Apple Inc.: Innovation Strategies, Performance, and Future Report

This report provides a comprehensive overview of Apple Inc.'s innovation management, exploring its history, current performance, and future strategies. It examines Apple's commitment to innovation, its organizational structure, and its impact on the market. The report delves into Apple's business models, design processes, and competitive advantages, highlighting key innovations such as the iPod, iPhone, and iPad. It analyzes Apple's innovation capabilities, including its talent management, research and development, and strategic approaches to product development. The report also assesses the industry landscape, including market trends and future innovation requirements. The report concludes by discussing Apple's efforts to build future innovation capabilities, emphasizing the importance of organizational culture, consumer experience, and intuitive user interfaces. The report is a valuable resource for understanding Apple's approach to innovation and its impact on the technology industry.

Managing Innovation

EXECUTIVE SUMMARY
The report is based on the overview of Apple Inc, which is one among the leading
companies that deals in mobile-devices, tablets and many more devices. It has been observed that
Apple has highly focused on their commitments that they will continue their approach to bring
innovations and creativity in their software and all their gadgets. Moreover, the company has
maintained to fulfil all their allegiance which has facilitated them in building up their customers
loyalty and value. As addressed in the report that the company has maintained that their level of
creativity and bringing intuitive in their products and services.

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................4
THE ORGANIZATION & INDUSTRY OVERVIEW...................................................................4
The organization and its innovation history................................................................................4
Organizations' existing innovation performance and capabilities...............................................5
The industry in 2016...................................................................................................................7
The Future of the industry in 2020 and beyond..........................................................................9
Innovation requirements in 2020 and beyond...........................................................................10
Building future innovation capabilities for the organization....................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

ILLUSTRATION INDEX
Illustration 1: Apple iPhone sales in 2009 to 2015..........................................................................6
Illustration 2: Ten most innovative companies in the world ...........................................................9

INTRODUCTION
Innovation is a set of activities that includes new sources, ideas, thoughts, device and
methods. It is often viewed as the way or application of introducing better solutions or sources
that meet new kind of necessitates unarticulated needs or defined types of market needs. This is
mostly used by an organization to attract high number of customers and to attain a strong
competitive advantage. Thus, the report is providing information about effectiveness of
managing innovations by the organization in developing perfect method of marking a strong
presence in the market (Verganti, 2013). Along with this, the report is structuring information
starting from organization overview, its innovation techniques of performing and capabilities to
bring new ideas, organization position in 2016 and 2020.
THE ORGANIZATION & INDUSTRY OVERVIEW
The organization and its innovation history
Apple is one among the leading brand in technological sector which basically deals in
mobile, tablets, laptops, computers and many more aspects. Apple is widely known and popular
for its innovation and techniques provided by them to their customers. This popularity has
positioned Apple at number one ranking which gives a strong competitive advantage to the
company that no other tech company can defeat them. Apple is aiming on inspiring people to
think beyond the imaginations and thus, such commitments have helped the company in valuing
the customers as well as the market. The company was founded by Steve Jobs in 1976 at a
garage and now it owns a strong market share (Hughes, 2007). Apple basically delivers
consumers with a high form of succession and presents a great set of software within a fabulous
hardware which includes great range of ideas and innovative engineering. However, the
company has established a strong presence in its market by creating new and innovative aspects
and niches. It has created a new set of game-changing innovations like iPod, iTunes, iPhone and
iPad.
Apple has started its business 40 years ago and still has maintained its commitment for
providing well crafted and intuitive compute products. Steve Jobs, who formed the company,
along with several creative minds was earlier responsible to design and bring advance technical
products (Kennedy, 2006). The history of Apple's innovations started with APPLE II which was
launched in 1977. It was designed by Steve Wozniak which was highly known for providing a

creative set of applications. Main innovation in Apple II is extremely supported and attracted
public towards the products. It was a specific system which includes a spreadsheet program that
enables the small businessmen to do practical working in one hour than they could do in 10 years
with a paper and pencil.
In January 1984, Apple launched its first personal computer which was a basic prototypic
desktop that was featuring a mouse and graphical user interface (GUI). The company's software
line includes the mass-produced Macintosh PC's which were user-friendly and established as
revolutionary in its sector. But, soon the management encountered statements that it is not up to
the mark and started addressing some new set of ideas which could be placed in the computers.
In 1998, they released iMac G3 which gained many customers due to its bright, blue coloured
body and semitransparent casing (Lin, Chen and Chiu, 2010). The designer of iMac, Jony Ive,
added a new USB ports that credited high level of help which motivated many potential buyers
towards the company. The rising market of company forced them to think beyond the
imagination of their customers and introduce new ideas which would assist them in attracting
large number of customers. Further, company has launched wide range of innovative and

revolutionary products which include iPods (October 2001), iPhone (January 2007), MacBook
Air (January 2008), iPad (April 2010) and many more. All the models were extremely different
from their competitor’s products which were in the same segment. Company has hold up its
commitments on offering creativeness and innovation in its products and services.
Illustration 1: Apple iPhone sales in 2009 to 2015
(Source: Statista, 2016)
§
Organizations' existing innovation performance and capabilities
The current market of Apple is quite competitive and strategic as the rising number of
participants is breaking the level and groups of their potential customers. Being an innovative
company, Apple needs to implement new ideas and creativeness in all its products which
requires talent, research & analysis and effective approaches to develop and introduce new
technical devices. However, it has become imperative for management team of Apple to bring
innovation at greater extents (Luther, 2011). The company has implemented many changes in its
working by introducing effective and professional level of thinking and identifying ways to
complete the task. It has been examined that the company is aiming on bringing innovations in

the products rather they developing products as per the demands of the clients. In that case, the
company is focusing efforts on their development team and innovation leaders in order to
energise the pace of innovations. For this, the firm as defined the following structured of aspects: Innovative business models – Apple has highly targeted with building and offering
innovative and creative products which is very distinctive from the other similar
products. The management team of Apple has widened up the scope of humans thinking
as they have linked up their imagination to reality. It has been witnessed that the
company is aimed on integrating a systematic innovation approaches to build up new
creativity and attain high level of success (Madsen and Pedersen, 2013). Apple follows
various types of strategies like value proposition, wining by surprising; creating greater
values, etc. are evident as the most useful schemes of maintaining their stated loyalty and
commitments. Innovation system – Evaluating the existing position and market reputation of Apple, it
has been ascertained that their current creativity performance is likely gaining greater
response from the market. The company has implemented a strong system that basically
includes effective set of disciplines and talent that builds up professional innovation
skills to introduce creativeness in their people, generate new ideas and stimulate design
process (Maglio and Spohrer, 2013). However, the process of determining new ideas is
easy rather than bringing it to existence.
 Apple's design process – As stated in the prior information about the accessibility and
actuality of implementing the ideas, Apple has supported their innovative team in
generating ideas which is possible to design in practical and technical aspects. Thus, the
company has developed an effective set of actions plan to create a team of talented,
creative and professional individuals.
Moreover, the present scenario of Apple’s organizational culture has addressed as a key
factor in increasing the company’s success and achieving greater response from the potential
buyers. As it is termed that a company’s organizational environment and culture develops their
capabilities and personalities in supporting up-gradation, implementing new policies and
structuring new strategies (McKelvey and Munslow, 2011). In Apple’s case, all the employees
are effectively developed and coordinated in their organizational culture that facilitates them in
craving new set of innovation and creativity. Such innovations are noticeable in terms of their

products like iPhone, iPad, iPod and Apple Watches. While the company’s organizational
environment and culture currently contributes to expand the business strengths which eventually
imposes limits, derives opportunities and challenges to the firm. However, Apple has been
gradually fine-tuning its organizational culture to properly match the dynamics of its business
environment. Considering the business strategy of Apple which defines its vision, mission and
objectives that are to be accomplish by their management team through offering creative and
advance range of gadgets, devices and electronic equipments (Menguc, Auh and Yannopoulos,
2014). For this, the company is introduced various actions plan and aimed on the following
aspects:
 Creating an exceptional consumer experience
 Intuitive and innovative user interfaces
 Sleek design of all the products
 Iconic form of branding

By stating such factors of achievements which has helped Apple in accomplishing better
performance goals, excellence in working, creativeness and bringing greater level of innovation.
All such determinants have fascinated the firm in supporting and succeeding the market
objectives. The results of effective performance can be ascertained from the overall sales of
Apple's product in the international market. By which the company has determined that in 2015
the sector of electronic gadgets has gained a large extent which supports the management in
implementing new ideas and structure of innovative products. In addition to this, the rising
awareness and cognizance among the individuals are highly advantageous for the company in
expanding its market (Bloch, 2011). However, Apple is mainly focused on offering innovative
technical products in the market rather than developing products as per the requirements of their
targeted clients. For this, Apple has orientated specific structure and strategies in order to
increase the overall capabilities of the company. By analysing the business history and
performance in 40 years, it has evidenced that Apple has highly improved its level of working
and create new applications, software and hardware which are quite unique and different in the
market.
Illustration 2: Ten most innovative companies in the world
(Source: Jaruzelski and Mainardi, 2011)

The industry in 2016
Apple has faced many changes in its techniques of functioning and introducing creativity
in their products. For this, they have implemented strategical methods in order to increase the
capabilities of identifying greater sets of innovation (Arundel, O’Brien and Torugsa, 2013). The
overall staffs of the management has focused their attention on recruiting and selecting better
level of talent that has high form of expertise and abilities in creating greater source of
creativeness. It has been ascertained that Apple has expanded its market in all the countries of
Asia as well as Africa till 2016. Earlier the company was unable to mark high level of presence
in this market and thus, the awareness among the potential clients reduces which eventually
decreases the overall sales and revenue of the company. But the marketing team of the company
stated that high price differentiation among different areas is the reason that brings down the
capabilities of the company to attain better level of profits (Battistella, Biotto and De Toni,
2012). In respect to this, the company settled price as per the potentiality of the customers for
assorted areas which drastically encourages the revenue and earning capacity of the company.
It has been assessed that Apple's revenues or earnings have extremely soared in 2015,
totalling over £155 billion which is rises up from £128 billion in 2014. Till the end of 2016, the
company is forecasting this level to reach to £180 billion. It was reasoned that this emerging
results was all due to Cook which is an effective operator and has steered the company into a
right direction within the new areas such as enterprise and has upgraded all the products that
include the iWatch, Apple Music, iPods, iPhones and various other software products, including
the real time assistance of Siri. In 2015, Apple launched iPhone 6S which has been accumulated
as a relatively small update to the iPhone 6, but still the phone broke the record of Apple's first
week sales record (Bloch, 2011). Apple also faced a high response from the customers that has
been a big hit in China which supported the company's step to expand its business in Asian
countries. The accelerating revenue was addressed over 100% to £8.7 billion in the third quarter
of 2015. This motivated all its employees and customers towards the innovative products offered
by the company. As in early 2015, Apple was restricted and faced many issues in attracting the
buyers of Chinese market. However, Apple has provided following guidance about its fiscal
2016 first quarter:
 Revenue was between $75.5 billion - $77.5 billion
 Gross margin was up to 40 percent

 Operating expenses were totalled as $6.4 billion
 Other income/(expense) were approx $400 million
 Tax rate charges were of 26 percent
While moving onto 2016, Apple is aiming on updating its key products lines and factors
that includes new model of MacBook Air which had a quiet low business in 2015. Along with
this, company will continue to expand its business in China and in other countries of Asia. The
launch of Apple Music, which reported a high level of competence with Spotify and was broadly
successful and analysts see expectation for the service to grow to the same size as Spotify around
25 million paying subscribers by the end of 2016 (Bucolo and Matthews, 2011). In addition to
this, it was also noted that Apple won't release its next-generation iPhone until the fall of 2016,
so there are still some months left of development ahead. For the present time, Apple's flagship
for iPhones are the iPhone 6s and the iPhone 6s Plus which are discharged to the public in
September of 2015. Though, there is more time left which could be expanded to several months
before the launch of new iPhone 7, rumours about the device started generating out in January
2016 (Davenport, 2013). The company has already provided brief information and details about
the upcoming iPhone 7 in 2016, but still the market has higher expectation as per the company's
commitments for the products.
The Future of the industry in 2020 and beyond
Apple has claimed that they will continue their approach to bring innovations in their
software and all their gadgets. As addressed in the analysis that the company has maintained that
their level of creativity and bringing intuitive in their products and services. As per the stated
strategy of the company in 2016, in which the current CEO of Apple, specified that the future
plans of the company is to design a slimmer and thinner iPhone, iPods, iPads and many more.
Thus, the reason being planning such strategies is to introduce lightning thinner ports in all its
devices that consumes less power and gets faster charge. Such statements by the CEO, specifies
their strategies for future, but, in context to the management it is very tough and imperative to
overcome the commitments (Hsu, 2011). Introduction to ideas are easy and actuality of that idea
it highly pugnacious, hence, high form of thinking and needs more dedication in achieving the
specified tasks. For this, the company needs to direct efforts on the development and creative
team, as they have to assess the best source of engineering and technical aspects in order to place
a distinct product in the market.