Apple Computer

By: Phil Morettini
Submitted: 2007-01-17 15:48:06
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Apple Computer--one of my favorite topics in Corporate & Marketing Strategy. This is a company that apparently is even more hardy than felines--they seem to have already used up more than 9 lives. Apple has so many boom-bust cycles, and has been given up for dead multiple times. Today they are again on top of the world. They have had many fits and starts on the strategy front, with many failures, managerial changes and restarts. But the most interesting part of the Apple story to me, is the influence of Steve Jobs.

He was there and drove the strategy leading to the initial boom of the Apple II and original Mac. Lauded as a marketing mastermind and entrepreneur deluxe. Then when the Microsoft/Intel duopoly overcame (and almost buried) Apple, he was discredited and widely scorned for "missing the window" by following a "closed" business strategy, with standardization and commodization of PC technology all the rage. Now he has ridden back on his horse as the saviour when Apple was yet again on it's "relevancy" deathbed, and has succeeded in turning the company around, yet again. Truly an amazing feat. The most interesting part to me, is that at least on the surface, he is following exactly the SAME proprietary product strategy, and the same marketing and distribution strategy that appeared to fail in his previous regime. So what's changed? Or has anything changed?

It is very possible that Jobs hasn't learned the big lesson, and is simply following the front part of the technology adoption curve like he did early on with the Mac. He may "run out of steam" once again, as Apple tries to make the jump from the techies and early adopters of "cool" technology to mainstream buyers that require a completely different value proposition. Has the ipod "crossed over" in to the mainstream yet? Has Jobs wised up, and will he be able to pull off his proprietary approach this time by making a few adjustments to his marketing model?

It will be fascinating to watch. There are a few signs he has learned. Apple has recently come out with more aggressively priced products at the low end both on the Mac and ipod line, instead of just skimming profits at the top and leaving the low end exposed. And he has even been able to private label the ipod to HP (which is amazing), while retaining the service revenue streams in that deal. If he can keep pulling deals like that off, he may succeed this time. But his closed, proprietary approach tightly links the ipod/Mac/iTunes very closely Will he alienate mainstream buyers by shutting out these practical buyers desire for "choice", leaving big holes in the market for competitors? We shall see. It is a great story and will be a telling marketing case study to watch play out. I'd love to hear what you think.

Phil Morettini is the Author and President of PJM Consulting (http://www.pjmconsult.com). PJM Consulting in a Management Consultancy to the Software and Technology Industries. The firm executes special strategic projects and provides interim senior management in General Management (CEO/COO/Division Manager), Product Marketing, M&A, Distribution Channels and Business Development. Please contact Phil at pm@pjmconsult.com.

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