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SWOT Analysis of Apple's iPhone 5s

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SWOT Analysis of Apple's iPhone 5s

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  • December 2, 2013
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The situational analysis of a company’s product is essential to understanding where a product can best succeed and, often more importantly, where it will fail. To conduct a thorough analysis of a product involves examining the strengths, weaknesses, opportunities, and threats that a product brings to a company. In the case of Apple and the iPhone 5s, these four qualities are simple to ascertain. I. Strengths

The Apple iPhone 5s, has several strengths. For instance, Apple has very high consumer loyalty. In fact, data compiled by Consumer Intelligence Research Partners states that 78% of iPhone users go on to buy another, whereas Android users have a 67% retention rate. These figures are even more impressive when one examines individual Android brands. Here are some of the top smartphone companies and their respective consumer retention rates. It is this remarkably outstanding customer loyalty that allows Apple to churn out massive profits. For whatever reason, most Apple users will only use Apple products. Apple knows this, and continues to offer smartphones at a significant markup, sometimes exceeding 40% of the total cost to produce it. Due to gross overpricing, Apple is able to make larger profits than its competitors, even though it only holds 13% of the market share. II. Weaknesses

While Apple may have an advantage in consumer loyalty, it has a severe disadvantage when it comes to new consumers and emerging markets, primarily because suitable alternatives are readily available. For example, the cheapest (16GB internal storage) iPhone 5s has a retail price of $649(USD), compared to the global average price of all smartphones which is $312(USD). Since an iPhone can cost more than twice as much as a suitable alternative it becomes increasingly difficult for Apple to penetrate price-sensitive markets. Another weakness the iPhone 5s has is a lack of upgrades from the iPhone 5. When one compares the specifications of these two phones, differences do not...