IGCSE Business Studies

Marketing Project 2010

Osama Hassan El Bushra

The organization of Apple was established in 1976 as a computer company. However, in the last decade,
Apple has expanded into a complex company that specializes in much more than just computers. In
2001, Apple broke the barrier with the iPod, eventually becoming the dominant market leader in music
players. In following, Apple joined the phone industry in 2007 with the iPhone, which has also been
widely successful. Apple is known as a consumer goods company, therefore evaluating its value requires
understanding its products and consumers. This would be very challenging where Apple competes with
many different companies throughout the different industries it takes part in. Apple has established a
unique reputation in the consumer electronics industry since it is flexible from its philosophy of
comprehensive artistic design to its distinctive advertising campaigns. The unique characteristic about
Apple is that it has a very strong customer base, which is extremely important in understanding Apple.
Meanwhile, more press is associated with their CEO, Steven P. Jobs (Apple chief executive) who is seen
as the architect of many of Apple's amazing products, and the reason for their success due to his
presentations at Apple's media events that are electrifying and revolutionary. Given his superstar image,
his status and health as Apple's CEO ties into how investors value Apple. For instance, earlier in the year
there was an inaccurate report that he sustained a heart attack, and rumors flew through the internet,
briefly dropping Apple's stock price 5%. Apple's major products are considered as iTunes, TVs,
Macintosh computers, software iPod and recently iPhone.

Apple’s marketing strategy focuses on introducing the best personal computing and music experience to
students, teachers, professionals, businesses, government agencies and consumers through its
innovative hardware, software, peripherals, services and Internet offering.   Besides, iPod as a hardware
device that to deliver the portable entertainment experiences to consumers; Apple also offers the online
media store – the iTunes Music Store to enhance the wonderfulness of “Apple experience” for its
customers.   The iTunes Music Store is a portfolio of peripherals that support both Mac and Windows
users who has iPod products to enjoy a variety of other service and support offerings.

Steven Jobs was born on February 24, 1955, in San Francisco,

California. He is a visionary in the world of personal computers that
led the entire computer hardware and software industry to
restructure itself. At the young age of 21, and with help of a friend,
he built a personal computer called the Apple. This little piece of
technology was a giant step ahead in the marketability of PC’s. It
brought the once believed to be a government and large
corporations equipment, to households across North America.

There had never been any real effort to make the computer an item
for ordinary people. Apple Computer Inc. had revolutionized the
personal computer industry by making the machine user-friendly. He
re-introduced the windows interface and mouse technology that, like
stated above, set the standards for the industry to follow in all
applications interface in software.
Apple Computer, Inc. is largely responsible for the enormous growth of the personal computer industry
in the 20th century. The introduction of the Macintosh line of personal computers in 1984 established
the company as an innovator in industrial design whose products became renowned for their intuitive
ease of use. Though battered by bad decision-making during the 1990s, Apple continues to exude the
same enviable characteristics in the 21st century that catapulted the company toward fame during the
1980s. The company designs, manufactures, and markets personal computers, software, and
peripherals, concentrating on lower-cost, uniquely designed computers such as iMac and Power
Macintosh models.

Apple was founded in April 1976 by Steve Wozniak, then 26 years old, and Steve Jobs, 21, both college
dropouts. Their partnership began several years earlier when Wozniak, a talented, self-taught
electronics engineer, began building boxes that allowed him to make long-distance phone calls for free.
The pair sold several hundred such boxes.

In 1976 Wozniak was working on another box--the Apple I computer, without keyboard or power
supply--for a computer hobbyist club. Jobs and Wozniak sold their most valuable possessions, a van and
two calculators, raising $1,300 with which to start a company. A local retailer ordered 50 of the
computers, which were built in Jobs's garage. They eventually sold 200 to computer hobbyists in the San
Francisco Bay area for $666 each. Later that summer, Wozniak began work on the Apple II, designed to
appeal to a greater market than computer hobbyists. Jobs hired local computer enthusiasts, many of
them still in high school, to assemble circuit boards and design software. Early microcomputers had
usually been housed in metal boxes. With the general consumer in mind, Jobs planned to house the
Apple II in a more attractive modular beige plastic container.

Jobs wanted to create a large company and consulted with Mike Markkula, a retired electronics
engineer who had managed marketing for Intel Corporation and Fairchild Semiconductor. Chairman
Markkula bought one-third of the company for $250,000, helped Jobs with the business plan, and in
1977 hired Mike Scott as president. Wozniak worked for Apple full time in his engineering capacity.

Jobs recruited Regis McKenna, owner of one of the most successful advertising and public relations firms
in Silicon Valley, to devise an advertising strategy for the company. McKenna designed the Apple logo
and began advertising personal computers in consumer magazines. Apple's professional marketing team
placed the Apple II in retail stores, and by June 1977, annual sales reached $1 million. It was the first
microcomputer to use color graphics, with a television set as the screen. In addition, the Apple II
expansion slot made it more versatile than competing computers.

The earliest Apple IIs read and stored information on cassette tapes, which were unreliable and slow. By
1978 Wozniak had invented the Apple Disk II, at the time the fastest and cheapest disk drive offered by
any computer manufacturer. The Disk II made possible the development of software for the Apple II.
The introduction of Apple II, with a user manual, at a consumer electronics show signaled that Apple
was expanding beyond the hobbyist market to make its computers consumer items. By the end of 1978,
Apple was one of the fastest-growing companies in the United States, with its products carried by over
100 dealers.
In 1979 Apple introduced the Apple II & plus; with far more memory than the Apple II and an easier
startup system, and the Silent type, the company's first printer. VisiCalc, the first spreadsheet for
microcomputers, was also released that year. Its popularity helped to sell many Apple IIs. By the end of
the year sales were up 400 percent from 1978, at over 35,000 computers. Apple Fortran, introduced in
March 1980, led to the further development of software, particularly technical and educational
applications.

In December 1980, Apple went public. It’s offering of 4.6 million shares at $22 each sold out within
minutes. A second offering of 2.6 million shares quickly sold out in May 1981.

Meanwhile Apple was working on the Apple II's successor, which was intended to feature expanded
memory and graphics capabilities and run the software already designed for the Apple II. The company,
fearful that the Apple II would soon be outdated, put time pressures on the designers of the Apple III,
despite the fact that sales of the Apple II more than doubled to 78,000 in 1980. The Apple III was well
received when it was released in September 1980 at $3,495, and many predicted it would achieve its
goal of breaking into the office market dominated by IBM. However, the Apple III was released without
adequate testing, and many units proved to be defective. Production was halted and the problems were
fixed, but the Apple III never sold as well as the Apple II. It was discontinued in April 1984.

The problems with the Apple III prompted Mike Scott to lay off employees in February 1981, a move
with which Jobs disagreed. As a result, Mike Markkula became president and Jobs chairman. Scott was
named vice-chairman shortly before leaving the firm.

Despite the problems with Apple III, the company forged ahead, tripling its 1981 research and
development budget to $21 million, releasing 40 new software programs, opening European offices, and
putting out its first hard disk. By January 1982, 650,000 Apple computers had been sold worldwide. In
December 1982, Apple became the first personal computer company to reach $1 billion in annual sales.

The next year, Apple lost its position as chief supplier of personal computers in Europe to IBM, and tried
to challenge IBM in the business market with the Lisa computer. Lisa introduced the mouse, a hand-
controlled pointer, and displayed pictures on the computer screen that substituted for keyboard
commands. These innovations come out of Jobs's determination to design an unintimidating computer
that anyone could use.

Unfortunately, the Lisa did not sell as well as Apple had hoped. Apple was having difficulty designing the
elaborate software to link together a number of Lisas and was finding it hard to break IBM's hold on the
business market. Apple's earnings went down and its stock plummeted to $35, half of its sale price in
1982. Mike Markkula had viewed his presidency as a temporary position, and in April 1983, Jobs brought
in John Sculley, formerly president of Pepsi-Cola, as the new president of Apple. Jobs felt the company
needed Sculley's marketing expertise.

In the third quarter of the 1984 Super Bowl, a strange and disorienting advertisement appeared on the
TV screens of the millions of viewers tuned in to the yearly ritual. The ad opens on a gray network of
futuristic tubes connecting blank, ominous buildings. Inside the tubes, we see cowed subjects marching
towards a cavernous auditorium, where they bow before a Big Brother figure pontificating from a giant
TV screen. But one lone woman remains unbroken. Chased by storm troopers, she runs up to the
screen, hurls a hammer with a heroic grunt, and shatters the TV image. As the screen explodes, bathing
the stunned audience in the light of freedom, a voice-over announces, "On January 24 th, Apple
Computer will introduce the Macintosh. And you'll see why 1984 won't be like "1984."

This commercial, designed by the advertising agency Chiat/Day to introduce Apple's Macintosh
computer and directed by Ridley Scott fresh off his science fiction classic Blade Runner, has never run
again since that Super Bowl spot. But few commercials have ever been more influential. Advertising Age
named it the 1980s' Commercial of the Decade. You can still see its echoes today in futuristic ads for
technology and telecommunications multinationals such as AT&T, MCI, and Intel.

The 1984 commercial was a critical moment in the development of the American public's conception of
the proper uses and cultural implications of personal computers. PCs were introduced in the 1970s as
tools - utilitarian objects designed to facilitate specific tasks. In the 1980s, they became full-fledged
commodities - shiny consumer products defined not just by their use value, but by the collection of
meanings, hopes, and ideals attached to them through advertising, promotion, and cultural circulation.
With the 1984 ad, Apple identified the Macintosh with an ideology of "empowerment" - a vision of the
PC as a tool for combating conformity and asserting individuality. And while Apple's own fortunes have
waned of late, its vision of the power and potential of the personal computer has triumphed, becoming
the ideological underpinnings of techno-boosterism in the 1990s.

So what does it mean for a consumer product to claim to be "empowering"? What kind of political vision
does this promise imply? In order to begin assessing the implications of Apple's ideal, I want to look
more closely at the "1984" commercial, to track how the ad negotiates the irony of promoting individual
liberation via the purchase of a mass-produced machine.

I should clarify that this discussion is part of the larger project of my dissertation, which is a cultural
history of personal computers. The perspective of my work is that the meanings, uses, and ideals we
associate today with the personal computer are not the inevitable result of technological determinism,
but rather are the consequences of struggles among groups with different visions of what computers
can and should do. To trace the intersecting discourses of these groups, the dissertation looks at a wide
variety of materials, from corporate archives to user group newsletters to novels, films, and of course,
commercials.

This discussion here can only address one particular angle of influence: the Apple corporation's attempt
to define the meanings of its product. The commercials, of course, were not the end of the story;
viewers saw the commercials, bought the computers, then proceeded to do things with them Apple
never could have envisioned. In fact, it wasn't until the development of desktop publishing later in the
1980s, a phenomenon nobody in 1983 could have foreseen, that the Mac really established its long-
term viability.

Nonetheless, the 1984 commercial was what established the framework through which people made
sense of the Mac, and eventually, I'd argue, all computers. Ever since that commercial, the Mac has
glowed with an aura of rebellion and empowerment. Without that commercial, those subsequent
developments might not have been possible. The creative workers who embraced the Mac later in the
1980s may have never taken the plunge, without the buzz the commercial created. Without such a
blockbuster introduction, in fact, the Mac might have sank before it ever had a chance to prove itself - as
happened to its immediate Apple predecessor, the Lisa.

In 1985, the "Macintosh" computer line received a big sales boost with the introduction of the
LaserWriter printer and Aldus PageMaker, home desktop publishing was now possible. But 1985 was
also the year when the original founders of Apple left the company.

Steve Wozniak returned to college and Steve Jobs was fired, his difficulties with John Sculley coming to a
head. Jobs had decided, to regain control of the company away from Sculley, he scheduled a business
meeting in China for Sculley and planned for a corporate take-over, when Sculley would be absent.
Information about Jobs' true motives, reached Sculley before the China trip, he confronted Jobs and
asked Apple's Board of Directors to vote on the issue. Everyone voted for Sculley and Jobs quit, in lieu of
being fired. A job later rejoined Apple in 1996 and has happily worked there ever since. Sculley was
eventually replaced as CEO of Apple.