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iLiberty-The Licensing of OS X

iLiberty-The Licensing of OS X. Leasing out the Mac Operating System, OS X, to outside PC makers. iLiberties would have the same internal components. All manufacturing and R&D would be done by the PC companies. Overall benefits for Apple from this strategy.

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iLiberty-The Licensing of OS X

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  1. iLiberty-The Licensing of OS X • Leasing out the Mac Operating System, OS X, to outside PC makers. • iLiberties would have the same internal components. • All manufacturing and R&D would be done by the PC companies

  2. Overall benefits for Apple from this strategy • Increased sales with extremely high profit margins. • Increased sales of software and peripheral hardware across the board. • Expanding cash flow to continue Apple’s policy of technical innovation.

  3. Benefits of Licensing • Taking advantage of others’ large and effective marketing campaigns. • Taking advantage of others’ superior production efficiency • Competing for school and company contracts.

  4. How this changes Apple’s strategy • Apple’s current strategy: leveraging their superior operating system to boost hardware sales. • Old focus: Hardware New focus: Operating System • Production of “lower end” hardware.

  5. Why switching over from PCs to iLiberties is worth it to the consumer: • The iLiberties will be less expensive and the OS will be of a higher quality than those of the PCs • Mac OS X is more ‘hacker proof” and “virus proof” than Microsoft Windows XP • OS X is extremely intuitive and easy to learn • Wide availability of software for Macs

  6. SWOT Analysis: Strengths • In 2004 Apple had $2.96 billion in cash available for investment in new technologies. • It has a loyal customer base that is accustomed and comfortable on its OSX operating system. • High quality operating system and hardware/peripheral products are stable, reliable and virtually virus free.

  7. SWOT Analysis: Weaknesses • Doesn’t get its products the exposure they deserve • The company has been struggling in recent years to keep up market share. • Apple’s quality over quantity motto doesn’t permit the production of cheaper PCs at a lower level of quality.

  8. SWOT Analysis: Opportunities • Microsoft’s weakening grip on their market share • The Windows operating system has many flaws that make it prone to viruses and security breaches. Technological solutions to this are not an option. • Profit margins are extremely high with Operating Systems.

  9. SWOT Analysis: Threats • Windows continues to solidify its status as the featured operating system • Apple’s market share in the computer market continues to decline. • Its current situation and its future with its market share.

  10. Advertising Mediums Television • Fox • The OC • NBC • The Apprentice • 6:00 p.m. News • ESPN and The WB • Hourly Commercials • MTV • The Newlyweds • MTV Video Music Awards • The Real World

  11. Advertising Mediums • NEWSPAPERS • The New York Times • Education Section • Technology Section • Business Section • MAGAZINES • Seventeen • Disney Magazine • Sports Illustrated

  12. i Create i Invent i Think i Design i Learn i Liberty i Explore i Play i Challenge i Plan i Question i Change

  13. Target Cities and Populations Sales Representatives

  14. Marketing Financials NEW YORK TIMES (5 year cost) 1st 5 months: $66,680.00 1st year: $188,424.00 2nd year: $144,124.80 3rd – 5th years: $169,505.28 (total) 5 year total: $502,054.04 MAGAZINES (5 year cost) Seventeen: $277,140.00 Disney: $109,850.00 Sports Illustrated: $960,000.00

  15. Marketing Financials TELEVISION • Allotted $600,000.00 per 30 second commercial, averages depending on time slots • Television Total (5 year cost): $45,000,000.00 • Total Marketing 5 year Cost: $ 79,000,000.00

  16. How this will affect the sale of Apple made Macs • We do not expect sales of Apple made Macs to dip. • Different target markets for iLiberty and traditional Macs. • iLiberties target: Consumers for which price is most important. • Apple made Macs target: Consumers who desire superior quality and performance.

  17. Survey Results • People who rate “quality” as the most important differentiator: 62% • People who reported spyware, adware, or virus problems on their computers: Mac Users: 4% PC Users: 69% • PC Users who said they would switch away from Windows if an alternative was available: 51%

  18. Financials • We have the ability to finance this venture through debt due to our low debt-to-equity ratio.

  19. Financials • Expected return on sales – High profit margin

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