Apple Inc.

Is a Closed System a Problem?

Authors: Edward Lee, Katrina Jones, Michael Brown, and Steve Bodnar

Agenda

Company Overview What is a Closed

System? Apple’s Systems Potential Solutions Evaluation of Solutions Final Recommendation

Company Overview

Founded in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne in California

Worldwide and publicly traded company

Over 35,000 employees (and counting) and 160 executives

Changed name from Apple Computer Inc. to Apple Inc. in January 2007

Steve Wozniak & Steve Jobs 1976

Company Overview

Acquired 8 companies since 2002

Revenue and Net Income in 2009, $42.9 and $8.2 billion, respectively

Apple’s Systems

A closed system is an “isolated system that has no interaction with its external environment”

(Anonymous, www.businessdictionary.com/definition/closed-system.html)

OS X

Apple’s OS X can only be run on Apple computers!

iTunes and iPod

iTunes is a digital media program that allows users to play any music,movies,or apps on their computer

iPod is a portable media player that uses itunes to load media files onto the device

iPhone

A revolutionary cellular phone in both design and features.

iPad

On January 27, 2010, CEO & Director of Apple Inc., Steve Jobs, introduced Apple’s latest innovation, the iPad

Solutions for Apple’s Closed Systems- Open Systems

Most common systems

Integrate with the most common languages/ software

Loss of “niche”

Solutions for Apple’s Closed Systems- Do Nothing

“Since the iPod was introduced in October 2001, its share price has multiplied by more than 23 times from $8.78 to $207.88” (Foremski, 2010).

Halo effect- “customers who buy an iPod become hooked on Apple’s products and their ease of use, and then buy a Macintosh as their primary or secondary PC” (Gibson, 2005)

Evaluating Solutions- Open Systems

Standard IT and consumer electronics business practice

Evaluating Solutions- Do Nothing

Apple has evolved, somewhat

Staying innovative has it’s benefits

It’s business model is working

Recommendation

Recommendation

References

Anonymous. Retrieved from www.businessdictionary.com/definition/closed-system.html

Cartwright, D. (2006). Do you still need a Mac? ITNOW, 48(5), 30-31.

Cohen, P., (2007). Apple 100 Million iPods sold, and Counting. Retrieved from http://www.macworld.com/article/57233/2007/04/ipodmilestone.html\

Cusumano, M. (2008). Technology strategy and management: The puzzle of Apple. Communications of The ACM, 51(9). 22-24 doi:10.1145/1378727.1378736.

Dalrymple, J., (2005). Analyst: iPod Halo Effect Should Continue. Retrieved from http://www.macworld.com/article/45964/2005/07/halo.html

Foremski, T., (2010). Apple Becomes More Closed With Each New Device. Retrieved from http://blogs.zdnet.com/Foremski/?p=1089

Gibson, B., (2005). Analysts Agree: Apple’s ‘Halo Effect’ Might Be the Real Deal. Retrieved from http://www.macobserver.com/tmo/article/Analysts_Agree_Apples_Halo_Effect_Might_Be_the_Real_Deal

Hoovers, Inc. (2010).Retrieved from http://hoovers.com/company/Apple_Inc/rtjcci-1.html

References

Johnson, M.W., Christensen, C.M., Kagermann, H. (2008). Reinventing you business model. Harvard Business Review, 51-59.

Jordan, A., (2009). Apple’s Computer Market Share Falls Slightly In Q1 of 2009. Retrieved from http://www.mactropolis.com/apple-news/apples-computer-market-share-falls-slightly-in-q1-of-2009

Kane, Y.I. & Clark, D. (2009, April 30). In major shift, Apple builds its own team to design chips. The Wall Street Journal.

Krazit, T., (2005). Mac OS On A Dell? Dell Favors, Apple Opposes. Retrieved from http://www.pcworld.com/article/121421/mac_os_on_a_dell_dell_favors_apple_opposes.html

Mickalowski, K., Mickelson, M., & Keltgen, J. (2008). Apple’s iPhone launch: A case study in effective marketing. The Business Review, Cambridge, 9(2). 283-289

O’Dell, J. (2009, October 4). Adobe announces full Flash player for Blackberry devices & 35 funded Flash apps. Retrieved from: http://www.readwriteweb.com/archives/full_flash_player_coming_to_blackberry_devices.php

References

O'Brien, J., & Marakas, G. (2009). Management Information Systems. New York, NY: McGraw-Hill.

Ricker, T. (2007). Apple drops “Computer” from name. Retrieved from: http://www.engadget.com/2007/01/09/apple-drops-computer-from-name/

Yoshida, J. & Ojo, B. (2009, December 14). The case for Apple, and the case against it. Electronic Engineering Times, 4-10.