Apple

1.0 Introduction

Apple Computer, Inc. (Apple) designs, manufactures and markets personal computers and related software, services, peripherals and networking solutions. The Company also designs, develops, and markets a line of portable digital music players along with related accessories and services, including the online distribution of third-party music, audio books, music videos, short films and television shows (Company Description). Apple's products and services include the Macintosh line of desktop and notebook computers: the iPod digital music player, the Xserve G5 server and Xserve redundant array of inexpensive disks (RAID) storage products, and the Mac OS X operating system (OS). The iTunes Music Store, a portfolio of peripherals that supports and enhances the Macintosh and iPod product lines, and a variety of other services and support offerings (Company Description). It sells its products worldwide through online network. Apple owns retail stores, direct sales force, third-party wholesalers, resellers and value-added resellers.

With the release of the Apple I in 1976 by Steven Jobs and Steven Wozniak, Apple was born (Apple Computers). Apple Computer Incorporated ignited the personal computer revolution in the 1970s with the Apple II, and reinvented the personal computer in the 1980s with the Macintosh (Apple Computers). Apple played a major role in shaping the direction of technology in the late 20th century. Apple originally focused on do-it-yourself computer kits aimed at computer hobbyists, but with the introduction of the Apple II in 1977, the company became known for its powerful and easy-to-use computers. Apple now commits to its original mission - to bring the best personal computing products and support to students, educators, designers, scientists, engineers, businesspersons and consumers around the world. Today, Apple computers are considered to be some of the most stable, innovative, and user-friendly computers available (Company Description).

This report focuses on the Apple Computer Inc.'s successful growth and innovation over the past few years and the success of Apple in international markets and what factors determine the international success of Apple.

2.0 Successful in Growth and Innovation

In the personal computer market, Dell is a classic process innovator. Its products are commodities that essentially meet the prevailing needs of most buyers. However, through the perpetual fine-tuning of its supply, assembly, and distribution operations, Dell has gained a cost advantage over its rivals that made it the as fastest-growing and most profitable company in the industry. Apple, on the other hand, is the model of an effective product innovator. It generates profit by offering distinctive and stylish products that are sizable which buyers are willing to pay more for (Carr, 2005).

Apple had resurgent in the late 1990s, attributable to innovation of breakthrough products like the iMac, iBook, and iPod (Carr, 2005). Soon after Steve Jobs returned to CEO position in 1996, he hired an operations ace, IBM and Compaq veteran Timothy Cook, to improve the company's supply chain. By copying the best practices like Dell, Cook dramatically reduced Apple's in-channel inventory, which leads to savings in working capital that provided immediate boost to profitability (Carr, 2005). On the distribution end, Apple has successfully introduced efficient direct-to-customer channels such as online sales and stores that are very approachable to the customers.

The Apple stores are mainly located in US, Canada, UK and Japan. Customers can find the latest products at a nearby Apple store. Experience the newest Apple hardware, applications and accessories, including digital cameras, camcorders, and the entire iPod family. Customers can meet Mac Specialists who demonstrate products and answer relative questions. For the Apple online sales, customer can easily sign in to the Apple stores to purchase the products. Apple uses the best carriers in the business to make sure all the orders arriving on customers' doorstep as soon as possible. Two-days and overnight express services are available for most of Apple products (Apple Computer homepage). Some products that are in stock at the warehouse can be shipped on the same-day. Moreover, if the customers need help to decide which new Mac to buy or they have questions about product compatibility. They can give a call to Apple expert sale representatives for advices (Apple Computer homepage).

Most of new products will often incorporate ideas and components filched from others. For example, the most popular products of Apple computer--iPod digital music and video player, Apple borrowed the major components from outside suppliers -- the basic circuitry from PortalPlayer, the tiny hard drive from Toshiba, the battery from Sony, the digital-to-analog converter from Wolfson. It uses Japanese components and outsources its manufacturer to a Taiwanese company that assembles the products mainly in China (Kitazume, 2006). However, Apple concentrates innovation as its core strengths of engineering, design, marketing, partnering, and, most important of all, the integration of hardware and software. Since Q4 2005, Apple's R&D investment is up to $59 million more than Q4 2004 (Nussbaum, 2006), which means that Apple has becomes more innovative.

Some data about Apple in the past few years are showing below.

Graph 1 shows the Apple's shares during year 2003 to now.

Table 1 shows Apple annual income from 09/2001 to 09/2005.

Table 2 is the annual balance sheet of Apple from 09/2001 to 09/2005.

Graph1: (Apple Computer Stock Report)

Total Return%

2003

2004

2005

YTD

Stock

49.1

201.4

123.3

-8.7

+/- Industry

11.4

186