Company Analyses – Apple Inc.

Apple Inc. was incorporated in 1977 in California. The company engages in the design and manufacture of mobile communication devices, media devices, and personal computers. It sells a variety of software, services, accessories, networking solutions, and third-party digital content and applications. The company’s products and services include the iPhone, iPad, Mac, Apple Watch, Apple TV, iOS, macOS, WatchOS, tvOS, iCloud, Apple Pay, and a variety of accessories, as well as the Mac App Store, iBook Store, and Apple Music. The distribution network for Apple Inc.

’s products consists of retail stores, an online store, direct sales force, third-party cellular network carriers, wholesalers, retailers, and value-added resellers.

The target customers of the company are consumers, small and mid-sized businesses, education, enterprises, and government. Apple Inc. operates in a highly competitive industry and has a prominent place in the ever-evolving consumer technology industry. Since the launch of the iPod, Apple Inc. has become a product provider for everyone. Currently, Australia’s Apple niche group has invented iHome, a unique invention that may revolutionize the building industry worldwide (Johnson, et al., 2017).

The price elasticity of demand for the different products of Apple Inc. is inelastic. Apple Inc.’s products include iPhones, iPods, and other devices. Consumers are willing to pay any price for iPhones. Factors contributing to the inelastic demand for Apple products include a broad consumer base and product hype; these factors are counterbalanced, however, by lower prices for substitutes. The brand image of Apple is so strong that it makes customers willing to pay a premium. Consumers are willing to buy Apple products regardless of price increases. The strengths of Apple Company lie in its strong brand image, high-profit margins, and rapid, effective innovation. This strong brand image enables the corporation to introduce profitable new products. The company adopts a premium pricing strategy that results in huge profit margins. Moreover, the company enjoys a good competitive advantage due to its commitment to keeping abreast of the latest technologies (Microeconomics, 2013).

Apple Competitors

Apple Inc. (AAPL) is a widely known company in the manufacture of desktop, laptop, mobile computing devices, smartphones, and entertainment technology spaces. The primary competitors of AAPL are Dell Technologies, HP Inc., Lenovo Group from China, and ASUSTeK Computer Inc., a Taiwanese company. In the smartphone sector, the tough competitors are Sony Corporation and Samsung, whose latest product introduction is the Samsung Galaxy and Notes series that significantly reduced iPhone sales. Samsung has attained a market leadership position, especially in mobile phones, and captured the market not only in Asia, but also worldwide (Investopedia, 2018).

Threats of Apple Inc

The main threats of Apple Inc are:

• Aggressive competition
• Imitation
• Rising labor costs in various countries

The main competitor of Apple Inc. is Samsung, a company that innovates new products very rapidly. The main threat for Apple Inc. comes from imitation factors; a large number of local and multinational companies imitate the features and design of Apple’s products. Another threat that must be combated by Apple Inc. is the rising labor cost. This increasing cost of labor, especially in China, reduces the company’s profit margin. To maintain the profit margin, Apple Inc. must increase the sales price of their products (Smithson, 2019).

References

1. Apple Inc. (2017). Annual Report. Retrieved from http://www.annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_AAPL_2017.pdf
2. Johnson, D., et al. (2017). Apple Niche Market. Retrieved from https://danjohnsonpr.files.wordpress.com/2015/02/apple-niche-market-final.pdf
3. Investopedia. (2018). Who Are Apple’s Main Competitors in Tech? Retrieved from https://www.investopedia.com/ask/answers/120314/who-are-apples-aapl-main-competitors.asp
4. Smithson, N. (2019). Apple Inc. SWOT Analysis & Recommendations. Retrieved from http://panmore.com/apple-inc-swot-analysis-recommendations
5. Microeconomics. (2013). Apple Inc. Retrieved from http://shireengantaylorian.blogspot.com/2013/06/apple-inc.html”

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