Has Apple's innovation engine stalled?

Apple CEO Tim Cook.

  • Demand for iPhone5 may be dwindling
  • Phones using Google%27s Android are big threat in growing Asian market
  • Wall Street%27s waiting for a wow-worthy innovation

SAN FRANCISCO — Apple's profit-gushing iPhone came into question again Monday, briefly sending shares below $500 on concerns of a sales slowdown, as Wall Street's gizmo darling is in danger of becoming yesterday's glamour stock.

Shares of Apple skidded 3.6%, to $501.75, amid growing uncertainty about whether Apple can continue its pace of trendsetting innovation. The stock's latest fizzle was attributed to a report in The Wall Street Journal that says Apple decreased parts orders for its iPhone 5.

That came after Citi analyst Glen Yeung last month said that cuts to Apple's orders from its suppliers, while inconclusive, "bring into question the strength of iPhone 5 and refocus investors onto risks in the Apple story."

Under intense Wall Street scrutiny, Apple needs to dazzle consumers once again with the next big must-have thing in order to buoy its stock.

This month marks three years since Apple launched an industry-changing invention. Its iPad tablet was brought out by a beaming Steve Jobs, who introduced it as a "magical and revolutionary device." Now, that magic act is in question under CEO Tim Cook at a pivotal moment for the world's most valuable company.

"Investors are aware of how difficult it is for a technology company to continue to come up with products that are going to wow consumers." says Jay Ritter, a finance professor at the University of Florida.

Apple has failed so far to deliver an encore to its iPod, iPhone and iPad. This is critical for new growth, because the iPhone makes up the bulk of Apple profits — trailed by iPad — as competitors gain. U.S. markets have become saturated with iPhones.

Now, the battleground is shifting to Asia and emerging markets, where price-sensitive consumers are turning to cheaper Android-based devices.

"China is currently our second-largest market; I believe it will become our first," Cook told the Xinhua News Agency during a trip to Beijing last week.

Still, both television makers and content owners are on notice that next in line is a game-changing TV. Rumors are rampant Apple will do just that — to be followed by more years of fat sales, burgeoning market share and investment by Apple. But some signs point in another direction.

Studios and cable providers have made it clear they don't want to work with Apple and would prefer to create their own business models, notes Keith Bachman of BMO Capital Markets. "We remain skeptical on Apple's eventual foray into TVs," he wrote last week to clients. "We think this will be a niche market opportunity for Apple."

Needham & Company analyst Charles Wolf concurred. "I frankly would be surprised if they launched a TV," he says. "The economics of a TV are so difficult. It's low-margin; the upgrade cycle is really slow."

That's bad news for Apple. The company is under siege by rivals, and it's far from a sure bet that iPhones and iPads can continue to produce monster profit multiples.This all comes ill-timed for a slower-advancing Apple.

Under attack from Google's Android — which now commands 72% of the worldwide smartphone market, vs. 14% for Apple's iOS — Apple is stepping toward price competition rather than pulling off another rabbit trick.

Apple's innovation mojo -- in question since Steve Jobs died in October 2011 (Forbes dropped Apple to No. 5-ranked innovator for 2012 in the Cook era from No. 1 in 2011) — has Wall Street on high alert.

Apple's prospects will be no clearer than when it reports first-quarter earnings on Jan. 23. It's expected to report selling 45 million to 50 million iPhones for the all-important holiday quarter ending in December.

Apple commands 75% of worldwide smartphone profits, according to analysts, and its earnings are the envy of businesses around the world.

But Samsung on Monday said that it has sold more than 100 million of its Galaxy S line of smartphones since its 2010 debut.

Apple declined to comment.

Magic carpet turbulence

More than a year after Jobs' death, the question among Silicon Valley watchers is, how long can Apple's magic carpet ride last?

Apple faces growing competition from the likes of Google, Amazon.com and Samsung in the fast-paced tech market without its forceful visionary, says Vivek Wadhwa, vice president of academics and innovation at Singularity University. "Where is the latest and greatest from Apple?" he asks. "It's been a few years."

"Apple's biggest challenge is to define itself in the post-Steve-Jobs era," says Salesforce.com CEO Marc Benioff, who worked at Apple in the 1980s. "Where it is struggling is when it pretends to be Steve Jobs instead of actualizing its new identity. They need to find out who they are now."

Apple's advances are increasingly being met by products from Amazon's Kindles and Samsung's Galaxy devices — running Google's Android — as well as facing a rising threat from Nokia and other device makers running Microsoft's recently launched Windows 8.

In a me-too move, Apple came to the retail party with a smaller iPad after Google and Amazon launched smaller formats first — in the tablet category Apple created.

"I would hope they are working on something now. They need to keep this meteoric growth," says Jared Ficklin, a technologist at Frog Design, a design consulting firm that worked on early Apple computers.

Stock plunge woes

Apple needs a new game-changing product to nudge the stock. Shares of Apple have drooped about 29% since they hit an all-time high of $705.07 last year. Investors are concerned Apple can't keep growing at the same rate without consuming another industry. The big problem is, Apple has run up against the law of numbers: To grow on a significant percentage basis -— Wall Street's quarterly fix — requires massive growth.

"They fight the law of large numbers — the company will need to go to new markets" to keep growth up, says Edward Jones analyst Bill Kreher. "There's a lot of concern about innovation and what Jobs brought to the table."

Without a new invention, Apple needs to sell an ever-increasing number of iPhones and iPads.

"They've had such a fabulous run. It's just hard to sustain such high growth once you get that big," says Richard Sloan, a professor at the University of California at Berkeley. "Apple was sort of the king of the glamour stocks since about 2009 with increased visibility on increased sales in iPhone and iPad."

The run, at this rate, had to end. "Everyone thinks this is going to be a flat quarter" compared with a year ago, Sloan says.

'Value' company momentum

Apple has missed quarterly earnings estimates in three of the past five calendar quarters, including the past two, says FactSet.

Meanwhile, Apple's reputation as being a fast-growth company appears to be waning. Analysts expect the company to earn $13.46 a share in the December 2012 quarter, down 3% from the $13.87 a share it earned at the same time last year, says S&P Captial IQ.

Apple is now transitioning from a "growth" stock to a "value" one, financial experts say. The sell-off that carved billions off market capitalization was due, in part, to this concern, experts say. Institutional investors that have established growth-oriented funds could be liquidating their positions.

"Hedge funds could be pulling out," Sloan says. "I would suspect that it's the growth-oriented investors."

Value funds — think investors in Microsoft, General Electric and Coca-Cola — would be next in line to pick up the stock because Apple has a $121 billion cash hoard, pays a dividend that may increase, and remains a relatively safe haven for lower-risk investors.

"The market is certainly valuing Apple more like Google and Microsoft," says Ritter. "People are concerned: Is the smartphone market saturated?"

Price battle?

Apple could become a ho-hum value stock if the company transitions from innovator to commodity hardware maker. It's now entrenched in markets that are uber-competitive on features and prices.

The only advantages are Apple's focus on better hardware designs, home-brewed intuitive software and vibrant marketplaces for media and apps. Those still command a premium, but rivals are mimicking all areas of its business to grab a massive chunk of the market.

As a result, Apple appears ready to head down the path of price competition. The launch of its iPad Mini last year was evidence of its need to offer a tablet to compete with Amazon's smaller Kindle tablets and Google's Nexus 7, which are selling briskly. The device is also expected to make less money as it eats into sales of higher-margin iPads.

Speculation has run high that Apple may also offer a lower-cost iPhone to compete in emerging markets and Asia, where cheaper Android-based devices dominate. The Cupertino, Calif.-based company could cut costs by replacing its sleek aluminum chassis with a plastic one and packing in lower-performing components.

"There's tremendous pressure on Apple in Asia and some of these emerging markets," says IBB Consulting analyst Jeff Wang. "There is a lot of pricing pressure that's being created by unlocked or unsubsidized," less-expensive phones offered locally.

"Cutting the prices of their Apple products — it's a slippery slope into chasing a race to the bottom," says Allen Adamson, managing director of branding firm Landor Associates. Apple should "start thinking of themselves as a luxury brand rather than a mass brand. The margins are much better."

Contributing: Matt Krantz in Los Angeles and Jon Swartz in San Mateo, Calif.

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Apple innovation; a case study

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Related Papers

case study has the apple innovation machine stalled

Accounting Forum

William Lazonick

NZ Collection

Journal of the International Academy for Case Studies

TODD A FINKLE

The primary issues in this case involve business startup and management, and are appropriate for entrepreneurship and management courses. A secondary issue demonstrates how personal drive and motivation are critical components of successfully managing and growing a business, thereby making this case appropriate for discussion on the topic of strategic management. The case chronicles the life and passion of entrepreneur, Steve Jobs – illustrating the rise, fall, and current state of the Apple Computer Company. The purpose of this case is to illustrate how individual passion, determination, and innovation is a critical element in business start up success and also to stimulate critical thinking in terms of future direction for a company in a struggling economy.

Dr. İbrahim Atakan Kubilay

Apple Corporation is one of the most profitable, and socially influential companies that ever existed. Its products are in homes, businesses and entertainment venues. It constantly brings out new high-tech tools to the consumer electronics market, the most recent one being the Apple Watch. The creation of this company is more humble, and is the result of a conjuncture of various factors that have converged to create a unique environment. It all started with a group of amateur electronics enthusiasts. Smart individuals, an engineering-oriented social environment, business angels willing to invest in a new start-up company, and the developments in technology appearing at the right time and place have all contributed to this creation. It took engineering knowledge, visionary management and a business outlook to succeed. Individual entrepreneurs and developing countries carefully study the reasons behind the success and influence of Apple, so that they could recreate the conditions for imitating similar successes for themselves and their countries. Especially universities are encouraged to launch start-up companies and dive into the commercial world. Techno-parks are built to imitate the achievements of garage founded companies such as Apple. In this study, the perceived and deducted reasons for Apple’s success are examined using an opinion survey, and accounts of the founders are examined and conclusions are made based on this information. The results show that the perceived and true reasons for Apple’s success may be very different and that a legendary image of the company with an ardent fan base may obscure the true reasons behind its success.

gregory johnson

Scot King , Bruce Holman , Marilyn Gates

International Journal of Accounting and Financial Reporting Vol 4, No 2 (2014)

Zohaib Babar , Jawwad Jaskani , Tehreem Ilyas

Purpose: This case suggests the development of financial reporting of Apple Inc. in comparison with the industry over the period of 2004 to 2013. This study is helpful for different field of researchers e.g., management, technology, etc. Apple Inc. was found in 1976 by Steve Jobs. In 2007, Apple introduced smartphones and iOS and was the pioneer in this industry. But after the rising competition in this industry Androids snatched the market share from the Apple. Methodology: This study illustrates the reasons and the current performance of the company in the industry. The performance has been measured through actual financial data and through various financial techniques. Findings: This study has found that the company is losing share in the market because of the features in its products whereas the features offered by other competitors are relative consumer friendly and according to their demand. Suggestions: To retain the market share Apple should offer more products that are more affordable for the consumers. DOI: http://dx.doi.org/10.5296/ijafr.v4i2.6079

Samuel Roscoe

The Apple Computer Company is arguably one of the most innovative technology companies to emerge in the last three decades. Apple, Inc. is responsible for bringing to market such products as the Macintosh desktop and the portable computer, iPod and iTunes, and most recently, the iPhone. The success of the company can be traced to the ingenuity of their founder and CEO, Steven Jobs. His philosophy has always been to create products that consumers find easy to use and integrate innovative technology. Throughout Apple’s history it has accomplished these goals. However, with a growing line of products, a competitive market landscape, and an unpredictable technology life cycle curve, the company faces challenges as to the direction of its product lines. The case gives an overview of a tool that is used to analyze a company’s product line portfolio and applies it to Apple, Inc.’s array of products. Questions for discussion are provided to enable students to use critical thinking skills in applying the case material.

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How Apple Is Organized for Innovation

  • Joel M. Podolny
  • Morten T. Hansen

case study has the apple innovation machine stalled

When Steve Jobs returned to Apple, in 1997, it had a conventional structure for a company of its size and scope. It was divided into business units, each with its own P&L responsibilities. Believing that conventional management had stifled innovation, Jobs laid off the general managers of all the business units (in a single day), put the entire company under one P&L, and combined the disparate functional departments of the business units into one functional organization. Although such a structure is common for small entrepreneurial firms, Apple—remarkably—retains it today, even though the company is nearly 40 times as large in terms of revenue and far more complex than it was in 1997. In this article the authors discuss the innovation benefits and leadership challenges of Apple’s distinctive and ever-evolving organizational model in the belief that it may be useful for other companies competing in rapidly changing environments.

It’s about experts leading experts.

Idea in Brief

The challenge.

Major companies competing in many industries struggle to stay abreast of rapidly changing technologies.

One Major Cause

They are typically organized into business units, each with its own set of functions. Thus the key decision makers—the unit leaders—lack a deep understanding of all the domains that answer to them.

The Apple Model

The company is organized around functions, and expertise aligns with decision rights. Leaders are cross-functionally collaborative and deeply knowledgeable about details.

Apple is well-known for its innovations in hardware, software, and services. Thanks to them, it grew from some 8,000 employees and $7 billion in revenue in 1997, the year Steve Jobs returned, to 137,000 employees and $260 billion in revenue in 2019. Much less well-known are the organizational design and the associated leadership model that have played a crucial role in the company’s innovation success.

  • Joel M. Podolny is the dean and vice president of Apple University in Cupertino, California. The former dean of the Yale School of Management, Podolny was a professor at Harvard Business School and the Stanford Graduate School of Business.
  • MH Morten T. Hansen is a professor at the University of California, Berkeley, and a faculty member at Apple University, Apple. He is the author of Great at Work and Collaboration and coauthor of Great by Choice . He was named one of the top management thinkers in the world by the Thinkers50 in 2019. MortentHansen

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Apple case study: How Steve Jobs built Apple around simplicity

Graham Robertson, Founder of Beloved Brands

Graham Robertson, Founder of Beloved Brands

Brand Toolkit

Our Apple case study starts with 𝘁𝗵𝗲 𝗱𝗮𝘆 𝗦𝘁𝗲𝘃𝗲 𝗝𝗼𝗯𝘀 𝗿𝗲𝘁𝘂𝗿𝗻𝗲𝗱 𝘁𝗼 𝗔𝗽𝗽𝗹𝗲. This is the starting point that 𝘁𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗲𝗱 𝗔𝗽𝗽𝗹𝗲 𝗶𝗻𝘁𝗼 𝗼𝗻𝗲 𝗼𝗳 𝘁𝗼𝗱𝗮𝘆’𝘀 𝗺𝗼𝘀𝘁 𝗮𝗱𝗺𝗶𝗿𝗲𝗱 𝗯𝗿𝗮𝗻𝗱 s . Steve Jobs recognized that consumers were frustrated by how all the other technology brands designed their products in a lab without any thought for the consumer. Steve Jobs made the most significant contribution to the Apple brand strategy by starting with the consumer experience and then working back to the technology. The Apple brand positioning builds everything around the idea that “Apple makes technology so simple that everyone can be part of the future.” 

Moreover, we witnessed the most incredible decade that any company has ever seen, with Apple launching iTunes, iPod, iMac, the MacBook Pro, MacBook Air, iPhone, and the iPad. 

If you are a marketer looking to improve your knowledge by looking at what Apple has done so well, our Apple case study will teach plenty of lessons for using a brand idea to inspire and steer everyone who works on the brand. At every step of the Apple brand strategy, we will provide a link to click on and learn how the process can work on your brand. 

If you are a fan of Apple, click on this link to view their best store locations: Apple Store locations . Or come see some of their best advertising: Apple Advertising . 

How Steve Jobs built the Apple brand strategy around simplicity

Building the Apple brand

Our Apple case study will show how to develop Apple’s brand positioning statement and plan . Then, I will show how Steve Jobs pushed to stretch their “simplicity” brand idea across their company. Everyone who works behind the scenes knows their role in delivering simplicity.

Simplicity drives all Apple advertising. 

In the 1980s, Apple started with “technology for the rest of us” when they took on IBM. And they continued that attack with “I’m a Mac” ads that took on Microsoft. Simplicity drives Apple’s innovation. Steve Jobs pushed for great advertising. 

The beauty of Apple is how they take complex technology and simplify it so consumers can do more with Apple products. 

The Apple brand strategy even drives their retail stores. Their Genius bar helps answer technology questions. They allow consumers to play with their products. Apple salespeople are trained to avoid “geek speak.” 

The return of Steve Jobs

After Steve Jobs returned in 1997, he shifted the focus to rebuilding around the  brand idea of “Apple makes technology so simple that everyone can be part of the future.” Jobs came in with a consumer-first approach in a market dominated by an obsession with gadgets, bits, and bytes. At the heart of our Apple case study is the use of the brand idea of simplicity and its impact on the brand strategy.

Steve Jobs view on simplicity

Undoubtedly, simplicity is one of the values Steve Jobs held very close to his heart. For example, he built simplicity into everything Apple did and everything it stood for. Even over the last decade, Apple is still following the Steve Jobs playbook.

Apple Brand Positioning

The apple brand positioning builds everything behind the “simplicity” brand idea..

We use our consumer benefit ladder to find differentiation. Importantly, turn your brand’s features into consumer benefits. Stop thinking about what your brand does. And, start thinking about what your consumer gets. That’s when the Apple brand positioning statement comes alive.

Functional consumer benefits.

To help brand leaders kickstart their brand positioning work, I have created 12 functional zones that expand to over 50 potential functional benefits. For instance, as you look through the list, gravitate to the functional benefits you think will fit your consumers’ needs and differentiate your brand by looking for words where your brand does it better than competitors. While you might start with our words, try to layer in your own creative language with the specific category or consumer language.

Emotional consumer benefits.

Below is a list of 40 potential emotional benefits that help build an emotional brand positioning statement that differentiates your brand. Importantly, you want to own one emotional space in the consumer’s heart as much as you own the rational space in the consumer’s mind.

Functional Benefit Cheatsheet

To illustrate, click on our Consumer Benefit Cheatsheet to build the  Apple brand positioning . 

Choosing the right benefit clusters for Apple

Using our brand positioning process, the Apple brand positioning narrows in on the brand’s potential benefit clusters of the functional and emotional benefits. 

What Apple does: best features

  • Intuitive and easy to use:  Apple allows everyone to do more and get more from their devices.
  • Stylish designs: Fashion-forward designed so that people want to show them off. 
  • Integrated technology: All   devices, software, and services work harmoniously, enhancing user experience.
  • Fresh innovation: Apple   customers always have access to cutting-edge features and advancements.

What Apple consumers get: functional benefits

  • Simplifies your life:  Hassle free, easier to use, integrated.
  • Sensory Appeal: Touch/feel, subconscious, and style. 
  • Experience:  Responsiveness, rituals, and service.

How Apple consumers feel: emotional benefits

  • Feel free:  Alive, excited, exhilarating.
  • Get noticed: Cool, trendy, popular, and playful. 
  • Optimism:  Successful, inspired, and motivated.

Apple Brand Positioning

To illustrate, click on our Consumer Benefit ladder we use   to build the  Apple brand positioning . 

Apple Brand positioning statement

Once everything is settled, the overall Apple brand positioning statement focuses on simplifying technology to help you feel smarter so you can do more with every device.

Brand Positioning Statement example for Steve Jobs

To illustrate, click on the  Apple Brand Positioning Statement . You can zoom in, download it, or share it. 

Beloved Brands Playbook

Old school brand positioning vs new school

When brand positioning began in the 1970s and 80s, the goal was to stay single-minded and focused and even get down to one word. For example, Volvo was about SAFETY. I still believe in that thinking for marketing communications.  If all Volvo does is “safety,” no one would pay $50,000 to $70,000 USD for their cars. The additional benefits earn extra money for the comfortable leather seats, stylish design, and high-quality radio.

However, as brands have matured, the brand positioning should drive product innovation, the purchase moment, and the ideal consumer experience. One word might not be enough.  Now, we can see brands can own a cluster of benefits. 

Below, we can see the cluster of benefits, both functional and emotional, to create a word cloud for Apple. These words can show up as support communications to the ‘simplicity’ idea. Moreover, these words should appear in product design, in-store layout, people management, and consumer experience. These words should drive every part of the Apple brand strategy. 

Cluster of Consumer Benefits that steer the Apple Brand Strategy

To illustrate, click on our Cluster of Consumer Benefits that   we use   to build the  Apple brand positioning . 

Beloved Brands Marketing Training

To view, use the arrows to see our Beloved Brands Marketing Training program brochure.

It's time to elevate your marketing team's performance with our Beloved Brands Marketing Training program.

Our marketing training makes your marketers smarter with brand analytics, strategic thinking, brand positioning, brand plans, and marketing execution. 

Building Apple's brand idea

Everyone seems to call the short-form description of a brand by different names; brand DNA, big idea, brand essence or shout from the mountain. I keep it simple by calling it the brand idea. To win in the marketplace, your brand idea must be interesting, simple, unique, inspiring, motivating, and ownable. 

I created a brand idea blueprint with five ideas that surround it.

On the internal brand soul side, describe the products and services and the cultural inspiration, which is the internal rallying cry to everyone who works on the brand. On the external brand reputation side, define the ideal consumer reputation and the reputation among necessary influencers or partners. The brand role acts as a bridge between the internal and external sides.

brand idea for Apple based on brand positioning steve jobs Apple case study

To illustrate, click on the  Apple   Brand Idea  we use   to build upon the  Apple brand positioning . 

The Apple case study uses the brand idea for Apple is “making technology so simple that everyone can be part of the future.” Most importantly, Steve Jobs insisted they take a consumer-first mentality as they transformed leading technology advancements into “consumer-accessible” technology, helping fuel the perception among the mass audience that Apple is an innovative leader. 

Apple brand idea map

To illustrate, click on the  Apple   Brand Idea Map  we use   to build upon the  Apple brand positioning . 

Beloved Brands Mini MBA

Our apple case study is part of our beloved brands mini mba. take a look..

Below is an example video (30 minutes) from our Beloved Brands Mini MBA. We use the Apple case study to demonstrate the Apple brand positioning tools.  

To view the Beloved Brands Mini MBA video , use the   ▶️  button to play.  

Apple's Brand Key Model

A Brand Key model is a tool from consumer marketing that allows marketers to lay out their brand’s unique selling proposition (USP) elements on one page. This article will go through the Brand Key model explained with nine elements that build the USP. And, with each element, we will show you the work you need to do. 

Below is the Brand Key example for the Apple brand. It brings to life Apple’s unique selling proposition of simplicity. To read more on brand key models, click this link: Using a Brand Key Model to Define your Brand’s USP.

Brand Key Example for Apple bringing their unique selling proposition to life under steve jobs

To illustrate, click on the  Apple   Brand Key  we use   to express the  Apple brand positioning . 

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Use Apple's brand idea as a lens to see the problems not delivering

Apple has done a great job taking that simple brand idea and stretching it across its brand story through advertising and its innovation plan (as they have entered many new technology categories). 

They have also used their brand idea to guide how they manage the purchase moment (to make sure their retail outlets are easy for consumers) and how they create happy experiences. And, when they don’t nail the ideal consumer experience, they go out of their way to help. They also have the genius bar and on-site lessons, which help increase consumers’ knowledge.

The other beauty of having a crystal clear brand idea is that everything that goes against that brand idea almost acts like an obvious virus. Below are four examples of where Apple is missing out on “simplicity,” which puts the brand idea at risk. Above all, these should trigger action plans to build into your brand plan. In pointing out these flaws within our Apple case study, I am yet to see Apple take action. 

I wonder what Steve Jobs would think of these flaws.

Apple flaws

To illustrate, click on the  Apple Case Study diagram to show where they go aga inst the Apple brand positioning.  

Apple brand strategy

How the five elements of smart strategic thinking sets up apple's famous turnaround plan:, 1. set a vision of what you want..

To start our Apple case study, their vision is to make it easy for everyone to be part of technology in the future. The main issue was creating brand fans and then mobilizing them to spread the word to the masses.

2. Invest resources in a strategic program.

Next, Apple invested and aligned everything behind the Apple brand positioning and brand idea: “Apple makes technology so simple; everyone can be part of the future.” They use this brand idea at every touchpoint, including the brand positioning, communication, innovation, purchase moment, and experience.

3. Focus on an identified opportunity.

For decades, Apple consistently focused on empathizing with—and taking advantage of—the consumer’s frustration with technology. In the 1980s, they attacked IBM’s personal computers as too complicated. In 2005, they used “I’m a Mac, and I’m a PC” advertising to attack Microsoft. Each time, it used its “consumer-first” mentality to transform leading-edge technology into accessible consumer technology.

4. Leverage a breakthrough market impact.

Above all, the Apple brand strategy takes a fast-follower stance that takes current technology and makes it simple to use. Every platform, including desktops, laptops, phones, watches, tablets, and music streaming, delivers the brand idea of simplicity. They deploy high-profile launch hype to use vocal advocates to spread the word to their friends.

5. Performance result that pays back.

Most importantly, Apple created a consumer bond with its brand fans to enter new categories. On top of that, it is now the most beloved consumer-driven brand, with premium prices, stronger market share, sales, and profits. The Apple brand strategy used brand love to help drive a remarkable 40x revenue growth over ten years, skyrocketing from $5.7 billion in 2005 to $240 billion in 2015. This rapid growth helps cover the high costs of advertising and R&D, giving them very healthy operating margins, up over 35%. All this strategic effort has increased their market capitalization by over $1 trillion.

Apple Strategic Thinking bringing Steve Jobs strategy to life Apple Brand Strategy

To illustrate, click on the  Apple Brand Strategy diagram . You can zoom in, download it, or share it. 

Marketing Training Ad

Apple brand plan

We are going to build out a Brand Strategy Roadmap that can steer the brand for the next three to five years. And, we’ll show a one-page Annual Brand Plan. We’ll show the rough brand plan work you can do. 

Apple Brand Strategy Roadmap Steve Jobs

To illustrate, click on the  Apple Brand Strategy Roadmap . You can zoom in, download it, or share it. 

The rough brand plan for Apple

With the Apple case study, our strategic thinking model sets up the core elements of the Apple brand strategy:

Apple wants everyone in the world to be part of the future.

Continue aggressive sales growth, geographic expansion into China, and launch a major new consumer-friendly technology each year.

Key issues: 

  • How do we convey Mac’s superior user experience versus the traditional PC? 
  • How do we enter the music industry and increase the availability of online music to support our iPod?

Strategies: 

  • Apple will launch a full communications assault to challenge the PC/Microsoft Windows dominant position by finding flaws in the PC to contrast with Mac computers’ simplicity to steal significant market share by enticing frustrated PC consumers to buy a Mac. 
  • Apple will launch a full assault against the entire music industry with a disruptive innovator stance to show how iTunes provides higher quality digital music on your iPod much cheaper, faster, and smarter than CDs to gain an entry point into the music industry.
  • TV advertising to highlight new features and challenge competitors. 
  • Launch innovation each year, including phones, tablets, online music, watches, and personal computers. 
  • Launch specific products for China. Increase retail space around the world. Build out the e-commerce program.

Apple Strategic Plan Apple Brand Strategy

To illustrate, click on the Apple Brand Plan example that brings the Apple brand positioning to life.

Beloved Brands playbook

Apple advertising

Advertising has delivered “simplicity” since the 1970s.

Apple’s advertising has been relatively consistent for over 40 years and incredibly connected with consumers. As Steve Jobs was launching Apple, the early print ads of the 1970s talked about how we designed the computer, so you don’t have to worry about the details. 

How Steve Jobs built Apple around simplicity

Steve Jobs pushed for the “1984” TV ad for the Mackintosh launch that spoke about freedom from machines. Although the message was a little ahead of its time, it fit with simplicity. Above all, the brilliance of the side-by-side “I’m a Mac, and I’m a  PC” TV ads epitomized the brand idea by making the PC seem overly complicated and frustrating while setting up the Mac as the simple alternative. These ads really express the Apple brand positioning statement.

Take a look at some of "I'm a Mac" TV ads. Enjoy!

To illustrate, click the ▶️ button to see the  Apple brand advertising that brings the Apple brand positioning to life . 

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Apple innovation

Building product innovation around simplicity.

Apple has taken many failed technology ideas like online music, tablets, or mp3 players and turned them into consumer-friendly platforms such as iTunes, iPads, and iPods. With each new product, Apple uses launch hype to generate excitement to spark the enthusiasm of the early adopters who spread the word. Also, Apple has successfully taken its cherished brand fans into new categories. 

The combination of Johnny Ives and Steve Jobs created many great Apple products. 

Learn how to make innovation decisions.

Apple product Innovation steve jobs and johnny ives

Video on Apple's product innovation philosophy

To view the Apple brand innovation  philosophy  use the   ▶️  button to play.  

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Apple retail

Purchasing apple products is very simple, including its own retail store experience.

Retail stores are a significant part of the Apple Case Study.

Steve Jobs saw a vision for retail to help Apple use simplicity to manage the purchase moment through its retail stores, ensuring the experience is simple and straightforward. All staff carry a credit card machine and complete the transaction very quickly. No lines or cash registers. 

Simplicity shines through the store layout, with the genius bar for one-on-one tech questions and support and the training area to teach classes. The brand also displays every Apple product to allow consumers to take them for a test drive. It’s all about delivering the consumer experience that Steve Jobs loved so much.

apple retail layout at the purchase moment steve jobs

To illustrate, click on the  Apple Store  Layout.  You can zoom in, download it, or share it. 

Even when Apple products are in other stores, the brand has used its power with that retailer to create a distinct store-within-a-store concept, which replicates a similar look and experience from Apple’s retail locations. Look at a few of those beautiful store locations below, or go to our article by clicking this link: Beautiful Apple stores.

Fifth Avenue Apple store in NYC

Apple Fifth Avenue 1

Tower Theater Apple store in LA

Beautiful Apple Store Location

To illustrate, click on the  Apple Store  examples.  You can zoom in, download it, or share it. 

Apple in Singapore

Apple Singapore

Milan Apple store

Apple store location in Milan Italy

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Apple consumer experience

Obsessing about the consumer experience.

As Steve Jobs famously said, “You have to start with the customer experience and work backward to the technology.” Apple even believes opening your Apple products should be like unwrapping a gift. 

Steve Jobs wanted the consumer to be able to use any Apple product right away rather than spending hours loading software or setting up their machine. Regarding product integration, Apple products work together, and they work the same way, which makes it very simple for consumers when they move from one Apple product to another.

Next time you are in a brainstorming session, try to think like Steve Jobs. 

Apple Consumer Experience based on Steve Jobs

To illustrate, click on the  Apple Consumer Experience .  You can zoom in, download it, or share it. 

Apple brand loyalty

How apple's brand love leads to increased power.

As we continue our Apple case study, let’s look at the power and profit Apple generates through brand love. 

As they achieved an extremely tight bond with loyal followers, they used the tight consumer bond to generate brand power that they quietly wield in the market. Apple’s retail network generates twice the sales per square foot of any retailer worldwide, yet it is a very soft-sell environment. 

I was recently on a double-decker bus tour of New York City, and when the bus went past the 5th Avenue Apple flagship store, half the bus stood up to take a photo. And they have such power over the supplier network with an array of engineers following extremely tight procedures. 

Also, they have power over the media, generating over $2 billion worth of free media each year. Moreover, Apple fans often want to work at Apple, giving up lucrative jobs to be part of the brand.

Smartphone loyalty scores

Below, we can see the loyalty scores of the various smartphones. Apple leads the way with over 90% loyalty, moving from one model to the next. Samsung’s loyalty is below 70%. And LG has fallen to 32%. At LG’s level, you constantly need to source new consumers. That’s an extremely expensive way to manage your brand. 

Apple Case Study, brand love brand loyalty steve jobs

To illustrate, click on the  Apple Case Study diagram .  You can zoom in, download it, or share it. 

Whoever says loyalty does not exist has not talked with Apple consumers. Apple significantly outperforms its competitors and uses that loyalty to drive future sales. 

Apple's prices continue to increase

As Apple’s loyalty holds strong, they can increase their prices with each model. Loyal consumers are less price sensitive. This translates the Apple brand strategy into added profits. Steve Jobs used hype marketing to create a very tight bond with consumers. 

Explaining the Apple brand

We can see how Apple uses power over its consumers to increase prices each year. Their iPhones deliver 40% profit margins, 4x higher than their competitor’s profits. 

The power of the Apple brand

How apple's brand power leads to increased profit.

The Apple brand strategy extrapolates the power they generate into profit , with their incredible financial performance over the last 15 years. And they generate significant price premiums, relatively lower cost of goods, and moderate marketing spend ratios. Most importantly, this keeps their margins healthy for a technology firm. 

Furthermore, Apple has entered many new categories over the past 15 years. Each time, their army of loyal fans has followed, moving into laptops, phones, tablets, and the music business. In each segment, they continue to gain market share to drive volumes. 

Finally, the higher margins and volumes make for a beautiful profit statement. 

Apple profitability

Apple profit

We can use our eight ways that a brand can drive profit to see the impact of the magic of the Apple brand on profits. Apple uses price, cost control, entry into new categories, and driving market share in each category.  

Even though Apple gives the perception of an extremely friendly brand that is on the side of the consumer, they are now a huge mass market corporate brand, with a market capitalization of $500-600 billion, which is 2-3 times the value of companies like Coke, Procter & Gamble, Pfizer, and IBM. 

So, if you invested a mere $10,000 in 2005, you would have $240,000 a decade later. The Apple case study is indeed a glorious look at the vision of Steve Jobs.

How Steve Jobs built Apple around simplicity

To conclude our case study, we can see how Apple uses its brand strategy to drive loyalty, revenue, and profitability each year. Their P&L is a thing of beauty. 

Apple turns their brand love into higher power and profits

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Case Study on “Has the Apple Innovation Machine Stalled?”

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Paper details:

You have to do case study and answer 9 questions in APA Format. 1 The return on investment delivered by Apple has fallen considerably. Explain why. 2 Steve Jobs’ impact on Apple is without question. Surely a company of over 100,000 employees is not reliant on one person? How did his death affect Apple? 3 Apple’s fortunes have ebbed and flowed over the past 40 years. The past few have seen growth; in your assessment will the next few years see decline? 4 Explain how Jonathan Ive may be responsible for much of Apple’s past success and future fortune. 5 Discuss whether Apple has shunned open innovation and adopted a very closed innovation model. 6 Samsung seems to be nibbling away at Apple’s market share. Has Apple mismanaged its outsourcing?7 How might Apple be able to capture value from the rise of Apple as a lifestyle brand? 8 Discuss how, on the one hand, Apple seems to very good at disruptive innovation, yet it is also accused of copying others. 9 How do you solve the Apple stores problem? I have also Attached Sample APA format of how case study questions that has to be answered . Absract make sure it is in between

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IMAGES

  1. 7. Case study Has the Apple innovation machine stalled

    case study has the apple innovation machine stalled

  2. Apple's Innovation Strategy: A Case Study

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  3. Solved Has the Apple innovation machine stalled? Adapted

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  4. Apple case study : Apple innovation case study help

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  5. SOLUTION: Has the apple innovation machine stalled

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  6. Apple 3rd Copy.docx

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COMMENTS

  1. PDF Has the Apple innovation machine stalled?

    Has the Apple innovation machine stalled? This case study examines the success and failure of new products from Apple. Many analysts have argued that the death of Steve Jobs has had a sig-nificant impact on Apple's innovation ability. What is more likely is that competition has increased and profits have been reduced; but did Apple make mis-takes?

  2. Has Apple's innovation engine stalled?

    SAN FRANCISCO — Apple's profit-gushing iPhone came into question again Monday, briefly sending shares below $500 on concerns of a sales slowdown, as Wall Street's gizmo darling is in danger of...

  3. (PDF) Apple innovation; a case study

    Purpose: This case suggests the development of financial reporting of Apple Inc. in comparison with the industry over the period of 2004 to 2013. This study is helpful for different field of researchers e.g., management, technology, etc. Apple Inc. was found in 1976 by Steve Jobs. In 2007, Apple introduced smartphones and iOS and was the ...

  4. SOLUTION: Has the apple innovation machine stalled

    Has the apple innovation machine stalled Content type User Generated Uploaded By Rnfl_Rqhpngvba Pages 2 Rating Showing Page: 1/2 1. The return on investment delivered by Apple has fallen considerably. Explain why. Apple didn't create noticeably innovative products in recent years. It only

  5. Case Study Apple.docx

    Case Study: Has the Apple innovation machine stalled? 1. The return on investment delivered by Apple has fallen considerably. Explain why. The return of investment of Apple has fallen considerably because the sales has decreased. It has affected the revenues and net income of the company.

  6. Solved Has the Apple innovation machine stalled? Adapted

    Pearson. Stiffer competition in smartphones and tablets from the likes of Samsung has raised concerns over whether the party is over for Apple. One should not be surprised. Apple's fantastic profit margins - 38.6 per cent This problem has been solved! You'll get a detailed solution from a subject matter expert that helps you learn core concepts.

  7. How Apple Is Organized for Innovation

    Apple is well-known for its innovations in hardware, software, and services. Thanks to them, it grew from some 8,000 employees and $7 billion in revenue in 1997, the year Steve Jobs returned, to ...

  8. Apple case study: How Steve Jobs built Apple around simplicity

    At the heart of our Apple case study is the use of the brand idea of simplicity and its impact on the brand strategy. Undoubtedly, simplicity is one of the values Steve Jobs held very close to his heart. For example, he built simplicity into everything Apple did and everything it stood for. Even over the last decade, Apple is still following ...

  9. Assessment-1 (20%) : Apple Case Study

    Assessment-1 (20%) : Apple Case Study | PDF | Disruptive Innovation | Innovation Assessment 1 - Free download as PDF File (.pdf), Text File (.txt) or view presentation slides online. Innovation Assessment

  10. Case Study on "Has the Apple Innovation...

    August 19, 2021 · Case Study on "Has the Apple Innovation Machine Stalled?" Case Study on "Has the Apple Innovation Machine Stalled?" Paper details: You have to do case study and answer 9 questions in APA Format. 1 The return on investment delivered by Apple has fallen considerably. Explain why. 2 Steve Jobs' impact on Apple is without question.

  11. SOLUTION: Apple Case Study

    On the case study, it is mentioned that many analysts claim that the death of Steve Jobs has significantly affected Apple's innovation ability. However, Jonathan Ive said in his interviews that Job's absence has not affected Apple's innovation ability. According to him, Apple develops products consistently. Ive claims that Apple will ...

  12. 7 case study has the apple innovation machine stalled highlighted

    Case study Case study Has the Apple innovation machine stalled? This case study examines the success and failure of new products from Apple.

  13. Innovation Management Apple Case Study.pdf

    9 Université Paris 1 - Panthéon Sorbonne CG CG 101 CARTERJAMES2020 View full document 35Case study Case study This case study examines the success and failure of new products from Apple. Many analysts have argued that the death of Steve Jobs has had a sig- nificant impact on Apple's innovation ability.

  14. Apple Case Study

    introduced the iPad Mini - a 7-inch tablet (a category Jobs dismissed as pointless) - which has preserved the iPad's leadership in tablets. This is in addition to Tim Cook's exceptional management of Apple's supply chain. When Cook initially took over Apple's. Has the Apple innovation machine stalled? Microsoft S&P avg. Apple ...

  15. case study 1 NPD.docx

    1 Case Study 1: Apple "Has The Apple Innovation Machine Stalled?" Nehal Sanjana Koppera (Student ID- 1515913) Trine University New Product Development & Innovation Strategies (GE---5113-2O1--OL- SP-2022) Prepared for Professor: Dr. Khalil Gatlin Trine University January 15, 2023

  16. Case Study Apple

    Has the Apple innovation machine stalled? This case study examines ihe success and failure of:=r\ prlC"; j:s 'ro':l A:p,: il3,r 3r,r-iisii L'd',:-argued that the death of Steve Jobs has had a sig-nificant inrpact cr, ,{ppie'r trlnr):.ra ahiiit}r. '.,r"Ii',ei is more likely is that competition has increased and

  17. Case Study on "Has the Apple Innovation Machine Stalled?"

    Case Study on "Has the Apple Innovation Machine Stalled?" Paper details: You have to do case study and answer 9 questions in APA Format. 1 The return on investment delivered by Apple has fallen considerably. Explain why. 2 Steve Jobs' impact on Apple is without question. Surely a company of over 100,000 employees is not reliant on one person?

  18. CaseStudy1AppleAJ (docx)

    Management document from Trine University, 6 pages, 03/15/2020 Has the Apple Innovation Machine Stalled? APPLE CASE STUDY AKSHATHA JOYIS GE-5113 - New Product Development & Innovation Strategy. Professor Mitchelle Zajac 1. The return on investment delivered by Apple has fallen considerably. Explain why? S

  19. Apple 1st Copy.docx

    Solutions available Apple Case Study Has Apple Innovation Machine Stalled? Student name Student ID Institutional Affiliation 1 | P a g e Running head: Apple Case Study 1. The return on investment delivered by Apple has fallen considerably. Explain why? Return on investment of Apple has fallen considerably.

  20. (Solved)

    Case study Has the Apple innovation machine stalled? This case study examines the success and failure of new products from Apple. Many analysts have argued that the death of Steve Jobs has had a significant impact on Apple's innovation ability.

  21. 7. Case study Has the Apple innovation machine stalled

    introduced the iPad Mini - a 7-inch tablet (a category Jobs dismissed as pointless) - which has preserved the iPad's leadership in tablets. This is in addition to Tim Cook's exceptional management of Apple's supply chain. When Cook initially took over Apple's. Has the Apple innovation machine stalled? Microsoft S&P avg. Apple. 2000 ...

  22. Apple.pdf

    When Cook initially took over Apple's Has the Apple innovation machine stalled? Microsoft S&P avg Apple 20000 40 80120 160 200 2002Share price earings ratio 2004 2006 2008 2010 2014 2012 Figure 1.10 The rise and fall and rise of Apple Source: Zeynep Demir/Shutterstock.com

  23. Case Study 1 Ajinkya.docx

    essay HAS THE APPLE INNOVATION MACHINE STALLED? 1 Has the Apple Innovation Machine Stalled? Ajinkya A. Joshi Trine University HAS THE APPLE INNOVATION MACHINE STALLED? 2 1.The return on investment delivered by Apple has fallen considerably.