Posted by: Marius Constantinescu
Steve Jobs, Apple's co-founder and former CEO died on Wednesday after a long battle with pancreatic cancer. Jobs revolutionized the way consumers use electronics and built the Apple brand by setting a new industry standard for products such as smart phones, tablets, PCs. His legacy is not only linked to Apple but also to Pixar - a company he acquired from Lucasfilm in 1986 for $5 million, invested another $5 million of his own money and in the end sold it to Walt Disney Company in 2006 for $7.4 billion in a transaction that made Jobs the single largest shareholder of Disney stock.
Market's first reaction to Steve Jobs death mirrors the modest selloff in August when Jobs stepped down as chief executive, however Apple stock may remain volatile as the company's new chief executive, Tim Cook, gains confidence from investors. Apple's strategic course for the next years is already in place and Cook's first big product introduction - iPhone 4S - got a lukewarm reaction from the markets as the general expectation was for a totally new iPhone 5.
While Apple currently dominates some key segments, the other competitors are faster closing the gap. Samsung is the first challenging Apple for the crown of the company selling the most smartphones worldwide. HTC brings EVO 3D smartphone to the market challenging the iPhone by coming with similar features and adding a cool 3D camera. On the tables side the iPad is clearly still dominating the market, however there are a lot of new choices recently ranging from Samsung Galaxy, Assus Eee Pad and recently Amazon's Kindle Fire tablet currently selling at a brisk pace. Google has recently acquired Motorola and will also soon challenge Apple on these fronts.
While in these consumer segments Apple is leading the way and the other are currently following, there are market segments that Apple was not able to significantly get into. In the business sector with the exception of publishing companies very few firms are using Apple computers/laptops. Not only the price of an Apple computer is significantly more expensive than a Windows based PC, but then you have license issues, employee's training issues etc. From a smartphone perspective Blackberry is still the preferred device in the business sector with its strong email security and its browsing capabilities.
Apple also claims that Mac is the best computer you can get for school and that the Apple products are perfect for education. We would agree that Mac is one of the best computers but also one of the most expensive ones. MacBook Air starts at $999 and that is significantly higher than a Windows based PC so a parent or student will obviously keep that in mind when making a purchase.
Apple after Steve Jobs will face stronger competition in the key segments where it is currently leading (smart phones, tables, PCs) so in order to keep the leading position Apple’s next generation products have to be at least as reliable, innovative and user friendly as the first generations products. Ability to lower down the prices for Apple’s next generation products will be a key factor in case Apple wants to increase their presence in the other market segments such as education and the business sector.
