Apple Research Report #2 (Essay Sample)

Research Report
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Introduction
Apple Inc. which was formally known as Apple Computer Inc. is a multinational corporation that designs, develops and also sells a wide variety of consumer electronics, personal computers, and computer software. It is located in United States of America California and has its headquarters in Cupertino, California. Among its adequately known hardware products in the market industry are; iPhone Smartphone, iPad tablet computer, and iPod music player among many other computer accessories. Moreover, it develops and sells the following computer software; iOS and OS X operating systems, Safari web browser, iTunes media player, and iWork and iLife creativity and productivity collections.
On the other hand, Microsoft Corporation is a multinational software corporation that designs, develops, manufactures, accredits and supports a variety of computing products and services. The company is situated in United States of America and has its headquarters in Redmond, Washington. It was established on the 4th of April, 1975 by Bill Gates and Pal Allen. Since then it has risen to be the world’s greatest software maker as measured by revenues. Subsequently, it is also among the most valuable companies in the world.
Owing to the competitive nature of the software industry, both Apple and Microsoft have been rivaling for customers by virtue of their product specifications, functionality, target market, and even leadership profiles. Generally, for a company to gain an adequate competitive advantage in the market front, it has to establish viable strategies that can enable it make pertinent decisions with regard to what out to be done in a given situation. It is important to note that, some decisions taken by companies lead to business success while others arguably result to business failures. In this regard, it is paramount for any given company to establish outstanding strategies that can enable it attain market dominance and remain a significant icon in the market industry.
BluePhoenix Accounting Firm is currently experiencing an increase in its profits as a result of resurgence in its annual sales. Based upon this rationale, the institution’s management wishes to invest part of its earnings in the stock market. Therefore, a team was picked to identify two potential companies operating in the same industry. From an in-depth financial analysis done by the financial department of the company on both Apple and Microsoft, the company’s CEO requested me to execute an intense qualitative research in order to give a comparison of the two chosen companies.
The main intention of this report is to provide adequate information about the two companies so that the financial department can make the most precise decision on which company to settle with. Therefore, this report exposes the historical aspects of the two companies, some of their success stories, their past and even future challenges. Additionally, the writing also gives a critique of the professional analysis of the two companies, after which recommendations are given regarding to the choice of the best company to invest in.
Historical Conditions of the Two Companies
Apple Company was established on the 1st of April 1976 by Steve Jobs, Ronald Wayne, and Steve Wozniak. The company started by selling Apple I personal computer which was designed by Wozniak (Chumney & Cowart, 2010). This kit was first presented to consumers at the “Homebrew Computer Club” where it was advertised for sale as a motherboard. It was later sold in July 1976 at a market price of $666.66. It was later on incorporated as “Apple Computer, Inc.” on the 3rd of January 1977 without services of Wayne who had sold his shares to both Wozniak and Jobs for $800. At this time, Mike Markkula provided the necessary business expertise and financial support of approximately $250,000 to aid the incorporation process. Throughout initial five years in the market, the company saw a steady increase in its revenues to an extent that the average growth rate for those years was 700%. Between the years of 1981-1985, Apple introduced the Lisa and Macintosh computer models. Unfortunately in the year 1982, Jobs was removed from the Lisa panel due to infighting. As a result, Jobs took charge of Jef Raskin’s cheap computer project by the name Macintosh. The two products; Lisa and Macintosh competed in order to gain an adequate market reception. For this reason, Lisa decided to sell its first computer by the name GUI in 1983. Unfortunately, its price tag was too expensive for many consumers. It also had limited software titles and therefore it did not prevail for long.
In 1985 a supremacy conflict broke between Jobs and John Sculley who had been hired as the CEO of the company two years earlier. Consequently, jobs resigned from the company the same year and formed NeXT Inc. On the 9th of April 2007, the word “Computer” was detached from its name and it started using the name “Apple Inc.” Similarly on the same day, Steve Jobs launched the I Phone, thus reflecting its transition towards consumer electronics. At present, Jobs is no longer in charge of the company since he took a medical leave due to poor health. It is perceived that Apple is currently enjoying a sufficient chain in its supply and has established itself as the second largest IT Company in the world.
On the other hand, Microsoft was initially established to design and vend BASIC interpreters for Altair 8800 model. It then rose and dominated the “Personal Computer Operating System” industry by introducing MS-DOS in late 1980s. This model was later followed by “Microsoft Windows” model of operating systems. Due to its effective public offering, the company attained a rise in its shares and created over 12,000 millionaires and 3 billionaires from its employees in the year 1986. In 1990s, it significantly diversified its market space from the operating systems industry and for that reason it was able to make several corporate acquisitions. Notably, in May 2011 the company obtained Skype Technologies for an estimated $8.5 billion which is its prevalent acquisition to date.
As of the year 2013, the company is the most dominant entity dealing with both Office suite and PC operating systems. Moreover, the company produces a variety of software for desktops as well as servers. it is however expected that Steve Ballmer will retire as the company’s CEO once a successor has been identified.
Brief Comparative Statistics
By the 29th of September 2012, Apple had 72,800 full-time employees on permanent basis and 3,300 full-time employees on temporary basis worldwide. With regard to the company’s fiscal statistics of the year 2012, the company declared plans to sell dividends at $2.65 per share. As a result, on September 2012, the company attained a record share value of over $705 alongside 936,596,000 outstanding shares prior to June 30, 2012. Here it achieved the highest market capitalization of approximately $660 billion, which exceeded Microsoft’s record of 1999. By May 2013, Apple Inc. had maintained about 408 vending stores in 14 countries worldwide. It also had online iTunes Store and Apple Store which is presently the world’s leading music retailer. It is the leading publicly traded corporation worldwide by market capitalization; having an estimated value of approximately US$415 billion prior to March 2013. Due to the above mentioned increase in revenues, the company was ranked 6th in the Fortune 500 register of companies in May 2013 having risen 11 places higher than its 2012 ranking position.
Consequently, Microsoft Company is run by external board of directors as is expected of publicly traded companies. As of the month of June 2010, its board of directors comprised of; Steve Ballmer, Bill Gates, Dina Dublon, Raymond Gilmartin, David Marquardt, Reed Hastings, Helmut Panke, and Charles Noski. Board members are elected through a majority vote during an annual shareholders’ meeting. The company has 5 committees in charge of specific matters. For instance, the Audit committee oversees accounting issues; compensation committee approves compensation for employees and even the CEO; finance committee, which oversees financial matters; Governance and Nomination Committee, oversees corporate issues; and the “Antitrust Compliance Committee”, which prevents the company from breaching antitrust laws.
From current company statistics, Microsoft’s assets accounted for $41 billion in the year 2011. However, this amount did not account for $8.5 billion of unsecured debt. Similarly in February 2011, the company gave out a corporate bond tallying to $2.25 billion which was relatively lower than government bonds. With regard to 2011 annual report, a common share was sold at between $22.73 and $29.64.
Fundamental Philosophical Differences
Apple is adequately known for firmly enforcing accountability. Every project has a definite process with a “Directly Responsible Individual” commonly known by the acronym DRI in Apple terminology. For instance when Scott Forstall, who was then the “iOS Vise President” declined to sign an official apology from Apple for several faults in the Maps app that had been redesigned, he was strictly forced to resign. At the company, workers are specialists who only work in areas of their own specialization (Smith, 2011). In fact, no employee is exposed to responsibilities which are outside their vicinity of expertise. Most importantly, Apples procurement, manufacturing, and logistics permit it carry out extensive product launches without the idea of having to maintaining huge, profit-sapping inventories. Moreover, the company has moved from advertising its products as &ld...