOs, Michael Spindler and Gil
Amelio, failed trying to turn the tide on the relentless spread of IBM clones running
Microsoft. Microsoft's operating system, Windows, was becoming the industry standard and
Apple’s OS was showing signs of age. Amelio set about addressing the OS issues by buying
NeXT Inc. – the company run by none other but former Apple founder Steve Jobs.

→ The Second Chance CEO

From the introduction of the Macintosh onward, Apple has either been a reflection of or a
reaction to the management of Steve Jobs. In the Macintosh, Apple was trying to create a
machine that made computing simple and enjoyable for the user. Job’s, in particular, was out
to create a user experience that would convince everyone to buy a Mac. Jobs believed a truly
revolutionary product couldn't depend on customers’ needs and wants because the customer
can’t understand the quality of the product until he or she is holding it. Unfortunately, he was
ahead of his time in 1985 – precisely 12 years ahead of his time. When Jobs overthrew
Amelio and took the reigns of Apple once more in 1997, the hardware had caught up to his
vision for all things digital. He launched the iMac with a strong marketing campaign featuring
the “Think Different” slogan. Although Jobs is often given credit for spending the money and
time on marketing, Apple has always been excellent at marketing and branding. The real
difference between the iMac and all the products preceding it was the beauty and design. It
was not a tower and monitor setup like every other PC on the market. The iMac almost
looked like a racer’s helmet photographed at speed, a colorful blur sweeping back from the
screen. In 1998, the iMac was the most aesthetically pleasing machine on the market. It was
the computer no one knew they wanted until they saw it. It was elegant and, thanks to the OS
upgrade, it was user-friendly.

→ The iEcosystem

The iMac was just the start as Apple released a string of hit products that reflected the new
focus on elegance and user experience. These included the iBook, the iPod, the iPhone, the
MacBook Air, and the iPad. The iPod became the category killer in MP3 players, the iPhone
essentially launched and then dominated the smartphone market, and the iPad somehow
convinced millions of people that they needed yet another screen to consume content on. All
of these devices were perceived as being better in quality – and certainly in design – than
competing products. Jobs were relentless on design and indoctrinated the entire culture of
Apple into the art of design. The other point he brought Apple back to in his second tenure is
the ease of use. After a few minutes of using the wheel on an iPod or tapping icons on an iPad,
these new forms of control became part of the simplicity that makes Apple so appealing. Now
every product update from Apple is anticipated by the media and the general public in
addition to the fans that the company had from the start.

More importantly, all of these products moved Apple into a new business model of creating a
tight ecosystem of hardware, software, and content. Apple didn’t create iTunes to be a simple
program for users to transfer MP3s onto iPods, as was the case with many of the other
manufacturers’ offerings. Instead, the company attacked the concept of an album by breaking
them into songs that would be sold individually at a fraction of the price of the whole album.
The same process took place with software. Many popular computer functions could be done
on Apple’s mobile devices using stripped down apps – available of course, on Apple’s App
Store.

Being the first big mover into many of these markets, Apple built the stadium and set the
rules for the game. When you pay for books, movies, apps or music on an Apple device, Apple
gets a cut. Of course, this business doesn't generate as much revenue as selling an iPhone or
an iPad where the markup is much more generous.

That said, it is the content you buy through Apple that locks many people into buying Apple
again when their i-device gets on in years. So the content part of the ecosystem pays off for
Apple in the short-term and the long-term. Once you migrate to Apple because of the design
or the simplicity, it is the integration with your content that keeps you there.

→ The Post-Jobs Era

Steve Jobs died in 2011 of pancreatic cancer. Serving as CEO until shortly before his death,
Steve Jobs turned the reins of the company over to Tim Cook. The post-Jobs era at Apple has
nonetheless been a success by most measures, with Apple continuing to be the dominant tech
company in both market share and stock price. However, some analysts feel that without Jobs
as the creative force, Apple has become solely iterative in its tech releases rather than
transformative. The major release of the post-Jobs era has been the Apple Watch. In the
absence of a groundbreaking new product, Apple is heavily reliant on the production cycle of
the iPhone to power its financial success. Critics say that without Steve Jobs at the helm,
Apple has lost its innovative edge in recent years and is riding on its brand to drive sales. Its
Apple Watch, for instance, has not drawn the same enthusiasm and cult following as its
iPhone did when it was first launched.

On September 10, 2019, Apple held a social media event in which it announced new services
and upgraded editions of familiar products. In many respects, the 2019 announcement was
more of the same. Apple did reveal a new subscription service for video games called Apple
Arcade and an update regarding its Apple TV+ streaming video-on-demand service, first
announced in March of 2019, but other upcoming offerings focus on upgrades to existing
products. The 7th-generation iPad, for instance, includes an expanded 10.2-inch Retina
screen as well as some added multitasking features, though it is not a wholesale revision of
the popular tablet. The 5th-generation Apple Watch also includes an upgraded display. The
product that investors and customers alike are perhaps most keen to learn about, however, is
the latest version of the iPhone, Apple's iconic smartphone. The iPhone 11 is expected to
maintain the same basic design of the phone as the last two upgrades, which has prompted
some investors to yawn, according to CNN.

Yet, the company still produces some of the best products with the most integrated
ecosystem, but the gap between Apple and competitors like Samsung and Google is no longer
as pronounced as it once was. Indeed, companies like Samsung are increasingly poised to
take the lead when it comes to product innovation: just days ahead of Apple's iPhone 11
announcements, Samsung revealed a new line of 5G and foldable smartphones.

→ Apple's Product Lines

Apple's main product lines are the iPhone, iPod, iPad, and MacBook, which all compete in the
cellular phone, media player, tablet, and personal computer markets, respectively, which
represents a strong diversification in their product portfolio. The Cupertino- based company
has a looming presence in each market—a reputation that can be attributed to the monopoly
that the company seemingly has on innovation.

Starting with the iPod, the company has found ways to create markets that didn't previously
exist and revolutionize ones that did. As opposed to other Fortune 500 companies, Apple is
known for its commitment to innovation through research and design, evidenced by its $16.2
billion research and design (R&D) budget in 2019, up $2 billion from 2018. Other companies
focus more of their energy on advertising, cost cutting, or overall efficiency, and the
difference between Apple and "other companies" is clear.
2.2 Business process of the industry

Apple’s product development process

We cannot talk about Apple’s business practice without getting into its product development
process. After all, Apple is in the business of developing consumer electronics products, most
of which have become icons and largely responsible for the succeeding trends in the field. To
this day, more and more companies are cropping up, trying to come up with products that
are loosely based on, or inspired by, Apple products, with the intention of competing with
Apple.

Over the years, since Steve Jobs founded Apple and started churning out those Apple
products, the company’s product development process has been under much speculation. It’s
not that the people inside Apple were being tight-lipped or keeping everything under wraps.
They just weren’t the type to discuss the process at great length when they could just spend
the time in the product development room, if there is even such a thing.
 1. Design

It all starts with design. Apple products have already established a reputation for having
impeccable design hinged on simplicity, functionality, and a distinct look. This is mostly
attributable to the inventive and innovative minds of the members of the design team.

The Industrial Design machine of Apple is where the brilliant ideas come from, and a great
factor of its success is how it is kept cohesive and disciplined by a department head. This is
exactly how Steve Jobs started it. He had the vision, and he steered the design team towards
achieving that vision, keeping them focused and on a straight trajectory towards their design
goal. Being kept separate from other divisions or departments of the business also greatly
helped. This way, the design team was pretty much left to let their creative juices flow,
without having to mind other issues such as finance, costs, and the technical Keeping the
design team to a small number of people is also part of the strategy. One would think that
they would have more people involved in the design process; but one downside of that is
having too many ideas that could derail the direction that the design team planned to take
from the start.
Having a small number of people involved in the design process also aids in keeping details
about a new product shrouded in secrecy, something that Apple is known for.

2. Start-up creation

The secrecy continues. Once a new product has been designed, a team that is solely devoted
on the development of that product will be formed. It is essentially building a start-up within
the company. They will devote all their time and resources on the project or product, and
they will be directly reporting to the big bosses. This cuts through the usual communication
or bureaucracy involved, and they will be answerable to no one else but the executive
management team.

What Apple does is to assign specific rooms or even entire sections within the Apple
compound where the start-up will be doing their work, safe and free from outside intrusions
and other disturbances. In other circumstances, the members of the team may even be
explicitly prohibited from communicating with others – even within the company – with
regards to the product they are currently working on.

3. ANPP Implementation

Since Apple started making the Macintosh, the company has always made it a point to have a
well-documented roadmap or guide for the members of the team to follow. This was the
ANPP. It is essentially a document that contains, in great detail, all the steps and phases of the
development of the product. It covers everything about the development process, from the
specific tasks that must be performed, the specific persons who will work on them, how long
each task is expected to be completed, and the chronology or order of accomplishment of said
tasks to facilitate the completion of the product.

4. Product Review

While it is true that the team works towards achieving a vision or a goal for a product, this
does not mean that the process is fixed and has no room for changes or flexibility. Just like in
other businesses, Apple also conducts periodic reviews for the products that are in process.
In the case of Apple, these product reviews are conducted every Monday. It is a good way to
track the progress of the product development team and also take note of issues or serious
problems that have been encountered by the team in the process. This is probably going to
take a toll on a company that has a lot of products in the pipeline at any given time.
Fortunately, Apple does not have too much of a problem with that, since it makes sure to
have only a few products-in-progress, so things are kept on a more manageable level.

5. Production proper

Finally, the design will be made more concrete as the production process begins. There are
two key personnel involved in this stage: the engineers and the supply personnel. You have
someone in charge of the product process, who will manage the engineering aspect. He will
be working with the supply manager, who is responsible for sourcing the raw materials
needed in the production process.

6. Testing, tweaking, rebuilding

Just because a product has undergone the production process does not mean that it is
outright completed. There is still a need to test it, so adjustments can be made and, if needed,
the product will be rebuilt. Steve Jobs’ perfectionist attitude was apparent in how Apple
tirelessly builds tests and rebuilds its products, until such time that it is 100% confident in its
quality and performance, and gives it the green-light to be introduced to the market. In the
past, we have seen many designs of the iPhone being leaked prior to their release, only for
the final product to be markedly different from the leaked versions. This is because the leaks
were often the initial versions, and the final version – the one finally released into the market
– has undergone various redesigns and rebuilding, after a series of testing has been
performed.

Many businesses are satisfied with testing only once or twice, then releasing it to the market,
even if they still have issues about some aspects of the product. This is because testing and
rebuilding takes a lot of time, not to mention money. Apple does not let the cost affect its
decision, however, preferring to test and rebuild as many times as possible until they get it
right, and they come up with a product that they are fully satisfied with.
 7. Packaging

First impressions last, and customers are initially attracted by the packaging. This is why
Apple devotes a lot of attention and resources to the packaging aspect. It’s not just about
having a box with the name and company logo printed on it. The packaging also takes into
account the experience of the customers when unboxing the device packaging.

8. Finally, the Launch

Apple has the Rules of the Road, which is basically a product launch action plan. It details all
the key points of the product development process, breaking them down into the nitty-gritty.
This document is so top-secret and highly-valued, and Apple takes it seriously when working
towards the launch of the new product.
2.3 Market demand and Supply – Contribution to GDP – Revenue Generation

Market Demand and Supply

During its inception, Apple Inc. was formed to focus on supplying computers. However, with
time the company evolved to include other products and services. It is worth noting that the
company has been at the center of the most revolutionary technology development of the
past 4 decades. Currently the company operates as an international company that designs
and manufactures consumer electronics and related software products. The company’s
consumer electronics include Personal Computers, iPads, iPods and iPhone smartphones.
They trade their products and services in physical retail stores spread across the globe as
well as its online store where consumers can access and purchase software and hardware in
the online platform. It also runs the iTunes store which provides its consumers with movies,
music and games for their digital devices.

Most economists articulate that the law of demand and supply is simple and that increase in
demand usually results in increase in price if supply is constant. This is a law that Apple has
defied in various different ways. Apple’s products usually have high demand. The company
maintains high prices for its products and even though it strives to increase the supply of the
products, the supply continues to fall short of the demand for the products. This has
significantly worked for the benefit of the company, especially in the smartphone market
where its iPhone continues to compete favorably. It is estimated that once it launches new
brands or new models of its smartphones, Apple usually records demand increase of about
7.2% each month for about 4 months. The 7.2% increase translates to an average of demand
for about 5 million units of quantity demanded. Many economists and theorists explain that
this is mainly because the company engages in extensive marketing and promotion initiatives
before it actually launches new products in the market, then after it launches the products, it
usually emphasizes on how the product meets the needs of the consumers, to influence
continued growth in the demand for the products.

To guarantee that the demand for its existing products remains high, Apple commonly
engages in price cut strategies. For instance, after the launch of its iPhone 5 in 2012, the
company imposed price cuts of about $200 per unit. This strategy ended up ensuring that
demand for the product continues to go up as well as its sales. Due to increasing demand for
its products, Apple constantly improves its supply capabilities. It is however worth noting
that the demand for its products over the recent few years has been considerably fluctuating.
This is mainly due to competition from other smartphone manufacturers such as Samsung.
As a result, the company uses market forces to set its prices as shown in Image 1 below.
Currently, the company’s supply levels successfully serve its goals and objectives with
regards to the supply being lower than the demand with the aim of ensuring that the
company maintains high levels of prices for its products.

Contribution to GDP

Apple just crossed the $2 trillion market capitalization mark, becoming only the second
company ever to do so. From a garage in Los Altos, California to the most profitable company
in the world with its devices, services and ethos interwoven into much of modern daily life,
the high-flying valuation sets it apart from its nearest tech competitors. Amazon and
Microsoft boast market capitalizations of about $1.5 trillion each. Google’s is just north of $1
trillion.
In terms of company fundamentals, there is little substantive difference between whether a
company is a few dollars over or under an arbitrary number. But cresting the marker can
send out a powerful psychological signal. It’s a historic datapoint further cementing the
company that ushered in the personal computer revolution and illustrating its continued
strength under Tim Cook, who took the reins after the passing of hands-on company
cofounder Steve Jobs in 2011. “Apple’s $2 trillion valuation represents about 10 percent of
GDP for the U.S. and about 7percent of the S&P 500,” said David Kass, professor of finance at
the University of Maryland’s Robert H. Smith School of Business. “Its iPhone is ubiquitous. It
has transformed the way we live. Its ecosystem is self-sustaining.”

But a more significant moment may have been when the company topped $1 trillionfor the
first time, in August 2018. After breaking $1 trillion, it becomes easier for investors to
imagine it might go to $2 trillion or $2.5 trillion, Munster said. The tech and services company
has positioned itself to take some advantage of its new stature. In early August, the company
announced a four-for-one stock split, the company’s fifth stock split since going public in
1980. Individual shares are trading in the mid-$400’s, so for instance a unit worth $440
would be split into four shares of $110. That makes them more affordable for smaller
investors to pick up.

Apple wants “to make our stock more accessible to a broader base of investors,” said Luca
Maestri, the company’s chief financial officer, during a recent earnings call. Historically, stock
splits tend to increase demand, increasing value for existing shareholders, which include
company employees. The tech company isn’t the first to hit the $2 trillion mark. Saudi
Arabia’s state-owned Saudi Aramco, the world’s largest producer of oil, did so during its
December 2019 stock debut. But the company was hammered during this year’s global
economic slowdown and a plunge in oil prices, and its valuation has since tumbled to $121
billion. Apple’s stock has been on a tear since 2019, more than tripling from its $150 price in
January of that year, driven by anticipation for upgrades to 5G devices and strong demand for
the iPhone 11. Apple’s surge and increasingly diversified profits are the primary driver of its
new valuation. Barclays estimated the company will see nearly $60 billion in profits this year,
over four times that of Walmart. Increasingly, customers are reliant on a blend of
interconnected Apple services such as iCloud, Photos, Music, and the App Store, which has
shifted focus from fixed prices for apps with in-app purchases to recurring subscription
models.

Revenue Generation

Apple registered its highest revenue to date in 2018, when the company’s revenue stood at
almost 266 billion U.S. dollars. Apple’s success over the years can be explained by strong
brand loyalty, and the constant release of innovative products, updates and features. The
iPod, for example, was one of the first successful releases of the company to the consumer
market. Introduced in 2001, iPod sales accounted for an average of 19 percent of Apple’s
total global revenue up until 2009. The increased capacity of smartphones to play and store
music has been pinpointed by industry experts as the main reason for the decline of digital
music devices sales, such as the iPod.

iPod sales started to drop consistently, while Apple’s iPhone gained space in the market.
iPhone sales have constantly increased since its market introduction in 2007, going from
around 40 million units sold in 2010 to more than 230 million iPhones sold in 2015 alone.
That year, iPhone sales generated more than 155 billion U.S. dollars in revenues for Apple.
The increase in devices sales had a direct impact on the iPhone’s share of the company’s total
revenue. In the beginning of 2009, sales of the iPhone accounted for about 25 percent of
Apple’s total revenue. By the first quarter of 2018 (4Q ’17 calendar year), this share was at
almost 70 percent. As of 2018, the iPhone is the most profitable segment for Apple,
generating 167 billion U.S. dollars for the company.

Apple’s iPad tablet, the Mac computer and costumer services are important revenue streams
as well for Apple. Together, these three revenue streams generated about 25 billion U.S.
dollars for the company in the first quarter of fiscal year 2019 (4Q ’18 calendar year). Other
products such as Apple Watch, Apple TV and Apple Music generated 7.31 billion U.S. dollars
during that same quarter.
2.4 Level and type of competition –firms operating in the industry

Level and Type of Competition

Apple Corp. manufactures and markets a variety of computers and consumer electronics
products, including smartphones, tablets and music players. The investment analyst firm
Market Realist identified brand strength, innovation, supply chain management and premium
pricing strategy as key factors in the company’s competitive advantage.

❖ Brand Strength
Apple was the world’s leading brand in 2017, ahead of Google, Coca-Cola and IBM,
according to annual rankings published by brand consultancy firm Inter-brand. Brand
strength gives companies like Apple great visibility in the marketplace and helps build
consumer loyalty. The company’s strong branding, and the interrelationships between
its products, encourage customers who buy one Apple product to try another.
Products such as the iPhone, iPad and Mac share the same software and applications,
and operate in a similar way, making Apple a natural choice when customers are
considering another device.

❖ Innovative Products
Apple has a long-established reputation for innovation and a commitment to
developing new products. The company developed the graphical user interface, first
used in its own computers, and, more recently, pioneered the iPod music player and
introduced new levels of performance for smartphones. A key competitive advantage
for the company is its ability to develop innovative products that share the same
operating system, software and applications. This minimizes the risk, timescale and
costs of product development, enabling the company to introduce a stream of new
products and stay ahead of competitors. Apple’s innovative strategy of developing
products that complement each other strengthens customer loyalty and helps build a
barrier to competition, according to the website Innovation Excellence.
❖ Strong Integrated Supply Chain
An ecosystem of suppliers, developers and business partners provides Apple with a
strong competitive advantage. The company owns chip manufacturers, controls
manufacturing, follows extremely strict software standards and operates its own
stores. Deals with leading music and entertainment companies provide a vast source
of media for all the company’s products. It also has a community of more than 6
million independent software developers creating applications for Apple products.
This gives Apple control over the entire process of product development,
manufacturing and marketing – an advantage that competitors find difficult to match.
❖ Premium Pricing Strategy
Apple sets premium prices for its products and minimizes discounts to wholesalers to
keep prices consistent across the market. The company aims to offer customers a
high-quality product with unique features and uses high prices to reinforce the
perception of added value and maintain profitability. The high-pricing strategy also
sets a benchmark for competitors, which must offer equivalent features to match
Apple’s perceived value without losing money.

❖ Firms Operating in the Industry

Apple Inc.’s operations management (OM) involves the application of the 10 decisions
of OM to ensure that all aspects of the business are running smoothly. In operations
management, the 10 decisions relate to such aspects as product design, quality
management, process and capacity design, and location strategy, as well as inventory
management, among other operational areas. In Apple’s case, the 10 decisions of
operations management are carefully implemented through coordinated efforts in
product design and development, sales and marketing, and the firm’s supply chain,
along with the company’s other business areas. With considerable leadership in the
computer technology and digital content distribution industries, Apple Inc. is an
example of success in addressing the 10 decision areas of operations management.
Operational effectiveness and strategies involving technological innovation help the
business thrive, in spite of competition involving Dell, Lenovo, Microsoft, Sony, Google,
Amazon, Samsung, Walmart, and other companies. This success highlights the
 importance of Apple’s strategic approaches to achieve high productivity goals and
objectives in operations management areas.

Apple Inc. has a dedicated team of senior managers, each of which handles the
implementation of measures to address the 10 decisions of operations management. The
company has excellent performance in maximizing efficiency in operations management.
This operational efficiency translates to competitive advantages and capabilities that fulfill
strategic objectives, ultimately leading to the achievement of Apple’s corporate mission and
vision statements.

Apple Inc.: 10 Decision Areas of Operations Management

1. Design of Goods and Services. Apple’s processes in the design of its products are
handled through a number of organizational components and officials. For example,
the development and production of Macs involve a Senior VP for Mac Hardware
Engineering and a VP for Mac Software Engineering. This coordination reflects the
nature and characteristics of the corporate structure of Apple Inc. In thisdecision area
of operations management, these VPs coordinate with the company’s Senior VP for
Operations. The system of interactions ensures that the outputs in this operational
area are successful in making Apple excel in the design of its technological products.
2. Quality Management. This decision area of operations management emphasizes
quality standards and controls. Apple Inc.’s Senior VP for Operations coordinates with
eight other Senior VPs to ensure compliance with the company’s quality standards.
The company is known for high quality standards that permeate different areas of the
business, including product design and development, retail, marketing, online sales,
industrial design, and human resource management. Thus, Apple has a holistic
approach in ensuring quality to address this decision area of operations management.

3. Process and Capacity Design. Apple’s human resource management strategies include
support to maximize workforce capacity for product development and design. In
addition, the company works with suppliers to ensure efficient processes and
adequate capacity in this decision area of operations management. Forinstance,
suppliers are given directives for process design, as well as the Apple Supplier Code of
 Conduct to optimize their human resource management. Moreover, Apple Inc. strives
for innovation in its facilities to optimize capacity and process efficiency. Thus, the
company has a comprehensive approach for this decision area of operations
management.

4. Location Strategy. Apple Inc.’s location strategy is selective, involving limited

authorization of sellers. However, most authorized sellers are located in urban centers
to maximize foot traffic and brand exposure. At present, the company has hundreds of
stores in more than 20 countries around the world. Despite this limited approach to
seller authorization, the company is now among the most profitable in the world, and
Apple Stores have the highest revenue per square foot of retail space in the United
States. Thus, Apple’s selective location strategy successfully satisfies this decision area
of operations management.

5. Layout Design and Strategy. Apple’s layout design and strategy emphasizecustomer
expectations. For example, company-owned and authorized-seller stores are spacious
with minimal décor to ensure focus on Apple products. In the company’s other
facilities, this decision area of operations management is addressed through
innovative office layouts that encourage creativity and efficiency of workflows.
Creativity is a critical factor among employees involved in product design and
development processes at Apple Inc.

6. Job Design and Human Resources. This decision area of operations management
requires job design and human resource strategies specific to the trends in relevant
HR management needs. In Apple’s case, job design and HR strategies are based on
Steve Jobs’ original emphasis on excellence. However, the company has been
gradually changing its HR strategies under Tim Cook to reflect a more sociable
workplace for optimum employee morale. Apple Inc. has mastered job design and
human resource strategies to ensure continued support for its industryleadership.

7. Supply Chain Management. Apple’s supply chain is among the most efficient and
streamlined in the world. To address this decision area of operations management,
 the company uses automation of processes and regular monitoring of suppliers. This
monitoring evaluates supplier capacity and productivity, as well as compliance with
the Apple Supplier Code of Conduct. The automation aspect serves as the main
strength of the corporation’s approach to supply chain management.

8. Inventory Management. In this decision area of operations management, Apple Inc.

uses different methods of inventory management, such as the serialized method for
effective tracking and control of products. The company also uses the first in, first out
(FIFO) method, which ensures that most old-model units are sold before new Apple
product models are released to the market. Apple Store managers also handle the
inventory management of their respective stores.

9. Scheduling. Apple Inc. applies this decision area of operations management through a
combination of automation and manual processes. Automation is used for scheduling
activities in the supply chain and production processes. On the other hand, manual
scheduling is used for individual Apple Stores and in some aspects of the company’s
offices. The main aim of the firm in this decision area of operations management is to
maximize the capacity utilization of facilities, equipment and human resources.

10. Maintenance. Apple Inc. addresses maintenance needs through dedicated

maintenance teams. For example, the company has different maintenance teams for
its various facilities. Apple’s IT teams also function as maintenance teams for the firm’s
servers and other IT assets. The VP for Human Resources ensures that the company’s
personnel are always at adequate capacity to maintain high performance at the
company’s facilities. Thus, Apple effectively addresses this decision area of operations
management.

Productivity at Apple Inc.

Apple Inc.’s operations management monitors and evaluates productivity through various
criteria. The company’s global size and diverse activities translate to different standards,
benchmarks and criteria for productivity in different business areas.
2.5 Pricing Strategies in the industry

A business can use a variety of pricing strategies when selling a product or service. The price
can be set to maximize profitability for each unit sold or from the market overall. It can be
used to defend an existing market from new entrants, to increase market share within a
market or to enter a new market. A pricing strategy is a model or method used to establish
the best price for a product or service. It helps you choose prices to maximize profits and
shareholder value while considering consumer and market demand.

Penetration Pricing:

Penetration pricing is a pricing strategy where the price of a product is initially set low to
rapidly reach a wide fraction of the market and initiate word of mouth. The strategy works
on the expectation that customers will switch to the new brand because of the lower price.
Penetration pricing is often used to support the launch of a new product, and works best
when a product enters a market with relatively little product differentiation and where
demand is price elastic – so a lower price than rival products is a competitive weapon. This
pricing strategy is followed by companies with the intention to maximize their market share.
They believe that a higher sales volume will lead to lower unit costs & higher long-run profit.
Example: China Mobile Phones in India. This is one of the fastest growing industries in India.
China mobile phones are cheap and offer the same features as an expensive mobile from
some other well-known manufacturers.
A few samples of Chinese mobiles are shown above. Only problem that exist for the Chinese
mobile phones is that consumer generally have a low quality perception associated with
them and hence, do not trust their quality. However, they are well-suited to people who want
to enjoy features of a high end mobile without having a budget for the same.

Predatory Pricing:

Predatory pricing, also known as undercutting, is a pricing strategy where a dominant firm
deliberately reduces prices of a product or service to loss-making levels in the short-term.
Predatory pricing is the illegal act of setting prices low in an attempt to eliminate the
competition. Predatory pricing violates antitrust law, as it makes markets more vulnerable to
a monopoly. This pricing strategy is followed with the intention to wipe out the competition.
Example: In the year 2003, LG and Samsung along with Reliance came up with Rs. 500/-
mobile scheme where both handsets along with connections were available for Rs. 500/-.
This was something which revolutionized the mobile phone and telecom industry.

Perceived value Pricing:

In this case the pricing is done based on the customer’s perception about the Company and
its product. Perceived value is made up of several elements such as buyer’s image of product
performance, the channel deliverables, warranty, quality and even softer attributes such as
suppliers reputation.
Example: A good example for this kind of pricing is Apple iPhones. They are offered in price
range of Rs. 31,000/- to Rs. 42,500 /-.Their prices is set based on image of brand apple &
customer affinity towards it. Comparable mobiles phones from other manufacturers like
Sony Ericson, Nokia are offered at relatively cheaper price. For example comparable N series
mobiles from Nokia are offered at prices below Rs. 30,000/- (Except for Nokia- N9 & Nokia-
8800Carbon). Also, SONYERICSSON –Satio is offered for Rs. 31,000/- & all other Sony brands
are available for prices below it. Apple can set higher prices since; it feels that its customers
will be ready to pay for it based on its perceived value.

Value Pricing:

This is pricing strategy in which a company wins loyal customers by charging a fairly low
price for a high quality offering. Example: Nokia E 63 Mobile. This mobile is priced at Rs.
11,260/-. This mobile offers a large number of high end applications like: Web-Browsing,
Email, Data Network, GPRS, GPS & Navigation and lots of other facilities apart from serving
the basic mobile functions. At the same time it has a sleek body & robust structure.

Product form pricing:

Product-form Pricing: Different prices charged for different variants of the same product. E.g.,
the price of the same type of a car may vary because of different colour and add-on features.
Different versions of the same product are priced differently.
Examples: Nokia-5000 is priced at Rs. 4,300/- Whereas, Nokia-7210C-Supernova is priced at
Rs. 4,800/- offers almost the same features. The reason for difference in pricing is due to the
sleek structure of Nokia-7210C.

Promotional Pricing:

1. Special Event Pricing:

In this case special prices are offered during special occasions like festivals to increase
the sales. Example: Last Diwali (September, 2009) Samsung offered discounts on
Samsung Omnia mobile phone. Their market price at that time was Rs.33, 990/-
whereas their discounted price for Diwali was Rs. 31,990/-.

2. Low-Interest financing:
Company can offer low interest financing to customer. This will reduce the burden of
initial cost to the customer. Example: In 2009, Nokia piloted a scheme in two Indian
states where it sold handsets on a weekly installment of 100 rupees ($2) over 25
weeks period.

3. Psychological Discounting:
This is done to make the customer believe that product is priced cheaply or some
cases just break the price barrier that customer has in his mind like price at price Rs.
999/- which is priced just below Rs. 1,000/-.
2.6 Industrial performance global, national and regional basis

IPhone which is a prominent symbol of Apple accounted for 63% of the total revenue in
2018. The other electronic goods such as iPad, Mac and the Apple Watch accounted for a
relatively much lesser proportion of the revenue for the company. The second highest
contributor to the revenue (2018) was its services segment, which included the wallet; Apple
Pay, iTunes and Cloud. In the last four years, the services segment has witnessed the highest
growth at a CAGR of 19.8%. The iPhones revenue grew at CAGR of 13.1%, but the iPad
revenue recorded a decline of 11.2% and the Mac revenue witnessed a very sluggish growth
of 1.4% in the same period. The market has not responded very positively to the iPad and the
Mac of late. The company has been reducing the selling price of its iPad over the last four
years, yet the sales volume witnessed a decline of 10.5%. The sales volume of Mac also
declined though by a very small number in the same time period. iPhone has always been the
most promising product of the company, which witnessed an increase in sales volume at

CAGR of 6.5% even when its average selling price increased at a CAGR of 6.2% in the last five
years. However, even for the iPhone, the YoY revenue growth was very unstable. It was 52%
in 2015, but minus 11.8% in 2016.
The company has a very high brand value and strong customer loyalty. Its customers have
associated the company with innovations for the creation of products that are valuable,
rare and inimitable. However, with time as the value of the company has increased so has
the expectations of its customers. The company is forced to innovate in order to maintain
its position in the market and any failure to meet rising expectations of its customers that
can result in a slow down or negative growth for the company. Another area of concern for
the iPhone is the saturation in the global smartphone purchases. The volume of
smartphone purchases went on increasing steeply from 2009 when it was launched, up to
2013. Thereafter (2014), the global smartphone purchases have remained more or less
stagnant as almost all users by then switched to smartphones. It is forecasted that global
smartphone purchases will remain stagnant in the near future. The company has over the
period of time launched new services such as mobile wallet and cloud storage and these are
showing good signs of growth. The services segment accounted for revenue of USD 18.06
billion in 2014, which more than doubled to USD 37.19 billion in 2018.
Furthermore, as Apple is now trying to expand its horizons in the services segment, the
launch of video streaming service seems to be an opportunistic move as there is a lot of
untapped growth potential in this market. According to Grand View Research, the global
market for video streaming services is worth USD 36.64 billion and is expected to grow at a
CAGR of 19.6% to reach USD 124.57 billion in 2025. This is a new medium of entertainment
and people are gradually switching to this medium for entertainment. The online video
streaming can be regarded as a substitute for television. In the United States, video
streaming services have already overtaken television in terms of the number of households
as 69% of the households have video streaming service, whereas 65% have television. One
of the major advantages for subscribing to video streaming services is that the consumers
can choose a movie or show from a large pool of available options, whereas on the
television the consumers are restricted to what is available on a given channel. The below
chart shows the video streaming users across all continents as a percentage of the total
population. Televisory expect the video streaming subscribers to increase in Europe and
Asia and reach at par with America in the coming years.

Currently, the market for video streaming has few players with the major names being
Netflix, Amazon Prime and YouTube. The other players include Hulu, Sling and HBO. Netflix
has undergone phenomenal growth in the last five years with its member count and
revenue growing more than three-fold from 2012 to 2017. The video streaming companies
have to make concrete efforts to continuously acquire new content in order to keep the
customers engaged. Companies benefit hugely when they gain exclusive streaming rights
for coveted content. This industry requires a high capital expenditure in terms of
technology investment and huge efforts for content acquisition. Overall, we can
characterize this industry as a competitive industry with high entry barriers, wherein the
companies have to continuously differentiate themselves. The technology infrastructure of
a company has to be sophisticated to allow seamless streaming without any hindrances
even in the case of relatively low internet strength. The content has to be vast and should
also have some good quality shows that are unavailable with competitors. The revenue
streams for these companies can be a subscription fee, advertisements or a combination of
both. Apple has been following a differentiation strategy to compete in the market and the
same strategy can be used to gain a competitive advantage in this industry.

Moreover, Apple is a technology company and also has cloud services. It has economies of
scope to venture at relative ease in this business. It has strong customer loyalty and it may
acquire customers more easily owing to its loyal customer base. Further, with the help of
its existing products, it may be easy for the company to bring in its existing customers on
video streaming service seamlessly. Netflix and Amazon Prime have started creating their
own content to attract and engage subscribers. YouTube has also announced similar plans.
What lies to be seen is whether Apple will also follow the suit and start creating its own
content. Apple has always created differentiated products and sold them at a premium.
Another thing that is awaited to be seen is what differentiated features will be offered by
Apple and will it sell this service at a premium. Amazon could attain profitability owing to
its prime memberships after facing loss in the retail segment for a prolonged period.
Similarly, the services business can be a good hedge for the company against any threat to
the growth of its core revenue streams. Amazon competes with Apple directly in many
businesses and this decision also serves a strategic purpose to keep the growth of Amazon
in check. Another valuable asset gained from this business is, of course, the data. The video
streaming industry is growing and Apple is on a rising tide by entering into this business
and it is expected to benefit from the foray.
2.7 Prospects and challenges in the industry

Forbes magazine rated Apple as the most valuable brand in the world for the 10th straight
year. That's pretty impressive for a company that's focused on technology, an industry in
which things can change at light speed. Yet Apple has gotten to become the largest company
in the world by market cap not by trying to become the largest Smartphone vendor, but the
most beloved. More than any other tech company, Apple has always heralded the end user
experience above everything else, not merely the speed, storage capacity, or other
technological specs of its gadgets. That commitment to melding technology with the liberal
arts was established under late founder Steve Jobs, and it continues to this day under current
CEO Tim Cook. And as long as Apple's future management takes care of the brand and
expands it into new areas, Apple should continue its strong track record. Apple's innovations
are usually incremental; applying its design chops to the latest consumer tech trends. Apple
didn't invent the MP3 player or the Smartphone, but it went on to dominate those products
through its focus on design, user experience, and brand cachet. Looking out 10 years, the
Apple of 2030 should continue to incrementally improve its hardware products and even
introduce some new ones but in a new twist, Apple will also expand its brand to develop a
suite of bundled consumer services. That will be a big challenge for the tech giant, but also an
opportunity. And of course, there's the possibility of a new out-of-the blue blockbuster
invention during the next decade as well. Here's what customers and shareholders can look
forward to in the Apple of 2030.

Still making gadgets and iPhones

While many think we'll all be living on Mars and communicating through telepathy in 2030, I
think we'll still be using smart phones as our primary gateway to the world. Of course, it will
be a far better, faster, and more functional Smartphone, operating on one of the 5G networks
currently in their early build outs today.

The 4G standard was introduced in 2009 and is still in use today. 5G, which has just begun,
will probably take a longer time to ramp up because of the complexity of building out
expensive "small cells" throughout the country. Given the difficulty involved in building out
5G networks, the 5G standard will probably also last well into the 2030s before the
introduction of "6G," whatever that may be.
Apple's first 5G iPhone was due to come out this September, but rumours are that the
introduction will be pushed back about a month because of the corona virus outbreak. Still,
even though a 5G iPhone will probably be out this year, a lot of the new space-age
applications that many anticipate probably won't be ready until networks are more fully built
out in next several years. This is why Apple took its time in releasing a 5G phone well after
other Asian Smartphone vendors. Some also think there could be another gadget "beyond"
the iPhone that becomes the new communication super-gadget. One possibility is "smart
glasses" that might allow a person to communicate, read, and interface the internet in an
augmented-reality-like screen on the lens, rather than the screen of an iPhone.

Rumours are that Apple is already working on pair of augmented and virtual reality (AR/VR)
smart glasses that could be released as early as 2022, according to Apple analyst Ming-Chi
Kuo. Apple did make a recent AR-based acquisition just this month, acquiring NEXTVR for
roughly $100 million in mid-May. NEXTVR enables the watching of sports, music, and other
entertainment events through all of the major VR headset vendors, and it has already inked
deals with the NBA, Wimbledon, Fox Sports, the WWE and other sports productions entities
as well.

Aside from potential smart glasses, Apple is also rumoured to be working on a self-driving car.
However, the Apple car, code-named Project Titan, has gone through several fits and starts
over the years, with some believing Apple has now abandoned the car idea altogether
to focus on autonomous software systems. However, Apple made a key automotive hire as
recently as late 2018, bringing in ex-Tesla (NASDAQ:TSLA) executive Doug Field, leading
many to believe the Apple car project is still on. For his part, Ming-Chi Kuo thinks an Apple Car
will be released somewhere in the 2023-2025 timeframe, bringing in another potential star
product into Apple's arsenal of devices, with the car being the biggest and boldest project yet.

Besides these new, futuristic projects, I'd still expect Apple to still be selling plenty of
iPhones, Apple Watches, iPad tablets, laptops, and desktops alike, even 10 years out. After all,
the personal computing laptop was invented 40 years ago, and I think it's unlikely to change
very much as mankind's main tool to get work done.
Services will be key

Since the iPhone established itself as the world's most important electronic device in 2007, it
has only grown in importance to consumers ever since. As Apple investor Warren Buffett said
of the iPhone: "It's a very, very, very valuable product to people that build their lives around
it. And that's true of 8-year-olds and 80-year-olds."

In other words, the iPhone isn't just a phone but is now the best distribution platform in the
world. That has enabled Apple to profit handsomely from sales of iOS applications through
the app store, for which Apple typically takes a 30% cut. However, it appears that Apple itself
will become more of a services company, releasing more and more of its own "private label"
services. Apple has put a lot of money and resources behind a slew of new Apple-branded
services over the past year: Apple TV+, the Apple credit card, Apple News+, and Apple
Arcade, supplementing the existing Apple Care, iCloud storage, Apple Music, and Apple Pay
services the company had already developed out over the past few years.

Look for these services to grow in importance over the next decade. Last quarter, Apple's
services business grew 16.6% to $13.3 billion, making up 22.9% of Apple's total sales, while
hardware sales fell. Even better, services gross margin is higher than those of Apple's
hardware products, with gross margin of 65.3%, versus just 30.3% for hardware.

Like other large tech giants, Apple will make a big effort to create a bundled ecosystem of
consumer services over the next decade, as hardware sales inevitably slow down but Apple's
installed base expands. I expect several new private-label services to be introduced over the
coming decade, and for the existing services to get better over time. By 2030, it's quite
possible there will be an Apple-branded version of just about every type of entertainment,
financial, or other consumer service. A big acquisition or two may happen to accomplish this
feat as well in certain areas. By 2030, it's possible that over half of Apple's sales come from
these services, as management takes Apple's brand beyond mere gadgets.

A brave new world for Apple

As Apple's devices become more and more intimately intertwined with our own lives, there's
tremendous opportunity for the company, but also risk. After all, creating beautiful devices is
one thing. However, now that Apple is a distributor of a credit card, will it take on brand risk
if any sort of malfeasance happens around its financial services? After all, Wells Fargo
(NYSE:WFC) was also a beloved banking brand until it slipped up in 2016, and it hasn't
recovered since.

Apple is also now producing its own TV and film content. What kind of content should it
make? Family-friendly fare, or gritty, challenging content aiming to shake up the status quo?
Can it do both? What is more closely aligned with Apple's brand as it becomes more of a
global mainstream company? And is it too late to catch up with Netflix
(NASDAQ:NFLX) and others, which have been at this for longer? Moreover, as Apple digs
further into people's health, that opens up a whole can of worms around liability and also
privacy.

These are all issues Apple is going to have to grapple with in the 2020s, but the company will
need to contend with them if Apple is to become more a services company by 2030, which is
key to its profit growth.

However, as long as the company adheres to its brand principles, admits mistakes, and keeps
improving its products and services while maintaining its technological edge, shareholders
should still have a lot to look forward to over the next decade.

For years, Apple has been a popular company, both among consumers and among investors.
Consumers have been raving about Apple’s “cool” touch products that marry art and
technology, fueling WOM and buzz every time the company would come up with a new
product. Investors have been chasing after Apple’s stock, creating enough momentum to
propel the stock to new highs.

In recent weeks, Apple’s buzz and momentum seems to be fading away, however, as both
Consumers and investors have showed little enthusiasm for the company’s new product, the
iPhone 4S. What happened? Is the company losing its buzz and momentum?
Though it is too early to say for sure, Apple is facing four immediate challenges that may
slow-down its buzz and momentum:

1. Technology challenge. Judging from the features of iPhone 4S, Apple’s radical
innovation machine seems to be running out of steam. The new phone is a marginal
rather than a radical improvement over its predecessor, both in terms of its physical
attributes and technological capabilities.
2. Leadership challenge. The company is in the middle of a leadership transition that
casts a cloud of uncertainty over its future. It will be difficult for Apple to thrive
without Steve Jobs, as he was a leader with a strong vision, a man who knew the
technology, the market, and the art, and he could combine altogether in blockbuster
products; and he had the charisma to develop and spread the message to Apple
followers, creating efficient and effective WOM and buzz campaigns.
3. Competition challenge. So far, Apple’s barriers to competitors and innovation magic
have been formidable, and any company -- from Nokia (NYSE:NOK) to Research in
Motion (NASDAQ:RIMM) to Hewlett-Packard (NYSE:HPQ)-- that has tried to challenge
Apple have been trashed. In recent months, however, Apple has faced a serious
challenge to two of its blockbuster products, the iPad and the iPhone. On the tablet
market, Apple contends with an unlikely challenger: online seller Amazon.com
(NASDAQ:AMZN). Last week, the company is expected to announce the release of its
new version of the Kindle reader, which some analysts expect to be a serious
challenge to Apple’s iPad. On the iPhone side, Apple faces a new challenge from
Google’s (NASDAQ:GOOG) Android phones, especially if Google manages to integrate
Motorola Mobility (NYSE:MMI) successfully to its organization. In fact, according to a
Nielsen Survey, Android phones command a 43 percent market share, compared to 28
percent for iPhones.
4. Economy challenge. Though Apple enjoys a strong brand among consumers that
makes demand for its products inelastic, its sales are sensitive to an impeding down
turn, especially in Europe.
 CHAPTER 3: DISCUSSION

3.1 PRODUCTION DEPARTMENT

The production department of a business is responsible for the production of goods that
are used by a company, the specific design of those goods and the way in which the
goods are produced. Every aspect of production of goods and the creation of low costs is
decided within the production department of a company.

The production department can be the largest organization within a business. It

may employee mechanics, machine setup specialists, maintenance personnel, and
machine operators. A key focus of the production department is efficiency.

In between the processes of production, the department works to improve the

efficiency of the production or assembly line so that it can meet the output targets set
by company management and ensures finished products offer consumers the best
value and quality
DIFFERENCE BETWEEN PRODUCTION DEPARTMENT AND PURCHASING
DEPARTMENT:
➢ The Purchasing department will be responsible for providing the materials,
components and equipment required to keep the production process running
smoothly. A vital aspect of this role is ensuring stocks arrive on time and to the right
quality.
➢ The purchasing team receives the requisition of resources from the production
team. The production team acquired the necessary resources for producing the
desired product.
➢ Production department is the buyer / End User. Purchasing team helps the end-
user.
➢ Purchasing department is facilitator in procurement / supply chain.
➢ To Purchase department, Production department is a Client in a wider sense, in
narrow sense, it is a Customer.
OBSERVATION:

Production Department is the department which directly involves in

manufacturing products. Examples are the machining, finishing, and assembling
departments.
Production Department is the functional area responsible for turning inputs into
finished outputs through a series of production process. The production manager is
responsible for making sure that raw materials are provided and made into
finished goods effectively. He must make sure that work is carried out smoothly,
and must supervise procedures for making work more efficient and more
productive.

3.2 IMPORTANCE OF PRODUCTION DEPARTMENT

Apple’s Product Development Process may be one of the most successful design
processes ever implemented. With the company verging on becoming the world’s first
$1 trillion business organization – there’s a lot that designers can learn from Apple and
introduce into their own design environments.

Apple is a notoriously secretive business. In Steve Jobs’ time at the company it would
have been near impossible to find out about the internal workings of the business. This
isn’t surprising when a business’s market advantage is its design approach. It’s worth
keeping it under wraps.

However, Adam Lashinsky, the author of Inside Apple: How America’s most Admired
and Secretive Company Really Works has been given a look at the process. While there
are still aspects of the way that Apple works that are shrouded in secrecy – you can get a
good idea of the overall high level process.

Like any good design company, the design process at Apple is not over when
manufacturing begins. In fact, Apple iterates the design throughout manufacturing. The
product is built, it’s tested and reviewed, then the design team improves on it and it’s
built all over again. These cycles take 4-6 weeks at a time and may be run many times
over a product’s development lifecycle.
When production is complete the Engineering Program Manager will take possession of
some or all of the test devices and then take them back to Apple’s headquarters at
Cupertino.

This is a very costly approach but it’s one of the reasons that Apple has a reputation for
quality. The more you invest in design, the more likely you are to build incredible
market changing products. It’s the process that the iPod, the iPhone and the iPad went
through.

The final step in Apple’s product development is product launch. When the product is
considered to be as good as it can be – it enters an action plan known as “the Rules of
the Road”. This explains all the responsibilities and actions that must be taken prior to a
commercial launch of the product.

OBSERVATION:

Production planning and control is one of the most important tasks in the
manufacturing firms as organizations try to cut their costs of production. Apple has
been very successful in the market because of the quality of its products, and the
efficiency with which it delivers its products. It would be interesting to understand the
strategies that this firm uses in its production planning and control to achieve such a
massive success.

3.3 SUGGESTIONS:

• Identifying Inputs.
• Scheduling Production
• Minimizing Production Costs
• Ensuring Product Quality
• Improve Existing Products.
 FINDINGS

Over the past 30 years Apple has amplified from computer design to developing
consumer electronics. The company was started by Steve Jobs, Steve Wozniak, and
Ronald Wayne in the 1970’s. Steve Jobs is the current CEO of Apple and is doing a very
efficient job in running the company. Apple uses a differentiation business strategy,
which means that all employees and departments work together in the creation of their
products. Since the employees work together our products tend to be more productive.

• Apples main business initiative is customer relationship management. When

working with or purchasing from Apple you are promised top notch customer
service and assistance.

• Apple uses many different types of internet business models. Business to

Business e-commerce is used in the selling of computers to help operate
everyday proficiency in other businesses. Business to Consumer e-commerce is
the selling of iPods, computer, and other products to different individuals rather
than businesses.

• Business to Government e-commerce is the process of selling of any Apple

products to government operated organizations. As you can tell Apple works
with many different groups of customers.

• When purchasing from Apple you are offered many different payment options.
One payment option is electronic bill presentment and payment, this system
sends bills over the internet and helps to provide an easy method for you to pay
them. This method is most convenient for customers so that they can purchase
and pay for their items without ever leaving their home.

• In running their business Apple finds it very important to use database

warehouses. They feel this way because it is a huge collection of business
information that is collected from many different databases. They also utilize
data marts, which helps them to focus on certain operations throughout the
 business rather than the overall summary of the business.

• In the analytical processing databases and operational databases which Apple

uses the most consists of many different files. Some of these files are Costumer
files, order files, sales files, and supplier files. In having these files it makes the
entire business process for Apple more convenient and more efficient.

• Apple applies the four principles of network security by offering a valid source of
confidentiality with their terms and agreement statement. Apple has their terms
and agreement which explains their integrity and availability. Whether looking
up online or calling the store via telephone any answer to any question is
answered honestly. Their security and access controls explain Mac OS X Server is
built on an advanced architecture to deliver the features you want with the
security you need.

What we found to be the most interesting about Apple is how they are very
innovative and early adapters. Apple is usually the first company to come out with a
new product line before anyone else. This is very risky but it seems to be working to
Apples advantage.

SUGGESTION:

➢ If Apple can stretch the iPhone product line in both ways, such as releasing the
device with lower prices with the process optimization and increased efficiency
as well as coming up with the new models in the upper segment of the product
range to target the corporates and professionals, then it will ensure that the
company grows in terms of user base and revenues.

➢ To conclude, Apple is positioned as "High quality = High price". If the company

can perform at par with the striking new technology, high class design and
stability, company has a bright future in coming years. With its remarkable
marketing strategy going in hand with the powerful innovation and pioneering
technology, there are lot of opportunities and market segments, in which Apple
can penetrate and secure the pole-position.
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