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#Written by David Tam, 1996. #
#davidkftam@netscape.net Copyright 1999#
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David Tam
Tuesday, November 5, 1996.
Business Press Review
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Brethour, Patrick. "Apple taking aim at niche markets". The Globe and Mail.
Friday, November 1, 1996. B8. ------------------
Apple Computer Inc. has a new business strategy in becoming successful in
the computer industry. They are focusing their marketing, research,
development, and manufacturing efforts on a few key niche markets. The
introduction of the low-cost notebook computer designed for the classroom, the
Emate 300, is just one of the results of those efforts. It is a stripped-down
portable computer for students that will sell for less than $1000. Durability
and easy of use will be its main features, but it won't have many of the
features necessary to sell well in the consumer and corporate markets.
Apple plans to concentrate in the niches that have brought success. These
niches are the technical, scientific, publishing, and education markets. Mr.
Lorion, vice-president of education at Apple, believes that the computer
industry market is fragmenting as it matures, and that specialized machines for
particular markets will soon become the trend.
Though most analysts agree with Apple's plan for success, many are divided
on whether the long-term benefits are found in specialization in the niche
markets. Many believe Apple will thrive if they continue to introduce new
products that increase demand in those selected niches. However, by pursuing
only a handful of markets for an extended period of time, Apple threatens to be
pushed to the margins of the industry. This possible contradicts Apple's
desires to become a key player in the computer industry once again. Though
this strategy is beneficial in the immediate future of the company, many
strategists question its long-term results.
I believe that this move towards specialization is good in the short-term.
As we have discussed in the lectures, specialization, especially in the
high-tech industry, is the key to success because the computer industry market
is very large and the competition is very fierce. However, specialization does
have risks. If those niche markets were to change, and no longer had the need
those products, then Apple would be in serious trouble. To remedy this risk,
Apple must realize that if they are to specialize in their niche markets, and
to fully take advantages of specialization, they must conduct a lot of research
and development, and innovation in their products and services.
Once Apple has built a solid foundation and reputation in these niche
markets, I believe they must expand in the market once again. This should only
occur once the company is enjoy substantial amounts of profit.
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