Apple's Competitive Advantages

1. What were Apple's competitive advantages?

With Apple's Macintosh computer series, they had several features that separate themselves from other computers in the market while still maintaining interoperability with other machines. The qualities that Apple held are its attractive design, ease of use, security, and high-quality bundled software. They had the complete control of both computers' hardware and software, enabling them to develop its own peripherals for the use of "plug and play" system. Despite the computers Apple produces were proprietary design, they had slowly become much flexible, incorporating some of the common interfaces like USB port. Even though Mac was slow with limited compatibilities to other programs, Apple was able to gain the corporate market and 50% of the education sector with its unmatched capabilities in desktop publishing.

Another aspect that had contributed to Apple's competitive advantages was introduction of its retail stores. Its retail strategy had allowed visitors and customers be exposed to its Macintosh product. With the exposure, the number of sales increased from "new to Mac" consumers.

2. Analyze the dynamics of the PC industry. Are these dynamics favorable or problematic for Apple?

The PC industry is an extreme fast pace market. From the mid of 1980s to 2000, the annual growth of PC unit had an average of 15%. The market stays around at 10% to 15% annual growth, but that growth mainly occurs in Asia and other emerging markets. Domestically, because approximately 60% of households already have a PC, the market growth has dropped sharply to 3% annually. The profit margin is huge when Apple has started making computers, but that has decreased drastically. The computer industry is very competitive with many other well-known manufacturers like Dell and Hewlett-Packard. Majority buyers for the Mac PC are home buyers and small and medium businesses. But the buyers are price conscious as they prefer to have products that have mobility and wireless capabilities. In addition, the amount of software available to use and the quality associated are important factors as well. These dynamics may be problematic for Apple.

3. Has Steve Jobs finally solved Apple's long-standing problems with respect to the Macintosh business?

When Steve Jobs takes the job back with Apple, the long-standing problems are not easy to solve and they are mainly due to the flaws in Macintosh business model. The issues are the incompatibility of the operating system and available software out in the market, the use of processor chips from Motorola and IBM, and incompatibility due to its proprietary standards and formats. Several years after Jobs has taken the position, many changes have been made to Macintosh to solve the problems. One major change that has been made is the switch to Intel processors. By not using the inefficient chip from Motorola and IBM, Apple is able to close the gap between itself and the Wintel competitors. As the barrier is removed, Mac can run many of the