Analyzing Apple Inc.'s Intellectual Capital Strategy (Essay).

Background of Intellectual Capital

Questions:

1. Presentation of the business organization selected (basic data such as history, main activity, sector in which it operates, competitors, etc.)?

2. Justification for the selection of that business organization?

3. Analysis of its intellectual capital?

a. Innovation model. (Taking into account collaboration with teaching institutions)?

b. Human capital (Focusing in whether they have a particular policy for knowledge workers; if the company is based exclusively in knowledge workers or not)?

c. Intellectual property rights. (Do they have a portfolio? Explanation of the types of IP they use)?

4. Analysis of its intellectual property strategy. (Do they treat IP as a core asset or not? How do they seem to exploit its IP? Take into account the recommendations made by John Palfrey in his book)?

5. Conclusion from a managerial perspective?

6. Recommendation (Should they change anything, should they remain as they are and what)?

According to Engdahl (2010), the combination of intellectual property (IP) is Intellectual Capital. Through the intellectual capital, organisation in business environment can increase their business as well as exploits also. However, Neethu (2014) argued that collective knowledge about the organisation or society individually is called intellectual capital.

This study firmly focuses on analysing the intellectual capital strategy of Apple Inc. Apple is the largest seller in electronics products worldwide. However, this study analyse the intellectual capital strategy for Apple and identify the potential strategy that undertake by Apple in terms of continuous growth and success.

In 1976, Steve Jobs and Steve Wozniak introduced the company Apple in electronics market. After starting the business, Apple still maintain their market share and continuous growth rate in electronics and communication market. At first, the company started their business by making a simple computer machine. Headquarter of Apple is located at Cupertino in America. Apple design and develops all types of electronics products as well as computer along with mobile phone and sell into the market. Neethu (2014) stated that Apple is best known for the hardware services. Apart from that, there were some critics who thinks that unique product line make the Apple successful and attain continuous success for the company.

There are several unique products that present in open electronics market such as iPod Music Player, Mac based computer system, iPad tablets, iPhone smart phone, etc. Apple not only provides the unique products to customer but also they serves unique operating system with their products. For example, Apple gives OS X operating system for their computer and for their iPhone smart phone, the company use iOS operating system. In the smart phone of Apple, the manufacturer include iTune media browser and in computer, the company serves Safari web browser. Apart from that, Apple provides wide range of creativity service such as iWork, iLife, etc (Apple.com, 2015). In 1996, when the company was first introduced by the Jobs and Wozniak it name was Apple Computer Inc.

However, in 2007 the term Computer was removed from its name and the new name of the company established as Apple Inc. According to the market review of 2012, in information technology System Company, Apple covers the second position just after Samsung Electronics. On the contrary, in mobile phone market, Apple covers third position after the Samsung and Nokia. Moreover, in United State Apple got the honour of most predictable admired company by the Fortune Magazine. Market review of 2013 demonstrated that Apple currently run their business over fourteen country worldwide such as Japan, America, China, India, Australia, etc. More than 406 retail stores are operated by the company worldwide. Apart from that, Apple facilitates the customer by providing online iTune stores and Apple Stores. Thus, Apple attains $414 estimated value in world electronics market that is counted as second largest publicity traded corporation.

Introduction of Apple Inc.

In electronics market, Apple serves wide range of products and service such as computers, tablet, smart phone, etc. Therefore, Apple faced large competition from other organisation that related with the electronics products and smart phone. Following table shows the competitors of Apple separately in computers, mobile phone and tablet market –

Competitors in Computer Market	Competitors in mobile Phone Market	Competitors in Tablet Market
Dell, HP, Accer, Lenovo, Microsoft, IBM, Toshiba, etc	Google Nexus, Sony, Nokia, HTC, Samsung, Blackberry, etc.	Sony, Samsung, Amazon, HP, Dell, HTC, Micromax, Lenovo, HCL, etc.

In order to survey the strategy of intellectual capital, analyst selects the company Apple in business environment. Apple is selected for this case study because Apple is the world largest business company in electronics market and it has wide range of innovative strategy that makes the company strong and attains continuous success. Apple has the capabilities of marketing and advertising that helps in increasing brand awareness in market. Plomer (2013) cited that well established brand is the method of achieving potential success and large customer base with more loyalty. Apple firmly focuses on developing and providing quality products or service to customer instead of focusing price sensitivity.

Poyago-theotoky & Teerasuwannajak (2012) claimed that, this strategy makes high margin and drive the penetration for Apple in electronics market rather than their competitors. Apart from that, Apple keep their eyes in future growth and success that allows in launching new innovative products or service such as iCloud, iTunes, etc. in each event, Apple introduce products with more anticipation rather than the last one. Moreover, technology of new products is leading up rather than the last one. Roughton (2008) acknowledged that Apple always make their products that makes a suspicious in customer mind for innovative conjecture named next big thing. For this innovative strategy and intellectual property, Apple Inc was selected by the analyst in order to analysis the Intellectual capital strategy.

a. Innovation Model

Stoll et al. (2009) argued that Apple is best known for its innovation. The company widely considered as the innovative company worldwide for their continuous changes strategy and service. The key innovation of Apple is the traffic of new products.

Business Line of Apple: In order to develop and provide innovative products with high quality, Apple segment their product line into different part such as iPad, Mac, iPhone, iTunes, hardware as well as software along with accessories and innovative service. Apple provides Solid State Derive (SDD) instead of Hard Disk (HDD) in their computer system. The technology of SDD is much smaller and sensitive rather than HDD. Apart from that SDD has not any spin up time rather than HDD. Therefore, it allows customers by taking less start up time for the biggest asset. In order to sell their, Apple act as wholesaler by developing authorized Mac retailers. Furthermore, the company applied manufacturer direct model in terms of selling the computer directly to their customer via their own portal www.apple.com. Apart from that, Apple plays traditional retailers role to sell their products.

In 1996, the company first introduced mobile device in market. However, Apple fully focused on quality construction and experience of customer in their manufacturing process of mobile phone devices. Therefore, Apple introducing wide range of software and hardware services along with cloud service in their products that make the company powerful in mobile platform service. The company sells their products through partners as well as traditional retailer along with online channels. In order to provide offer or several discount in their products Apple involve freemium business model within their business operations.

Design and Disruption: In order to design with better way, Apple applied tried and true method in their operation process. In terms of making high revenue and less competition, Apple involved multiple business model within their business operations. Apple always focused on human interaction revolutionizing in their products and service. Apart from that, Apple uses the brightness technology of Sharp Company that helped in providing better graphical user interface rather than other companies such as Dell, HP, Samsung, etc. However, when the company faced much competition from Microsoft, they changes their computer model and developed iMac that brings lot of opportunities for Apple in terms of achieving future growth and success. Moreover, Apple designed iPod music player with large storage capacity first rather than other company’s music player. Logical user interface made the iPod music player to disrupt the Apple in electronics industry via innovative design (Refer to Appendix).

b. Human Capital

In intellectual Capital, human capital is the heart. The terms human capital related with the competencies, capability, resource, skills, knowledge, and innovation of employees. According to Awuku (2005), in order to generates intellectual capital, employees has to take responsibility using their attitude, agility of intellectual, competencies, capability, knowledge and skills. Apple offer $415 million in order to settle the suit of anti-poaching of their employee. Apart from that, Apple provides do not hire policies for their workers within the workplace of Apple that allows workers in preventing claim in order to get higher payment and getting high positioned job in their competition company. Apart from that, Apple provides high payment to their employees and management of Apple is great (Stoll et al. 2009). Apple provides fantastic policies that help in never getting tiered in job. Moreover, Apple always encourages constant improvement for their employees providing training.

c. Intellectual Property Rights

Like other innovation, intellectual property is also embodied for Apple. The company include wide range of intellectual property such as patents, rights and permission, copyrights and trademark, etc.

Rights and Permission: Copyrights permission of Apple is also different unlike their competitors. Is the third party want to copyrights their products such as video, photograph, the applicants must to submit accurate image as well as materials that he/she tries to seeking, need to surround the image or text for the project by apple company, mentioned the submit publishers along with date and provide a suitable title (Apple.com, 2015).

Guideline to use Apple Trademarks: In order to use the Apple trademark, the third party must to be authorized reseller. Apart from that, third party has to present proper licence in terms of using logo of Apple for promotion or advertising into markets. If the agreement with Apple and guideline match with the business process of third party, they can use Apple Log for sales or advertising. Moreover, if the third party uses Apple Logo in their referential phase in terms of selling products or advertising items or packaging the products, they must have the compatibility with the technology or products of Apple (Apple.com, 2015).

Intellectual Capital Strategy of Apple Inc.

Submission Policy: In order to submit the products by third party, organisation have to submit content automatically become a part of Apple company. They are not able to make any compensation with the company. Apart from that, Apple is able to redistribute of third party’s contents in any way (Apple.com, 2015). Moreover, Apple provides the feedback collecting system from the user about their existing business system. Apple provides feedback service in unrestricted basis for their users.

In the global electronics market, Apple in International Trade Commission receives honour from the Administrative Las Judge Thomas Pender. In order to identify copied technology, Thomas Pender the judge of USITC (U.S. International Trade Commission) quoted that does it look like it, feel like it, smell like it.

In order to make the company as a leader in technology, Apple involves the Intellectual Property Strategy of Nortel. It helped the company in developing the business in technology like a leader of electronics market. However, Palfrey (2012) opined that Apple fights with the large multi front war in order to become a leader in technology. In Germany and Australia, Apple manages their technology as well as their products from the temporary interaction with their competitors. Raju (2006) pointed out that, Apple has the manipulated evidence in the technological rivalry at Dutch against their competitors like Samsung. According to the review of 2011, Apple fields the case that present in USITC that was retailing against the case field by the other companies in same environment. During that time, Apple represented two design patent such as US D558, 757 and US D618, 678 and the five patents that suit their business (M-cam.com, 2015). Following table demonstrates that claim construction of five patents where one patent dropped and it was owned by the other electronics product manufacturing company name Samsung.

Patent Document	Title	Name of Assignee	Priority	Issue	File
US 7479949	Graphical User Interface, device of touch screen, method, etc	Apple	6th September, 2006	20th January, 2009	11th April, 2008
US 789697	Mechanism of plug detection	Apple	11th June, 2007	7th September, 2010	29th May, 2008
US 7912501	Circuit for Headset plug input and output detection	Apple	5th January, 2007	22nd March, 2011	5th January, 2007
US RE41922	System and circuit and method for data transferring from device to computer	Apple	10th May, 1993	9th November, 2010	5th June, 2002
US 7863533	Development of mobile phone	Samsung	6th March, 2000	9th March, 2012	10th December, 2007

The above analysis Apple won the pool patent that asserted with the other three patents. However, it demonstrates that, Apple never performs with the miracle, they achieved owner or maintain success in electronics market with higher invention and high quality services (Mohammed, 2009). According to the examiner of USPTO, bit of Apple is less enforceable.

5. Conclusion

Apple protects their intellectual property especially for the mobile devices such as iPad, iPhone, etc. In order to decrease competitors, Apple served as a venue in marketplace via the infringing products and services. Apart from that, Apple indirectly dominates the market place of Android Operating System and Google Nexus technology. The strategy of Apple in business is litigious as well as calculated assaults rather than their competitors especially in Europe and South Korea. However, due to high increase rate of smart phone hardware developer such as Nokia, Samsung, Lenovo, etc, Apple managed their show up and focused on developing software functionality patents. The case between Apple and Samsung demonstrated that Samsung illegally design their products like Apple. The major strategy of Apple that is still unique rather than other electronics manufacturing company is price and quality. Though the consumer of Apple limited, but the company never develop or introduce low quality products for the price sensitive customers.

Based on the above analysis, following are the recommendations that need to integrate within operational process of Apple –

Research the Possibilities of User Interface: Apple need to design more innovative user interface especially for the Mac operating system based computer and other PCs. The user interface must to be easy in using or handling by the user. Therefore, initiatives menu functions have to present in Apple’s PCs.

Diversification: Apple already established their brand in electronics market successfully. However, the company has to develop more products and diversify the business that maintain their quality as well as make reasonable prices of their products.

Expand Stores Locations: In order to make more profits and enlarge customer base, Apple need to expand their stores locations in all part of the world. This allowed Apple in providing better service to their customers as well as makes a presence in consumer mind.

Reference List

Books

Engdahl, S. (2010). Intellectual property rights. Detroit, MI: Greenhaven Press.

Palfrey, J. (2012). Intellectual property strategy. Cambridge, Mass.: MIT Press.

Raju, C. (2006). Intellectual property rights. New Delhi: Serials Publications.

Stoll, P., Busche, J., & Arend, K. (2009). WTO--trade-related aspects of intellectual property rights. Leiden: Martinus Nijhoff Publishers.

Journals

Awuku, E. (2005). “Biotechnology, Intellectual Property Rights and the Rights of Farmers in Developing Countries”. The Journal Of World Intellectual Property, 8(1), 75-82.

Mohammed, E. (2009). “Moral rights and mortal rights in Canada.” Journal Of Intellectual Property Law & Practice, 4(4), 261-266.

Neethu, R. (2014). “Braiding intellectual property law with human rights”. Journal Of Intellectual Property Law & Practice, 9(4), 341-342.

Plomer, A. (2013). “The Human Rights Paradox: Intellectual Property Rights and Rights of Access to Science”. Human Rights Quarterly, 35(1), 143-175.

Poyago-theotoky, J., & Teerasuwannajak, K. (2012). “R&d productivity and intellectual property rights*”. The Manchester School, 81(3), 276-292.

Roughton, A. (2008). “The interface between intellectual property rights and competition policy”. Journal Of Intellectual Property Law & Practice, 3(4), 270-271.

Websites

Apple.com,. (2015). Apple - Legal - Copyright and Trademark Guidelines. Retrieved 16 January 2015, from https://www.apple.com/legal/intellectual-property/guidelinesfor3rdparties.html

Apple.com,. (2015). Apple - Apple Info. Retrieved 16 January 2015, from https://www.apple.com/about/

Apple.com,. (2015). Apple - Legal - Rights and Permissions. Retrieved 16 January 2015, from https://www.apple.com/legal/intellectual-property/rightsandpermissions.html

Apple.com,. (2015). Apple - Legal - Unsolicited Idea Submission Policy. Retrieved 16 January 2015, from https://www.apple.com/legal/intellectual-property/policies/ideas.html

M-cam.com, (2015). Retrieved 16 January 2015, from https://www.m-cam.com/sites/www.m-cam.com/files/20120606%20-%20Apple%20v%20Reality.pdf