Apple Inc Industry Analysis
Group Assignment 1
Apple Inc.
We chose to research Apple Incorporated, one of the most innovative companies of our generation. It is safe to say that nearly every one in the US and many foreign countries have used or at least heard of Apple products. We will be looking at the macroeconomic variables that impact Apple’s business as well as how the current developments in the industry have impacted Apple’s financials and we will also look at how Apple competes with other firms in the same industry.
The first macroeconomic variable that we believe will affect Apple, Incorporated is the global forecast for Gross Domestic Product for 2013. The global forecast for GDP is 3.3% for 2013 according to Global Macroeconomic Outlook. This is relatively slow growth because the 10-year average was 3.8%. Usually slow growth is followed by a fall in demand of goods and services. Since Apple makes and sells more cyclical items, this could lead to a decrease demand for Apple products. To continue making the revenue that the company needs, it could force them to lower their prices, which will also result in lower profits. Although, Apple products are more of a luxury item, there is a trend of dependence on smart phones and other technology that Apple produces so they may not be affected as much as other companies that produce luxury products.
Apple, Inc. has a strong presence in the United States of America and Japan so another factor to look at would be the GDPs for those countries. The GDP in America is supposed to be 0.02% higher than the 10-year average and almost double (0.9% as the 10-year average to 1.6%) in Japan. Using these numbers we can guess that Apple, Inc. will probably continue to grow since those GDP’s are larger than the past average but at a very slow rate since the growth is minimal.
The profit margin for Apple, Inc. has increased from 21.5% in 2010 to 23.9% in 2011. Using these numbers we could estimate that the profit margin for the company will
Apple Inc.
We chose to research Apple Incorporated, one of the most innovative companies of our generation. It is safe to say that nearly every one in the US and many foreign countries have used or at least heard of Apple products. We will be looking at the macroeconomic variables that impact Apple’s business as well as how the current developments in the industry have impacted Apple’s financials and we will also look at how Apple competes with other firms in the same industry.
The first macroeconomic variable that we believe will affect Apple, Incorporated is the global forecast for Gross Domestic Product for 2013. The global forecast for GDP is 3.3% for 2013 according to Global Macroeconomic Outlook. This is relatively slow growth because the 10-year average was 3.8%. Usually slow growth is followed by a fall in demand of goods and services. Since Apple makes and sells more cyclical items, this could lead to a decrease demand for Apple products. To continue making the revenue that the company needs, it could force them to lower their prices, which will also result in lower profits. Although, Apple products are more of a luxury item, there is a trend of dependence on smart phones and other technology that Apple produces so they may not be affected as much as other companies that produce luxury products.
Apple, Inc. has a strong presence in the United States of America and Japan so another factor to look at would be the GDPs for those countries. The GDP in America is supposed to be 0.02% higher than the 10-year average and almost double (0.9% as the 10-year average to 1.6%) in Japan. Using these numbers we can guess that Apple, Inc. will probably continue to grow since those GDP’s are larger than the past average but at a very slow rate since the growth is minimal.
The profit margin for Apple, Inc. has increased from 21.5% in 2010 to 23.9% in 2011. Using these numbers we could estimate that the profit margin for the company will
Cited: Global Macroecomic Outlook. (n.d.). Meketa Group. Retrieved October 7, 2013, from www.meketagroup.com/documents/2013Q1-%20Global%20Macroeconomic%2 "Pcs Industry Profile: United States." Pcs Industry Profile: United States (2012): 1-39. Business Source Premier. Web. 8 Oct. 2013. US Dollar Currency Exchange Rate Forecast. (n.d.). Interest Rate, Stock Index, Real Estate Price & Exchange Forecasts. Retrieved October 8, 2013, from http://forecast-chart.com/usd-trade-weighted.html