apple ipod case study

8/7/2019 Apple Ipod Case Study

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Apple Ipod Case StudyTeam:

Anuj Jindal

Jasmeet SinghLekshmi P

Nitin Kumar Tiwari

Varun Chandra


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Agenda

About Apple Inc.

Product line of Apple

Timeline of Apple Products Apple Ipods

Various Generation of Apple Ipod

Timeline of Apple Ipod

Case Analysis

Conclusion


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About Apple Inc. Apple Inc. (NASDAQ: AAPL; NYSE: AAPL; previously Apple Computer, Inc.) is

an American multinational corporation that designs and markets consumer

electronics, computer software, and personal computers.

Established on April 1, 1976 in Cupertino, California by Steve Jobs, Steve

Wozniak, and Ronald Wayne, to sell the Apple I personal computer kit, andincorporated January 3, 1977, the company was previously named Apple

Computer, Inc., for its first 30 years, but removed the word "Computer" on

January 9, 2007, to reflect the company's ongoing expansion into the

consumer electronics market in addition to its traditional focus on personal

computers.

As of September 2010, Apple had 46,600 full time employees and 2,800

temporary full time employees worldwide and had worldwide annual sales

of $65.23 billion.


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Product line of Apple

The company's best-known products include theMacintoshline of computers,

the iPod,

the iPhone and the iPad.

Apple software includes theMac OS X operating system; the iTunes media browser;

the iLife suite of multimedia and creativity software;

the iWork suite of productivity software; Aperture, a professional photography package; Final Cut Studio, a suite of professional audio

and film-industry software products;

Logic Studio, a suite of music production tools; the Safari internet browser; and iOS, a mobileoperating system.

As of August 2010, the company operates 301 retail stores in ten countries, and an onlinestore where hardware and software products are sold.

As of May 2010, Apple is one of the largest companies inthe world and the most valuable technology company inthe world, having surpassed Microsoft.


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Users

Apple appears not to have gone out of its way to create brand loyalty.At one time, Apple evangelists were actively engaged by the company,but this was after the phenomenon was already firmly established.

Apple Store openings can draw crowds of thousands, with somewaiting in line as much as a day before the opening or flying in from

other countries for the event. Research in 2002 by NetRatings indicate that the average Apple

consumer was usually more affluent and more well-educated than PCconsumers. The research indicated that this correlation could stemfrom the fact that on average Apple Inc. products are more expensivethan PC products. Almost ten years later the New York Times noted,"...the iPad 2 actually costs less than its comparably equipped

Android rivals.John Sculley told The Guardian newspaper in 1997: "People talk about

technology, but Apple was a marketing company. It was the marketingcompany of the decade."


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About Ipod

iPod is a line of portable media players designed and marketed by Apple andlaunched onOctober 23, 2001.

The product line-up currently consists of the hard drive-based iPod Classic, thetouchscreen iPod Touch, the compact iPod Nano, and the ultra-compact iPodShuffle.

iPod Classic models store media on an internal hard drive, while all other modelsuse flash memory to enable their smaller size (the discontinued Mini useda Microdriveminiature hard drive).

As with many other digital music players, iPods can also serve as external datastorage devices. Storage capacity varies by model, ranging from 2 GB for the iPodShuffle to 160 GB for the iPod Classic.

All of the models have been redesigned multiple times since their introduction. Themost recent iPod redesigns were introduced on September 1, 2010.

The iPod branding is also used for the media player applications included withthe iPhone and iPad; the iPhone version is essentially a combination of the Musicand Videos apps on the iPod Touch. Both devices can therefore function as iPods,but they are generally treated as separate products.

Discontinued models of the line include the iPod Mini and the iPod Photo, theformer being replaced by the iPod Nano, and the latter reintegrated into the mainline as the iPod Classic.


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History

Tony Fadell, former employee of General Magic andPhillips, envisioned a brand new MP3 player. Unlike thebulky flash memory-based MP3 players from Rio and othercompanies, Fadell wanted to deliver a small hard drive-

based player that was linked with a content delivery systemwhere users could legally obtain and download music.

The first company he pitched it to was RealNetworks (in2000), where the CEO, Rob Glaser, was already in control ofa large content delivery system through Real's premiumradio and television channels. Real could not rationalizegoing through the trouble of releasing an accessory to theiralready profitable system, so they would be caught offguard when the iTunes Music Store was opened.

Fadell also approached Phillips, which also rebuffed him.


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Out of desperation, Fadell turned to Apple, which years before had sworn offconsumer electronics after their unsuccessful Pippin and Newton. Theexecutives at Apple were very enthusiastic about implementing Fadell's plan

at Apple - unbeknownst to Fadell, Apple had bought the rights to SoundJamMP months before. He was hired in early 2001 and was given a developmentteam of around thirty people and a deadline of one year to release asuccessful product.

Fadell was not confident that Apple would fund (or even complete) thedevelopment of custom hardware and software for the player, so he shoppedaround for an existing player to use as the basis of the Apple player. After

briefly looking at Rio and Creative, the team found PortalPlayer, a newcompany that had not yet released a full product

Several of the prototypes that PortalPlayer had been working on weredelivered to Fadell's group at Apple, and it became clear that the companieshad lots of work to do. For example, the players did not support playlistslarger than ten songs, did not have equalizers, and had Byzantine interfaces.

Apple never allowed anyone outside of the development team in Fadell'sgroup and select PortalPlayer employees to see a complete iPod. Whenever adevice was being tested, it was encased in a shoebox-sized enclosure with thecontrols on different faces to keep outsiders from knowing the size and layoutof the device.


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Perhaps worst of all, the player's batteries lasted for less thanthree hours. According to the liaison between Apple andPortalPlayer, Ben Knauss, "Most of the time building the iPodwas spent finishing [PortalPlayer's] product."

Steve Jobs took a very active role in the project, schedulingfrequent meetings with the directors from Fadell's group andPortalPlayer. During these meetings he would tell them indetail what issues he had with the device, whether it was the

interface, sound quality, or the size of the scroll wheel. This was rare for an Apple project at the time, and it

reassured the leaders in the group that the project would notbe axed immediately.

In the span of eight months, Fadell's team and PortalPlayer

dedicated all of their energies to finishing the iPod. In threemonths, Apple had created a preliminary version of the userinterface and scroll wheel that would ship with the finishediPod.


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The First iPod

The finished iPods used 5 GB Toshiba hard

drives that were the size of a quarter, ARM

processors (the same processors used in the

Newton and Acorn), an operating system from

Pixo, a large high resolution display, a lithium

polymer battery, and the most recognizable

aesthetic feature of the device - the scrollwheel.


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In early October, Apple began hyping the iPod's release (which wasstill a secret from the press after eight months of development).The hype culminated in an announcement that Apple would make amajor announcement on October 23, 2001, and that it was "notMac".

Rumors immediately flared up about a revitalized Newton or PVR,but no major site predicted that Apple would release an MP3player.

The iPod was announced to the world from a rented auditoriumnear Apple's corporate campus in Cupertino. The audience - andthe rest of the computer industry - was shocked by the product. No

one grasped the importance of the device to Apple and the musicindustry in general until much later. Many reacted to the productwith hostility, with criticisms that ranged from its $400 price to thescroll wheel and its lack of Windows compatibility.


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Generations of Ipods


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Ipod Sales

Since October 2004, the iPod line has dominated digital music player sales in theUnited States, with over 90% of the market for hard drive-based players and over70% of the market for all types of players.

The release of the iPod Mini helped to ensure this success at a time when competingflash-based music players were once dominant. On 8 January 2004, Hewlett-Packard (HP) announced that they would sell HP-branded iPods under a license

agreement from Apple. Several new retail channels were usedincluding Wal-Martand these iPods eventually made up 5% of all iPod sales. In July 2005, HPstopped selling iPods due to unfavorable terms and conditions imposed by Apple.

In January 2007, Apple reported record quarterly revenue ofUS$7.1 billion, of which48% was made from iPod sales.

On 9 April 2007, it was announced that Apple had sold its one-hundred millionthiPod, making it the biggest selling digital music player of all time. In April 2007, Apple

reported second quarter revenue ofUS$5.2 billion, of which 32% was made fromiPod sales. Apple and several industry analysts suggest that iPod users are likely topurchase other Apple products such as Mac computers.

On 21 October 2008, Apple reported that only 14.21% of total revenue for fiscalquarter 4 of year 2008 came from iPods.At the September 9, 2009 keynotepresentation at the Apple Event, Phil Schiller announced total cumulative sales ofiPods exceeded 220 million.

In October 2001, Apple introduced the iPod.

It did what youd expect - play music - but also what you didnt expect - beintuitively easy to operate (in 2002, this was unexpected in MP3 players).


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16

An OODA loop with power

Feed

Forward

Observe Decide Act

Action

(Test)

Implicit

Guidance

& Control

Implicit

Guidance

& Control

Observations

Unfolding

Circumstances

Outside

Information

UnfoldingInteraction

With

Environment

Unfolding

Interaction

With

Environment

Orient

Decision

(Hypothesis)Feed

Forward

Feed

Forward

Feedback

Feedback

J. R. Boyd, the Essence of Winning and Losing, 1995.

Cultural

Traditions

Genetic

Heritage

New

InformationPrevious

Experience

Analyses &

Synthesis


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17

2002 2003 2004 2005 2006

iPod

1 Gen

2 Gen

3 Gen

4 Gen

5 Gen

Mini1 Gen

2 Gen

2 Gen

Nano

1 Gen

2 Gen

Shuffle1 Gen

2007

6 Gen

3 Gen

Touch

Penetrate: Learnthe marketplace;build

Exploit!

It turns out that the real iPod killer is Apple

itself. Last week, the company eliminated its

top-selling model, the iPod mini, and topped

itself with the iPod nano, an even smaller device

that becomes the new target dangled in front ofthe competition

Seattle Times, Sept 17, 2005


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And how well did Applesstrategy work?

2002 2003 2004 2005 2006

iPod

1 Gen

2 Gen

3 Gen

4 Gen

5 Gen

Mini1 Gen

2 Gen

2 Gen

Nano

1 Gen

2 Gen

Shuffle1 Gen

2007

6 Gen

3 Gen

Touch

100million


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How well did Apples strategywork?


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According to Boyd, a fighterpilot didnt

win by faster reflexes; he won because his reflexes

were connected to a brain that

thought fasterthan the opponent.

Bing West and

MajGen Ray Smith, USMC, Ret.

The March Up, p. 11


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You dont wait for the future.You create it.

Hwang Chang Gyu,President, Samsung Semiconductor


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Thank You!!

apple ipod case study

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