A Marketing Analysis Apple Inc. vs Dell Inc.

INTRODUCTION

The global computer hardware industry grew by 4.8% in five years time from 2001-2005.  The industry generated a total market value of US$366.9B in 2005.  The market consists of computers, servers, mainframes, workstations and peripherals. The most lucrative segment in 2005 was attributed to the demand of personal computers with a total market value of US$208.2B, representing to 56.7% of the overall market value. It is projected that from 2005-210 it will grow by a compounded annual growth of 5.9% equivalent to US$489.1B by end of 2010. (Research and Markets, Computer Hardware Industry Guide, 2005).

 The key players in the market are Apple Inc, Dell Inc, Hewlett-Packard, International Business Machines Corporation, Sun Microsystems, Toshiba Corporations, Lenovo Group Ltd, etc. On the other hand, the fast growing region is Asia Pacific with the growth of China and India
This marketing analysis report will focus on the two (2) key players namely Apple Inc. and Dell Inc.   Apple is headquartered in Cupertino, California with a total 21,600 employees and generated total revenue of US$ 6,217M as of September 2007. (Google Finance).  It has regional presence in Americas, Europe, Japan, Middle East and Asia Pacific. Meanwhile, Dell Inc.’s headquarters is in Texas with a  total  83,300 employees and generated a total revenue of US$ 14,776M as of August 2007employees. (Google Finance) The company has regional presence in the Americas, Europe, Middle East and Africa and Asia Pacific.
Both companies are very strong in Internet Marketing. Their products and services are readily available in their respective websites.   They are also very strong in branding their products, distribution, pricing and promotions.
APPLE INC.

COMPANY OVERVIEW
The Company
Apple was founded in 1976 and formerly known as Apple Computer Inc. Its headquarters is in Cupertino, California with total of 21,600 employees as of September 2007. Today, the company is known as Apple Inc. There have been so many product developments and innovations that transpired from Apple II during the 1970’s to the Macintosh computer in 1980’s.
Apple was incorporated in 1977 and introduced Apple I before the year of the 70’s ended. Apple II was launched in 1980 and faced stiff competition in 1983 with the entry of IBM in the PC market. In 1984, it introduced its first mouse driven computer Macintosh. Nearing five (5) decade in the business, the company has been through lot of transitions and had faced a lot of challenges to remain competitive in the global market.
            The company acquired companies and collaborated with various companies from 1990’s to 2006.  In 1991, IBM, Motorola and Apple formed AIM to create new computing standards. It acquired NeXT,, NeXT Os, Rhapsody in 1996 and made agreement with Microsoft with the appearance of MS Office on Mac PCs.  2001 is a year where the company acquired PowerSchool that provides web-based student information system and Spruce Technologies involved in developing and marketing DVDs. In 2002, the company allied with Ericsson and Sun Microsystems to create standard format for delivery of multimedia applications and content to wireless devices such as smart phones and PDAs. These alliance enabled Apple to combine the strengths of Quick Time Video Creation, Sun’s content distribution software and hardware the Ericsson’s mobile infrastructure and services. In the same year, it acquired Prismo Graphics, Silicon Grail, Zayante, eMagic and Nothing Real.   In 2005, Apple agreed to use Intel microprocessors in Macintosh computer. This is also the year where there were collaborations with Acura, Audi, Cingular Wireless for mobile phones and itunes.  In 2006, the company teamed up with Air France, Continental Delta, Emirates, KLM and United Airlines to integrate iPod with in-flight entertainment systems.  In 2007, it changed its name to Apple Inc to represent a stronger product portfolio and focus on electronics market. (Apple Inc Homepage)
Market Performance: Market Value
There are innovations in the desktop and notebook computes as well as in the operating systems, music players and on-line stores. In its fiscal year ended September 30, 2007, it recorded revenue of US$24.01B with a net income of US$3.50B. The 1st quarter of 2007 revenue posted was US$7.1B from the US$5.7B generated in the 1st quarter of 2006. The international sales accounted to 42% of the US$71.B. (Finance Yahoo)
LINE OF BUSINESS
Apple is engage in selling computer hardware equipment, peripherals, accessories, software, network solutions, digital music, mobile communication devices and other related accessories worldwide.
SPECIFIC MARKETS
Geographical Markets
Apple Inc.’s operations are in the Americas, Europe, Japan, Middle East, and Asia Pacific where they provide similar hardware and software products and services. Their Retail markets are operational in the US, Canada, Japan and UK.  The same period, US, Italy, Canada and US has combined total of 197 retails stores.

The Customers
The company sells to three (3) distinct markets such as educational, home and business consumers. (Apple Computer Inc.) Apple has diversified product portfolio that caters to the demand of the different markets.
MARKETING MIX
The Products
The product lines are segmented according to the use and applications. Listed below are the products and services offered globally and the specific brands by Apple:
Product Lines
Brands
Apple Desktop
iMac, eMac, Mac Mini, PowerMac, Mac Pro, Xserve and Xserve Raid Storage System
Portables
MacBook, iBook, MacBookPro, PowerBook
Music Products and Services
iPod, iPod nano, iPod Shuffle, iTunes Store,
Peripherals
Displays, Apple Cinema HD Display
Software Products and Computer Technologies
·   Operating Systems: Mac OS X Tiger, Spotlight, Mac OS X Server version 10.4;
·   Server Software and Server Solutions
·   Professional Applications Software: Final Cut Studio 5.1, Soundtrack Pro,  Motion 2, DVD Pro 4
·   Consumer, Education, and Business Oriented Application Software: iLife’06, iWeb, iPhoto 6, iMovie HD6, iDVD 6, GarageBand3, iTunes, iWork 06, Pages 2, Keynote 3, iPhone
·   Internet Software and Services: Safari, Quick Time,.Mac,
Wireless Connectivity and Networking
·   Airport Extreme, Airport Express
Table 1.  Product Lines, adopted from the Apple homepage’s product list

Apple Computers are available with their iMac and PowerPC product lines. The first one is less premium and powerful than Mac. It comes in trendy colors with simple text, graphics, Internet access and e-mail applications.

Product Innovations:
In 2006, the company introduced a new remote desktop product named as Apple Remote Desktop3 which is considered as the 3rd generation desktop management software. “Apple Remote Desktop 3 offers a wide range of high performance desktop management features including lightning-fast Spotlight searches across multiple Tiger systems; over 30 Automator actions for easily automating repetitive system administration tasks; a Dashboard Widget that provides quick and convenient observation of remote systems; and AutoInstall for installing software automatically on mobile systems when they return online”. (Apple Press Release, Apple Introduces Apple Remote Desktop3, April 2006)
            The company released a new operating system names as Mac OS X Leopard. “Leopard is the sixth major release of Mac OS X and is packed with more than 300 new features. Leopard introduces Time Machine, an effortless way to automatically back up everything on a Mac, a redesigned Finder that lets users quickly browse and share files between multiple Macs; Quick Look, a new way to instantly see files without opening an application; Spaces, an intuitive new feature used to create groups of applications without opening an application. Spaces, an intuitive new feature used to create groups of applications  and instantly switch between them, a brand new desktop with Stacks, a new way to easily access files from the  Dock; and major enhancements to Mail and iChat  (Apple PR website, Apple Sells Two Million Copies of Mac OSX Leopard in First Weekend, October 30, 2007)
The Price Model
            The pricing structure is based on the suggested retail price for single or multiple licenses as well number of terminals to be managed. An example is the pricing of the two new products such as Mac OSX Leopard’s at US$129 for a single user license while for the five user is at US$199. The same with Apple’s Remote Desktop3 with a price of US$299 for 10 systems and US$499 for unlimited number of systems.
The Distribution
Apple products are available in their retail stores, on-line Apple Stores and to the store of authorized resellers.   The company also expands its distribution through Ingram Micro and MicroAge.
The Promotional Vehicles
Apple promotional activities started in 1976 until today. The company started with print advertisement in 1976 for Apple I in black and white. In 1980’s the introduction of brochures and magazine advertisements to promote their products. They are also into TV and Internet advertising.
ADVANTAGES/STRENGTHS
Apple computers are easy to use and friendly. It has a multimedia that is can be easily installed because of its plug and play characteristics that are applicable to the Macintosh computers. The strategic alliance and acquisition enable the company to position its self in a fast growing demand and changes in the mere computer hardware product to variety of software and applications to meet the changes in consumers demand for integration of computers to Internet and Multimedia applications. (History of Apple, Inc.) The opportunities facing Apple Computers complement their strengths.  Their lead to voice recognition or the voice recognition software where computers can understand more than 200 words, high exposure to multimedia applications which are now becoming the most sought applications of the young market and the expertise and strengths of their strategic partners will drive the growth of the company.

DELL INC.

COMPANY OVERVIEW
The Company

Dell Computer Corporation was founded in 1984 and currently holding its headquarters’ office   in Round Rock, Texas with total of 83,300 employees as of August 2006. Since 1985 to 2007 the company received a lot of business recognition, expansion of manufacturing facilities and developed new products and services for the global market. In 2003, the company changed its name to Dell Inc.

The company launched its first computer product in 1985 known as Turbo with Intel processors inside. In 1991, Dell launched its first notebook and in 1997 offered its 1st work stations and US consumer business. Another product was launched in 2001, the PowerConnect Network Switches. In 2002, new lines were offered such as printers for business and consumers.
Market Performance: Market Value
As of August 2007, the company recorded revenue of US$14,776M. (Google Finance)
LINE OF BUSINESS
Dell Inc. is engage in the design, development, manufacture, marketing, sale, and support of various computer systems and services worldwide.
SPECIFIC MARKETS
Geographical Markets
The company has regional presence in the Americas, Europe, Middle East and Africa and Asia Pacific. The most lucrative region is Asia-Pacific and Japan with a total revenue of US$1.9B in the 3rd quarter of fiscal year 2007. Led by 33% growth in volume in China, Dell is considered the fastest growing manufacturer in the region. India, on the other hand, grew by 93%. The other regions such as Europe, Middle East and Africa achieved total revenue of US$3.3 billion with a total volume grow of 9%. In the Americas, total revenue reached by US$9.9B while market volume in Brazil increased by 37% and in Canada about 19%.   In terms of product segmentation, the most lucrative is desktop with revenue of US$4.7B, followed by Mobility US$ 3.9B, Software and Peripherals US$2.3B, Servers US$1.5B, Enhanced services that generated US$1.4B and Storage revenue of US$ 577 M. (Dell Press Room, Dell Reports Preliminary Revenue of $14.4 Billion; Preliminary Earnings per Share of $0.30, November 21, 2006)
            Dell had major manufacturing expansions from 1998 to early months of 2007. In 1998, there were international expansions in United Kingdom and Ireland to cater to the European, Middle East and African markets.  Subsidiaries in Australia and Japan were formed in 1993. In 1996, the company opened its Asia Pacific Customer Center in Malaysia and in 1998 there were manufacturing expansion programs in the Americas and Europe. In the same year, Dell opened a manufacturing facility in China.  The manufacturing facility in Brazil for the Latin America market was opened in 1999. This year, Dell opened a manufacturing plant in India. (Dell Inc. Company Profile)
The Customers
The company sells to large corporation, government, healthcare, educational customers, small to medium business and individual customers.

MARKETING MIX
The Products
The product lines are segmented according to the use and applications. Listed below are the products and services offered globally and the specific brands by Dell Inc.:
Product Lines
Brands
Desktop Computer Systems
Dell XPS, OptiPlex, Dimension, Dell precision workstations,
Mobility Products
Dell MP3 Players, Dell Axim handhelds, Notebook computers, Dell XPS, Latitude, Inspiron,
Music Products and Services
iPod, iPod nano, iPod Shuffle, iTunes Store,
Peripherals
Displays, Apple Cinema HD Display
Software Products and Peripherals
·   Printers, Monitors, Plasma and LCD televisions, Projectors, 3rd party Printers, Televisions, Software, Digital Cameras, Networking Products and Storage Devices
Services
·   Assessment, design and implementation services
·   Deployment services
·   Training & certification services
·   Enterprise support services
·   Client support services
·   Managed lifecycle services
·   Financial Services
Table 2. Product list adopted from the Companys’s website
The Price Model
Dell computers are priced lower than the competitors. The company is offering huge amount of volume discounts with the support Intel. Intel is their microprocessor partner that supports their overall computer business lines.

The Distribution
The company had retail store to present the products and implemented the Direct Sales Strategy to eliminate middleman to lessen the channels of distribution. Eventually, Dell Inc realized that they have to expand channel instead of the Direct Strategy. They started selling with Wal-Mart stores in the US and Canada and currently have plans for retail stores and partnership worldwide. (Hoovers, Dell Company Overview). The Direct Distribution allowed the company to get orders directly with the customers and control their inventories.

The Promotions
Dell Inc, uses television, magazines, catalogs, newspapers and Internet to advertise their products.
ADVANTAGES/STRENGTHS
Dell Inc has a strong market position. In 1992 it was listed as among Fortune 500 world’s largest companies and in 2000 was 1st in ranking for the global market share. It has the largest storage segment with partnership with EMC the US-based information infrastructure technology and solutions company. It has growing market presence in India and China. The diverse product portfolio caters to all types of consumers from all over the world.

COMPETITIVE LANDSCAPE: APPLE INC.  VS. DELL INC.
Product
Apple Inc.’s  product lines are more diverse than Dell Inc.’s product offerings in the market. Apple is engage in selling computer hardware equipment, peripherals, accessories, software, network solutions, digital music, mobile communication devices and other related accessories worldwide while Dell Inc. is more focus on the design the design, development, manufacture, marketing, sale, and support of computer systems.

Price
In general, Dell computers are priced lower than computers primarily due to huge volume discounts. Sample Price Comparison Matrix of the two (2) companies:
APPLE INC.
DELL INC.

PRODUCT SPECS
Apple base specs
Mac Pro
NVIDIA GeForce 7300 GT 256MB
Memory – 1GB, DDR2 SDRAM 533MHz, ECC (2x512MB DIMMS)
HDD – 160GB 7200RPM S-ATA
Optical – Superdrive dual-layer DVD+/-RW drive
KB/Mouse – Apple Keyboard and Apple Mighty Mouse
Sound and Firewire – FireWire 800/400 and sound with various I/O inc. optical
No monitor
One year standard AppleCare
PRODUCT SPECS
Dell base specs
Dell Precision 490
Graphics Card – 128MB PCIe nVidia Quadro NVS 285
Memory – 1GB, DDR2 SDRAM 533MHz, ECC (2x512MB DIMMS)
HDD – 160GB 7200RPM S-ATA
Optical – 16X DVD+/-RW drive
KB/Mouse – USB Entry Quietkey, Dell standard USB 2-Button Optical Mouse
Sound and Firewire- Onboard AC97 sound and 1394a Controller Card
No monitor
Three year onsite economy service & support
Dual Core Intel Xeon 2GHz x 2 (4MB shared L2 cache)
U$2,086.00 (with a $200 discount for small business)
$2,124.00
Dual Core Intel Xeon 3GHz x 2 (4MB shared L2 cache)
U$3,686.00 (with a $200 discount for small business)
Apple: $3,224.00

Dual Core Intel Xeon 2.66GHz x 2 (4MB shared L2 cache)
U$2,866.00 (with a $200 discount for small business)
$2,424.00

Table 3: Product and Price Comparison, adopted from Press Release, Theinquirer.net, Apple Thrashes Dell on MacPro Pricing, Dean Pullen, August 2006

Dell’s pricing strategy is more on Discount Offerings to their customers. “Any major OEM has trouble matching pricing with Dell, considering the massive volume discount Dell gets from Intel. But Apple aren’t only matching them on the lower specs, they’re thrashing them on the higher spec systems – relatively huge margins of pricing difference.”  (The Inquirenet, Press Release Apple Thrashes Dell on Macro Pricing, Dean, Pullen, August 2006)

Distribution
Apple Inc.  is into on-line stores, retail stores and have partnerships with authorized resellers. On the on the other hand, Dell Inc. is always into Direct Sales.
Promotion
Both companies are into print, TV and Internet advertising.
COMPARATIVE WEBSITE REVIEW OF APPLE INC AND DELL INC.

 (Adopted from the Apple Website)

In general Apple Inc’s website is more sophisticate and has a very technical view of their homepage. To navigate their site the tabs will be of help to explore the topics that a customer want to access. The home page contains the latest product of Apple in which is the Mac OS X Leopard.  To get product information and  other services the Search Button will be of used.
 (Adopted from Dell Inc Website)
            The approach of Dell Inc’s website is patterned more on the Advertising Approach. The products are presented on the homepage, with the claim of Excellence on Design, types of consumers are listed and search for contacts can be seen at a glance.
Two (2) Appealing Sections of Apple Inc.
            Apple Inc. homepage has a tab to display the stores. In this section everything has been presented with actual pictures and prices. The customer can easily pick up his choice with all the information available per product. There is also a listing of popular accessories which is appealing and the presentation of Top Sellers for products and services to help customers decide which one to buy.  Another appealing section is the Support Tab where there are links on popular discussion, manuals and links of support per product and per service.
Two (2) Appealing Sections of Dell Inc.
            On the homepage of the website there is a Status of My Order Tab which is really appealing for tracking of the purchased product. This indicates that Dell Inc. is keen on the delivery time to satisfy the immediate need of its customers. Another appealing section is the Segmentation of its Customers Tab which presents that Dell Inc. can cater to the needs of the Home & Home Office, Small & Medium Business, Large Business and Government, Education & Healthcare and Life Sciences.
How to Improve the Site
The two (2) websites are totally presented in a different manner. Apple Inc. is more inclined on Intenet Savvy Outlook while Dell is more on a Marketing Approach.  The websites have a global approach. It might be more appealing if they can have regional presentation of the availability of products/services and support per region.

CONCLUSION

            Apple Inc. and Dell Inc are some of the known Computers and Peripheral manufacturers. They have been in the business for more than 20 years. Both companies are aiming to remain competitive by re-inventing their approach to their marketing mix.
            They type of consumers whether individuals or corporate are now very much involved in various Internet transactions and applications. The days of recording and documentation are now considered the simplest way of PC application. The users are now aiming for more sophisticated applications that can make their business more effective and efficient. In addition, the consumers are moving fast to cope up with globalization.  Hence, they need a more diversified business process to communicate and transfer relevant data to various businesses worldwide.
            These needs can be correlated to the growing product lines of Apple Inc. and Dell Inc. These two (2) companies are aiming to meet the requirements of their diversified consumers around the world.

BIBLIOGRAPHY

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