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Apple Case Answer Essay

Organization Overview; Introduction

This case discusses the apples Inc. Apple Inc. is one of the world’s most successful and most recognizable companies, established by Steve Jobs and Steve Wazniak. Over its 30 year existence, the company had seen a lot of changes in the computer industry. During its life it faced many problems like changing of CEOs and shifting in its major strategies which costs lotto the company. But at last it was Steve jobs who saved the company and afterwards it started competing in the market. Steve Jobs Bring new era to Apple Inc. He shifted the strategies to differentiation strategy and launched many products like iMac, iPod, iPhone. On April 4, 2010, Apple Inc. launched the iPod; the company’s third major innovation released over the last decade under its iconic CEO Steve Jobs.

Apple’s strategy of shifting its business into non-PC products had thrived so far, driven by the smashing success of the iPod and the iPhone. Yet challenges abounded. Macintosh sales in the worldwide PC market still languished below 5%. Growth in iPod sales was slowing down. IPhone faced increasing competition in the smartphone industry. What would the future hold for the computer giant in a rapidly changing world? How should the company allocate resources between its more traditional offerings (computers) and its newer products (iPods, iPhones, Apple TV, etc.) in order to maintain and improve its market position? Also, how should Apple’s unique retail strategy be used to support the company’s product decisions, and by capitalizing on new and emerging trends thus further maintaining its competitive advantage.

* Mission Statement

Apple is committed to bringing the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offering.

* DEEPLIST Analysis:

* Demographic

Demographic factors highly affect the computer industry. As buyers are of all ages and different genders, also every individual have different choice like the use of iPod, iPhone and iPad is increasing in young generation. Literacy rate is increasing in our country and use of internet and computer in education as well as in homes also increasing. Children and teenagers are more interested in playing games on computers and increasing usage of social website, chatting etc. Information technology playing a vital role in business world due to these virtual organizations, are increasing. So demographic factors is plays important role in the industry.

* Economical

In the past few years, the industry has been affected by the slow economic and that resulted in low consumer spending. There is no sign of improvement, consumer spending and investment might decrease as well. Discount rate 13.5% from the central bank of Pakistan and it is the highest rate in Pakistan that negatively affecting this industry .Due to weak economic conditions, Pakistan’s educational is encountering large budget deficits. This factor has a negative impact over Apple’s sales in the educational segment. Sales of products that include components obtained from foreign suppliers can be adversely affected by currency exchange rate fluctuations and by international trade regulations.

* Social Factors

Social Factors also influence the industry as different segments of the society have different buying behavior and income so it affects the overall demand of the computers. The computer and internet usage is growing worldwide and is a good source of opportunities for the computer industry. Customers has become more experienced and computer literate in our country comparing with past. Education has become a prime issue for the new generation, which is a key factor for the company’s business.

* Political and legal

Political uncertainties and terrorism activities are directly impacting the overall business of the company. Energy crisis more and more taxes badly affecting the industry. For instance, when government imply 15 % sales tax it becomes difficult for the companies to manage profits. The company has to comply with the environment regulations such as environment safe disposal or recycling.

* Technological

As computer industry is a technology oriented industry so Technological factor greatly influence the industry as well as Apple Inc. As the technology changes it affects all the production processes, People appreciate more & more advances in their systems and are switching over to new information appliances. Technology is evolving at a rapid pace now days. Internet availability and usage is growing and leads to good opportunities for the industry. The traditional desktop and tower systems might become outdated by the entrance of new revolutionary products. New technology demand is increasing by schools and professionals.

Problems:

* Frequent changes in strategies and top management

* Apple Mac, application softwares not easily available

* Premium segment; requires heavy R & D costs

* Operates in Niche market

Five forces (porter) that apple applied.

Motorola Mobility v. Apple Inc. is one of a series of ongoing lawsuits between technology companies Motorola Mobility and Apple Inc.. In the year before Apple and Samsung began suing each other on most continents, and while Apple and High Tech Computer Corp. (HTC) were already embroiled in a patent fight, Motorola Mobility and Apple started a period of intense patent litigation.

The Motorola-Apple patent imbroglio commenced with claims and cross-claims between the companies for patent infringement, and encompassed multiple venues in multiple countries as each party sought friendly forums for litigating its respective claims; the fight also included administrative law rulings as well as United States International Trade Commission (ITC) and European Commission involvement.[1] In April 2012, the controversy centered on whether a FRAND license to a components manufacturer carries over to an equipment manufacturer incorporating the component into equipment, an issue not addressed in the Supreme Court’s default analysis using the exhaustion doctrine in Quanta v. LG Electronics.[2] In June 2012, appellate judge Richard Posner dismissed the U.S. case with prejudice and the parties appealed the decision a month later.

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Motorola Mobility’s suits

In early October 2010, Motorola Mobility filed a complaint with the ITC against Apple alleging patent infringement.[6] The complaint allegations concerned six Motorola patents, and sought remedies of a court-ordered bar on U.S. imports of infringing products, and an injunction prohibiting Apple from importing, marketing and distributing infringing products. The ITC instituted its investigation a month later and Motorola subsequently dropped its patent claims with respect to two of the six patents at issue.[7]Motorola also filed two complaints for patent infringement against Apple in the U.S. District Court for the Northern District of Illinois (Illinois Complaints), and another complaint for patent infringement against Apple in the U.S. District Court for the Southern District of Florida (Florida Complaint).

Both complaints alleged Apple infringed 18 Motorola patents. In November 2010, Motorola voluntarily dismissed the Illinois Complaints, (asserted as counterclaims in the actions brought by Apple on October 29, 2010 in the U.S. District Court for the Western District of Wisconsin). Later that November, Apple also filed counterclaims in the Southern District of Florida, alleging Motorola infringed six Apple patents in manufacturing and selling mobile devices, set-top boxes and digital video recorders.[7]Additionally, in October 2010, Motorola filed a complaint for a declaratory judgment against Apple and NeXT Software, Inc.[8] in the U.S. District Court in Delaware, seeking a ruling that Motorola did not infringe any claim of twelve patents owned by Apple and NeXT. In response, in early December 2010, Apple asserted these twelve patents against Motorola, Inc. and Motorola Mobility, Inc. in the Western District of Wisconsin and moved for a change of venue from Delaware to Wisconsin. Ultimately, both parties’ patent assertions were subsequently transferred to the Northern District of Illinois.

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Apple’s counter-suits

In late October 2010, Apple filed two complaints in the Western District of Wisconsin for patent infringement against Motorola, Inc. and Motorola Mobility, Inc..[9] The complaints alleged Motorola infringed six patents and sought money damages and an injunction. In early November 2010, Motorola filed counterclaims against Apple alleging Apple infringed twelve Motorola patents which Motorola originally asserted in the Northern District of Illinois. The Western District of Wisconsin transferred the actions to the Northern District of Illinois and trial was scheduled for June 2012 on six Apple patents and three Motorola Mobility patents. Also in late October 2010, Apple filed a complaint with the ITC for patent infringement against Motorola, Inc. and Motorola Mobility, Inc..[10] Apple’s complaint alleged Motorola infringed three Apple patents with Motorola’s mobile devices offered in the U.S.. Apple’s complaint sought a court order barring imports of those devices and sought an injunction prohibiting Motorola from engaging in further activities related to the same mobile devices.

The ITC began investigation in late November 2010; in mid-January 2012, the Administrative Law Judge (ALJ) found no violation by Motorola for the three asserted Apple patents; Apple filed a petition to review the ALJ’s findings but the ALJ ultimately ruled for Motorola and against Apple in mid-March 2012.[11] In mid-March 2011, Apple filed counterclaims against Motorola in the ITC proceeding (which was subsequently removed to the Western District of Wisconsin court), and instituted a new action in the Western District of Wisconsin, Apple Inc. v. Motorola Mobility, Inc., alleging that Motorola breached standards commitments (see Context, below), with counterclaims including equitable estoppel, waiver, breach of contract, violation of Section 2 of the Sherman Antitrust Act, unfair competition and interference with contract. Apple sought declaratory judgments that Motorola’s license terms involving standards-essential patents were unreasonable and discriminatory, that Motorola was not entitled to injunctive relief, and that Motorola committed patent misuse.[7]

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Context

Components manufacturers and major patent holders such as Motorola and Samsung commit to licensing their standards essential patents to other industry participants through their participation in standard-setting organizations (SSOs), while other industry participants negotiate licenses to use those patents, including manufactures and sellers of smartphones and tablets.[12] North American technology companies’ treatment in the marketplace of their respective products and mobile operating systems (OSs) spans the spectrum from completely proprietary systems to open-source license systems: Apple and RIM manufacture and sell products that run on only their respective proprietary mobile OSs; Microsoft licenses its proprietary mobile OSs, (Windows Phoneand Windows Mobile), to non-affiliated wireless handset original equipment manufacturers (OEMs); and Google sponsors Android, an open-source mobile OS it distributes free to OEMs.[13] All these OSs provide platforms for software application developers as well as for a variety of products and services offered by competing product manufacturers. Such products in turn rely on, and their patent holders commit to, SSOs’ rules for both standards essential patents disclosure and reasonable and non-discriminatory licensing (FRAND) grants for compatibility and interoperability of devices.[13]

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Further developments

In March and April 2011, Motorola filed patent infringement complaints in the court in Mannheim, Germany, alleging that Apple Retail Germany GmbH, Apple Sales International, and Apple Inc. infringed three of Motorola Mobility’s patents, two of which are standards-essential patents. In December 2011 and February 2012, the court in Mannheim, Germany found that Apple products infringed two of the three Motorola Mobility patents, one standards-essential and one non-essential, and granted injunctions.[7] Between May and December 2011, Apple filed patent infringement suits in Munich, Düsseldorf and Mannheim, Germany alleging that Motorola infringed Apple’s utility and design patents. Apple asserted the design patents against Motorola’s tablet products. In mid-February 2012, the Munich court found that a Motorola smartphone unlock feature infringed one of the Apple utility patents,[14] and granted an injunction.[7] Five days prior to the Munich court decision, Apple sued Motorola in the U.S. District Court for the Southern District of California.[15]

Apple’s complaint sought a declaratory judgment and injunction based on an alleged breach of contract by Motorola, and alleged that Apple is a third party beneficiary under a patent licensing agreement between Motorola Mobility, Inc. and Qualcomm, Inc., and thus in reliance on that contract. Apple alleged that Motorola’s rights under two patents it asserted against Apple in Germany were already exhausted under the licensing agreement and asked the court to enjoin Motorola from prosecuting and enforcing its claims against Apple in Germany. In February 2012, the European Commission, Competition Directorate-General, sent Motorola notice that the Commission received a complaint by Apple on the enforcement of Motorola’s standards-essential patents against Apple, allegedly in breach of Motorola’s FRAND commitments. Apple’s complaint sought the Commission’s intervention with respect to standards-essential patents.[7]


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