Apple is striving to regain market share in the computer industry by doing the impossibleselling low-end products. That is, the antithesis to its image as a niche premium product maker.
Buoyed by the huge success of its iPod players and its online stores, Apple recently unveiled two low-end products iPod Shuffle (a flash memory-based player) and Mac Mini (a miniature version of its popular iMac computers, but without the keyboard, display and the mouse) priced at $99 and $499 respectively. Coupled with the launch of iPod Shuffle and Mac Mini, Apple recently opened 101 stores to help it reach its consumers better. In one of the most price competitive markets of computers and digital appliances, Apple has started offering cheaper versions of its products to garner a share in the mass markets, from where it stayed away for a long time.
Premium pricing and not licensing its technology were the two crucial factors that relegated Apple as a premium niche-market player reducing its market to command a miniscule share of around 2% now. Its policy of having its own distribution channels didn't give it good reach to the consumers, which the mass market players like Dell and HP had. However, iPod had a surprise in store for the company. The portable MP3 music player with its simplicity and ease of use changed the way people bought and listened to music.
Apple's plans of reaching the masses are largely built on the success of its iPod, which has seen a whopping growth of 525%, while the Mac had 26% and an overall 74% growth in its revenue in the first quarter of fiscal 2005. The key to this new strategy of Steve Jobs, CEO of Apple, is offering its software and hardware at lower prices. Although the plans come with some inherent risks like cannibalization and lower margins in the crowded cheap computers markets, the company looks to replicate its success of the iPod. |
