Apple was founded in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne. Wozniak was the electronics man: he designed and hand-built the first Apple computer, the Apple 1, which was first shown to the Homebrew Computer Club in that year. The Apple 1 was very basic, but was put on the market for $666.66, which would be well over $2000 at today's prices. 

Ronald Wayne bailed out of the company early. He sold his shares to the other two directors for $800 a couple of weeks after the company was formed. History does not record whether he later regretted this decision. 

In the years to follow, Apple went through a number of changes: Jobs became a victim of office politics and left for a while, starting his own software company. Later, Apple bought the company and Jobs was reinstated, at first as an advisor but later as CEO. The company adopted a ‘top right’ policy of aiming for high prices and high profit margins. Leading rivals IBM and Microsoft, meanwhile, adopted a mass-market approach, putting PC hardware technology into the public domain and going for a wide distribution of Windows software. Apple continued to retain possession of both hardware and software development, thus retaining control over their marketing. This also reassured customers that they could not be fobbed off with excuses. If a PC crashed, it would be easy for the manufacturer to blame the software, and the software producer to blame the hardware producer – this option did not exist for Apple, since it produced both. 

Despite voices within the company expressing the fear that Apple would price itself out of the market, the firm continued with its high-price high-profit approach. Apple aimed to make a 55 per cent profit on all its products, and aimed to produce the best-engineered hardware and most user-friendly operating systems to justify this......

Case study questions 

1. Why did Apple's introduction of cheaper computers fail? 

2. How might you go about creating a sales forecast for a new iPhone model? 

3. Why do Apple provide comprehensive after-sales service? 

4. What role does design have in maintaining Apple's lead? 

5. Why did Apple introduce Office for Mac?