Apple in 2012: Controversy and competition

December 27, 2012

Apple had quite the year, refreshing the majority of their product lines, dealing with a controversy or two and fighting off the competition. The company was also the subject of close scrutiny, as investors and others obsessively analyzed Tim Cook’s first year as chief executive officer. Legal battles, new competitors and expectations have all buffeted Apple’s ship this year, but at the end of the day it still carries the title of the world’s most valuable public company.

Product success: Apple has had a huge year for products as it refreshed the majority of its product lines. The iPhone 5, a slimmer, taller version of its smartphone, has set sales records around the world even as it’s faced complaints about being an incremental improvement over previous models. The company introduced two full-sized iPads this year, plus an all-new iPad mini that topped holiday shoppers’ wish lists.

With new Macs, Macbooks, iPod models and more, Apple has changed nearly all of its product lines and kept customer demand for its gadgets high. And while there was no predicted Apple TV, the company has said that it’s looking for technology markets to disrupt — hinting that there’s still some innovative magic brewing in its research labs.

Battle for market share: Throughout the year, Apple has watched Google’s Android operating system gain market share in smartphones and tablets around the world. It’s a challenge for Apple — which generally releases one new product in each line per year — to fight against the flood of Android products being produced by companies such as Samsung, HTC, Motorola and LG. This year, Samsung took particular aim at Apple’s production schedule with ads for the Samsung Galaxy S III, which told those waiting for the iPhone 5 that the “next big thing is already here.”

Of course, this battle also played out in courts around the world, as Apple and Android smartphone companies lodged dozens of intellectual property complaints against each other. Apple lost some decisions in Europe and Asia, but notably won a major decision in the United States this summer. Samsung was ordered to pay the Cupertino, Calif., company $1.05 billion in damages, though Apple could not win a sales ban on infringing Samsung products.

Labor audits: Apple also faced a lot of heat throughout the year for the working conditions in its supplier factories — particularly those of its main supplier, Foxconn. The company released the names of companies in its supply line for the first time in history this January.

The company also joined the Fair Labor Association in February, a group charged with conducting independent audits of Apple’s supply chain. Starting with the factories run by Foxconn, the FLA conducted its audits and published its report on Apple in late March. The report found that, while they are improving, problems with the working conditions at the factories remained, including several instances in which employees worked more than the legal limit of hours in a week.

Tim Cook: In his first full year as Apple’s chief executive, Tim Cook took several steps to make Apple his own. The most notable instance was his decision to apologize, publicly, for the software bugs in the company’s Maps program. He even named competing mapping programs that users may like in his statement.

“At Apple, we strive to make world-class products that deliver the best experience possible to our customers,” Cook said. “With the launch of our new Maps last week, we fell short on this commitment. We are extremely sorry for the frustration this has caused our customers and we are doing everything we can to make Maps better.”

Other notable Cook changes include instituting a charity match policy at Apple and giving Apple investors a stock dividend for the first time in the company’s history.

Executive shakeup: Cook also made his mark at Apple by shaking up the structure of its executive-level employees. Most notably, Cook dismissed long-time Apple employee Scott Forstall and chose to fire Apple retail head John Browett.

Cook then put Apple’s top designer, Jony Ive, in charge of software and hardware “human interface” design — something that fits well with Apple’s approach to consumer technology. He has also unified iOS and Mac OS design under Craig Federighi and added some software projects such as Siri and Maps under the supervision of Eddy Cue, who already oversees the company’s iTunes store, iBooks and other services. Finally, Apple veteran Bob Mansfield is in charge of a new wireless division.

Those decisions show that Apple is — to use a favorite Cook phrase — doubling down on its strategy to streamline its computer and mobile businesses.

Related stories:

Apple CEO Tim Cook’s compensation for 2012

Mac Mini production may head to the U.S.

Sign up today to receive #thecircuit, a daily roundup of the latest tech policy news from Washington and how it is shaping business, entertainment and science.

Comments
Show Comments
Most Read Business