Business Model Canvas For Apple – Unless you’ve been living under a rock, you probably know how big Apple, Inc. is. Over the past few decades, Apple has become one of the most recognizable brands in the world. It has dominated the technology industry, becoming one of the most respected companies in the world.
As of August 2021, Apple’s market capitalization was about $2.43 trillion. With a business model based on innovation and consumer-focused devices, Apple is able to maintain a loyal customer base through user-friendly design, easy data migration to new product lines, and integration between Apple devices. Every time Apple releases a new iPhone, the long, winding lines are a testament to the success of its business model.
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Apple has created an entire technology ecosystem, often referred to as the Apple Ecosystem Lock. The company’s strong commitment to product integration makes it easier for customers to use new Apple products. Therefore, it is more difficult to switch to a competitor’s product.
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In terms of selling high-end hardware and gadgets, Apple built brand loyalty in the early 2000s with a radical push to put a computer in every pocket. Unlike then-dominant Microsoft, which focused on putting a computer on everyone’s desk. This non-conformist business model has catapulted Apple to the top of the tech food chain.
However, every success story also has a couple of failures along the way. Over the last 40 years, Apple has faced disappointing product launches, maintaining leadership and legal problems. However, its profitable business model ensured Apple’s success.
In the 1970s, computers were big and expensive machines, and the industry was dominated by IBM. In addition, only a few enthusiasts knew how to manage and use these technologies apart from large corporations.
The idea of microcomputers began to take root among computer enthusiasts in Silicon Valley. Several people built personal computers using parts such as the first chips made by Intel.
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During this time, the founders of Apple, Steve Jobs and Steve Wozniak, first met through a mutual friend, Bill Fernandez, in 1971. They began their first business partnership later that year, when Wozniak, who had experience working with electronics, began building his original invention called “blue boxes.”
These boxes allowed people to make free long distance calls. Jobs convinced Wozniak to sell about two hundred blue boxes at $150 each, and they split the profits. Wozniak also worked on several other inventions, one of which was a video terminal that he could use to log into minicomputers.
In 1975, the Altair 8800 became the first commercially successful computer. However, it required the user to assemble various components, so it had no real appeal to the average person. It has mostly captured the hearts of electronic enthusiasts and know-how computer geeks.
At the time, Wozniak could not afford to purchase the microcomputer processors that were on the market. Instead, he decided to learn as much as he could by designing computers on paper. It paid off handsomely, and by 1975 Jobs and Wozniak had left Reed College and UC Berkeley, respectively.
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They started attending various meetings and conferences to gain more knowledge about the computer industry. One particular meeting they attended at the Homebrew Computer Club inspired Wozniak to build a microprocessor into his video terminal and get a full computer.
In April, Jobs and Wozniak founded Apple Computer with Ronald Wayne (who worked with Jobs at Atari). Wayne designed the company’s first logo and drafted the first 10% partnership agreement. However, after just twelve days, he gave up his share to avoid any potential financial risk.
Wozniak finished work on his personal computer kit, which was called the Apple I. It was a printed circuit board that lacked basic features such as a keyboard, monitor, and case. Jobs had to sell his Volkswagen Type 2 van for a few hundred dollars. Wozniak sold his HP-65 programmable calculator for $500 to raise money for components.
They used Jove’s parents’ garage in Los Angeles, California as an office and factory. The first public launch of the Apple I took place at the Homebrew Computer Club. The computer received a warm reception, which convinced the couple to go into business.
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Wozniak proposed the design to Hewlett-Packard (HP), where he worked at the time, but was turned down. So he decided to sell the Apple I for a little more than the cost of parts. All he wanted was to get back the money they had invested in building the computer.
Jobs, on the other hand, had bigger plans. He approached a local computer store called The Byte Shop to sell them 50 units of the Apple I. This was a significant risk for the store for several reasons. First, there was not enough Apple I to fulfill the order, and Apple Computer Inc. there was no money for their production.
Atari, where Jobs worked, demanded cash for the components it sold him, and the bank he applied for a loan turned him down. Although Job’s friend’s father offered to lend him $5,000, it was not enough.
Fortunately, Paul Terrell, owner of the Byte Shop, decided to give Apple a $500-per-unit purchase deal anyway. Jobs hoped that Wozniak would be able to produce enough working computers to break even (they were selling the Apple I for $666.66).
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They gathered family and friends around the kitchen table to help solder the parts they bought from Cramer Electronics (a national electronic parts distributor). After the computers were tested, Jobs took them to the Byte Shop. A total of 200 Apple I units were sold.
Apple Computer Inc. was registered on January 3. Wozniak designed the Apple II, an upgraded personal computer designed for mass production. Meanwhile, Jobs and Wozniak meet with Mike Markkula, who invests $250,000 in the company.
Markkula was instrumental in securing credit and additional venture capital for Apple. He also recruits Michael Scott, who was the first CEO of Apple.
Wozniak and Jobs wanted to create a computer that would fit into the everyday life of an ordinary person. Thus, the Apple II was released in June of that year at a retail price of $1,298. The Apple II had a completely redesigned TV interface with a simple text display and graphics.
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However, it was not the only personal computer of its kind on the market. Its competitors, the Commodore PET 2001 and the Tandy TRS-80, were released at the same time. All three machines were designed to make personal computing as simple as possible.
Users did not need to have any computer skills to start using it. There was something different about the Apple II, however; color video communication and presentable packaging. The Apple II had no visible boards or wires. In addition, Apple collaborated with programmers Dan Bricklin and Bob Frankston, and in 1978 the Apple II became the official carrier of the new VisiCalc spreadsheet program.
VisiCalc paved the way for Apple to enter the business market. Moreover, the fact that the Apple II began to have enterprise customers attracted more software and hardware developers, such as Microsoft, to the machine. In fact, Apple’s home user segment was boosted by the compatibility of the Apple II with the basic Microsoft Office program.
The value of the Apple II was its impeccable design and high performance. It is not surprising that the product has become very popular. By the end of the year, Apple’s revenue was $750,000.
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After two years of success with the Apple II, Apple announced the Apple III in May 1980 during the National Computer Conference (NCC) in Anaheim, California.
Apple rented out Disneyland for the day and commissioned bands to play in honor of the Apple III. This third-generation PC was supposed to strengthen Apple’s position in the business environment. Despite the success of the Apple II, IBM still dominated the enterprise computing market.
The Apple III was released in November at a retail price of $4,340 to $7,800. Although it was a relatively conservative design for computers of the era, it had some fantastic features that corporations used. For example, it had a typewriter-style upper and lowercase keyboard and an 80-column display.
Until August, Apple was one of the largest microcomputer companies. It was slowly overtaking giants like IBM, and first-half revenue had already surpassed the $118 million of the 1980s.
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In fact, the lack of production capacity restrained growth. The combination of the Apple II and VisiCalc ensured that businesses continued to purchase Apple PCs. When IBM discovered that all its corporate customers wanted VisiCalc, the computer giant quickly released its own personal computer in August 1981.
However, Apple had many advantages over the IBM PC. First, Apple built a strong network of dealers in the US that supplied them with hardware parts. Apple also had partnerships with hundreds of independent software developers and had a developed international distribution network. Additionally, the Apple II had over 250,000 customers.
The IBM PC had none of that. Fortunately for IBM, Apple’s failure
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