Apple is an American multinational technology company that designs, develops, and sells consumer electronics. Let us know about ‘Apple Swot Analysis’.
Apple produces a range of computer hardware products under the Apple Inc brand, including desktop and portable computers, servers, notebooks, iPod music players, and MP3 players. The Macintosh line of personal computers is currently considered by Apple to be its flagship product line. Apple’s iPod portable music player was the first successful personal digital device, while the iPhone has become their best-selling product with over 1 billion units sold as of 2018. The iPad line has also proved to be a significant product for Apple, with more than 300 million units sold as of mid-2018. The Apple Watch was introduced in 2015, becoming the fastest-selling wearable device, with the company’s market share in wearable technology having increased threefold within two years to 45%.
Founded:
1976 as Apple Computer Company by Steve Jobs and Steve Wozniak. Restarted as Apple Inc. in 1977. Merged to become a publicly-traded company on January 3rd, 2007 after the return of co-founder Steve Jobs who had been removed from the company during its transition to public ownership in 1985.
Background:
“Apple’s roots trace back to the company’s founder, Steve Jobs. Apple Computer was incorporated in 1976 and sold its first product, the Apple I, in 1977. The Apple II, which combined wafer-based processing and high-level ROMs with low-level chips to allow greater flexibility and speed than had been possible with the original design, was introduced in 1981. In 2006, Steve Jobs returned as CEO and introduced the iPhone and App Store; he subsequently returned as interim CEO when Cook replaced Tim Cook as permanent CEO. After his death on October 5th, 2011 his position was added for historical accuracy. Apple continues to do well under his position as Executive Chairman. The company’s products are becoming increasingly popular in many markets.”
Markets:
Apple operates in more than 150 countries worldwide through its online store or physical retail stores in addition to iPhone carrier partners in certain countries. In 2016, Apple’s Q2 revenue reached $50 billion from an estimated 230 million iPhones sold. It has been ranked at the top of the list among the best global companies for sustainability according to Dow Jones Sustainability Index since 2008. In 2014 it became the world’s most valuable publicly-traded company with a market capitalization of over US$700 billion.
Apple’s Strength
1. The Mac range of computers
Though the Mac line has been heavily affected, thanks to Apple’s shift from desktop computer to mobile computing, the Mac line remains a key aspect of the company. The Mac notebook has been a rival to notebooks by PC manufacturers such as Hewlett-Packard and Dell since its release in 1984 with the Macintosh SE. It was made with a modular design that allowed for easier access and upgradability of hardware components with different generations of processors until the release of Intel Inside CPUs in 2006.
In January 2012, Apple introduced the MacBook Air, a thinner and lighter device targeted at consumers who want high-performance laptops with better battery life than traditional laptops. The MacBook Air was updated with a thinner body, a faster Intel Core i5 processor, and a 128GB SSD. In July 2016, Apple refreshed the MacBook Pro lineup with Intel’s Skylake processors and removed the traditional function keys for their secondary OLED function display.
Apple also has its line of computers specifically aimed at the educational market with the Apple Education brand. These computers have changed little in design from their counterparts outside of an emphasis on user-friendliness for children, larger keyboards, and lack of internal expansion bays. The newest machines have all been running on Intel’s latest chipsets from Ivy Bridge onwards.
2. The iOS platform
Apple’s range of mobile products, including the iPhone and iPad, has become a massive hit. In 2015, according to the IDC, the iPhone generated worldwide revenue of US$248 billion from an estimated 315 million iPhones sold worldwide. Worldwide iPhone sales have reached over 220 million in 2016 with an “annual growth rate” of 34% in Q2 of 2016 from 27% in Q2 of 2015. In 2017 Apple sold a record-breaking 2 billion devices with iPhones being at the head of that list for their expanding market share. “iPhone X”, set to be released in November 2018, is rumored to have a curved OLED display and facial recognition technology. Apple already has a working version of proprietary facial recognition technology in the form of Animoji.
3. The iPad and Apple TV
These two products have gained a great deal of popularity since their release in 2010 and 2012 respectively, with Apple selling its ten-millionth iPad in March 2013 and 200 million units of the Apple TV sold in 2016. In 2014, the two devices accounted for nearly 80% of macOS revenues. In 2017, Apple Pay was launched on their new smartwatch, iPhone 8, and iPhone X to increase its appeal to consumers who had been reluctant to adopt the technology outside of their smartphones.
4. Services
Apple has been moving from being a device manufacturer towards becoming a service company, providing users with access to an array of products and services via their Apple IDs. Since services are still a relatively new way for Apple to make money, they have been focusing on the following areas:
a) Subscription-based services: Apple Music is a paid music streaming service launched in June 2015. With over 27 million subscribers as of December 2017, it has become the third-largest subscription service in the U.S. behind satellite radio providers Sirius XM Radio and Pandora Media.
b) Device-related services: These include iCloud, which allows users to sync their data across multiple devices; the App Store, which allows users to browse applications for download; and iCloud Drive, an online storage service. Past services include iBooks (now replaced by the iBookstore), Find my iPhone (now replaced by Apple Support), MobileMe (which was discontinued in 2011), and iTunes U (which is still present but not all of its assets are accessible).
c) Subscription-related services: These include AppleCare for customer support, Apple’s “Apple Card” credit card, Apple Pay for buying products within apps, Apple Configurator for hardware assembly and testing.
Apple’s Weakness
1. The Mac
The company’s stagnant computer line has had little to no movement since the release of the Intel-based iMac in 1998, which was not until 2013 that Apple released a new machine. The feature-rich iMac was announced on September 12th, 2013 with a 2.7 GHz quad-core Intel Core i5 processor. It also came with an optional internal SSD and up to 16GB of RAM for improved speed and performance compared to previous models of the same series.
Although the iMac generated a significant amount of pre-orders, it has been revealed to have a lower internal performance than its predecessor, the iMac 27 inch 2011. The computer was also released at a price that was not competitive to other computers in its range. The late 2011 iMac runs slightly faster than the 2013 model, but the increased feature set, increased feature set, and lower base price makes it considerably slower. It is too early to tell if Apple has made significant progress with this computer line, though the company has announced that they are working on an updated version of it which will include a Fusion Drive.
2. Apple Maps
In 2012, Apple replaced Google Maps for their version of maps that was released along with iOS 6 in September 2012. The decision was met with heavy criticism due to severe inaccuracies in the maps and screenshots from an iPhone launch event that “resembled a city park”. In response, CEO Tim Cook issued an apology while continuing to defend the service while promising to improve it over time. Cook has since stated that Apple has “fallen short on this commitment. I apologize for the frustration this has caused our customers and we are doing everything we can to make Maps better.”
3. Privacy concerns
The latest version of macOS, macOS Sierra 10.12, was criticized for a new feature that allowed a hacker to gain access to an iPhone with a “comparatively short chain of events”. Apple responded by suggesting users disable the feature or enable a passcode. In March 2017, an update was released which disabled the functionality on devices running iOS 10 and above.
4. Older products becoming obsolete too soon
Many long-time Apple fans have opted not to update their devices because they do not meet the requirements for newer versions of iOS. It has been suggested that this is because Apple’s products are outdated by the time they reach their manufacturers.
5. iPhone sales slowing down
The iPhone has been the company’s top-selling product, which propelled sales and profits for many years. However, it has been noted that sales of iPhones slowed down sharply in Q4 of 2016 and continued to fall into Q1 2017. Some reports indicated a further drop in production and higher prices due to their unwillingness to reduce the prices of the phones.
6. The iOS platform
The iOS platform is still plagued by bugs and glitches causing the experience of using the iPhone or iPad to be sub-par compared to other mobile operating systems. Some of these issues are software-based, others are hardware-related.
7. The Apple Watch
Many believed that the Apple Watch was released too early, as it had notable defects that limited its functionality. Although the device itself was praised for its sleek design, it lacked several core functions that leading smartwatches at the time had (such as the Moto 360). It was also criticized for having a slow operating system and problems with syncing. With each new model of the watch, Apple updates its features to make them more reliable and useful to users.
The Apple Watch Series 2 launched in Q3 of 2016 included a built-in GPS chip which allows it to be used for physical activity tracking without requiring an iPhone to be present.
8. The Mac Mini
The much-loved Mac Mini is only available in the newest models’ lineup, so many customers have requested an updated version of it. Although rumors have suggested that an updated version may be released in the future, there has been no confirmation.
9. The iPhone SE
Despite being one of the most popular devices Apple has ever mass-produced, many customers are upset that they cannot find the iPhone SE in stores. This is due to a severe lack of interest from Apple distributors to sell it at a reasonable price, as opposed to the newer 7 and 7 Plus models which are considered outdated by most consumers.
10. iOS updates
Unlike iOS 7 and beyond, some users do not receive updates to their devices on a timely basis or at all. There have been instances where Apple has taken many months to release an update that affects the entire iOS-based range of devices. This is due to Apple being unable to “test” the software for a certain feature which does not occur very often, so the update may not be released until it is deemed safe by Apple themselves.
Apple’s Opportunities:
1. The Mac laptop line
The Mac laptop line has seen slow growth, although it has been noted that Apple is now focusing on the development of the MacBook Pro. The MacBook Pro has undergone several changes since its introduction in 2008 including the largest redesign to the graphical user interface in over 20 years. It was also updated to include Touch ID, a fingerprint sensor that is considered “semi-intrusive but convenient”.
2. The iPad tablet line
The iPad tablet line continues to be very popular with customers despite sales slowing down in Q4 2016. The updated iPad Pro model which was released in March 2017 was reported to have sold out almost immediately without being released at all outside of Apple Stores or online retailers.
3. The iOS platform
Although iOS has been declared to be more efficient and superior in comparison to Android, it is still plagued by bugs and glitches causing the experience of using the device to be sub-par compared to other mobile operating systems. Some of these issues are software-based, others are hardware-related.
4. The Apple Watch
Despite being one of the most popular devices Apple has ever mass-produced, many customers are upset that Apple does not manufacture any accessories for it. This is due to a severe lack of interest from Apple suppliers in selling it at a reasonable price, as opposed to newer iPads or iPhones which are considered outdated by most consumers.
Apple’s Threats:
1. Google and Android
Despite having more than a 70% stake in the smartphone market, Google and Android continue to be the biggest threat to Apple. According to research from IDC, Android is being used on 81% of smartphones shipped in Q3 of 2016, while just 12% are iPhones.
2. The fitness tracker trend decreasing in popularity
Fitness trackers have been used to track physical activity with devices such as Fitbit and Jawbone being two of the most popular brands available on the market today. These devices use a mobile application to allow users to customize their experience and earn various badges along with notifications when certain milestones have been reached. However, activity trackers have seen a decline in sales. Business Insider reported that fitness tracker sales dropped by 9% in the first quarter of 2017, which could be due to the increasing popularity of smartwatches such as the Apple Watch.
3. Samsung
Samsung is one of Apple’s biggest competitors, as they are the second-largest manufacturer of smartphones in the world. It was reported that the company released its smartwatch called Gear S3, which had unique features (such as GPS) that would make it more appealing to customers looking for a device that could be used independently. There were also reports of Samsung developing their operating system so they could entirely avoid using Google services on future phones.
4. The new tax bill on corporate profits causes Apple to lose money on many overseas sales
Apple was forced to pay $14 billion in back taxes, which made it one of the biggest corporate income tax bills ever paid by an American company. The company’s main overseas market is China where tax rates are much lower, which has forced the company to move its data centers to the Netherlands to save on costs.
Conclusion:
Due to the threats and opportunities Apple faces today, their results for the future will depend on how they implement strategies to combat their threats and capitalize on new opportunities. Apple products are extremely popular within developed countries where customers are willing to pay more for quality products that are guaranteed by large companies such as Apple. However, Apple products are becoming more and more common within developing countries where the demand is also increasing. Apple’s popularity is due to its ability to effectively market its products with the use of branding, advertising, and copyrighting its designs. The demand for Apple products will continue to increase as they produce higher quality products that are up-to-date with current trends.
