Other external factors, such as rising inflation rates, could also affect consumer spending power, which would further reduce demand for luxury items such as those offered by Apple, thus reducing profits earned by the company as well as overall revenues generated over time through digital payments. SWOT Analysis of Apple 3. } Available at: PwC (2016). These are just a couple of some litigation over the past few years. } Every year Apple becomes one of the most important targets for identity theft. Press Esc to cancel. Other currencies therefore have to be converted to the U.S. dollar in order for the company to be able to calculate its total revenue and transfer its profits back to the U.S. Google with their Android operating system, Business Model Canvas: The Definitive Guide, Business Model What is it and How it works. Services: The services business of Apple, which includes Apple pay, Apple Music, and the App store, is growing rapidly and is a possible source of revenue for the firm. The Company devotes significant resources to network and data security, including through the use of encryption and other security measures intended to protect its systems and data. Apple has been successfully competing in China since entering the market in 2009. Apple Inc SWOT Analysis 2021 In this swot analysis, we will take a look at the leading strengths of Apple that have helped it sustain its leadership position in the tech industry, apart from the weaknesses, the company needs to overcome and the growth opportunities it can exploit for faster growth. This Apple SWOT analysis will help us in determining what makes Apple such a big name in . Form 10-K for the Fiscal Year Ended December 31, 2018. } } Apple SWOT analysis framework is a strategic management decision-making technique that identifies the firm's most important issues based on internal and external business conditions. This means that Apple currently receives a large share of its profits in currencies other than the U.S. dollar. Also, when it comes to mobile devices, iPhones were one of the first mobile phones that allowed access to internet streaming services like Spotify, thereby allowing users unprecedented access to content anytime, anywhere, through their phones themselves. In 2019, Apple spent only 6.2% of its revenue on R&D or in absolute numbers US$16.217 billion, which was comparatively lower than Alphabet Inc.s US$21.419 billion, Samsung Electronics US$16.952 billion or Microsoft Corporations US$16.876 billion. The company was also the only one which could provide the best quality products with a great ecosystem. The Worlds 50 Most Innovative Companies 2018.Available at: Forbes (2020). Sustainability made Possible through Liam 7. In summary, Apple music clearly shows its potential. Virtual reality (VR) and augmented reality (AR) are two up-and-coming technologies that have gained traction amongst tech giants around the world in recent years. Iniciar sesin Registrate. Available at: Fast Company (2018). We will try to find out major Apple's strengths, weaknesses, opportunities and threats that affect its performance positively or negatively. The SWOT analysis helps to benchmark Apple's business and performance along with identifying its competitive stance in the IT industry. As of 2018, Apple had a market capitalization worth over $1 trillion, making it the first American technology company to ever reach such heights. Smartphone Industry Value Chain and Apples Role within it. } In order to increase their market share, most of the smaller smartphone vendors are actually offering the same or near the same quality hardware in their smartphones as Apple for much lower prices.[33]. Soundcharts is an analytics tool that tracks more than a thousand Apple Music charts in one analytics dashboard. It became the companys second largest market in 2011 and is the only country besides the U.S. that generates over 10% of its revenue. Nonetheless, its gross margins are declining and will continue to decline. Available at: Canalys (2019). The company designs, manufactures and markets smartphones, tablets, personal computers, wearables and accessories, and offers many related services including financial services. Apples brand is the worlds most valuable and recognizable brand. #col-1823339708 > .col-inner { Apples retention rates in the smartphone market are the highest among its major rivals. 2019 Winning Brands Brand Keys Customer Loyalty Engagement Index. Most Valuable Brand 2. Globally Iconic 3. For example, the company realized a sales increase for iPod products in 2005 and this caused the profits to rise to $320 in the second quarter of that year (Bernasek, 2010). In 2019, the U.S. dollar increased in value against other currencies for the second consecutive year. AR and VR will become very profitable growth markets and Apple should take advantage of this opportunity before its rivals could establish themselves in these markets. #row-1384567085 > .col > .col-inner { Siri is also only available on the Apples products such as the iPad, iPhone and Apple Watch. Available at: Forbes (2020). [15]. Figure 7. Apple have the ability to take over the technology industry, however I feel their supremacy will not be boosted by taking over the music streaming. Figure 5. padding-top: 30px; U.S. Dollar can still roar in 2020 even as it ends 2019 with a whimper. Unique, innovative and easy-to-use products and services that integrate seamlessly into one Apple ecosystem are the reasons why customers buy Apples premium products and enjoy using them. According to the Identity Theft Resource Center, instances of personal information theft are growing. Iniciar sesin Registrate. The most significant challenge has come from Google, Samsung, and even Xiaomi, all of which offer a range of Android-based smartphones and other mobile devices that compete directly with Apples products. Sign In . Family plan: Apple music offers a family subscription plan with its $14.99 a month generously allows up to six users at a time. Many technology companies spend lots of money on R&D to grow their sales, but few do so as successfully as Apple. Fortune Global 500. The companys brand reputation and customer loyalty also play a significant role in consumer decisions to purchase tits products and services. } It examines the worlds top brands in many industries and how loyal customers are to these brands. I explore Apple using a Strengths, Weaknesses, Opportunities, and Threats (SWOT) model. }. Concepts has successfully expanded its services over the past few years and developed numerous content stores like iCloud and Apple Music, which are accessible in about 52 countries. I have chosen Apple for this analysis. By tapping into the advertising business, through its planned iDSP program, Apple could create a brand-new source of revenue for its bottom line. As one of the most innovative tech giants of the modern era, along with Amazon and Google/Alphabet Inc., Apple continually sets new trends when it comes to technology development. Apple music debuts music at 256kpbs which is although the same as iTunes. The main companys product is iPhone, which runs on Apples iOS operating system and accounts for 54.7% of the total companys revenue. ET Artists can share personal content. Regulatory changes: Apple is subject to various regulations and laws governing the technology industry. SWOT Analysis of Apple Inc. for 2021. Blockchain has the padding-bottom: 0px; Apple could improve its brand reputation and appeal to environmentally-conscious consumers by focusing on sustainability initiatives like renewable energy and recycling programs. Apple Computer are expert in Developing own software and hardware. Innovation: greater innovation can help apple music streaming to produce unique products and services. Super Guides This Apple SWOT Analysis can assist us in understanding the factors that make Apple an iconic brand in the technology industry. Competitors such as Samsung, Google, and Microsoft have developed their own innovative products that compete directly with Apples offerings. January 12, 2023. Form 10-K for the Fiscal Year Ended September 30, 2019. In addition, Apple should improve and strengthen its R&D capabilities and introduce more innovative products to the market. Strength: iTunes Music Store is a excellent source of revenue, especially with the iPod and the accessibility on Windows platform. In this article, we do a SWOT Analysis of Apple. Pregunta al Experto. Apple competes primarily on price, product and service features, quality and reliability, design innovation, a strong third-party software and accessories ecosystem. Apples excellence in creating spectacular marketing campaigns, its superior advertising capabilities, premium quality products and ability to deliver an excellent customer experience has allowed the company to build the most powerful brand in the world. Apples reliance on a proprietary operating system and closed ecosystem have been both a strength and a weakness. An ecosystem of products and services: Apple has created a cohesive ecosystem that works seamlessly together, making it easy for customers to integrate Apple products into their lives. By capturing only 10%-20% market share the company could potentially earn US$6 billion to US$12 billion in additional revenue with an enhanced Apple Watch device. The companys success is revealed in this SWOTs 5 most important strengths. At the moment, software is the major differentiator between Apples iPhones and its rivals devices. Apple should continue to focus on developing its unique software and hardware ecosystem, which is the main companys differentiator and the main competitive advantage over the rivals. . Apple is regarded as the tech industry's pinnacle of innovation and the most powerful company in the world. Retail Stores. Today it is one of the most valuable companies which consistently surprise and delight its customers. #section_1771581351 .ux-shape-divider--top svg { . When considering Apples strengths, it would be remiss not to mention the companys leading technological edge. The major key weaknesses include lack of distribution channels in the countries and high price which can be overcome. A flagship device that is capable of supporting AR; Apple, Inc. (2019). Figure 6. One of the main factors contributing to this wearable market increase will be the demand for health-related wearables. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); About - Privacy Policy - Returns and Refund Policy, International Business Machines Corporation, https://s2.q4cdn.com/470004039/files/doc_financials/2019/ar/_10-K-2019-(As-Filed).pdf, https://www.interbrand.com/best-brands/best-global-brands/2019/ranking/, https://www.forbes.com/powerful-brands/list/, https://www.cnbc.com/2019/11/05/apples-advertising-agency-media-arts-lab-lays-off-several-employees.html, https://www.bankmycell.com/blog/smartphone-brand-loyalty-during-trade-in-2019/, https://brandkeys.com/wp-content/uploads/2019/05/2019-CLEI-Category-Winners.pdf, https://brandkeys.com/wp-content/uploads/2014/12/2014-Brand-Keys-Loyalty-Leaders-List-PR-Finalv3.pdf, https://brandkeys.com/wp-content/uploads/2015/02/Brand-Keys-CLEI-2015.pdf, https://brandkeys.com/wp-content/uploads/2016/10/2016-Loyalty-Leaders-Top-100-List.pdf, https://brandkeys.com/wp-content/uploads/2017/09/2017-CLEI-table-of-category-winnersFINALfeb1.pdf, https://images.samsung.com/is/content/samsung/p5/global/ir/docs/2018_con_quarter04_all.pdf, https://abc.xyz/investor/static/pdf/20180204_alphabet_10K.pdf, https://microsoft.gcs-web.com/static-files/7c96b326-33bc-4b84-8abb-7afd7a517ea3, https://www.canalys.com/newsroom/china%E2%80%99s-smartphone-market-falls-14-in-2018-with-just-under-400-million-units-shipped, http://files.shareholder.com/downloads/AAPL/3883149972x0xS1193125-12-444068/320193/filing.pdf, http://files.shareholder.com/downloads/AAPL/3883149972x0x789040/ED3853DA-2E3F-448D-ADB4-34816C375F5D/2014_Form_10_K_As_Filed.PDF, https://www.forbes.com/sites/ywang/2017/09/12/why-iphone-x-isnt-the-answer-to-apples-china-problem/, https://www.fastcompany.com/most-innovative-companies/2019, https://www.fastcompany.com/most-innovative-companies/2018, https://www.forbes.com/innovative-companies/, https://www.idc.com/getdoc.jsp?containerId=prUS45679219, https://www.researchandmarkets.com/research/dm5djr/augmented_reality?w=4, https://techcrunch.com/2017/01/11/the-reality-of-vrar-growth/, https://www.macworld.com/article/3446839/apple-ar-glasses-rumors.html, https://www.cnet.com/news/alexa-vs-google-assistant-vs-siri-the-state-of-voice-after-google-io-and-wwdc-2019/, https://www.businesswire.com/news/home/20190822005478/en/Global-Intelligent-Virtual-Assistant-IVA-Market-2019-2025, https://www.businesswire.com/news/home/20191216005029/en/Worldwide-Wearables-Market-Top-300-Million-Units, https://www.idc.com/getdoc.jsp?containerId=prUS45521319, https://www.globenewswire.com/news-release/2019/10/31/1938647/0/en/Wearable-Devices-Market-worth-62-82-billion-by-2025-Exclusive-Report-by-Meticulous-Research.html, https://www.pwc.com/us/en/industry/entertainment-media/assets/pwc-cis-wearables.pdf, https://www.productchart.com/smartphones/, https://www.idc.com/promo/smartphone-market-share/os, https://www.idtheftcenter.org/2018-data-breaches, https://www.statista.com/statistics/263401/global-apple-iphone-sales-since-3rd-quarter-2007/, https://www.kitco.com/news/2019-12-31/U-S-Dollar-can-still-roar-in-2020-even-as-it-ends-2019-with-a-whimper.html, Computer hardware (iMac, iMac Pro, MacBook, MacBook Pro, MacBook Air), Worldwide 509 retail stores in 25 countries (271 stores in the U.S. 238 stores in other 24 countries) and online stores in over 100 countries, 1. But these measures cannot provide absolute security, and losses or unauthorized access to or releases of confidential information occur and could materially adversely affect the Companys reputation, financial condition and operating results. [1]. Nonetheless, the companys innovation has slowed down and the company hasnt introduced any disruptive products or services since the iPad. #row-1695831028 > .col > .col-inner { Smartphone designs are also getting more similar. This gave Apples devices a competitive advantage over those of their rivals. Apple has now become a household name; there will be hardly any house that doesn't have an Apple device. by Scotty Soul) 13. This can be attributed not only to their products being seen as innovative and forward-thinking, but also to thoughtfully crafted business plans built on solid networks with suppliers, partners, and consumers alike. To capitalize on this growing trend, Apple has launched multiple successful streaming services, such as Apple Podcasts, Apple Music, and Apple TV+. Innovative products: Apple is known for its innovative products that push the boundaries of technology and design. Three month trial of Apple music will entice customers to test the service before making a decision to pay. Apples focus on innovation has helped the company to become the largest technology company in the world. This segment of the market is becoming a potential field for Apple, with little competition (Apple, 2019). #gap-325806325 { As fierce competition continues to grow, Apple has resorted to relying on its brand recognition rather than investing in research and development or innovation initiatives to remain ahead of the curve. Available at: IDC (2019). Available at: Grand View Research (2019). (function() { Apple revenue breakdown by product 2019 (% share of total revenue). Instead of growing by acquiring its competition (horizontal integration), the company chose to grow by venturing into other activities along the industry value chain. Available at: Graham, M. at CNBC (2019). } Wrist-Worn Wearables Maintain a Strong Growth Trajectory in Q2 2019, According to IDC. Through an effective marketing strategy consisting of advertisements leveraging Apples iconic brand logo and name recognition, they have the potential to tap into billions of dollars worth of untapped opportunities available in these new regions. This would strengthen the companys ecosystem and provide a better user experience. Save my name and email in this browser for the next time I comment. Apple enjoys a very loyal customer base, considering that it doesnt even have a loyalty program. . In 2018, Spotify's market share was . Available at: Wang, Y (2017). Availability on Android phones and Windows PCs as well as on iOS, Mac, iPhones, iPads and Apple Watch. For example, technology and other patent-holding companies frequently assert their patents and seek royalties and often enter into litigation based on allegations of patent infringement or other violations of intellectual property rights. The company identifies this as one of the main threats: The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and have not yet been fully resolved, and new claims may arise in the future. The price: Apple music is a pricey $10 a month. #section_896810660 .ux-shape-divider--top svg { Available at: Brand Keys (2019). text-align: left; This has helped to create a strong network effect, where the value of the products and services increases as more people use them. } Why did the company choose to vertically integrate instead of relying on other software, application or distribution providers like most of its competitors do? 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