R&D

As mentioned in my previous post, Apple spends a huge amount on R&D, 2011 they spent $575 million, and in 2012 so far they have spend over $750 million! While this is a huge amount of money, in terms of percentage of sales (total sales $46.3 million), it is nothing. In the past 5 years, the average percentage of sales spent on R&D is 2.8%. The funny thing about this I find is that Microsoft have spent $2.3 Billion in the same past quarter, and over the past 5 yeas have spent 13.8% of sales on R&D. When you think about this and think about which company has brought out more products, or products that literally change the world, you really have to think, what is Microsoft spending all their money on… or, how is Apple just that successful!!

Steve Jobs was an incredible marketer and advertiser. What he did was unlike anyone had done before; he truly was an advertising genius. As stated in the clip, http://www.youtube.com/watch?v=M-vZtSfqwlk, Jobs was able to make Apples products “seem tantalising, like you had to have it” it was almost portrayed as a “social obligation” to have the latest Apple product.

Basically, the other big companies such as Microsoft, Nokia, Google, Sony Ericsson etc all spend a lot of money on innovation, but only occasionally come up with something new and interesting. Jobs, insisted on maintaining a startup mentality within Apple, (even with 30,000+ corporate employees) and this combined with a focus on only a few projects at a time means Apple can spend less on R&D and get much more for its investment.

Through their R&D Apple has created some of the most technologically advanced products in the consumer electronics/computer software industry. These innovative products though have not come out of the blue; Apple understands that happy employees are more likely to work toward bettering their organisation. It is a incredibly collaborative company, it has zero committees, they are organised – as mentioned above – like a startup, one person is in charge of iPhone OS software, one in charge of Mac Hardware, one person is in charge of World wide marketing, etc. “We are the biggest startup on the planet” (Steve Jobs himself in the interview http://www.youtube.com/watch?v=f60dheI4ARg&feature=related)

There is a huge amount of teamwork at the top of the company that filters down to the rest of the company. Jobs spent his days meeting with these different groups, and discussing what can be done to improve things, new ideas etc. “You have to be run by ideas, not hierarchy”.

Truly unlike any other company, Jobs was well ahead of his time, and it has been incredible to live through it all, and it is truly exciting to think about what more is in the pipeline in the world of Apple and their incredible innovation. The fact a company can bring out something so different to what is already in the market, and in a matter of no time at all make the consumer feel as though they have been left out if they don’t have it, is truly remarkable.

Next blog will focus predominantly on Apples unique Advertising efforts. Stay tuned!

Apple taking over the world

I've been an Apple lover since I bought my first iPod in 2005 off a mate for $60, my obsession with Apple then took off in 2009 when I got my Macbook and first iPhone (currently onto my 2^nd). After doing some recent studies on this innovative company I have developed a whole new respect and admiration for Steve Jobs and Apple Inc. 

The thing I find most incredible about Apple is its ability to develop technologies and products that we, as the consumer, don’t even know we want yet. Every item in the past decade that Apple has produced nobody really saw coming, and if they did, it wasn’t to the extent to that which was actually produced. Apple has been successful in every product over this time; I put this down to their heavy focus on research and development. In 2011 Apple spent $575 million in R&D, in the past 3 months alone they have spent a staggering $758 million – to me, this suggests some amazing products and developments are to come – get excited!

According to Wikipedia, the first successful personal computer to feature a mouse and graphical user interface (GUI) was in fact the Apple Macintosh in 1984, a year later Microsoft introduced Microsoft Windows. However the Macintosh was not that successful and Windows took over the market and dominated for many years, still today, despite Apple growing at an astonishing rate, their operating system only accounts for just under 15% of the market. The reason for this? Simply that Microsoft designed an operating system compatible with various hardware, i.e. other computers, created by Dell, IBM, HP, Sony etc. This being said, part of the reason Apple OS are becoming more popular is that they are designed to fit perfectly in their own hardware – thus being able to tweak things perfectly and really hit at being easy to use for the consumer. I myself have found that using a Mac is so much more of a pleasure than Windows, there are functions I use on my Mac on a regular basis that I never would have even thought about when I used a Windows operating system – I’ll say it again, Apple knows what it’s users want before we do!!

Apple bought Pixar animations in 1986, a move from Steve Jobs that would prove to be extremely beneficial in the years to come. However it wasn’t until about 2001 when Apple released its first iPod that the company began to take off in a big way, since then it has produced an array of products including different iPod variations, MacBooks, iPads and iPhones.

I think that part of the reason Apple has been so successful is due to their heavy focus on customer satisfaction and fulfilment – everything they have designed has been based around the simplicity for a user and they continue to focus on this (as mentioned with their R&D expenditure). Along with this has been a heavy increase in advertising, between 2010-2011 ad spending increased 35% from $691M to $933M. This has clearly been beneficial as can be seen through their increased revenue but also the fact that you could ask just about anybody to describe an Apple ad and they could, wether it be about the iPod and a black silhouette dancing with a white iPod and ear phones on a very bright background, or the two guys talking named Mac and PC talking about why one is better than the other.

Basically, Apple is taking over the world – at this stage it doesn’t seem to be a bad thing, but only time shall tell. Fingers crossed it all stays good.

In my next blog I will focus more heavily on Apples R&D efforts. Stay tuned!