For its hardware business model, Apple first hires employees, primarily engineers and designers, to operate the business. Apple engineers build the applications and operating systems used by the Apple hardware devices, while the designers create the pristine shape of the various Apple products to increase consumer value. Once the engineers and designers at Apple create the blueprints for Apple products. Apple then buys supplies from different companies such as aluminum, silicon, and glass. Then the Apple sends them to a manufacturing plant operated by a 3rd party in China. Apple then sells the finished products to consumers directly through retail stores and online, or through 3rd party authorized resellers. Apple offers additional services via repairs and support services, these services generate revenue when consumers need to fix their products. Apple additionally provides a digital platform for application developers and musicians to sell their products.
Apple’s hardware business strategy is to sell highly sought after goods at a high premium. Then Apple allows 3rd party developers/musicians to sell their creations on Apple’s digital platform. Due to the closed environment, Apple has a competitive advantage against Android, because the Google Play marketplace is not the only store to acquire Android applications. Apple also uses viral marketing strategies by releasing information and making it appear as a “leak”. This creates a buzz for the product before it is released. This guerilla marketing strategy gives Apple a competitive advantage which no other competitor like Samsung, HTC, Dell, or Microsoft, utilizes. Initial releases for Apple products are far below market demand causing many consumers to wait in lo...
... middle of paper ...
...stomers and increase shareholder value.
However, consistent innovation is not entirely necessary. With the newest iteration of the iPhone, though there are few improvements, the operating system and product environment makes it difficult to switch to another OS. The phone’s data is not easily transferable from an Apple device to a competitor’s phone.
So at the moment Apple is doing a reasonable job maintaining growth and innovation, but big companies often fall into a trap of not properly adjusting to technological advancements. A similar firm, Microsoft, fell into that trap during the first decade of the 2000’s. The company was relying on making minor improvements to old technology. Apple has created an image for itself as an innovation leader.
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