A Project report

on brand marketing of
Apple Inc.

What is branding
The American Marketing Association (AMA) defines a brand as a "name,
term, sign, symbol or design, or a combination of them intended to
identify the goods and services of one seller or group of sellers and to
differentiate them from those of other sellers.

Therefore it makes sense to understand that branding is not about

getting your target market to choose you over the competition, but it is
about getting your prospects to see you as the only one that provides a
solution to their problem.

The objectives that a good brand will achieve include:

 Delivers the message clearly

 Confirms your credibility
 Connects your target prospects emotionally
 Motivates the buyer
 Concretes User Loyalty

To succeed in branding you must understand the needs and wants of

your customers and prospects. You do this by integrating your brand
strategies through your company at every point of public contact.
Your brand resides within the hearts and minds of customers, clients,
and prospects. It is the sum total of their experiences and perceptions,
some of which you can influence, and some that you cannot.

A strong brand is invaluable as the battle for customers intensifies day

by day. It's important to spend time investing in researching, defining,
and building your brand. After all your brand is the source of a promise
to your consumer. It's a foundational piece in your marketing
communication and one you do not want to be without.

Introduction To Apple
Apple Inc. is an American multinational corporation that designs and
manufactures consumer electronics and computer software products.
The company's best-known hardware products include Macintosh
computers, the iPod and the iPhone. Apple software includes the Mac
OS X operating system, the iTunes media browser, the iLife suite of
multimedia and creativity software, the iWork suite of productivity
software, and Final Cut Studio, a suite of professional audio and film-
industry software products. The company operates more than 250
retail stores in nine countries and an online store where hardware and
software products are sold.

Established in Cupertino, California on April 1, 1976 and incorporated

January 3, 1977, the company was called Apple Computer Inc. for its
first 30 years, but dropped 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. Apple
has about 35,000 employees worldwide and had worldwide annual
sales of US$32.48 billion in its fiscal year ending September 29, 2008.
For reasons as various as its philosophy of comprehensive aesthetic
design to its distinctive advertising campaigns, Apple has established a
unique reputation in the consumer electronics industry. This includes a
customer base that is devoted to the company and its brand,
particularly in the United States. Fortune magazine named Apple the
most admired company in the United States in 2008 and in the world in
2009. The company has also received widespread criticism for its
contractors' labor, environmental, and business practices.

Apple played a major role in the introduction of the personal

computer in the 1970s, which eventually kicked off the personal
computer revolution. It’s first big hit, the Apple II, was introduced in
1977 and was a very popular with home consumers. Being the innovator
that Apple is, it introduced the first graphical user interface (GUI) to the
commercial personal computer. This technology is used on all of today’s
major computer operating systems such as Windows XP as well as Unix-
like systems. Since then, the company has revolutionized the way people
and computer companies think about aesthetic design of computers and
consumer electronics alike as
well as the security and operability of the operating system. In addition,
Apple’s unmatchable success with it’s iPod mp3 player and revolutionary
iTunes music store has left many companies struggling to keep up with
the new wave of giving consumers the simplicity they desire in
technology.
 The recent announcement along with the release of new Apple
computers using the Intel processor, rather than the faithful IBM
PowerPc processor, has allowed the company to enter into an entire
new realm of needed compatibility with it’s desktop and portable
computers. The Intel chip allows the new machines to run the Windows
Operating System natively as well as OS X on the same drive. With the
correct setup of virtualization software, these two operating systems
may even run at the same time, and a couple of key commands would
be able to instantly switch
between operating systems. This development in technology now
encourages users to switch to the very desirable Macintosh community
without completely sacrificing the often thought needs of the PC.
 HISTORY

1976–1980: The early years

The Apple I, Apple's first product. Sold as an assembled circuit board, it

lacked basic features such as a keyboard, monitor, and case. The owner
of this unit added a keyboard and a wooden case.

Apple was established on April 1, 1976 by Steve Jobs, Steve Wozniak,

and Ronald Wayne, to sell the Apple I personal computer kit. They were
hand-built by Wozniak and first shown to the public at the Homebrew
Computer Club. The Apple I went on sale in July 1976 and was market-
priced at $666.66.

The Apple II was chosen to be the desktop platform for the first "killer
app" of the business world—the VisiCalc spreadsheet program. VisiCalc
created a business market for the Apple II, and gave home users an
additional reason to buy an Apple II—compatibility with the office.
According to Brian Bagnall, Apple exaggerated its sales figures and was
a distant third place to Commodore and Tandy until VisiCalc came
along.
1981–85: Lisa and Macintosh

Steve Jobs began working on the Apple Lisa in 1978 but in 1982 he was
pushed from the Lisa team due to infighting, and took over Jef Raskin's
low-cost-computer project, the Macintosh. A turf war broke out
between Lisa's "corporate shirts" and Jobs' "pirates" over which
product would ship first and save Apple. Lisa won the race in 1983 and
became the first personal computer sold to the public with a GUI, but
was a commercial failure due to its high price tag and limited software
titles.

The Macintosh 128K, the first Macintosh computer.

In 1984, Apple next launched the Macintosh. Its debut was announced
by the now famous $1.5 million television commercial, "1984". It was
directed by Ridley Scott, aired during the third quarter of Super Bowl
XVIII on January 22, 1984, and is now considered a watershed event for
Apple's success and a "masterpiece".
1986–93: Rise and fall

Timeline of Apple II family and Timeline of Macintosh models

The Macintosh Portable was Apple's first "portable" Macintosh

computer, released in 1989.

Having learned several painful lessons after introducing the bulky

Macintosh Portable in 1989, Apple introduced the PowerBook in 1991,
which established the modern form and ergonomic layout of the laptop
computer.[38] The same year, Apple introduced System 7, a major
upgrade to the operating system, which added color to the interface
and introduced new networking capabilities. It remained the
architectural basis for Mac OS until 2001.

1994–1997: Attempts at reinvention

The Newton was Apple's first foray into the PDA markets, as well as one
of the first in the industry. A financial flop, it helped pave the way for
the Palm Pilot and Apple's own iPhone in the future.

By the early 1990s, Apple was developing alternative platforms to the

Macintosh, such as the A/UX. The Macintosh platform was becoming
outdated since it was not built for multitasking, and several important
software routines were programmed directly into the hardware. In
addition, Apple was facing competition from OS/2 and UNIX vendors
like Sun Microsystems. The Macintosh would need to be replaced by a
new platform, or reworked to run on more powerful hardware.

In 1994, Apple allied with IBM and Motorola in the AIM alliance. The
goal was to create a new computing platform (the PowerPC Reference
Platform), which would use IBM and Motorola hardware coupled with
Apple's software. The AIM alliance hoped that PReP's performance and
Apple's software would leave the PC far behind, thus countering
Microsoft. The same year, Apple introduced the Power Macintosh, the
first of many Apple computers to use IBM's PowerPC processor.[45]

In 1996, Michael Spindler was replaced by Gil Amelio as CEO. Gil Amelio
made many changes at Apple, including massive layoffs. After multiple
failed attempts to improve Mac OS, first with the Taligent project, then
later with Copland and Gershwin, Amelio chose to purchase NeXT and
its NeXTSTEP operating system, bringing Steve Jobs back to Apple as an
advisor. On July 9, 1997, Gil Amelio was ousted by the board of
directors after overseeing a three-year record-low stock price and
crippling financial losses. Jobs became the interim CEO and began
restructuring the company's product line.

At the 1997 Macworld Expo, Steve Jobs announced that Apple would
join Microsoft to release new versions of Microsoft Office for the
Macintosh, and that Microsoft made a $150 million investment in non-
voting Apple stock.
On November 10, 1997, Apple introduced the Apple Store, tied to a
new build-to-order manufacturing strategy.

1998–2005: Return to profitability

Company headquarters on Infinite Loop in Cupertino, California.

On August 15, 1998, Apple introduced a new all-in-one computer

reminiscent of the Macintosh 128K: the iMac. The iMac design team
was led by Jonathan Ive, who would later design the iPod and the
iPhone. The iMac featured modern technology and a unique design. It
sold close to 800,000 units in its first five months and returned Apple to
profitability for the first time since 1993.

Through this period, Apple purchased several companies to create a

portfolio of professional and consumer-oriented digital production
software. In 1998, Apple announced the purchase of Macromedia's
Final Cut software, signaling its expansion into the digital video editing
market. The following year, Apple released two video editing products:
iMovie for consumers, and Final Cut Pro for professionals, the latter of
which has gone on to be a significant video-editing program, with
800,000 registered users in early 2007. In 2002 Apple purchased
Nothing Real for their advanced digital compositing application Shake,
as well as Emagic for their music productivity application Logic, which
led to the development of their consumer-level Garage Band
application. iPhoto's release the same year completed the iLife suite.
The entrance of the Apple Store on Fifth Avenue in New York City is a
glass cube, housing a cylindrical elevator and a spiral staircase that
leads into the subterranean store.

Mac OS X, based on NeXT's OPENSTEP and BSD Unix was released on

March 24, 2001, after several years of development. Aimed at
consumers and professionals alike, Mac OS X aimed to combine the
stability, reliability and security of Unix with the ease of use afforded by
an overhauled user interface. To aid users in migrating from Mac OS 9,
the new operating system allowed the use of OS 9 applications through
Mac OS X's Classic environment.

On May 19, 2001, Apple opened the first official Apple Retail Stores in
Virginia and California. The same year, Apple introduced the iPod
portable digital audio player. The product was phenomenally
successful — over 100 million units were sold within six years. In 2003,
Apple's iTunes Store was introduced, offering online music downloads
for $0.99 a song and integration with the iPod. The service quickly
became the market leader in online music services, with over 5 billion
downloads by June 19, 2008.

Since 2001 Apple's design team has progressively abandoned the use of
translucent colored plastics first used in the iMac G3. This began with
the titanium PowerBook and was followed by the white polycarbonate
iBook and the flat-panel iMac.

2005–present: The Intel partnership

The MacBook Pro (15.4" widescreen) was Apple's first laptop with an
Intel microprocessor. It was announced in January 2006 and is aimed at
the professional market.

At the Worldwide Developers Conference keynote address on June 6,

2005, Steve Jobs announced that Apple would begin producing Intel-
based Mac computers in 2006. On January 10, 2006, the new MacBook
Pro and iMac became the first Apple computers to utilize Intel's Core
Duo CPU. By August 7, 2006 Apple had transitioned the entire Mac
product line to Intel chips, over 1 year sooner than announced. The
Power Mac, iBook, and PowerBook brands were retired during the
transition; the Mac Pro, MacBook, and MacBook Pro became their
respective successors.. On April 29, 2009, The Wall Street Journal
reported that Apple was building its own team of engineers to design
microchips.

Apple also introduced Boot Camp to help users install Windows XP or

Windows Vista on their Intel Macs alongside Mac OS X.

Apple's success during this period was evident in its stock price.
Between early 2003 and 2006, the price of Apple's stock increased
more than tenfold, from around $6 per share (split-adjusted) to over
$80. In January 2006, Apple's market cap surpassed that of Dell. Nine
years prior, Dell's CEO Michael Dell said that if he ran Apple he would
"shut it down and give the money back to the shareholders."

Delivering his keynote at the Macworld Expo on January 9, 2007, Steve

Jobs announced that Apple Computer, Inc. would from that point on be
known as Apple Inc. The event also saw the announcement of the
iPhone and the Apple TV. The following day, Apple shares hit $97.80, an
all-time high. In May, Apple's share price passed the $100 mark.

On February 6, 2007, Apple indicated that it would sell music on the

iTunes Store without DRM (which would allow tracks to be played on
third-party players) if record labels would agree to drop the technology.
[76]
On April 2, 2007, Apple and EMI jointly announced the removal of
DRM technology from EMI's catalog in the iTunes Store, effective in
May.

On July 11, 2008, Apple launched the App Store to sell third-party
applications for the iPhone and iPod Touch.[78] Within a month, the
store sold 60 million applications and brought in $1 million daily on
average, with Steve Jobs speculating that the App Store could become a
billion-dollar business for Apple.[79] Three months later, it was
announced that Apple had become the third-largest mobile handset
supplier in the world due to the popularity of the iPhone.[80]

On December 16, 2008, Apple announced 2009 would be the last year
Apple would be attending the Macworld Expo, and that Phil Schiller
would deliver the 2009 keynote in lieu of the expected Steve Jobs. [81]

On January 14, 2009, an internal Apple memo from Steve Jobs

announced that he would be taking a six-month leave of absence, until
the end of June 2009, to allow him to better focus on his health and to
allow the company to better focus on its products.[82] Despite Steve
Jobs' absence, Apple recorded its best non-holiday quarter (Q1 FY
2009) during the recession with a revenue of $8.16 billion and a profit
of $1.21 billion.

SWOT analysis

Strengths:
Apple Computer Inc. is one of the oldest hardware
manufacturers that control over the product by manufacturing both
computers and their operation system. It is known that Apple has
a high Quality product which makes Apple different than its
competitors. Apple creates its product with unique designs to attract
the consumer’s eyes and increase its market share because
Apple success is based on fulfilling customer’s desires. Apple has
one of the top brand names within the technology industry all over
the world, and 54% of their profits are from foreign markets. Apple is
dedicated to develop new products which will make the use of
technology easier and more efficient. Apple always provides easy-
use product to the hand of the consumers. Most of its products are
light, small, and easy to carry around which make them more
competitive. One of the great things about Apple is product
diversification; Apple has a large number of product lines to target
everyone in the world. In addition, there are a huge number of
consumers who are loyal to Apple even though the prices of Apple
products are higher comparing to its competitors. The attractiveness
of Apple’s products has created a brand of distinction in the
computer industry. In 2005, Apple had reported a net income of
1,335,000,000 which equates to an increase of almost 400% from
its net income in 2004. So far, the company has done quite well in
2006. There was an increase in quarterly earnings growth of 41.4%.
Its stock price is the highest in the personal computer industry.
Apple is financed mostly by its equity. In fact Apple does not have
any debt, so investors would bear less risk by holding Apple’s
stocks. The company is loaded with extra cash that is ready to
acquire any firm that could help enhance the value of the company.

Weaknesses
Apple had difficulties on some of its products quality control.
Some consumers reported faulty screens in the iPod Nano. When
Apple first introduced the iPod, consumers faced problems with
faulty batteries. Apple is ranked fourth by sales of hardware, and it
is focusing on internal engineering more than the market. They must
continue to impress the market with new products. This puts huge
pressure for Apple to maintain its position as one of the industry
leader. The computer industry is a fast-changing type industry
where old products are constantly replaced by newer and more
improved innovations. For Apple to remain profitable, they must
invest huge amount of money in their product R&D which has been
increasing steadily every year.
Even though Apple may seem so financially strong, its lack of
debt may just be a fatal weakness. Apple is very vulnerable to a
major stock acquisition by other groups or companies. In addition to
the debt/equity issue, Apple has not issued any dividends to its
shareholders for many years, which may cause the investors to lose
their confidence in this company.

Opportunities
Apple is known for its innovative thinking. They have
developed a product line that is both functional and attractive. Their
product line has recently expanded to another level. Their iPods will
soon be able to communicate with specially designed Nike running
shoes where you could receive data such as calories burned and
distance ran. This project can benefit both companies and boost the
demand for iPods. Apple’s iPod line will have a clear advantage
over all the other mp3 players in the market. In addition to Apple’s
integration with other products, many cars models from all major
automakers have equipped their new models with iPod connectivity.
In regards to their desktop and notebook sectors, Apple has
developed new lines that are less expensive while maintaining its
high quality standards. These less-expensive computers should
help increase sales in the future. Apple has also changed its chip
supplier from IBM to Intel. This change would make Apple more
compatible with other systems. It enables Apple to run the Windows
operating system, which gives the user more flexibility.

Threats
Apple faces pressure from its competitors such as Dell and HP. Dell’s
low budget computers have given them the largest market share in
personal computers. According to the available data, HP leads the
industry with gross revenue of 88.89 billion dollars but Dell has the
highest net income. Even though Apple’s stock price is higher than both
Dell and HP, the difference in market share and revenues are far behind
them.
 The substitution effect is another threat for the computer
industry. Since technology changes at such a rapid rate, the iPods
and iMacs can possibly be replaced by other devices. However, this
change would not result in the collapse of the company but it would
certainly change the kind of role that Apple has in the industry.
Apple will be forced to develop new products to keep this from
happening. If another company comes out with a better product,
Apple would lose its market share to that company.
Another threat for Apple would be the exchange rates which
can cause shifts in supply and demand. Since Apple has a huge
international market, their revenues from foreign countries are
directly related to exchange rates. The depreciation of US dollars
could cause a decrease in their net receivables. On the other hand, an
appreciation in US dollars would increase net receivables but decrease
future demand since price would increase.

Future Goals and Expectations

Apple can definitely expect a prosperous future especially in the

near future. Over the past five years, net sales have been steadily
increasing with almost a 200% increase from 2004 and 2005.
Correspondingly, net earnings have been increasing as well. Apple owns
over 80% of the market share with its iPod product. With such favorable
trends, it is reasonable to assume that Apple will continue to increase in
its sales, earnings, and market share just as long as it keeps developing
and acquiring new strengths. For example, Apple has established its
name as one of the leading, innovative forces in the computer industry
that has a much diversified, high quality products that appeal to many
markets. Competitors will find it difficult to compete against the
company if Apple continues to strive for innovation, as it is its mission,
continuing its well-
developed marketing plan, further developing more high quality
products, and taking advantage of its opportunities. Thus, the threat of
product substitution and high levels of competition would be decreased.

However, although it seems that Apple is not in a position where

its favorable future outlook is threatened, it is best that Apple works on
its weaknesses so as to further increase its sales and decrease the
possibility of losing its customers to its competitors. For example, Apple
is known for its high quality products, which puts them into a
competitive advantage. However some components of its products such
as the iPod batteries and the iPod Nano screens are of lesser quality.
Apple must increase its R&D efforts to really minimize the number of
products with faulty components. Thus, customers would not be lost and
customer loyalty would be maintained.

Another weakness that must be addressed is the high prices of its

products. For example, the iPod nano ranges from $150 to $250
depending on the size, the iPod ranges from $300 to $400, and a Mac
desktop is at least $1300. Such high prices discourage potential
customers from purchasing Apple’s products. The solution to this
weakness is to decrease the prices to the point where profits are still
increasing. Likewise, the cost of sales should be decreased but only to
the point where the quality of the products is not sacrificed.

Another weakness that should be addressed is the lack of paying

dividends. Although other computer companies do not pay dividends,
they will eventually start paying dividends. Apple have not paid
dividends since 1995 and because of its increasing earnings, the
company has the ability to pay off dividends. Starting as soon as
possible will put Apple in a better competitive advantage because it will
definitely improve stockholder loyalty as well as allow for an increase in
shares.

With its already well-established name brand and its positive

sales/market share growth, Apple will without a doubt continue to
increase their earnings and market share. However, by working on at
least some of its weaknesses through minimizing the number of faulty
components in its products, decreasing its prices, and paying dividends,
Apple can tremendously gain a competitive advantage over its
competitors.

Apple Marketing Mix

Apple, Inc originated from the friendship and mutual interests of Steve
Wozniak and Steve Jobs. The Two collaborated in the development of
the “Apple I in the early 1970s. The Apple I was a step ahead of most
computers of the time featuring a use of aTV as a display system and a
cassette interface for recording programs.

After obtaining financing for the development of Apple II, the Apple
Computer Company was formed in 1970.As the growth of home
computer use grew, Apple grew with it. In 1980 the company issued its
initial public offering of investment stock.

Apple next introduced the MacIntosh Computer in 1983 during the

Super Bowl. The computers desktop publishing features provided the
foundation for future innovations that have become standard for the
company. Today Apple, Inc has more than 33,000 employees and
revenues exceeding 42 million dollars.
Product

 Portable Computers – including Mac products such as Mac Book

Pro, iMac, MacBook Air, Mac Mini, Xserve
 Servers – including Xserve, Xsan, MacOS X Ser, MobleMe.
 Accessories – including MagicMouse, Keyboard, Led Cinema
Display.
 Wi-fi Based Stations - including Airport Express, Airport Extreme,
Time Capsule.
 Developer – including Developer Connection, Mac Program,
iPhone Program.
 iPod – including iPod Shuffle, iPod Nano, ipod Classic.
 iPhone – including iPhone3GS, iPhone3G, iPad.
 iTunes – including movies, TV shows, audio books, games.
 Periphal products – including Printers, Storage devices, digital
videos and cameras.

Price

 Apple is a premium brand computer that does not attempt to

compete on price. The company has reduced prices after some
initial product launches. It uses skimming and preimuim pricing
strategies.
 The AppleiPad is priced at a minimum of $499.
 The Apple iPhone costs begin at $99.
 The Apple iPod Classic is priced starting at $249.
 The Apple iPod Nano costs $149.
 The Apple Mac Book costs $999.
 The Apple MacBook Pro is priced at $1199.
 The Apple Quicktime Pro for Windows costs $29.99
  Apples iPad pricing strategy includes the flexibility to lower the
prices if consumer response dictates such action. This would be
consistent with a similar $200 price cut on the iPhone in 2007.
 In 2009 Apple announced a reduced cost pricing structure for
iTunes - songs will cost 69 cents, 99 cents or $1.29. He said the
"vast majority" of the songs will cost 69 cents. Changes are said to
be a response to a slower pace of music downloads.

Place

 Apple, Inc Headquarters are located at is located at 1 Infinite

Loop, Cupertino, California.
 The Apple Consultants Network includes independent
professional service providers and technology consulting firms
that specialize in Apple and third-party solutions. Certified on
Apple technologies, these providers deliver on-site technology
services and support to home users and businesses of all sizes.
 Apple service providers are certified technicians, who complete
regular Apple training and assessments, and offer repair services,
and exclusive access to genuine Apple parts.
 They are located in Asia/Pacific, Africa, the Middle East Europe
and Latin America.
 Apple has over 200 retail stores worldwide including the US, UK
and Canada. Apple recently opened a new retail store in Shanghai
China.

Promotion

 Apple, Inc offers special discounts on refurbished MacIntosh

computers, iPod Nanos, and the 8GB iPod Touch. In each case a 1
year warranty is included on the all products.
 Apple, Inc authorized Training Centers are located throughout the
U.S. each provides instruction in Mac systems, Mac OS X, and
Apple’s professional applications. A wide range of certification
 exams and courses offer innovative learning opportunities for IT
and creative professionals, educators, and service technicians—
delivered exclusively by Apple Certified Trainers.
 The Apple Consultants Network website provides a search tool
allowing visitors to locate nearby certified Mac product
consultants in the U.S, Canada, and a number of international
locations.
 The online Apple Store offers free shipping for orders over $50.
 The online Apple store offers iTunes gift cards.
 Apple provides a $100 rebate when you purchase a Mac or
specific printers from the online store.
 Apple has packaged back-to-school offers, including some aimed
at college students.

People

o Stephen P. Jobs is the Chief Executive Officer of the

Executive Board at Apple, Inc
o Non Executive Board Directors include William V. Campbell,
Millard S. Drexler, Albert Gore, Andrea Jung and Author D.
Levinson.
o Key Senior Management team members include Timothy D.
Cook, (COO), Scott Forestall, Jonathan Ivey, (Industrial
Design), Ronald B Johnson (Retail), Robert Mansfield Mac
Hardware Engineering), Peter Oppenhiemer (Chief Financial
Officer), Mark Papermaster (Devices Hardware Engineering),
Philip W. Schiller (Worldwide Marketing), Bertrand Serlet
(Software Engineering), and D. Bruce Sewell (General
Counsel).
o Some certified Apple service providers offer additional
services beyond repairs and parts such as such as data
transfer, data recovery, upgrade services, and onsite
deployment and installation.
 o Every Mac, iPod, iPhone, and display comes with
complimentary telephone technical support for 90 days after
your purchase and a one-year limited warranty. The
AppleCare Protection Plan extends your service coverage
and gives you one-stop service and support from Apple
experts.
o The AppleCare Professional Video Support gives you direct
access to Apple's Professional Video Technical Support team
via telephone and email 12 hours a day, seven days a week.

Physical Evidence

o Apple Inc’s main website is located at

http://www.apple.com
o The Apple logo has evolved from its original depiction of Sir
Isaac Newton under a tree to the memorable rainbow apple
to the present blue Apple with a bite taken out.

Process

o Apple converts new customers and secures their loyalty

through a corporate emphasis on customer service.
o Apple seeks to attract its target market through bold public
relations events (such as the MacWorld Expo) as well as
advertising imagery which borrows from contemporary
modern art.
o Apple has expanded its distribution channels in recent years
including the addition of Wal Mart
 Vision Statement

"Man is the creator of change in this world. As such he should be above

systems and structures, and not subordinate to them."

Explanation of vision

Apple lives this vision through the technologies it develops for

consumers and corporations. It strives to make its customers masters of
the products they have bought. Apple doesn't simply make a
statement. It lives it by ensuring that its employees understand the
vision and strive to reach it. It has put systems in place to enable
smooth customer interaction. It has put objectives in place to
continuously move forward; implemented strategies to fulfil these
objectives; and ensured that the right marketing, financial and
operational structures are in place to apply the strategies.

Mission Statement

“Apple is committed to bringing the best personal computing

experience to students, educators, creative professionals and
consumers around the world through its innovative hardware, software
and internet offerings”

The Future of Apple

Personal Computers – A Shift in Strategy

Apple has historically taken a far different path than the traditional Windows and
Intel combination. Microsoft provides the Windows operating system to separate
downstream hardware producers such as Dell. Apple vertically integrated both
the operating system software and hardware completely under Apple. A
consumer running Microsoft Windows can choose from a myriad of systems
based on the Intel processor, while a consumer running Apple’s OS X must
purchase Apple hardware.

Apple is adjusting this strategy by migrating their microprocessors from IBM and
Motorola PowerPC to Intel. Analysts believe that the Intel-based Macintosh may
be able to run Microsoft Windows applications by the end of 2006. (Burrows)

In addition to switching processors, Apple positioned their computers as an

immediate option for the traditional Microsoft Windows user. With Apple Boot
Camp, users may now use Mac OS X or Windows on an Apple computer.
(Sutherland).By allowing users to run Windows on an Intel Mac, Apple reduced
the switching costs for traditional PC users. Apple may steal away customers that
are willing to pay a premium for a system that runs both Windows and Mac OS X.

Apple continues to retain a strategic option to license its technology to clone

makers such as Dell. Past attempts at licensing Apple technology (to IBM,
Gateway, and others) failed on accord of Apple’s rigid demands. Many
technology leaders (such as a 1985 letter by Bill Gates to Apple CEO John Sculley)
criticized Apple for keeping a closed architecture. Apple cofounder Steve
Wozniak criticizes this strategy, “We had the most beautiful operating system, but
to get it you had to buy our hardware at twice the price. That was a
mistake.”Whether Apple would be willing to pursue this reversal of vertical
integration is unclear. Although such a move would cannibalize a portion of
Apple’s own hardware sales, it would also provide royalty-based revenue that
could approach $1 billion annually. (Burrows) Jobs traditionally sided against
licensing Apple technology. He referred to Mac clone producers as “leeches” and
he personally killed Power Computing (a Mac clone producer) by terminating their
license in 1997.

External Aanalysis

Technological Environment

Brand Awareness – Style at a Premium

Apple’s products are trendy and stylish. After Jobs returned in 1997,
Apple retained designer Jonathan Ive to differentiate their computers
from the typical beige box. Ive’s design of the iMac included clear
colorful cases that distinguished Apple computers. Apple’s iPod (with
the trademark white ear buds and simple track wheel) commands a
15%-20% premium over other MP3 players.

Apple and Pixar limit the number of computer products and movies
that they sell. Product differentiation with focused quality and style also
extend to the Jobs Pixar – “Pixar's executives focus on making sure
there are no ‘B teams,’ that every movie gets the best efforts of Pixar's
brainy staff of animators, storytellers, and technologists.” (Burrows,
Grover, and Green)

Apple positions its Macintosh computers as higher quality and higher

price. HP, Dell, and other PC manufacturers are pricing many systems
under the $1,000 threshold. “Apple is struggling to meet demand for
its new MacBook Pro laptop despite a $1,900 price tag that is nearly
twice that of garden-variety rivals.” Apple has only recently entered the
low-end (below $500) consumer market with the Mac Mini. Although
the Mac Mini is a base model with few features, it comes encased in a
very small and distinctive package. Apple portrays this computer as
“Small is Beautiful”. (Apple) Likewise, the iPod Shuffle was Apple’s first
entry into the lower-end ($100 range) of flash-memory-based portable
music players.

Technology and the Digital Lifestyle

Apple not only dominates the music player market, its iLife suite
provides consumers with easy-to-use software for music and video
composition. With “podcast” a household word, Apple’s Garage Band
application makes the recording of podcasts and music very easy.

Industry Analysis Using Porter’s Five Forces Model

Apple operates in two primary industries:

 Computing - Hardware and Software

 Delivery of Entertainment and Media
Apple has always been under intense competition within the
computer, software, and entertainment industries. “Looking to
2005...Every time that Apple had jumped into the lead in a product
category during the past two decades, it had had difficulty in sustaining
its leadership position.” We use Porter’s Five Forces Model to
understand why Apple’s industries are so competitive.

Figure : Porter’s Five Forces Model

 Threat of New Entrants

Bargaining power ofLevel

Suppliers Bargaining power of Buyers
of Threat in an Industry

Threat of Substitutes

Figure : Summary of Industry Threats (Computer Equipment and

Entertainment Distribution)

Type and Organization Examples

Severity of
Threat
Entry – Verizon Streaming audio and video with V CAST.
High
Threat
Amazon On demand online services to purchase
music (similar to iTunes).
Google They make everything.
The “Next New entrants with disruptive technology.
Google”
Rivalry – Microsoft Windows Operating System, Windows
High Media Player for playing music and video.
Threat
Linux Competition to Mac OS X Operating
System.
Napster, Online music sources – alternatives to
Rhapsody iTunes Music Store.
Dell, HP, Alternate sources for computer hardware.
Lenovo
iRiver, Small, stylish MP3 Players.
Samsung,
Creative
DreamWorks Animated movies.
YouTube.co Online video.
m
Substitutes XM, Sirius Satellite Radio for music.
–
Moderate
Threat
XBox, PS2 Entertainment Media, Media and Music.
Various Internet Streaming Radio and Podcasts.
Music CDs, Alternative means to acquire music.
DVD-Audio
and
SuperAudio
 CD
Broadcast, Alternative sources for video.
Cable,
Satellite,
NetFlix, TiVo,
Theatres
Suppliers – Motorola, Suppliers of Processors and computer
High IBM, Intel, memory.
Threat Samsung
Microsoft Strategic Alliance / Supplier of Office for
Mac.
The Big Five - Sources of music. Will they raise prices and
BMG, EMI, break the dollar per song model? Some in
Sony, the record industry resent Apple’s
Universal, distribution model. “Apple reaps billions
and Warner from selling its hit music player, but there
are sparse profits from the songs being
sold over the Net.” (Burrows, Grover, and
Green)

Disney, ABC, Suppliers of Television and Movies. Will

NBC, CBS, they sign exclusive contracts with other
Fox, Pixar, online services? Note that this threat is
Sony reduced for Disney / Pixar.
Buyers – Consumers Consumers share music using peer-to-peer
Moderate and Illegal
Threat peer-to-peer networks without paying for music.
file sharing
Distributors Apple retailers may pressure for lower
prices or better terms. For example, the
release of the Apple Store in 2001
“infuriated longtime independent Apple
retailers that didn’t appreciate Cupertino
cannibalizing their sales.” (Linzmayer, 300)
Consumer Consumers or businesses may reduce
Attitudes and spending on personal computers or non-
Behaviors essential (potentially high elasticity of
demand) music players if they fear
economic downturns.
Consumer Consumers and businesses may continue
Refresh to use previous-model iPods and Macs
Cycles rather than upgrade to current iPods,
iMacs, or OS
The total industry threat for the industry space that Apple occupies
(computer equipment and distribution of entertainment) is a high
threat industry. Apple must continue to pursue product differentiation
(i.e. the style and ease-of-use of an iPod) and economies of scope (i.e.
offering ABC television shows on iTunes) to maintain their sustained
competitive advantage in this industry.

Which External Threats are Most Significant

 Computer Hardware and Software: Open Source software such as

the Linux Operating System and Open Office applications threaten
both Apple and Microsoft. The low (often, free) cost of the
software may allow it to overtake Apple and Microsoft, especially
in developing markets such as China.
 Music Products: Major online retailers such as Amazon are
considering entry into the online music market. With a wide
internet prese presene and a household name, Amazon could
present a formidable challenge to Apple. If the major record
labels (Universal, Sony BMG, EMI, and Warner) negotiate better
terms with new competitors to iTunes, Apple may be unable to
provide some of the music content that they currently offer. The
major music labels dislike Apple’s dollar per song pricing. They
 would prefer to earn higher profits with “variable pricing”.
(Wingfield) With variable pricing, the most popular songs would
be greater than $1, and less popular songs would be less than $1.
Although the labels recently renewed their contracts with Apple,
there may be provisions that allow future changes in the pricing
model. (Wingfield and Smith)
 Suppliers: The recent shift to Intel processors could present a
significant threat to Apple. With only two companies (Intel and
AMD) producing Intel-compatible processors, there is a strong
potential for tacit collusion and oligopoly power between these
suppliers. Apple purchasing must now directly compete with HP,
Lenovo, and Dell. If shortages or exclusive agreements
materialize, Apple could face problems with obtaining raw
materials. Apple should consider additional sources such as
Advanced Micro Devices (AMD).

Figure: CPU Market Share

Additional External Threats

Security
Apple software, like all large software products, has security
vulnerabilities that hackers may exploit. A significant exploitation in the
future could damage many businesses and households using Apple
computers. This would affect future customer purchasing decisions.
Apple enjoys a competitive advantage, because their OS X is mature
and stable due to its basis on BSD Unix. In fact, “computer security
folks back at FBI HQ use Macs running OS X”. However, the increased
use of Apple computers is prompting hackers to target the platform. In
February 2006, there was documentation of the first known Apple OS X
worm. By using iChat instant messaging, it spreads to other users and
deletes files from their Mac computers. If Mac OS X becomes as wide
of a target as Windows, Apple’s perceived differentiation as the more
secure platform may disappear.

Vertical Integration of Competitors

Sony is an example of a competitor with a unique position against

Apple. Sony Music supplies Apple with many of the songs for iTunes.
Sony also creates a version of the Walkman portable music player that
is a direct competitor to the iPod.

Sony is attempting to vertically integrate forward directly to the music

buyer. Sony integrated their music system (Mora) into the Sony
Walkman. Sony is exclusively distributing certain songs on Mora. (Hall)
Mora currently targets Japanese consumers. If Sony can gain additional
momentum (such as collaborating with other record labels), their
service could present a formidable challenge to iTunes in additional
markets.
Value Chain Analysis

To determine where Apple developed distinctive capabilities, Porter’s

generic value chain model provides a systematic framework for
identifying Apple’s utilization of resources. Primary activities for Apple
include Technology and Product Design, Production, Sales and
Marketing, Customer Service, and Legal Services.

Technology and Product Design

This component represents the true core (no pun intended) of Apple’s
capability. From being the first platform to run an electronic
spreadsheet (VisiCalc on the Apple II Plus) to the first to establish a
“digital lifestyle” hub (the Macintosh product lines), Apple’s history is
rich with cutting-edge technology development. Apple drives to be the
best, no simply the first. The Apple operating system is universally
regarded as more stable and reliable than Windows, while the desktop
publishing software bundles (iMovie, iPhoto, iTunes, etc.) are the most
comprehensive available to end users. Ives best summarizes the
entrepreneurial culture within Apple by saying that “it’s very easy to be
different, but very difficult to be better.”

Production

Because Apple had long refused to license its operating system to

external entities, the bundled packages of Apple-developed hardware
and software became the cornerstone of Apple’s production process.
Apple achieved unparalleled performance via 64-bit architecture,
integrated distinctive styling with the multi-colored translucent iMac
cases, and redefined intuitive operation with the iPod. While every
product introduction has not been a success (Lisa, Newton, etc.), Apple
treats component production as a natural extension of the design
process.

Sales and Marketing

We could simply title this section “Steve Jobs”. Since his return as CEO
in 1997, Jobs personally unveils all new product introductions, reviews
corresponding marketing campaigns, and approves new product
development guidelines. In a departure from their turbulent history,
Jobs “entered into patent cross-licensing and technology agreements
with Microsoft.” (Linzmayer, 290) After years of unimpressive market
share growth and cannibalization of a loyal consumer base, the door to
the expansive PC market was now more accessible to Apple than ever
before. Apple continued to command a market premium for producing
a “better mousetrap” throughout its history.

Customer Service

How has Apple retained substantial cash reserves during the explosive
growth and dominance of PCs worldwide? Apple created a virtual love
affair with their customer base by delivering technically superior
products (iPods vs. other MP3 players, Macs vs. PCs, etc.), and
aggressively pursuing hardware and software updates. Apple
integrated their primary activities so well that it is transparent to the
consumer where one activity begins and the other ends. A perfect
example of this is Apple’s willingness to develop software to run
Windows XP on its new Intel-based iMac and then post it online free to
iMac users. (Wingfield) In such an environment, customer service
merely becomes the realization of receiving a little more than
expected.Although Apple employs many resources and capabilities to
support their primary activities (human resources, supply procurement,
etc.), the most strategically relevant would be Legal Services.

Strategy

We can describe Apple’s strategy in terms of product differentiation

and strategic alliances. In each of these strategies, we examine what
Apple did historically and then discuss alternatives for Apple’s future.

Product Differentiation

Apple prides itself on its innovation. When reviewing the history of

Apple, it is evident that this attitude permeated the company during its
peaks of success. For instance, Apple pioneered the PDA market by
introducing the Newton in 1993. Later, Apple introduced the easy-to-
use iMac in 1998, and updates following 1998. It released a highly
stable operating system in 1999, and updates following 1999. Apple
had one of its critical points in history in 1999 when it introduced the
iBook. This completed their “product matrix”, a simplified product mix
strategy formulated by Jobs. This move allowed Apple to have a
desktop and a portable computer in both the professional and the
consumer segments. The matrix is as follows:

Professional Consumer
 Segment Segment
Desktop G3 iMac
Portabl PowerBook iBook
e

In 2001, Apple hit another important historical point by launching

iTunes. This marked the beginning of Apple’s new strategy of making
the Mac the hub for the “digital lifestyle”. Apple then opened its own
stores, in spite of protests by independent Apple retailers voicing
cannibalization concerns. Then Apple introduced the iPod, central to
the “digital lifestyle” strategy. Philip W. Schiller, VP of Worldwide
Product Marketing for Apple, stated, “iPod is going to change the way
people listen to music.” He was right.

Apple continued their innovative streak with advancements in flat-

panel LCDs for desktops in 2002 and improved notebooks in 2003. In
2003, Apple released the iLife package, containing improved versions of
iDVD, iMovie, iPhoto, and iTunes. In reference to Apple’s recent
advancements, Jobs said, “We are going to do for digital creation what
Microsoft did for the office suite productivity.” That is indeed a bold
statement. Time will tell whether that happens.
Apple continued its digital lifestyle strategy by launching iTunes Music
Store online in 2003, obtaining cooperation from “The Big 5” Music
companies—BMG, EMI, Sony Entertainment, Universal, Warner. This
allowed iTunes Music Store online to offer over 200,000 songs at
introduction. In 2003, Apple released the world’s fastest PC (Mac G5),
which had dual 2.0GHz PowerPC G5 processors.

Product differentiation is a viable strategy, especially if the company

exploits the conceptual distinctions for product differentiation. Those
that are relevant to Apple are product features, product mix, links with
other firms, and reputation. Apple established a reputation as an
innovator by offering an array of easy-to-use products that cover a
broad range of segments. However, its links with other firms have been
limited, as we will discuss in the next section on strategic alliances.

There is economic value in product differentiation, especially in the

case of monopolistic competition. The primary economic value of
product differentiation comes from reducing environmental threats.
The cost of product differentiation acts as a barrier to entry, thus
reducing the threat of new entrants. Not only does a company have to
bear the cost of standard business, it also must bear the costs
associated with overcoming the differentiation inherent in the
incumbent. Since companies pursue niche markets, there is a reduced
threat of rivalry among industry competitors.

A company’s differentiated product will appear more attractive relative

to substitutes, thus reducing the threat of substitutes. If suppliers
increase their prices, a company with a differentiated product can pass
that cost to its customers, thus reducing the threat of suppliers. Since a
company with a differentiated product competes as a quasi-monopoly
in its market segment, there is a reduced threat of buyers. With all of
Porter’s Five Forces lower, a company may see economic value from a
product differentiation strategy.

A company attempts to make its strategy a sustained competitive

advantage. For this to occur, a product differentiation strategy that is
economically valuable must also be rare, difficult to imitate, and the
company must have the organization to exploit this. If there are fewer
firms differentiating than the number required for perfect competition
dynamics, the strategy is rare. If there is no direct, easy duplication and
there are no easy substitutes, the strategy is difficult to imitate.

There are four primary organizing dilemmas when considering product

differentiation as a strategy. They are as depicted below.
 Organizing Dilemmas
Inter-Functional Collaboration
Too Much (Lockstep) Too Little (No Collaboration)
Slows Innovation No learning makes implementation difficult
Connection to the Past
Too Much (History as Constraint) Too Little (No History)
Stifles Innovation Lack of Direction in Innovation
Commitment to Market Vision
Too Much (Foresight) Too Little (No Sight)
No Innovation Can Take Place Fail to Exploit Historical Advantage
Institutional Control
Too Little (Chaos)
Too Much (Bureaucracy)
Lack of Flexibility in Uncertain Market Lack of Direction in Innovation

To resolve these dilemmas, there must be an appropriate organization

structure. A U-Form organization resolves the inter-functional
collaboration dilemma if there are product development and product
management teams. Combining the old with the new resolves the
connection to the past dilemma. Having a policy of experimentation
and a tolerance for failure resolves the commitment to market vision
dilemma. Managerial freedom within broad decision-making guidelines
will resolve the institutional control dilemma.

Five leadership roles will facilitate the innovation process: Institutional

Leader, Critic, Entrepreneur, Sponsor, and Mentor. The institutional
leader creates the organizational infrastructure necessary for
innovation. This role also resolves disputes, particularly among the
other leaders. The critic challenges investments, goals, and progress.
The entrepreneur manages the innovative unit(s). The sponsor
procures, advocates, and champions. The mentor coaches, counsels,
and advises.

Apple had issues within its organization. In 1997, when Apple was
seeking a CEO acceptable to Jobs, Jean-Louis Gassée (then-CEO of Be,
ex-Products President at Apple) commented, “Right now the job is so
difficult, it would require a bisexual, blond Japanese who is 25 years old
and has 15 years’ experience!” Charles Haggerty, then-CEO of Western
Digital, said, “Apple is a company that still has opportunity written all
over it. But you’d need to recruit God to get it done.” Michael Murphy,
then-editor of California Technology Stock Letter, stated, “Apple
desperately needs a great day-to-day manager, visionary, leader and
politician. The only person who’s qualified to run this company was
crucified 2,000 years ago.”

Since Jobs took over as CEO in 1997, Apple seems to have resolved the
innovation dilemmas, evidenced by their numerous innovations. To
continue a product differentiation strategy, Apple must continue its
appropriate management of innovation dilemmas and maintain the five
leadership roles that facilitate the innovation process.
Recommendations

For Company

Lowering the cost of products and maintaining the same quality

standards.

Can form joint – ventures.

Knowledge Management.

More number of retail stores for easy access.

Continuous innovation to expand.

For Others

Do not compromise on price for quality.

Choose the products based on individual needs.

Be unique and different.

Conclusion
We feel that Apple must focus on several key aspects to continue to
grow and succeed. They must continue a stable commitment to
licensing, push for economies of scope between media and computers,
and become a learning organization.

Apple apparently made a commitment to licensing. Although it should

continue, Apple may want to consider other forms of strategic alliances.
An equity strategic alliance may offer Apple the opportunity to obtain
additional competencies. An effective way for a company like Apple to
accomplish this would be in the form of a joint venture.Apple should
continue pushing the new line of media-centric products. Meanwhile,
Apple should not lose focus on its computers. Macintosh computers
were 39% of Apple’s sales in 2005. (Burrows) This very innovative
company exploits its second-mover position. In the future, they will
need to continue innovating to expand the boundaries of both media
and computers.One persistent element of both competitive advantage
and risk is Steve Jobs. He is both synonymous with Apple’s success and
has a large equity interest in Apple and Disney. If he were to divest his
leadership position, the reaction of both the market and consumers
would be uncertain. Given his position within the organization as well
as the history of the company when he was gone, Apple must find a
way to learn as an organization. This will allow the company to
withstand a departure by Jobs. Based on the actions of the
organization, we feel that the mid-term performance of Apple will be
strong. This period allows Apple time to overcome their challenges if
they move swiftly. For this reason, we feel that they will continue to
succeed and will continue to outperform their peers.

Apple avoids competition 

If you look at the history of Apple, you'll see that instead of rising to
competition, they often ignore it, or try to use legal means, or bundling
clout, to erase it.

When challenged by a larger market force, as with the IBM PC and its
clones in the early 80s, and with Windows 3.0, 95 and then NT 4.0 in
the 90s, they miss obvious marketing opportunities, ways to make their
products stronger by participating in markets that others develop. This
is an art that Microsoft has mastered, there's no reason Apple couldn't
have learned the same lessons, but they didn't.

And when dealing with smaller competitors, Apple routinely and often
unconsciously forced them out of business by bundling, or declaring
that they will bundle a competitive offering.

When the Internet happened, Apple struggled against it instead of

embracing it, preferring to invest in technologies that eventually ended
up on the scrap heap. A wasted lead in content development,
developers going to Windows, a poor Java implementation on the Mac.

The bottom line, the strategy of avoiding competition has been

disastrous for Apple. But they want to do it again.

The same old strategy 

The cloners, Motorola, Power Computing, UMAX, IBM and others, are
poised to ship products that would take Apple out of the hardware
business, because they're cheaper, faster, bigger, more powerful
machines than Apple's new products. These are the computers that
Mac users want and are, in my opinion, entitled to.

Even though we haven't seen the license agreements with the cloners,
it appears that Apple has the contractual right to forbid them to ship
the computers, for any reason at all. Apple wants to keep their
hardware business, so they exercise that right.

I despise companies that use hardball tactics to put their competitors

out of business. I admire companies that rise to competition. I happily
buy new products when I have a choice. I don't like to buy products
that I'm forced to buy.
Apple's Branding Strategy

Apple Inc. uses the Apple brand to compete across several highly

competitive markets, including the personal computer industry with its
Macintosh line of computers and related software, the consumer
electronics industry with products such as the iPod, digital music
distribution through its iTunes Music Store, and more recently in the
smart phone market with the Apple iPhone.

Apple's product strategy is to create innovative products and services

aligned with a "digital hub" strategy, whereby Apple Macintosh
computer products function as the digital hub for digital devices,
including the Apple iPod, personal digital assistants, cellular phones,
digital video and still cameras, and other electronic devices.

The Apple Brand Personality

Apple has a branding strategy that focuses on the emotions. The Apple
brand personality is about lifestyle; imagination; liberty regained;
innovation; passion; hopes, dreams and aspirations; and power-to-the-
people through technology. The Apple brand personality is also about
simplicity and the removal of complexity from people's lives; people-
driven product design; and about being a really humanistic company
with a heartfelt connection with its customers.

Apple Brand Equity and Apple's Customer Franchise

The Apple brand is not just intimate with its customers, it's loved, and
there is a real sense of community among users of its main product
lines.

The brand equity and customer franchise which Apple embodies is

extremely strong. The preference for Apple products amongst the "Mac
community", for instance, not only kept the company alive for much of
the 90's (when from a rational economic perspective it looked like a
dead duck) but it even enables the company to sustain pricing that is at
a premium to its competitors.

It is arguable that without the price-premium which the Apple brand

sustains in many product areas, the company would have exited the
personal computer business several years ago. Small market share PC
vendors with weaker brand equity have struggled to compete with the
supply chain and manufacturing economics of Dell. Apple has made big
advances in becoming more efficient, particularly in logistics and
operations, but would still find it difficult to make a profit at the price
levels Dell transacts at.

The Apple Customer Experience

The huge promise of the Apple brand, of course presents Apple with an
enormous challenge to live up to. The innovative, beautifully-designed,
highly ergonomic, and technology-leading products which Apple
delivers are not only designed to match the brand promise, but are
fundamental to keeping it.

Apple fully understands that all aspects of the customer experience are

important and that all brand touch-points must reinforce the Apple
brand.

Apple is expanding and improving its distribution capabilities by

opening its own retail stores in key cities around the world in up-
market, quality shopping venues. Apple provides Apple Mac-expert
retail floor staff staff to selected resellers' stores (such as Australian
department store David Jones); it has entered into strategic alliances
with other companies to co-brand or distribute Apple's products and
services (for example, HP who was selling a co-branded form of iPod
and pre-loading iTunes onto consumer PCs and laptops). Apple has also
increased the accessibility of iPods through various resellers that do not
currently carry Apple Macintosh systems (such as Harvey Norman), and
has increased the reach of its online stores.

The very successful Apple retail stores give prospective customers

direct experience of Apple's brand values. Apple Store visitors
experience a stimulating, no-pressure environment where they can
discover more about the Apple family, try out the company's products,
and get practical help on Apple products at the shops' Guru Bars. Apple
retail staff are helpful, informative, and let their enthusiasm show
without being brash or pushy.

The overall feeling is one of inclusiveness by a community that really

understands what good technology should look and feel like - and how
it should fit into people's lives.

Apple Brand Architecture

From a brand architecture  viewpoint, the company maintains a

"monolithic" brand identity - everything being associated with the
Apple name, even when investing strongly in the Apple iPod and Apple
iTunes products.

Apple's current line-up of product families includes not just the iPod
and iTunes, but iMac, iBook, iLife, iWork, and now iPhone. However,
even though marketing investments around iPod are substantial, Apple
has not established an "i" brand. While the "i" prefix is used only for
consumer products, it is not used for a large number of Apple's
consumer products (eg Mac mini, MacBook, Apple TV, Airport Extreme,
Safari, QuickTime, and Mighty Mouse).

The list of Apple's Trademarks reflects something of a jumbled past.

The predominant sub-brand since the introduction of the Apple
Macintosh in January 1984 has always been the Apple Mac. Products
whose market includes Microsoft computer users (for example
MobileMe, QuickTime, Bonjour, and Safari) have been named so they
are somewhat neutral, and therefore more acceptable to Windows
users. Yet other product have been developed more for a professional
market (eg Aperture, the Final Cut family, and Xserve).

The iPod Halo Effect

Though Apple's iPhone and iTunes music business is profitable in its

own right, Apple's venture into these product areas was based on a
strategy of using the music business to help boost the appeal of Apple's
computing business.

Apple is using iPod, iTunes, and now iPhone to reinforce and re-
invigorate the Apple brand personality. At the same time, these
product initiatives are growing a highly relevant, appealing brand image
in the minds of consumer segments that Apple has not previously
reached.

In a so-called iPod halo effect, Apple hoped that the popularity of iPod
and iTunes among these new groups of customers would cause these
segments to be interested in Apple's computer products. This does
seem to have happened. Since the take-off of the iPod there has been a
dramatic rise in Apple's computer sales and market share.

A couple of years ago, Apple's aspirations for the iPod halo effect was
was highlighted most strongly when it used the slogan "from the
creators of iPod" in its promotion of iMac G5 computers. In this
instance, the Apple brand came full-circle - having been built into a
branding system that originates in the personal computer market, then
leveraged into the consumer electronics market, and then back into the
consumer personal computer market.

Apple Brand Strength Now Creating Financial Success

So far, Apples' branding strategy is bearing fruit. For example, Apple
reports that half of all computer sales through its retail channel are to
people new to Macintosh, the company's sales and margins have been
growing strongly since 2006, and Apple has achieved several "best
ever" quarterly financial results during the past couple of years.

Leveraging the success of the iPod, Apple launched the iPhone

(released in July 07) to extend the brand even further. Apple's buzz
marketing efforts in the first half of 2007 were truly superb, culminating
in the release of one of the most highly anticipated products for many
years - and launching apple into a completely new market: mobile
handsets. By July 2008 the buzz about the 3G iPhone resulted in over 1
million units being sold in the first 3 days of its release in over 20
countries around the world.

Apple Re-entering the Corporate Market via the iPhone Halo

Though no-one at Apple would say so today, the next phase of Apple's
strategy seems focused on the Corporate marketplace.

A long time ago, Apple had a fairly strong market share in large
companies.

A long, long time ago (at the end of the 1970's) the first spreadsheet
program (VisiCalc) was launched on the Apple II. The first PC (the IBM
PC) to run a Microsoft operating system (PC DOS) did not appear until
1981. When Microsoft launched its Excel spreadsheet in 1984 it
appeared first on the just-released Apple Mac, such was Apple's
presence among accounting and finance departments.

Even though Apple effectively stopped competing for corporate

business during the 1990s, the Apple Mac is still used in some
corporate environments. Microsoft still has a vigorous applications
development team totally dedicated to writing business software for
the Apple Mac. New versions of Microsoft Office for Apple Mac still
come out approximately 2 years before similar functionality is placed in
the next version of Microsoft Office for the Windows operating system.

Over the next few years it seems likely that Apple will re-focus on the
Corporate marketplace: Apple has announced that "Snow Leopard"
(the next version of the Apple Mac operating system, due in 2009) will
include features allowing Mac computers to fully support Microsoft
Exchange. This will enable corporate IT departments to support
business users who wish to use Apple Macs for their main email clients.

Also, Microsoft continues to bring out advanced versions of Microsoft

Office for Apple Mac, and - very significantly - in mid-2008 Apple
announced a software upgrade for the iPhone which allows iPhones to
be fully supported by Microsoft Exchange email servers. Corporate IT
departments can now include iPhones as email clients.

Apple's strategy seems clear: to use the popularity of the iPhone to

break back into large corporations, and ultimately have Apple Macs on
the desks of large businesses (or more probably - in the laptop bags of
middle and senior managers in most large businesses. The Macbook Air
is also clearly aimed at this type of market).

As we say; no one in Apple will currently admit to such ambitions, but

this is clearly where Apple's branding strategy is headed.

Apple's Original Apple Macintosh Marketing Strategy

Stanford University has published contemporary records and original

documents of the marketing strategy for the Apple Macintosh launch in
1984, including the original Apple marketing strategy and the Apple
Macintosh product introduction plan written by Regis McKenna.

It is now 25 years since the launch of the Apple Macintosh (on January
24, 1984). Having proven itself and already gained considerable
popularity with the Apple II, Apple chose to announce the Apple Mac in
one of the most famous-ever commercials, aired during the third
quarter of Super Bowl XVIII on 22 January 1984.

In addition to the innovative Apple Mac graphical user interface (based

on concepts from Xerox PARC), the Mac's industrial design - shown
below - was revolutionary for the time. Interestingly, it share's the
same screen size (9 inch) as the latest popular PC format: NetBooks.

The original Mac graphical

  user interface was
revolutionary in its day. It
The first Mac (above) had introduced the use of the
just 128KB of RAM and a mouse and features such as
400KB 3.5-inch floppy icons, fonts, folders, and
disk drive, and a 9-inch, audio to 
512x342 pixel
monochrome display.
APPLE PRODUCTS

Current products

Mac and accessories

See also: Timeline of Macintosh models, List of Macintosh models
grouped by CPU type, and List of Macintosh models by case type

The Mac mini, low-cost desktop computer.

 Mac mini, consumer sub-desktop computer introduced in January

2005.
 iMac, consumer all-in-one desktop computer that was first
introduced by Apple in 1998. Its popularity helped revive the
company's fortunes.
 Mac Pro, workstation-class desktop computer introduced in
August 2006, it was previously known as the PowerMac.
 MacBook, consumer notebook introduced in 2006, available in
white, it was previously known as the iBook.
 MacBook Air, ultra-thin, ultra-portable notebook, introduced in
January 2008.
 MacBook Pro, professional portable computer alternative to the
MacBook, available in 13, 15, and 17 inch variants, introduced in
January 2006, it was previously known as the PowerBook.
  Xserve, rack mounted, dual or quad core, dual processor 1U
server.

Apple sells a variety of computer accessories for Mac computers

including the AirPort wireless networking products, Time Capsule,
Cinema Display, Mighty Mouse, the Apple Wireless Keyboard computer
keyboard, and the Apple USB Modem.

iPod

iPod Nano

On October 23, 2001, Apple introduced the iPod digital music player. It
has evolved to include various models targeting the needs of different
users. The iPod is the market leader in portable music players by a
significant margin, with more than 100 million units shipped as of April
9, 2007.[84] Apple has partnered with Nike to offer the Nike+iPod Sports
Kit enabling runners to synchronize and monitor their runs with iTunes
and the Nike+ website. Apple currently sells four variants of the iPod.

 iPod Classic (previously named iPod from 2001 to 2007), portable

media player first introduced in 2001, currently available in an
120 GB model.
  iPod Nano, portable media player first introduced in 2005,
currently available in 8 and 16 GB models.
 iPod Shuffle, digital audio player first introduced in 2005,
currently available in 1 and 4 GB models.
 iPod Touch, portable media player first introduced in September
2007, currently available in 8, 16, and 32 GB models.

i iPod Touch

2nd generation iPod touch with iPhone OS 3.0 Manufacturer Apple Inc.

The iPod Touch (trademarked and marketed as iPod touch) is a

portable media player, personal digital assistant, and Wi-Fi mobile
platform designed and marketed by Apple Inc. The product was
launched on September 5, 2007 at an event called The Beat Goes On.[4]
The iPod Touch adds the multi-touch graphical user interface to the
iPod line and is available with 8, 16, or 32 GB of flash memory. It
includes Apple's Safari web browser and is the first iPod with wireless
access to the iTunes Store. It also has access to Apple's App Store. The
second generation iPod Touch, featuring external volume controls, a
built-in speaker, a contoured back, built-in Nike+, and Bluetooth
support, was unveiled on September 9, 2008 at the Let's Rock keynote
presentation.

iPod Nano

4th Generation iPod Nano

The iPod Nano (marketed lowercase as iPod nano) is a portable media

player designed and marketed by Apple Inc. It is the midrange model in
Apple's iPod family. The first generation was introduced in 2005. [1] It
uses flash memory, like the iPod Shuffle, but with a 2-inch (diagonal)
QVGA display and the "click wheel" found on the iPod Classic. The iPod
Nano has gone through four models, or generations, since its
introduction.

Supported audio formats

 AAC (16 to 320 kbps)

 Protected AAC (from the iTunes Store)
  MP3 (16 to 320 kbps, including variable bitrate files)
 Audible (formats 2, 3 and 4)
 Apple Lossless
 AIFF
 WAV

iPod Shuffle

From left to right, the three generations of the iPod Shuffle.

The iPod Shuffle (trademarked as iPod shuffle) is a digital audio player

designed and marketed by Apple Inc. It is the budget model in Apple's
iPod family. It was announced at the Macworld Conference & Expo on
January 11, 2005, using the tagline "life is random". Instead of storing
data on a hard disk, it was the first iPod to use flash memory. The
current third generation model, introduced on March 11, 2009, weighs
10.7 grams (0.38 ounces).The iPod Shuffle is the smallest digital audio
player ever produced by Apple
iPod Classic

iPod Classic 6th generation

The iPod Classic (trademarked as iPod classic and known before its
sixth generation as simply the iPod) is a portable media player
marketed by Apple Inc. To date, there have been six generations of the
iPod Classic, as well as a spin-off (the iPod Photo) that was later re-
integrated into the main Classic line. All generations use a 1.8-inch hard
drive for storage.
The "Classic" retronym was introduced with the introduction of the
sixth-generation iPod Classic on 5 September 2007; [1] prior to this, an
iPod Classic was simply referred to as an iPod.

iPhone

At the Macworld Conference & Expo in January 2007, Steve Jobs

revealed the long anticipated[85] iPhone, a convergence of an Internet-
enabled smartphone and iPod.[86] The original iPhone combined a 2.5G
quad band GSM and EDGE cellular phone with features found in hand
held devices, running a scaled-down versions of Apple's Mac OS X
(dubbed iPhone OS), with various Mac OS X applications such as Safari
and Mail. It also includes web-based and Dashboard apps such as
Google Maps and Weather. The iPhone features a 3.5-inch (89 mm)
touch screen display, 4, 8, or 16 GB of memory, Bluetooth, and Wi-Fi
(both "b" and "g").[86] The iPhone first became available on June 29,
2007 for $499 (4 GB) and $599 (8 GB) with an AT&T contract.[87] On June
9, 2008, at WWDC 2008, Steve Jobs announced that the iPhone 3G
would be available on July 11, 2008.[88] This version added support for
3G networking, assisted-GPS navigation, and a price cut to $199 for the
8 GB version, and $299 for the 16 GB version, which was available in
both black and white. The new version was visually different from its
predecessor in that it eliminated the flat silver back, and large antenna
square for a curved glossy black or white back. Following complaints
from many people, the headphone jack was changed from a recessed
jack to a flush jack to be compatible with more styles of headphones.
The software capabilities changed as well, with the release of the new
iPhone came the release of Apple's App Store; the store provided
applications for download that were compatible with the iPhone. On
April 24, 2009, the App Store surpassed one billion downloads. [89] On
June 8, 2009, at Apple's annual worldwide developers conference, the
iPhone 3GS was announced, providing an incremental update to the
device including faster internal components, support for faster 3G
speeds and video recording capability.

 iPhone 3G, currently available in an 8 GB model.

 iPhone 3GS, currently available in 16 and 32 GB models.

Apple TV

At the 2007 Macworld conference, Jobs demonstrated the Apple TV,

(previously known as the iTV), a set-top video device intended to bridge
the sale of content from iTunes with high-definition televisions. The
device links up to a user's TV and syncs, either via Wi-Fi or a wired
network, with one computer's iTunes library and streams from an
additional four. The Apple TV originally incorporated a 40 GB hard drive
for storage, includes outputs for HDMI and component video, and plays
video at a maximum resolution of 720p. On May 31, 2007 a 160 GB
drive was released alongside the existing 40 GB model and on January
15, 2008 a software update was released, which allowed media to be
purchased directly from the Apple TV.

Products & Services

CinemaView HD TV and Data Displays Announced

PR: Collins America announces a group of display and TV products

engineered to radically expand the capabilities of today's Apple
computer systems. The new products include 24" and 47" HD LCD
displays, both with native Mini DisplayPort connections, and a full
featured headless TV system with full HD TV features, as well as Mini
DisplayPort connections both in an out.
 CinemaView believes that
tomorrow's graphics and video experiences simply are not going to be
the same as yesterday's, and that Apple will continue to lead and define
the path forward for consumer video entertainment. An investment
made into a display product to

day should lead to many years of easy integration with your home
video lifestyle. With Apple's implementation of Mini DisplayPort
connectors on its computers, and with HDMI on its Apple TV, these two
interfaces define the future of Apple-centric video.

The two new CinemaView displays have the 16:9 cinematic aspect ratio
and 1920 x 1080 resolution that is well suited for viewing either movies,
HD TV, or data. One of these displays makes a terrific companion to a
Mac, connecting by Mini DisplayPort, and routing USB 2.0 through the
same cable from the Mac to the display's four port USB 2.0 hub.

Our CinemaView TV product turns a CinemaView display into a full-

blown HD television system, in addition to enabling direct connection
to both a Mac and an Apple TV, too. Plug a 24" or 47" CinemaView
display into the Mini DisplayPort output, connect your favorite TV
peripherals by HDMI, composite, or component links, connect your Mac
to the Mini DisplayPort input and your Apple TV to an HDMI input.
CinemaView TV has dual cable-ready HD tuners with picture-in-picture,
and includes easy-to-use onscreen controls, and an RF wireless remote.
Inserting a CinemaView TV box between a Mac and either an Apple LED
LCD Cinema Display or a CinemaView display turns any new Mac system
into a complete HD home television system.
Software

Apple develops its own operating system to run on Macs, Mac OS X, the
latest version being Mac OS X v10.6 Snow Leopard. Apple also
independently develops computer software titles for its Mac OS X
operating system. Much of the software Apple develops is bundled with
its computers. An example of this is the consumer-oriented iLife
software package that bundles iDVD, iMovie, iPhoto, iTunes,
GarageBand, and iWeb. For presentation, page layout and word
processing, iWork is available, which includes Keynote, Pages, and
Numbers. iTunes, QuickTime media player, Safari web browser, and
Software Update are available as free downloads for both Mac OS X
and Windows.

Apple also offers a range of professional software titles. Their range of

server software includes the operating system Mac OS X Server; Apple
Remote Desktop, a remote systems management application;
WebObjects, Java EE Web application server; and Xsan, a Storage Area
Network file system. For the professional creative market, there is
Aperture for professional RAW-format photo processing; Final Cut
Studio, a video production suite; Logic, a comprehensive music toolkit
and Shake, an advanced effects composition program.

Apple also offers online services with MobileMe (formerly .Mac) that
bundles personal web pages, email, Groups, iDisk, backup, iSync, and
Learning Center online tutorials. MobileMe is a subscription-based
internet suite that capitalizes on the ability to store personal data on an
online server and thereby keep all web-connected devices in sync. [94]
Announced at MacWorld Expo 2009, iWork.com allows iWork users to
upload documents for sharing and collaboration.

Software

iPhoto to Disk Freeware Image Management Utility

PR: If your iPhoto library contains thousands of photos and movies

organized in hundreds of events, retrieving your media files may be a
challenging experience. That's where iPhoto To Disk can help.

Whether you need to export your photos or movies for use in other
applications or you just want to archive a part of your library, iPhoto To
Disk makes it easy.

iPhoto To Disk exports your media files to a well-structured folder

hierarchy. You probably don't want the thousands of photos and
movies in your library to all be exported to a single folder. Using iPhoto
To Disk you can automatically organize your export by "event" or by
"year and event" in a hierarchical folder structure.

iPhoto To Disk allows flexible naming of your media files. You can keep
your original media file names, but they are most probably meaningless
(they typically depend on your camera settings). Did you spend time
defining relevant names for your iPhoto events? Of course! Did you
label your photos and movies with titles? Great! Then, with iPhoto To
Disk, you can use this valuable information to automatically rename the
exported media files.

iPhoto To Disk is simple. All features are available in a single window, as

shown in the screenshot below. To retrieve your media files, select
iPhoto events in your library, drag your selection to the export basket,
choose your export preferences and click the "Export" button. Done!

Headquarters
Main article: Infinite Loop (street)

Apple Inc., 1 Infinite Loop, Cupertino, CA.

Apple Inc.'s world corporate headquarters are located in the middle of

Silicon Valley, at 1 Infinite Loop, Cupertino, California. This Apple
campus has six buildings that total 850,000 square feet (79,000 m2) and
was built in 1993 by Sobrato Development Cos.[114]

In 2006, Apple announced its intention to build a second campus on

50 acres (200,000 m2) assembled from various contiguous plots. The
new campus, also in Cupertino, will be about one mile (1.6 km) east of
the current campus.

Advertising

Since the introduction of the Macintosh in 1984 with the 1984 Super
Bowl commercial to the more modern 'Get a Mac' adverts, Apple has
been recognized in the past for its efforts towards effective advertising
and marketing for its products, though it has been criticized for the
claims of some more recent campaigns, particularly 2005 Power Mac
ads and iPhone ads in Britain.

Logos

Apple’s first logo, designed by Jobs and Wayne, depicts Sir Isaac
Newton sitting under an apple tree. Almost immediately, though, this
was replaced by Rob Janoff’s “rainbow Apple”, the now-familiar
rainbow-colored silhouette of an apple with a bite taken out of it. Janoff
presented Jobs with several different monochromatic themes for the
"bitten" logo, and Jobs immediately took a liking to it. While Jobs liked
the logo, he insisted it be in color, as a way to humanize the company.

The original hand drawn logo features Sir Isaac Newton, and one theory
states that the symbol references his discoveries of gravity (the apple)
and the separation of light by prisms (the colors). Another explanation
exists that the bitten apple pays homage to the mathematician Alan
Turing, who committed suicide by eating an apple he had laced with
cyanide.Turing is regarded as one of the fathers of the computer. The
rainbow colors of the logo are rumored to be a reference to the
rainbow flag, as a homage to Turing's homosexuality.

In 1998, with the roll out of the new iMac, Apple discontinued the
rainbow theme — supposedly at the insistence of recently returned
Jobs — and began to use monochromatic themes, nearly identical in
shape to its previous rainbow incarnation. However, no specific color is
prescribed throughout Apple's software and hardware line. The logo's
shape is one of the most recognized brand symbols in the world,
identifies all Apple products and retail stores (the name "Apple" is not
even present) and has been included as stickers in nearly all Macintosh
and iPod packages through the years.

The The rainbowThe The Aqua-The "glass"-

original "bitten" logo,monochrome- themed Applethemed
Apple used fromthemed logologo, used fromApple logo,
logo late 1976maintained the2001 to 2003 onused from
featuring until replacedsame shaped aspackaging and2003 to
Isaac in 1998 bythe rainbowadvertisements, present. It
Newton monochrome theme itand on earlyfirst appears
under thethemes. replaced. It isversions of Macon Mac OS X
fabled still used andOS X beforePanther and
apple often appears inPanther.[citation also on start-
needed]
tree. various colors on up of the
various iPhone, iPod
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in 2003. iPod Nano,
and all
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 products.
Slogans

Apple's first slogan, "Byte into an Apple", was coined in the late 1970s.
From 1997–2002, Apple used the slogan Think Different in advertising
campaigns. The slogan had a lasting impact on their image and revived
their popularity with the media and customers. Although the slogan has
been retired, it is still closely associated with Apple. Apple also has
slogans for specific product lines — for example, "iThink, therefore
iMac", was used in 1998 to promote the iMac, and "Say hello to
iPhone" has been used in iPhone advertisements. "Hello" was also used
to introduce the original Macintosh, Newton, iMac ("hello (again)"), and
iPod.[citation needed]

Apple TV

Apple TV on display pre-release at the Macworld 2007 conference

Apple TV is a digital media receiver manufactured, marketed and sold

by Apple. It is a small form-factor network appliance designed to play
digital content originating from the iTunes store, YouTube, Flickr,
MobileMe or any Mac OS X or Windows computer running iTunes onto
an enhanced-definition or high-definition widescreen television. Apple
TV can function as either a home theater-connected iPod device or a
digital media receiver, depending on the needs of the user. It was first
announced at a special press event in San Francisco, California on
September 12, 2006, by Apple CEO Steve Jobs.

The devices started shipping on March 21, 2007. This initial version
shipped with 40 GB of storage. A second version with a larger 160 GB
hard disk started shipping on May 31, 2007.

Features

AppleTV is a network device that allows consumers to use an HDTV set

to view photos, play music and watch video that originates from an
Internet media service or a local network. Internet media services
include the iTunes Store, YouTube, Flickr, or MobileMe. By connecting
directly to the iTunes Store, users can buy and rent movies, buy
television shows, songs, albums, and music videos and subscribe to
video and audio podcasts, much of the content in high definition.
Consumers can browse and view YouTube videos and Flickr or
MobileMe photo albums.[10] Apple TV can also sync or stream photo,
music and video content from a network-connected computer running
iTunes.[11] Apple TV includes enhanced remote control and AirTunes
capabilities.[2]

Apple plans to continue offering new features through automatic

software upgrades, leaving the door open to further utilization of its
hardware capabilities and new software developments.

Internet media services

Apple TV offers basic media services with movie previews and YouTube
videos. The Apple TV provides YouTube integration by receiving direct
streams from YouTube.[16][17] A YouTube account is not required to
browse and view YouTube videos, but it is good to configure for
personalized options, such as viewing favorites.[18]
With the 'Take 2' software update announced by Steve Jobs at
Macworld 2008, Apple TV became capable of acting as a pure stand-
alone device, no longer requiring a computer running iTunes on Mac OS
X or Windows to stream or sync content to it. Jobs stated, "Apple TV
was designed to be an accessory for iTunes and your computer. It was
not what people wanted. We learned what people wanted was movies,
movies, movies."[19] Users can access the iTunes store directly through
Apple TV to purchase movies, music, music videos, and television
shows.[20][21] Customers can also use Apple TV to rent regular or HD-
quality movies[22] Until mid-March, 2009, iTunes HD movies could only
be purchased from Apple TV.[23][24]

Consumers can browse and view podcasts from the iTunes store, saving
podcasts as favorites.TWiT's Leo Laporte notes that the podcast
support in the Apple TV puts podcasts on the same level as other
media,[25] and this was substantiated by the fact that the standard
podcast subscription process no longer applies with Apple TV. It is seen
by industry experts as changing podcasts to video on demand services.
[26]

Internet photos can be viewed from MobileMe and Flickr accounts. [18]
Apple TV will display the photos in a slide show, with automatic cross-
dissolve transitions. The Ken Burns effect can also be configured for transitions.[27]
Parental controls allow consumers to limit access to Internet media service content. Internet
media is split into 4 categories: "Internet Photos", "YouTube", "Podcasts", and "Purchase and
Rental ". Each of the 4 categories is configured by a parental control of "Show", "Hide" or "Ask"
to prompt for a 4-digit preset code. In addition, Movies and TV shows can be restricted based on
rating as well as explicit music and podcasts.[18]

Remote control

Apple TV comes with the standard Apple Remote,[6][31] Out of the box, the default
setting is unpaired which means any Apple Remote works with the device. Apple
TV can optionally be paired with one particular remote to prevent conflicts from
other IR-capable devices.[32] The remote control allows for adjustment of playback
volume, but for music only.[2][33][34]

Because the Apple Remote is a standard infrared remote, mainstream universal

remotes have been updated for use with Apple TV and can be used to control
volume.[34][35][36] The Apple TV can be programmed to recognize commands from
virtually any infrared remote control.[37]

On July 10, 2008, Apple released, in the App Store, Remote, a free application that
allows for a Wi-Fi-based remote control of the iTunes library on the Apple TV and
computers of the Mac line using Apple's line of devices with iPhone OS 2.0
(currently the iPhone and iPod Touch).[38][39] Remote's touch and gesture features
are similar to the multi-touch interface used on the iPhone and iPod Touch
"Music" app.[40]

The commands provided on the AppleTV handheld remote are: "play/pause",

"menu", "+", "-", "back", and "next". The "play/pause" button will also send the
unit into standby mode when held for approximately 5 seconds, however in
newer versions of software you must be in the main menu for this to work.
Pressing the menu button multiple times may not consistently get you to the main
menu, and it has been mentioned that in certain versions of software pressing
and holding the menu button will get you to the main menu directly. If the unit is
already in standby then any of the buttons on the remote appear to wake the
unit. There appears to be no way to discretely turn ON or OFF the device with any
infrared codes or get to any sub-menu (music, movies, pictures, etc). The use of
multiple functions for individual buttons or infrared codes is problematic,
especially for home automation/control systems and universal remotes.

Look and feel

The Apple TV's software is based on Front Row used on Mac OS X.

Apple TV presents an interface based on the Front Row software for Mac OS X
10.5 (Leopard) computers. Initially, Apple TV software version 1.0 was based on
an enhanced OS X 10.4 Front Row. Apple TVs interface was merged back into OS X
10.5 in late 2007, but since then, major Apple TV enhancements ("Take Two" and
later) have not been included in the OS X version of Front Row.[54]

Apple TVs Content is organized into six groups (Movies, TV Shows, Music,
YouTube, Podcasts, and Photos), and is presented in the initial menu along with a
"Settings" options option for Apple TV configuration, including software updates.
[55][56]
These initial menu options then lead to other submenus. [18] The included
Apple Remote is used to navigate through the menus by using the up or down
buttons and selecting options with the play button. The left/right buttons are used
to perform rewind and fast-forward functions while viewing video content, but
also perform previous song/next song functionality when selecting audio-only
content.[31]

Aside from "Movies" and "TV Shows" content, the "TV Shows" options allows the
user to sort contents by show or date and the "Movies" option also allows the
user to view movie trailers for new releases, just as the Front Row software does
on a Mac. All video content, including movies, TV shows, music videos, and video
podcasts, includes bookmark functionality. Apple TV automatically bookmarks
video content midstream to continue playback at a later time. [57] The "Music"
submenu offers similar options to those found on an iPod, presenting the
available music sorted by Artist, Album, Songs, Genres, and Composers, as well as
offering a shuffle option and listing available audiobooks. As categories are
selected with the remote, animated album art is displayed on the side of the
display for the contents of the selected category. While playing "audio-only"
content such as music and audio podcasts, Apple TV periodically moves album art
and content info on the TV display to prevent burn-in on video displays.[57]

Rear connectors including power, USB for firmware updates, Ethernet, HDMI,
component video and audio, and optical audio.

Processor Intel[1] Pentium M 1.0 GHz "Crofton" Processor[3]

Graphics NVIDIA GeForce Go 7300 (64 MB VRAM)[66]

Memory 256 MB of 400 MHz DDR2 SDRAM[4]

Hard drive 40 or 160 GB hard disk[1][4]

 USB 2.0 (officially for diagnostic use only, though hackers

have managed to allow connectivity of hard disks, mice, and
keyboards)[67]
Connectivity  infrared receiver
 HDMI
 Component Video.[1]
 Video and audio cables are not included with Apple TV.

 10BASE-T/100BASE-T Ethernet
Networking  802.11 b, g, n wireless networking (AirPort)[1]

 1080p/1080i 60/50 Hz (but maximum video resolution is

720p)[1]
Output  720p 60/50 Hz[1]
 576p/576i 50 Hz (PAL)[1]
 480p/480i (480i is unofficially supported) 60 Hz[1][14]

 digital optical audio

Audio  RCA analog stereo audio[1]

Power Built-in universal 48W power supply[1]

Dimensions 197x197x28 mm (7.7x7.7x1.1 in)[1]

Weight 1.09 kg (2.4 lb)[1]

Software 1.1 (June 20, 2007) YouTube integration, slideshow screensaver,

Updates[2] parental controls, framework updates, security updates, [68][69] photo
priority and browsing other iTunes stores.[70]

iTunes 7.3 (June 29, 2007) Apple TV Photo Streaming[71]

 2.0 aka "Take Two" (Feb 12, 2008) Standalone iTunes Store
features (directly from Apple TV through the Internet): rent
standard and HD movies with Dolby Digital 5.1 surround sound, buy
TV Shows, music and music videos. Content automatically syncs
back to the user's computer. Podcast directory of over one hundred
thousand video and audio podcasts. View photos from .Mac and
Flickr galleries. Play iTunes content on the audio system connected
to the Apple TV via AirTunes, [72] limited Internet radio support,[44][45]
show everything or only synced content, TV show display tweaks,
iPhoto events, and enhanced parental controls.[42]

2.1 (July 10, 2008) Movie Wish List, Support for Remote
application, AirTunes receiver, Photo browser, MobileMe protected
albums, Podcasts browsable by video and audio, Security fixes.[73]

2.2 (October 2, 2008) HD TV shows, Movie browsing by actor and

director, Chapter selection, alternate audio and subtitles, Movie
description, Genius playlists, On-The-Go playlists, Music videos in
playlists, Apple TV standby mode, Security fixes.[74]

2.3 (November 24, 2008) AirTunes Streaming from Apple TV, Third-
party Remote Controls, Playlists, Music Volume Control. [33][34]

2.3.1 (February 25, 2009) Network Test[75]

2.4 (June 24, 2009) Remote app directional control, Flickr Search,
New view options, Updated transport and chapter modes.[76]

Modifications and hacks

Hacks for the Apple TV were available within days of the unit's release. Particular
attention was paid to the device's operating system, which had been described by
Walt Mossberg before the release as "a modified version of the Mac operating
system".[77] Users created solutions for remote access, enhanced codec support,
installing a full blown copy of Mac OS X Tiger, USB hard drive access, web
browsing, support for enhanced remotes, and the ability to download metadata
from the IMDB.[78] The end result was a group of "unofficial" commercial and
community-supported add-ons for the Apple TV.[79][80]
Apple is not currently preventing users from installing Apple TV modifications, but
users are warned that applying hacks may void the product's warranty. [81] The
Apple TV system software updates will typically remove any software hacks that
are installed. Major ATV hacks are updated on a regular basis and the Apple TV
device can easily be re-hacked.[68] Most Front Row plugins are minor and have not
been updated to work with Apple TV 2.x. AwkwardTV reports 10 plugins out of 32
have been certified to be compatible with the "Take Two" update.[82]

Limitations

Functionality

Concerns have been expressed about the lack of personal video recorder
capabilities on Apple TV.[31][58] Apple TV does not contain a TV tuner, but a tuner
and PVR capability can be applied on the connected home computer through a
third party. The PVR software will connect to iTunes, enabling scheduled HDTV
recordings to automatically appear on Apple TV for playback. [89] One such PVR
idea says that Apple should buy TiVo and another mentions that Apple should go
a step further and turn Apple TV into a fully-functional cable box. [90][91] Critics
against the DVR/TiVo idea mention that the DVR market is dead and call the DVR
the "PDA of the living room".[92]

Industry experts feel that the Front Row interface is lacking standard iTunes
functionality, including rating items, synchronizing from more than one computer,
[93]
full Internet radio support,[35][92] and games.[94] After the success of the iPhone
SDK and the App Store, it has been mentioned that Apple TV should provide the
same functionality so that programmers can provide third party applications using
Apple TVs interface without having to hack the Apple TV device. The Movies
"Search" feature only searches iTunes Store movies, not search local network
movies (i.e. "My Movies").[96] The website Apple TV Junkie was created to "list of
all new HD & SD rental titles released on a daily basis", something which the
Apple TV interface does not provide today.[97]

Movie rentals on iTunes can be transferred to any video-enabled iPod, iPhone or

Apple TV for playing, but any movie rented on Apple TV must be watched on
Apple TV.[22][98] To copy a movie purchased on Apple TV to a video-enabled iPod or
iPhone, the movie must first be transferred to an iTunes-enabled computer on
the network.[99]
Apple TV/itunes is "not designed" to sync or stream content from networked
drives to Apple TV. Content which can be synced or streamed to Apple TV has to
be on the local drive or an external drive directly connected to the iTunes-enabled
computer.

Hardware

Apple TV content cannot be used with older televisions, although 480i is

unofficially supported as long as the TV supports component video connectivity.
RCA/composite video and F/RF connectors are not included on the Apple TV
device. Reviewers have noted that Apple is "future-proofing", and "if you do not
have HDTV now, you will in the future".

The Apple Remote can control volume, but only for Music on Apple TV.

Apple TV comes with only a power cable. Apple has teamed up with a third party
to provide cables for its customers. [112] A USB port is included on the device, but it
is reserved for service use only.

The Apple TV device runs "very hot",[35] sometimes reaching 44° C (111° F).[106][113]
According to Apple, this is normal. [114] There is no off button or function on the
Apple TV (although there is a sleep function) so the only way to cool the Apple TV
is to unplug it in sleep mode.