IntroductionApple is one of the most recognizable brands in the world today. Their brand identity is one of their most definite advantages that give it a clear edge over rivals. Apple has been able to associate its brand with sophistication, elegance, glamour, and class that is so desired by consumers who want to stand out from others (Kapferer, 2009). Apple has made it so that owning their product is buying into a lifestyle that they only can offer. Their product launch events create a lot of fuss and stir a storm in different social media platforms. This sense of uniqueness and association with the brand is appealing to consumers who become loyal customers.
Apple has been at the forefront in the creation and innovation of technologies that change the world. Since it was founded in 1976, Apple has managed to define the trend that technology takes (O'Grady, 2009). All of Apple's products are top quality that they determine how the industry shapes their gadgets. The introduction of Apple led to the modern designs we see in other smartphones, large multitouch screens, powerful cameras both front and back, among other innovations.
Apple's ability to stay in the loop of the consumer needs and trends has helped it remain at the top of the competitive food chain. In this regard, the company has established a chain of retail shops around the world. Currently, there are around 470 Apple retail stores in 17 countries selling the different products that Apple has to offer (Jason & Kenneth, 2017). The stores also have an innovative idea called Genius bar, where consumers get to interact with employees that have extensive knowledge about troubleshooting the various Apple products. This focus on consumers has led to increased and sales and customer satisfaction.
Owing to the popularity of Apple products, the company can afford to price their products above the industry's average. Apple products are easily the priciest in the world compared with rivals. Pricing above the industry average means Apple enjoys a significant profit margin number showing that it made a profit of 11.5 billion dollars in 2018 (Schneiders, 2011). The figures are backed by the fact that they captured about 50% of the smartphone market last year (Jason & Kenneth, 2017). The profit margins are one indicator of what a financial behemoth Apple is. iPhone sales are usually the highest when a new model is released despite its high prices.
Incompatibility of their DevicesApple has created an ecosystem of products that are not compatible with the rest of the other related products. All the other gadgets have universal charging systems that can be used on any device except for Apple products. Apple gadgets use iOS as their platform while the rest of the gadgets generally run on Google's Android platform (Himmelsbach, 2012). There are more android based devices than there are for iOS, with the number being estimated at 2.5 billion (Jason & Kenneth, 2017). In spite of this, an android user and an iOS user cannot share apps or music easily due to fundamental differences in their operating systems.
Apple products are famous for their exorbitant prices. Their flagship models, the iPhone has reached the 1000 dollar mark that way above what most of the consumers are willing and able to spend on the phone (Blythe, 2013). High prices mean Apple locks out potential consumers who would buy their products if they were better priced. Apple could be making more profits but has let that market share be divided among other companies.
High Consumer Expectations
Apple has been the leader in the technology sector for years now. The consumers are used to being wowed every time Apple releases a new product. However, keeping up with consumer expectations is becoming harder as innovations dry up while consumer expectations skyrocket, for example, the notable feature on their latest iPhone model is just an upgrade camera. The consumers expect their wants and need to be met since businesses exist because of them (Blythe, 2013). Apple will have to dig deep into their resources to come up with a new and fresh idea that will quench the thirst for innovation.
Small Number of Products
Apple releases the iPhone every year; the other well-known products are the MacBook computer, the iPod, and the iPad. Generally, for such a big company, the number of devices it relies upon is wanting. Apple has been trying to innovate new products such as the Apple watch and offer services such as the cloud (O'Grady, 2009). However, having a limited number of products means a drop-in sale at one time translates to a significant drop in earnings; for example, the biggest income generator for Apple is the iPhone; if the expected sales are not met, it adversely affects profits.
Apple has decided to venture into the electric automotive scene with their car. The revelation has created a buzz around car enthusiasts and loyal consumers (Beckmann, 2013). The company is following the trend of other tech companies such as Facebook and Google that diversified their portfolio. The electric car market is the new trend around the world as tech companies seek to be the global leader in this new market. With Apple's excellent reputation, there is an opportunity to be exploited in this industry. The diversification will increase the company's reputation if it manages to make another quality product.
With an increase in the economic wellbeing of countries, the potential market for Apple products widens. Emerging economies like the UAE, whose citizens have good disposable incomes, can afford to purchase the iPhone and other Apple products (Himmelsbach, 2012). There are more countries that are growing economically, which translates to surplus income for the residents who will then flex their financial muscles by buying premium products as expected (Blythe, 2013). Apple is among those companies that offer premium technologies, and this is an opportunity to increase revenue.
Future Advancement in Technology
If there is one thing that is constant changes, it is everywhere. The same applies to technology; advancements are made every day, breakthroughs that no one knows how they will impact the world are being made all the time. Apple has been known for its pioneering attitude, and this means that there are still opportunities to be exploited in technology. For example, the introduction of 5G is a technological advancement that Apple will incorporate in their next gadget release. 5G will bring with it new and advanced ways to integrate and manipulate other technologies (Chandramouli, Liebhart & Pirskanen, 2019). Apple will have an opportunity to dazzle their customers with innovations.
Apple has the opportunity to grow its business portfolio through collaborations with other companies. There are other premium products that would benefit Apple if they are incorporated in their business plans like their collaboration with beats when releasing iPhone 7 (Himmelsbach, 2012). Collaborations between strong brands create an air of expectation that translates to more sales and hence, therefore, more significant profit margins for the companies.
Competition From Other Smartphone Companies
Apple has been facing stiff competition from its biggest rival, Samsung. Samsung has been increasing its share market over the years with the latest statistics placing it at the top with more than 20% of smartphone sales belonging to Samsung, and Apple comes in third place behind Huawei (Himmelsbach, 2012). Although Apple leads in profits, this is a severe threat from its competitors. Apple has also tried to venture into cloud business where there are already established companies like Microsoft, IBM, and Google. Competition is part of business culture, and Apple needs to be aggressive to survive.
High Pricing of Apple Products
The high prices slapped on Apple product is a threat to its market penetration and profit margins. As competitors provide cheaper alternatives of the same quality, it is expected that they will shift to rival companies. Rivals such as Huawei, Samsung, and Xiaomi have been gaining traction in eating away the market share of Apple (Himmelsbach, 2012). This trend can be loosely tied with the pricing of Apple products.
Competition From the Android Platform
Another threat facing Apple is the Android operating system used by rivals. Android is a popular platform that is open to modifications, and this makes it versatile and a real threat to Apple's iOS platform (Himmelsbach, 2012). Most of the phones that are not from Apple use the Android platform (Himmelsbach, 2012). Although it has its weaknesses, the platform is rapidly adopting and improving, and the moment it gets as good as iOS, Apple will have problems.
Imitation of Apple Products
Imitation of Apple products is an expected consequence inherent, with it being the biggest brand in the world. Imitations hurt the company's sales and reputation. Consumers who think they bought the genuine Apple product will feel betrayed, considering the replicas sell at the price of the original gadgets. Most consumers would not spend another exorbitant amount on replacing the counterfeit device with a genuine one (Blythe, 2013). They will most likely opt to buy other cheaper models, and this hurts the consumer loyalty and potential consumers.
Section 5: Core Competencies
Apple has managed to stay ahead of the competition by being the pioneer of new ways and designs in their products. Their phones were the first to bring a multitouch display that revolutionalized multitasking in smartphones (Ireland, 2008). Apple has generally set the trend in technology with innovative products such as iPod, iPad, and Apple Watch. Such innovations catapulted Apple to the pinnacle, and they continue to do so as Apple innovates more technology to entice consumers.
Apple products are supreme in their design, both quality of the parts used and the aesthetics. Apple has been able to lure and keep a loyal customer base by providing gadgets with designs that are original, features added to ease their usages such as fingerprint lock, facial recognition, and voice command features (Ireland, 2008). The excellent design of Apple products is one of the significant factors why consumers keep buying their products. Sleek designs that sit comfortably in hand and pockets are a selling-points that consumers consider.
One the Apple's selling points is the simplicity of their gadgets. Consumers are put off by devices that are too complicated, and Apple has perfected the art of simplifying its products to consumer levels (Ireland, 2008). They have added features such as Siri, Safari browser to ease the usage of gadgets. Making user-friendly gadgets has ensured that anyone of any age and literacy level can grasp how to maneuver around the device. The interface and applications are designed for consumers to make maximum use of the device
Beckmann, D. (2013). What would apple do: how you can learn from apple and make money. New York: Biteback Publishing.
Blythe, J. (2013). Consumer behaviour. London: SAGE Publications Ltd.
Himmelsbach, T. (2012). A survey on today's smartphone usage. Munchen: GRIN Verlag GmbH.
Chandramouli, D., Liebhart, R., & Pirskanen, J. (2019). 5G for the connected world. Hoboken, NJ: John Wiley & Sons, Inc.
Ireland, R. D. (2008). Understanding business strategy: concepts and cases (9780324578997). South-Western.
Jason, D., & Kenneth L.K., (2017). Intangible assets and value capture in glo...
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