STRATEGIC FOCUS NUEVA Apple: using innovation to create technology trends and sustain competitive advantage After the prolteration of the PC format with Micro soft products and Intel semiconductors as the stan- dard configuration, Apple hit difficult times. A rapid succession of CEOS, Imited scale, elevated prices and products that did not seem to offer vabe, Apple had lost ts way. Only when Steve Jobs, its co-founder returned, was Apple able to capture positive attention by launching the Mac, a product that was pared down yet generated considerable excitement, not only among Apple enthusiasts. For what followed, Steve Jobs moved the "CEO of the Decade" by For tune magazine in autumn 2000 Apple started its regeneration in 2001 with its un veiing of the iPod, a portable digital music device, and then followed up with its complementary iTunes online music store, a service for downloading songs and other digital music and video clips. With the launch of the Phone, Apple entered a new category in a mar- ket, le mobile phones, in which it had no experience. Not only has done well in producing smply designed products, such as the iPod or the iPhone and its other recent devices, but also excelsh marketing its as thetic or elegant designs, which seem to please the customer and create a market buzz" for Apple products Apple has also continued to upgrade ts innovutive Pod with its second generation of iPod Touch. One analyst gave t a perfect score for the significant en hancements made. The iPod Touch provides similar tinctions as the iPhone, such as an internet connec- tion using the same touchscreen, and playing music and videos in the same way. An example of the con tinuous Innovation is the four-gigabyte iPod Shuffle in troduced in 2009. The new Shuffle can handle songs in 14 different languages and can store approximately 1000 songs, L.e. four times more than the first genera- tion Shuffie, launched in 2005. Apple has repeatedly "sot the standard" for design of personal computers since the mid-1990s. The innovations created since 1996 include a tool that created a quantum increase in the sale of digital music, made the mobile phone a feble computer that is fun to use, and in customer service through a chain of unique and popular retail stores. Thus, most external observers argue that Ap- ple is one of the most innovative companies. Because of its innovative products, Apple has become one of the fastest growing companies in the US. In 2010, with more than 2 milion brand new iPads sold in two months following is launch, Apple has cre- ated a new market and captured the largest share. During the recession in 2008. Apple posted record sales. The firm's strong performance in poor eco- nomic times is largely accorded to as innovation capa- bilities. Apple has continued to upgrade its current products such as laptops with enhancements (eg. MacBook and MacBook Pro). Aralysts believe that those innovation additions will keep Apple's hot streak alive and wel. Furthermore, projections sug- gest that smartphone sales wil surge over the nad fow yoars. These projections include a 200 por cont Increase in the sales of high-end mobile phones to 300 million units annually by 2013. The growing pop tlarity of web 2.0 applications such as Facebook and Twitter is increasing the desire for these phones. And, such demand is very positive for the future of Black Berry and Apple's Phone. By 2013, analysts believe that approximately 23 por cont of all new mobile phone sales will be smartphones. Although others are seeking to simply duplicate the lesson for Sony's stores: Just connect". New York Times, complementary and innovative relationships between http://www.nytimes.com, May 27: "Apple's "magica" Phone Apple's devices (e.g., iPod and IPhone) and iTunes, unweiled". BBC. http://www.bbc.co.uk, January 9 2007 Furchgott, R. (2006) Cell phones for the music fan". New Apple continues to innovate with products such as York Times, http://www.nytimes.com, December 28: Wild- the iPad and its ways of usage, e.g., opening a plat- strom, S. H. (2008) "Apple laptops. The hits keep coming" form for Apps, the small applications customers can BusinessWeek http://www.businessweek.com. November download for generally smal fees. Apple's focus on 4: Edwards, C. (2008) "Apple's superlative sequel: The latest innovation has helped it maintain a competitive advan- iPod touch", BusinessWeek http://www.businessweek.com November 20: Waters, R. and Nutiain, C. 2009) "Apple tage and marketing prowess over other industry moves to dear up uncertainty ahead of Jobs' absence" F- players, who have historically been much stronger nancial Times. http://www.ft.com, January 18; Stone, B. than Apple. Coupled with its innovation. Apple is an (2009) "Can Apple fill the void?", New York Times, http:// aggressive marketer. While most firms are paring www.nytimes.com, January 16: Apple bobbing". Financial back their costs and advertising during the recession, Times, http://www.ft.com, January 22, 2009: Lomas, N. (2009) "Smartphones set to surge", BusinessWeek http:// Apple has increased its marketing and advertising pro- www.businessweek.com, February 3, Stone, B. (2009) in grammes. It is rated as the second most prolific tech- campaign wars, Apple still has Microsoft's number" New nology advertiser, behind Microsoft. York Times, http://www.nytimes.com, February 4: Elmer Apple seeks to change the way people behave ver- Dewitt, P. (2009) "Apple is 14th fastest growing tech sus just competing in the marketplace for traditional company'. Fortune, http://www.fortune.omn.com, February Apple launches smaler, 4-gigabyte iPod shuffle", Houston products. In doing so, it has been able to establish first Chronicle, (2009). http://www.dron.com, March 11. mover advantages through radical concepts using ele- gant design and excellent market timing to establish its advantage. Others seem to compete in commodity Questions businesses with incremental innovations, while Apple influences what is on the consumer's mind. 1 Wil Apple be able to continue innovating? 2 What does success through innovation rely on? Sources: Fackler, M. (2005) "Sony Plans 10000 Job Outs". New York Times, September 23, Edwards, C. (2006) 3 Over the years, Apple has grown from a small player "Hitting the Right Notes at Sony". Business Week Online, to a dominant player. Will this change the perceived http://www.businessweek.com/print/technology/content value of Apple products, and if so how? jan 2006/20060109265301: Stross, R. (2007) "Apple's