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Strategy and Positioning

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June 16, 2014

Strategy and Positioning

Overview

Apple Inc. incorporated in 1977. Their business model has been design, production and promotion of personal computers, messaging and communication devices, mobile media, laptops and other portable digital equipment. The company also produces a wide range of associated software applications, secondary merchandise and services; the most well known among these: iPhone, IPod, iPad, Mac Book, IOS and OSX systems. Apple recently purchased a seed company from Silicon Valley that focuses on smartphone applications and sells products and software to government buyers (Reuters, 2014).

Computers have existed for several decades. Essentially, the computer, as we know it, is a very crude substitute for an external brain. No computer on Earth has ever been able to approach the complexity and capacity of the human mind. Technology’s attempts to simulate the complexity of even a small segment of the brain still seem overwhelmingly futile. In light of these limits, one logical solution is to develop a device that will join forces with a user’s mind rather than competing with it. One might assume that the characteristics of such a device would be present too much complexity; however, it may be very simple. Much like a computer or smartphone, the brain runs on electricity.

The chemical reactions that occur when we produce a thought create a reaction within our brain cells (or neurons). This electrical impulse releases chemicals (neurotransmitters) which in turn control the degree of energy of other electrical impulses. It is this impulse which controls the level of release (and type of) neurotransmitter that will influence the next electrical impulse. The psychiatric world commonly refers to this process as neural “firing.” It is common knowledge that these electrical impulses can travel to a set of electrodes when attached to the scalp of a subject. The key to harnessing and controlling how a thought is captured and translated lies within this practice. If a smart phone is able to translate refractory periods, it may be able to decipher thought through an interface.

Controlling machinery with thought involves capturing the thought impulse. Each impulse would travel to a receptor center which developers would model after a neural receptor cell. The idea of communication is to transfer thought to another person. The interface that can send a message directly to another person’s brain might, at some point, circumvent the need for a device (Oxbridge Biotech Roundtable, 2014).

SWOT Analysis

Strengths

Strengths of the Offering.

The biomedical engineering aspect of a prospective device is fairly straightforward. The developer could model the non-invasive device link to the brain after the EEG and neuro-prosthesis mechanisms. The primary goal is to eliminate typing and speech through the smart-phone and either accepting or rejecting the reproduction of the thought, prior to transmitting the message to the recipient. This will enable the user to avoid miscommunication or unintended words or messages. To accomplish this, the built-in receptor would also function as a filter or thought sifter. If this device is intuitive, it may, at some point, develop the capability to “auto-sift” as the program learns what thoughts the user tends to transmit accidentally and what messages he or she wishes to convey in a given circumstance or to a certain contact (Oxbridge Biotech Roundtable, 2014).

Strengths of the Company.

Apple’s strengths lie in its reputation. The company’s marketing and advertizing capabilities are strong, and its production, manufacturing and distribution is available through numerous channels in the United States.

Weaknesses

Weaknesses of the Offering.

The capability and knowledge available in the area of neuro-prosthetics as it relates to electronic based non- invasive technology is not as abundant on the biomedical engineering side. Understandably, devices that are exclusively for medical purposes hold a position of priority in this field of research. The efforts to establish adequate manufacturing and testing might be a challenge (Michigan News University of Michigan, 2014).

Weaknesses of the Company.

The weaknesses of Apple are in their product span, pricing levels and in their delivery conduits in Asia and India. The company also demonstrates limitations in area of product innovation, which this offering might help to remedy. Another of Apple’s major weakness is in system compatibility. Compatibility with software and hardware systems is a major challenge, as is the overall integrative functionality with other operating systems. This weakness may shed light on the company’s heavy dependence on iPhone, iPad and Mac Book sales (Reuters, 2014).

Opportunities

Opportunities of the Offering.

The offering would address the challenge the company has been enduring with regards to innovation and advancement. It would also possibly be a viable alternative to the iPhone and iPad and would offer the market an alternative to these products; thereby diminishing the dependence that the company has on iPad and iPhone demand. The product would be a huge advancement in technology and, if developed well, may eliminate and preclude competition for an indefinite period of time; which would boost profitability and share prices tremendously.

Opportunities of the Company.

Opportunities for Apple are mainly in the areas of acquisition of other similar companies in the market space, mobile payment capability, and clip-on gear. The biggest opportunity for Apple (or any company in its sector) is the discovery and development of a product that, like the iPhone, becomes a product that consumers covet more than any other device. That has always been the ultimate opportunity in this market space.

Threats

Threats to the Offering.

The threats exist mainly in patent claims and resulting lawsuits. There are other companies and research groups who are working on similar technology. Competition threats exist with these same groups. Other companies or developers may seek patents or have already received pending patents on similar technology (Reuters, 2014).

Threats to the Company.

The company is currently “king of the mountain.” Apple has a strong market share and industry position at the top; other companies want to push it down and take its place. The company is perpetually attempting to innovate with the same products. The competition is the biggest threat at the present time. The companies that pose immediate threats are Microsoft, Android, Nokia and Samsung (Reuters, 2014).

Target Market

Releasing new products is uncommon for the Apple organization. Consumers know Apple for its production of computers in the early 2000’s. However, in October of 2001 Apple released the iPod which was their first non-computer product. The iPod was a great idea that took the place of the compact disc player by introducing hard-drive based digital music player. Although this new product was guaranteed to be a great selling product and consumers found the iPod to be amazing, the sales for the IPod were not high. The reason for the low sales of the iPod was because of the pricing. The iPod’s pricing began at 399.00 dollars when it first came out; therefore the target market for the IPod was primarily wealthy consumers. The iPod did make a turnaround in late 2003, because apple made it available for windows computers to download ITunes. ITunes allows consumers to bypass compact disc altogether. Consumers were able to download music from ITunes on to their IPod which made the Apple company over 70 million dollars. With the company making so much money from the transformation, the prices for IPods began to fall. To this day this product has changed the way that the world listens to music through one of Apples product.

Apple understands that there are many trials and errors that come from marketing a new product. This is why coming up with a product that interacts with peoples brains will take time to market but will be a big success (Sanford, 2014).

A product is currently in development that interacts with the human brain. The company can target this product to many types of consumers because of the technology intrigue. However, when this product becomes public, the company would do well to attract the interest of the loyal Apple customers first. The design of the product must be a representation of Apple Inc. The second most important focus of the target market is consumers between the age of 18- 34. People in this age bracket are more likely to buy new technology. The product should not be so expensive that Apple loses some of its target market. It is very important that the target market can afford this product, so there is not a situation similar to 2001 with the introduction of the iPod.

The Needs that Drive Purchase

The Need for the target market to buy this product is apparent because of how much easier life can be for the product’s consumers. Logically, a consumer would want to use this product because it takes hands free to another level. To imagine a product that interacts with one’s mind to accomplish daily tasks (answering emails inconspicuously in the middle of meetings, accessing information without speaking or touching, use while driving a vehicle) it would be very convenient for a consumer to answer phone calls or play music just by thinking of whatever they want. The product would allow consumers to multitask in many different areas whether it be home, business, or leisure.

Industry Category

Apple Inc. is in the technology sector. This product would specifically fall within the Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing sub-sector (Investorguide, 2014).

Solves the Target's Needs

This product will meet specific needs of the typical individual that this industry and market sector targets. It will do so with a massive increase in the speed and effectiveness of communication, multi-tasking, research and access to information. This is just the beginning: the public market will perceive this device as limitless with regards to what it can do and how closely it can assimilate with (and familiarize itself with) the individual user.

Organizations Competition

Samsung is Apple’s primary competitor because of their smart-phone sales. Samsung does not surpass Apple, but a lot of different consumers use their products. Actually, all of the Android smart-phones are competitors to Apple because Apple only sells the iPhone. With Samsung, Windows, LTC, and many other smart-phone companies competing to make the most sales, Apple is forced to come up with new ideas to keep their phone sales high. The Mac-Book is a computer made by Apple the Mac-Book’s competition is the windows computer. When considering overall sales, Windows has sold more computers then Apple.

The last piece of major technology for Apple is the iPad. Although the iPad started the beginning of the android tablets, the tablets are still major competition to the iPad. When Apple releases this new technology, it will not be long before Androids begin making the same product.

What makes the organization different from competitors?

Apple is different from its competition in that Apple is its own brand. For example, one could say that Dell competes with the Mac-Book made by Apple. The Dell computer is made by Dell, but uses windows operating system. Unlike Dell Apple uses its own operating system therefore makes it a unique brand. Apple also ensures that it is close to impossible for their products to catch viruses. The Apple brand also stands apart from it competition because of its individuality consumer get from their products and like most luxury brand names Apple stands apart from the rest. Apple stands apart because other companies really don’t have their own design team and find themselves following behind Apples lead. It is difficult for Apples competition to sale more than apple when the competition is usually copying ideas from Apple (Barjarin, 2014).

Needs Leading to Consumer to Purchase

Logical Needs

Consumers buy smart-phones for convenience and communication freedom. If a business person is on the road frequently, he or she will have access to information and can respond in a timely way. This device will expedite communication well beyond any prior capabilities. Surely this is an evolutionary product. It will become more and more streamlined as it evolves. The limited knowledge that we have and are working with must be used to streamline use and eliminate any glitches, so that the end result is customer satisfaction. The purely logical use for this product is to bridge gaps in communication, time and space while avoiding any overly invasive aspects (Oxbridge Biotech Roundtable, 2014).

Emotional Needs

The human desire for the latest gadget is the primary reason for the massive market share that the cell-smart-phone industry enjoys. Since its introduction to the market, the cell phone has been an increasingly sought after item. It was not as common when it first broke into the market. This may be the reason that people began to covet the latest cell phone or smart phone, as they began to become more available; because at one time, it was an item for which only some people had a use. People generally want what they can’t have, and if the latest device is updated to remain perpetually out of reach, it will keep people reaching.

References

Arnold, N. (2014). Who are Apples 3 Biggest Competitors . Retrieved from http://wallstcheatsheet.com/stocks/3-of-apples-competitors.html/?a=viewall

Barjarin, T. (2014). 3 Ways Apple Sets Itself Apart from the Competition. Retrieved from http://techland.time.com/2012/07/30/3-things-that-set-apple-apart-from-the-competition/

Investorguide. (2014). Stock Profile AAPL. Retrieved from http://www.investorguide.com/stock-profile.php?ticker=AAPL

Michigan News University of Michigan. (2014). New cochlear implant could improve hearing. Retrieved from http://ns.umich.edu/new/releases/101

Oxbridge Biotech Roundtable. (2014). Brain Computer Interface: Technologies for the Brave New Brain. Retrieved from http://www.oxbridgebiotech.com/review/research-and-policy/brain-computer-interface/

Reuters. (2014). Apple Inc (AAPL.O). Retrieved from http://www.reuters.com/finance/stocks/companyProfile?symbol=AAPL.O

Sanford, G. (2014). Apple Company History . Retrieved from http://apple-history.com/h8