Innovation Audit of Apple: Analyzing History, Present & Future Needs

This report provides a comprehensive innovation audit of Apple Inc., examining its innovation history, current activities, and future requirements. It begins by defining innovation and outlining the report's purpose: to audit Apple's innovation, considering its history, present activities, and future needs within the broader competitive and macro environment, including upstream and downstream supply chain participants. The report analyzes Apple's existing innovation performance and capabilities, highlighting its mission and vision statements and key innovations like the iPod, iPhone, and App Store. It also includes SWOT, PESTLE, and Porter’s Five Forces analyses to evaluate Apple's position in the competitive consumer electronics industry. The report concludes by summarizing Apple's strengths, weaknesses, opportunities, and threats, emphasizing its ability to capitalize on opportunities and maintain its leadership position through continuous innovation. Desklib provides students access to similar solved assignments and past papers.

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Innovation at Apple
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1INNOVATION AT APPLE
Executive Summary
Innovation is an activity that drives the performance of companies. Innovation separates a
company from the other and helps the company carrying out innovation to be subject to
sustainable nature of outcomes with the help of the company can gain a competitive advantage
regardless of the industry that they are operating in. In the late 2000s, Apple was regarded as one
the most esteemed companies in the United States. Currently the company is considered one of
the top companies in the world as the company chairs on top of the revenue generation score on a
global level. Apple was the first company to develop an actual smartphone by re-inventing a
similar form of technology that is touchscreen phones. Over the years the company developed
and launched products such as iPhone, iPad, Mac, iTunes and various other forms of updates in
the form of operating systems for both PCs and iPhones. The iPod coupled with iTunes became a
hit in the United States followed by favorable performance across the globe. Apple disrupted the
electronic industry again with the launch of the iPod. Till date this is considered as one of the top
innovative activities carried out by any company. The iPod is considered a revolutionary product
in the electronical appliances industry. It can be said that that company were tap into the pulse of
the market with the help of which the company was able to develop ideas which resulted in
innovation that changes the nature of operations in the industry. The iPod and iTunes together
implied that people could listen to music with high degree of portability. Apple is an
organization that has established a standard in terms of developing disruptive know-how with the
help of which they have been able to disturb the industry on numerous cases. It has been found
that Apple is likely to capitalize on the opportunities that have been identified above, capitalize
on the strengths, overcome the weaknesses and mitigate the threats. The industry that the
company operates in is deemed to be highly competitive, however, the position that the company
has secured ensures that they are the best in the industry.

2INNOVATION AT APPLE
Table of Contents
Introduction......................................................................................................................................3
The Organisation & innovation Overview......................................................................................3
The Organizations existing Innovation Performance and Capabilities...........................................5
The Industry.....................................................................................................................................7
SWOT Analysis.......................................................................................................................7
PESTLE Analysis....................................................................................................................9
Porter’s Five Forces.................................................................................................................9
Conclusion.....................................................................................................................................10
REFERENCES..............................................................................................................................11

3INNOVATION AT APPLE
Introduction
Innovation refers to development of knowledge and application of the same in betterment
of products and services (Visnjic, Wiengarten and Neely 2016). The aim of the paper is to
critically analyze the importance of innovation in terms of operations of Apple Inc. who have
been able to develop products with a certain degree of innovation in the markets that the
company has been operating in. The strategies that have been adopted by the company and the
products that they have been able to develop in order to sustain the needs of the company has
will be evaluated and analyzed in the following sections.
The Organisation & innovation Overview
Apple Inc., previously known as Apple Computer Inc. is an American MNC that was
founded in the 1977 (Apple.com 2020). The company offers electronics in the form of
smartphones, tablets, personal computers and other related electronic devices. The nature of the
company is such that they have been able to comply with a great degree of innovation in the
markets that the company caters to. The company also develops software in the form of
operating systems for the personal computers that they provide and the smartphones that they
provide. Back in 2008, Apple was regarded as one the most admired companies in the United
States (Loviscek, Schild and Steffens 2019). Currently the company is considered one of the top
technology based companies in the world as the company presides on top of the revenue
generation tally on a global level. The aspect of innovation is bolstered in the company with the
help of the mission and vision statement that the company abides by. The company abides by the
mission statement of bringing in the best services to the diverse groups of stakeholders who are
associated to the company. The company realizes the importance of innovation in uplifting lives

4INNOVATION AT APPLE
of individuals and has thus, coined a vision statement with the help of which the company helps
in uplifting the quality of life of individuals. The company was brought under the lime light by
Steve Jobs after which the company was successful in developing favorable forms of technology
in the form of iPhones, iTunes, the iPod and others. After Time cook took over, the company
produced innovations in the form of Apple TV, Apple watch and others. The company is
currently holding its place effectively under the leadership of Tim Cook and he has been
regarded as the genius who has taken the company to the so-called next level (Kahney 2019).
Innovation has been recognized as a mainstay in operations of Apple (Arocha 2017).
Apart from the various types of innovation that has been carried by the company in terms of
development of a diverse product portfolio, the company has positioned the innovative
competency with the help of modifications to the brand logo itself. The change in the logo of the
company alone is necessary when it comes to communicating regarding innovation that has been
carried out by the company. According to the Patents and trademark office of the Unites States,
the company has been granted 74 new patents making the patents tally 2000 (Apple Inc 2020).
Apple was the first company to develop an actual smartphone by re-inventing a similar
form of technology that is touchscreen phones (Apple.com 2020). Over the years the company
developed and launched products such as iPhone, iPad, Mac, iTunes and various other forms of
updates in the form of operating systems for both PCs and iPhones. Following innovative
activities carried out by Apple with Timelines (Soh and Najihah 2019);
No. Innovation Year Remarks
1 Apple I 1976 Introducing PCS
2 Apple II 1977 Plug and play PCs
3 Lisa 1983 PCs with Graphical User Interface
4 Macintosh 1984 Mass marketing Graphical User Interface
5 Laser Writer 1985 Introducing Laser Printers

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6 Mac OS X 1988 Operating System with Unix
7 iMac 1998 Stylized Computers and Floppy Drive
8 Wi-Fi Airports 1999 iBook and Wi-Fi at airports
9 iPod 2001 Digital Music Player
10 iTunes 2003 Online Music Library
11 iPhone 2007 Introducing the first ever Smartphone
12 App Store 2008 Online Smartphone application store
13 Siri 2011 Personal Voice Assistant introduced in iPhone
4S
14 Touch ID 2013 Biometrics on Smartphones
15 Apple Pay 2014 Electronic and online payments
16 Apple Watch 2015 Introducing wearable computing
The Organizations existing Innovation Performance and Capabilities
Innovation is an aspect that has not been overlooked by Apple while they operate in the
global market (Nambisan et al. 2017). It can be said that the company had been keen on
capitalizing on innovation from the word go that is from when the company was established.
Every activity that is carried out at the company has direct links with the mission and the vision
statements that the company abides by. Thus, the innovation quotient of the company can be
understood by understanding the mission and the vision statements of the company. The mission
statement of the company states that the company is committed to provide the best possible
computing experience to various people across communities. Furthermore, the mission of the
company is to provide the same with innovative technology, internet usage and software. The
mission statement alone is sufficient in understanding the focus on innovation. This can be
further justified by the vision statement, which states that man is responsible for the changes in
their environment and the what man creates and thus, it is man who is in control of all the
creations and the changes that surround him.

6INNOVATION AT APPLE
In the current business environment, Apple can be considered the one of the most
profitable companies in the world. The company’s focus on innovation and the constant
innovative practices that are carried out by the company help in satiating the needs of the
company in terms of generation of sustainable and disruptive innovation. Disruptive innovation
refers to such a type of innovation with the help of which a company disrupts the flow of
operation of other companies operating in the same industry as the company (Guttentag and
Smith 2017). Apple is a company that has set a benchmark in terms of developing disruptive
technology with the help of which they have been able to disrupt the industry on several
occasions. Disruptive innovation was initiated after the company first developed a personal
computer. Even though Microsoft capitalized on a similar type of innovation, it was Apple who
first initiated the practice (Xiong et al. 2018). The innovative and genius minds at Apple were
the first to be able to identify the opportunity in commercializing computers so that consumers
can demand it on an individual basis. After launching various similar personal computers, the
company decided to invest their innovative ideas in a different place and came up with laser
printers that changes the perception of people regarding getting print-outs from their personal
computers. After carrying out various more innovative activities such as development of
operating systems and more, the next major innovative move by the company was made during
the early 2000s, 2001 to be exact.
In 2001, Apple disrupted the electronic industry again with the launch of the iPod. Till
date this is considered as one of the top innovative activities carried out by any company
(Heracleous and Papachroni 2016). The iPod is considered a revolutionary product in the
electronical appliances industry and it is with is the help of this innovation that the name Apples
was deeply positioned in the perceptions and mind of the consumers (Apple.com 2020).

7INNOVATION AT APPLE
Perception refers to the purview of an individual over a particular thing, entity or activity (Ware
2019). With the launch of the iPod, the company became positioned in the perception of the
consumers throughout the world as an innovative company that cares for its customers. The iPod
was launched in January and there was yet another hit from the part of the company later the
same year in the form of iTunes (Nargunde and Satish 2020). The iPod coupled with iTunes
became a hit in the United States followed by favorable performance across the globe. It can be
said that that company were tap into the pulse of the market with the help of which the company
was able to develop ideas which resulted in innovation that changes the nature of operations in
the industry. The iPod and iTunes together implied that people could listen to music with high
degree of portability. Diversification was introduced by stylizing the products and it further
gained popularity and favorable outcomes in the industry that the company were operating in.
Apple came with another innovation that can be considered one of the biggest if not the
biggest innovation in decade and or the decades to come. The company developed yet another
innovation which shook the way of carrying out mobility. In 2007, Apple launched the iPhone
which was a device that disrupted the industry (Lin et al. 2019). The iPhone was the full touch-
based devices which revolutionized the mobile industry. The iPhone can be considered the first
smartphone ever and it is as a result of the iPhone that innovative practices are being carried out
by various companies in the industry. The iPhone was the first ever phone that was without any
physical button, it was fully touch based and it came with applications that could be downloaded
from the app store. The iPhone was the first in class device to bolster such features and it
justified the innovation competence of the company.

8INNOVATION AT APPLE
The Industry
The consumer electronics electronic is ever growing. Furthermore, there have been rapid
changes as a result of high amounts of innovation. Companies such as Netflix and GoPro have
come up with ideas that have helped them capture the pulse of the market (Joachimsthaler,
Blanchon and Zinnbauer). Furthermore, companies such as One Plus, Huawei have
revolutionized the smartphone market. Thus, changes have been complied with by the big
players in the market. In order to analyze the industry effectively, there are some factors that
must be addressed in order to gain effectiveness in understanding the nature of the industry, the
competencies and shortcomings of the company and the external factors that could affect the
operations of the company. A SWOT analysis, PESTLE analysis and Porters 5 forces analysis
will be conducted to gain ideas regarding the industry.
SWOT Analysis
Strengths
Apple has high brand value and as a result of the same, the company are considered
global icons. High levels of technological innovation carried out by the company (Danko et al.
2017). The company is considered the brand of choice for numerous people. The company has a
diverse product portfolio and is another strength.
Weaknesses
Products offered by the company are considered highly priced and hence, it limits the
mass market acceptability (Dave 2018). The products offered by the company are only
compatible with the software launched by the company. It does not support software from other

9INNOVATION AT APPLE
developers. The company is seen to be entering industries that they are not so competent in,
example; online video streaming, gaming and others.
Opportunities
Generation of interest from customers which justifies the growth of the customer base.
Highly effective supply chain and distribution network. Environmental sustainability is an aspect
that eth company has not yet ventured into. Artificial intelligence can be further developed by the
company (Xiang 2018).
Threats
Coronavirus is a major issue hindering productivity and the financial sustainability of the
company (Chinazzi et al. 2020). Increasing number of competitors can be considered major
threat. Penetration pricing carried out by other companies in the industry.
PESTLE Analysis
In terms of the political environment there exists high corporate taxation in the United
States (Ohrn 2018). Dependent on Low cost manufacturing in China. However, there exists
political unrest between the US and China. In terms of the economic environment, The USD is
considered strong and thus, could generate high exchange rates. Performance could get hindered
by stagnated income in developing countries (Bansal 2016). In terms of the social environment
there has been rise in consumer spending globally and rise of young consumers. Talking about
technological development, there is high levels of competition from Google, Samsung and
others. Growing rates of cyber-crime, however, Apple is niche when it comes to cyber security.
Entry in the highly regulated financial market with Apple pay. Product diversity implies needs

10INNOVATION AT APPLE
for legal compliances. Faced with issues such as waste disposal, climate change, high prices for
electricity.
Porter’s Five Forces
Internal Rivalry is high as there is low product differentiation and high number of
competitors. Bargaining Power of Buyers is high as Switching cost is low and buyers have
market knowledge. Bargaining Power of Suppliers is low as moderate number of Suppliers and
supply. Threat of substitution can be considered Similar products but not completely similar
products. Threats of New Entrants is low as high capital needed to enter industry and difficult to
match-up with Apple in terms of Brand Value.
Conclusion
On a concluding note, it can be said that the Apple has been effectively aligned to
innovation and innovative ideas. This has given rise to new forms of Technology. The company
has successfully disrupted the electronics industry with products such as the iPod, iPhone and
others. The company is likely to capitalize on the opportunities that have been identified above,
capitalize on the strengths, overcome the weaknesses and mitigate the threats. The industry that
the company operates in is deemed to be highly competitive, however, the position that the
company has secured ensures that they are the best in the industry.

11INNOVATION AT APPLE
REFERENCES
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