CASE: “The Success of the iPod and iPhone raises the licensing question for Apple…. Again” 1. Use the Cyclic Innovation Model figure to illustrate the innovation process in this case and provide a brief description? Apple started in 1977 when it’s first personal computer was designed by Steven Jobs and Steven Wozniak. The thing that was different about the Apple Macintosh personal computer was that it used a mouse driven operating system, which was not being used by other computers at the time.
Microsoft were using a Microsoft Disc Operating System, which they licensed to all other PC manufacturers, Apple refused to do this which limited it to only people who bought Apple computers, this led to Apple’s shares falling significantly. Although Apple had an arguably better operating system they were losing in the market, because Microsoft licensed other manufacturers to use their operating system it became the common household system. This stubbornness although at the time seen to be foolish at the time, has helped with their success today (Trott, P 2012).
Apple’s technological research over time (and the return of Steven Jobs) led to the creation of the iPod. In 2001 the iPod was launched, from 2003 the sales of the iPod heavily increased, generating massive profits for Apple, and giving the brand more exposure. To help Apple deal with the market competitors they kept improving and modifying the iPod, whilst still being able to lower its price. They did this by making modified versions such as the iPod Shuffle, and upgrading other models. Apple has continued to upgrade and invent new products to keep its customers and attract new ones.
This has been done through the iMac, iPod, iPad and iPhone, adding new technological features, such as giving phones other multipurpose uses such as an iPod substitute as well as the invention of the ‘apps store’. Their technological developments to make these products do all sorts of amazing new things has given them a huge upper hand in the market (Trott, P 2012). Apple have made a positive shift in the market transition since they first started, from the debut of the Apple Macintosh in 1976 at the Homebrew Computer Club which was barely taken seriously.
To now where the release of the iPad which was criticized for being too big for an iPhone but too small for a laptop which has made considerable profit, is astounding. The brand image they have built is superior to any other technological brand in the market, in my opinion. 2. With Sales of iPod falling and Apple facing fierce competition from all quarters such as Sony, Dell, Samsung and other electronics firms as well as mobile phone makers who are incorporating MP3 players into their devices, can the iPod survive?
The iPod has become the standardized form of MP3 players in the market, taking up 50% of market share in the MP3 market (Trott, P 2012). Although Apple has recorded a fall in iPod sales in recent years, they have been substituted for other apple products which have had a huge increase in sales such as the iPhone which is commonly used as an MP3 player. Other companies have tried making and matching and bettering the iPod with their own MP3 players but have been unsuccessful in knocking off the number 1 MP3 player of the decade.
Apples brand is so strong in that market with so many different versions of the iPod, making them an affordable and safe choice when choosing an MP3 player. Still competitors will keep trying to better the iPod through MP3 technology in their own devices, the iPod will have to keep on improving if it wants to keep the upper hand in the market. To keep their spot Apple with have to keep improving the quality and technology of their iPod and keep its sleek original design, while still keeping the prices competitive with other brands.
Even newer technology will need to be presented by Apple if it wants to keep MP3 market shares high, futuristic technology will have to be designed possibly holograms technology and increasing the uses that the iPod MP3 already has. Although I believe it is inevitable that iPods and MP3 players will soon be a very small market in today’s society with so many other devices having the same technology plus more, that is still a fair while away and more profit is definitely yet to be made through the iPod.
New fashionable unique covers can make the iPods more attractive to consumers, as well as all the accessories; such as jogging/fitness straps to hold them while the consumer participates in physical activity. Also upgrading the headphone design so it sits in more comfortably. I think some kind of hologram technology will become evident in the future of the mobile phone or iPod technology. Also a backup storage where the whole device is always backed up to a computer device so absolutely nothing is lost if a phone breaks, or is lost. 3.
How can Apple influence future technology developments or establish strategic alliances to ensure it is a dominant force in the hand-held device that will incorporate both the cellphone and the MP3 player? Apple must continue to maintain a positive and trusting strategic alliance with other companies in the future to ensure that their plans for future technologies aren’t leaked, or copied. If they are able to create that kind of a strategic alliance, and with a major technical company (e. g. HP) they could create some mind blowing new technology in the future.
The possibilities if Apple were able to team up with a technology giant could mean massive $$ for both companies, and new technology which could come out of that type of alliance could set the standards for the next generation of the industry. With the ability Apple have to keep upgrading and improving their products this would give them a huge advantage over their competitors. However for now, Apple must make sure they maintain their brand image, as the producers of the newest and best technology.
The only way they will be able to do this is by keep upgrading their current products, while they wait for new technology’s to be developed. They must also keep designing new and upgraded products, so when new generation technology’s become available, people look to buy their product first. This will help keep them as a dominant force in the future hand-held device of MP3, cellphone industry. References: Trott, paul. 2012 innovation management and new product development 5th edition. prentice hall/pearson
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