SWOT Analysis on Apple Inc.
Apple has a very strong and well recognised brand. All of Apple’s products have a very high level of brand awareness and are recognised in all of the markets in which it operates. The evidence of this high brand recognition and awareness can be found by taking a look at the at the sales figure and revenue that Apple generates, For example, the iPad managed to gross in about $5 billion and unit sales of about 7.5 million in 2010, going on to sell a further 7.33 million units in the first quarter of 2011. Another example is the 93% rise in the net sales of the iPhone to generate revenue of about $25.2 billion in the year 2010. Apple’s brand recognition and awareness enables the company to set premium prices and generate major demand for its range of products. Industry sources place Apple as the fourth largest company in the global mobile phone market and third in the smartphone market with market shares of 5% and 18.5% respectively. Apple’s unprecedented success with every product it has launched is the reason why the company had an upward drive in market share over the past few years. In the years 2004 and 2005, Apple’s iPod held a 48% mp3 player market share with its closest competitor being SanDisk’s Sansa occupying about 8%. In 2011, the iPod held about 75% market share with about 300 million units sold since its launch. The first iPhone launch showed Apple’s relative obscurity in the smartphone market with only about 3.4% market share in the beginning of 2007 to about 19% at the end of 2011. Apple was able to capture 75% of the profits in the smartphone industry with only a rise of 9% market share from the previous year highlighting the company’s pricing power. Apple’s entry into the tablets market saw them selling 14.8 million units in 2010, 75% of global tablet PC sales, going on to control 70% of the tablets markets in the United States. The success of its products enabled the company to continue to grow while commanding premium pricing. The company’s success would be very hard for companies to emulate leaving Apple in a very strong place with outstanding brand position. Apple’s pursuit of both horizontal and vertical integration has enabled the company to become an intimidating competitor. The width in the range of products it offers is nothing short of impressive as they cover a lot of markets such as digital media, personal computers, tablets and smartphones to name but a few. Also, through the use of vertical integration, Apple has managed to offer hardware, software, content all the way down to retailing enabling it control its supply chain as well as making the customer dependant on only their operating systems making it hard to switch to competitors. An example of how Apple tie down their customers with horizontal integration can be seen with products such as iTunes and iCloud which essentially allow the customer to share media and documents across its range of products. This gives the company a considerable amount of competitive advantage. Apple prides itself on innovation and has a very strong emphasis on persistent investment in research and development which is vital in the development and augmentation of an innovative product range. In order to capitalize on the merging of various technologies such as the personal computer, mobile communication and digital electronics, Apple has developed a unique ability to design and make its own, hardware, operating systems, software and services to create innovative, exciting products that have its users in mind, providing them with top quality, easy to use devices that integrate seamlessly with each other. Apple has spent significant amounts on research and developments as they look to further develop the Mac range of Personal computers, the operating systems Mac OS X and the iOS, application software for their range of products as well as the development of new products. Research and development has enabled the company...
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