In-Depth Analysis of Smart Phone Industry

Topics: IPhone, Apple Inc., IPad Pages: 8 (2938 words) Published: May 13, 2012
1. Provide an in-depth analysis of the competitive forces and strategic issues shaping the Smartphone & Tablet industry from 2011 onwards

From 2011onwards, there was advancement of technology in Apple Company under the leadership and involvement of Steve Jobs. Although he had delegated the day-to-day operations to Tim Cook, he was still involved in the company’s major decision making. The company unveiled iCloud, which was an online storage facility for photos, music and files. Iphone 4S was introduced later on October 2011, which had 1080p video recording camera, an A4 dual chip with high capability, cloud sourced data and an intelligent software assistance. On the same month, the company purchased C3 technologies, which was the third mapping company that Apple had purchased. By January, 2012 Apple invented iBooks for iOS in New York and this marked a major achievement following the death of Jobs. On March the same year, the company announced the 3rd generation iPad that included a new CPU, a Retina display, 1080p video recording and a 5 megapixel camera. This summarizes the Apple’s progressive in the Smartphone & Tablet industry.

However, the company had been working in an environment with fierce competitive forces and compelling strategic issues. The industry is characterized by technological innovations, which many practitioners endeavor to compete in. Therefore, competition is common and logical as various industries try to improve their image in the market. It should not be forgotten that the customer is the main target and center of interest for many companies. This means that competition is not based on how much profit a company makes, but how pleasing and convenient their product is to the customer. Competitive forces are in existence as far as Smartphone & Tablet industry is concerned. These forces can be better explained with the help of relevant strategic models, which will put the industry under analytic perspective.

One of the models is the industry (ILF) theory, which has it that the timing of entry and exit as well as output levels is a crucial issue not only for business practitioners, but also for government institutions. Entrepreneurs face a hard task of determining when to enter, exit and how much to produce as far as effective operations are concerned. Companies in the Smartphone & Tablet industry have been faced with a hard task of determining when to penetrate a given market, when to exit from it and how much they need to produce to fully satisfy their customers. To secure maximum profitability, companies are supposed to enter a monopolistic market and establish a network of consumers. As the competitors enter the market, product development is done to retain a competitive advantage and when it becomes fierce, an option of leaving the market is valid. This model presents some logics as to why companies such as Apple endeavor to generate new products with improved features. They seem to understand that every product has a life-cycle that must be adhered to in order to retain high profitability.

Another model that is effective in explaining the competitive forces related to Smartphone & Tablet industry is the Porter’s five forces. This is an industry analysis framework that derives five forces capable of shaping the competitive nature of markets, thereby determining their attractiveness. One of the forces is the suppliers’ bargaining power, which impacts on the company’s costs and differentiation. Any shift in prices of raw materials results to increased or decreased cost of production, which in turn impacts greatly on the retail prices of products. Companies in the Smartphone & Tablet industry have been faced with a hard task of stabilizing the power of suppliers. This it because companies using the same raw materials have been on increase and this means that suppliers have alternative markets for their raw materials. Therefore, adjusting prices is not a hard task since they...
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