Challenges Faced by Apple Inc

Apple, an American multinational corporation which focus on designing and manufacturing consumer electronics and closely related software products, is now facing the challenges from all sides. In June of 2007, the Apple PC’s worldwide market share was only 3 percent, according to Roger L. Kay (2007). This unsatisfying market share stimulates the company executive team endeavouring to figure out a strategy to bring Apple a brighter future.

However, before Apple to go further, Apple has to solve two intractable problems which are the software especially the operation system software monopolization competition with Microsoft and market expanding against the driving competitors. This essay will classify and explain both the cause and effects of the problems, and then the possible solutions will be discussed. Finally a conclusion will be given. In the early 1990's, Apple's distant lead in graphical computing began eroding quickly.

Microsoft worked to made incremental progress in developing the entirely new Windows operating system. During the rise of Windows, Apple seemed content to rely on its existing, established share of specific markets that offered large profit margins ( RD ,1990-1995). The chance kindly offered by Apple finally brought up a new head of the operation system manufacturer- Microsoft. Now Microsoft is possessed of the largest operation system market share by around 90% in the world (IT Report, 2006) which is significantly regarded as the strongest competitor against Apple.

Once the Windows operation system is widely applied in the market, it is hard for the customers to switch their present systems because of misgiving, high expenditure for training operators and high cost for updating both the software and hardware. As a result, windows still occupies the market and Apple has to work arduously to make progress in the operation system under the additional commercial boycott inflicted by Microsoft.

By losing the predominance in operation system market and encountering compatibility problem with Microsoft’s products, Apple reasonably has to face the difficulty in making progressing in other related products , since usually these products such as personal computers, computer software and computer hardware need the support of Apple’s Operation System. Obviously recapturing the operation system market is the key to solving this problem. In order to win the war against Microsoft, Apple should seize the best time when

Microsoft is busy introducing an entirely new version of its core product (RANDALL STROSS, 2007), Vista, which also faces the compatibility problem with many pieces of hardware in used to promote Apple’s operation system and give Microsoft a hard counterpunch. However the opportunity opened by Vista is temporary. Double the promotion effort, set up more experience centres, enhance the advertisement promotion and offer proper discount can be considered as good ways to help Apple to promote the products and gain from Microsoft. Apple has to struggle in the war against Microsoft.

Meanwhile it also has to face other strong competitors in gaining the market share. In the worldwide desktop and portable market, Apple only takes respectively 1. 75% and 2. 93% of the total market share which is significantly less than what has been occupied by Dell ( Jim Dalrymple). The misleading of Apple’s strategy to shifting from retail towards direct sales results the low market share on a certain level. Randall Stross (2007) pointed out “If Apple had begun wooing Best Buy two years ago, and perhaps appointed an ambassador to look after the relationships with the chain and other resellers, the Mac would have been much better off”.

Unlike Dell, Apple relies on existing channel partners to sell most of its computers. Apple cannot abandon the retailers to gain the market share all by itself. To increasing the market share, Apple should take care of the relationship with the retailers and balance between the retail and direct sales. Using the resources what the retailers have to promote the Apple’s products and at the same time to expand the direct sales network can be a good choice for Apple to gain from both sides. The monopolization of the operation system market by Microsoft has brought a great loss to Apple.

However, Vista inescapably opens a window for Apple. This long-awaited but short chance, for Apple, should be valued, seized and regarded as a point to fight back. Apple’s misleading of shifting its target towards direct sales leads Apple a certain loss in market share. Balancing between retails and direct sales will sure be the activation for both the software and hardware market. Reference: 1. 1990-1995. Apple vs. Microsoft in the Enterprise. Roughlydrafted Retrieved October 7,2007,from https://www. roughlydrafted. com/RD/Q4. 06/9D82740A-139C-432C-8279-AD2D4E04892E. html 2. 2006, IT Report Retrieved October 7,2007,from ttp://www. itreport. com/ net/2006/1011/0710111421539HBF8H2H8764F0A39DEK. 3. September 16, 2007, A Window of Opportunity for Macs, Soon to Close. RANDALL STROSS Retrieved October 11,2007,from https://www. nytimes. com/2007/09/16/technology/16digi. html 4. Jim Dalrymple, Apple desktop market share on the rise; will the Mac mini, iPod help? Retrieved October 11,2007,from https://www. macworld. com/news/2005/03/20/marketshare/index. php 5. Microsoft, Wikipedia Retrieved October 11,2007,from https://en. wikipedia. org/wiki/Microsoft 6. Apple Inc, Wikipedia Retrieved October 11,2007,from https://en. wikipedia. org/wiki/Apple_inc.

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