Sunday, February 25, 2007

Apple vs Rest

I always puzzled about Apple Inc. and their business strategies,not in a small way but in broader sense.I can explain it very well.Usually they bring lot of creativity and aesthetics to their products compare to competitors.But here is my question,Who is competitor?Think about it seriously.Forget about iPod for the time being.Right from starting Apple separated itself from industry with vertical business model.Apple is well known for it's reluctance to work with partners.In fact Apple's Market share in PC business is just under 7%(US Market).My question is that 7% they want to target,when they claim they are far superior to competitors?Is 7% Market share worth of all those creativity and aesthetics??So, what went wrong??First,It's Apple's reluctance to work with partners(Microsoft got edge here).Secondly, their target Market is niche like Publishing and media Industry,Scientific and Academic fields.Thirdly,their products are not as affordable as competitor's.

Off late Apple seems to be realizing some of these facts and since Steve Jobs' return to Apple in 1997,they started playing the game like untouchable.Since then they achieved many milestones like Mac OS X release,iPod,iTunes,Intel partnership,Mac mini,Application S/W development like iMovie,iDVD etc. and now iPhone and iTV.Today,their Market cap stands at roughly $76bn,great achievement for a company which received flak from Michael Dell(CEO of Dell Inc.)with a comment "I'd shut it down and give the money back to the shareholders" when asked, in 1997, what he would do if he owned Apple.In fact today Apple's market cap is more than Dell Inc.

But Apple should do something to promote their OS which can give tough competition to Windows and currently it's a clear looser in this market despite it's superiority to windows.They tried it during Vista's launch time by running ads which highlighted how easy the transition to Mac than upgrading to Vista.In fact today you can run any OS on Mac but you can not run Mac OS X on windows.May be opening their OS to non Mac PC in the coming years can definitely do Magic.For the upcoming iPhone Apple using stripped version of OS X and this move welcomed by Bill Gates also 'coz it will make Mobile Phone as a Software intensive device and opens a big window for them as well.In fact Microsoft recently upgraded their Windows Mobile in the wake of this competition.Apple's strength is defining trend than following but some times it's proving as their weakness too.Apple neither targeting Google search nor MS Office but they want to become a consumer brand in media and entertainment industry and according to one hypothetical projection Apple can outperform Microsoft if they both grow at current rate.That may not happen,but Apple surely found it's growth curve.


raju said...

nice one shravan

R,G, said...

Apple run on windows? I'm sure that's not what you meant.