1. Introduction
Apple Inc. sits on the top of the most valuable global brands list 2022. The company has become USA’s first trillion dollar company- as reported by CNBC.
Following table provides some basic information about the Apple Inc.:
| Company | Apple Inc. |
| CEO | Tim Crook |
| Founding year | 1976 |
| Headquarters | California, USA |
| Type | Public |
| Number of employees 2022 | 164,000 |
| Annual revenue 2022 | $394.33 billion |
| Profitability 2022 | $99.8 billion |
| Market capitalization (December 02, 2022) | $2351.38 billion |
Top competitors of Apple Inc.: Samsung | Microsoft | Dell | Amazon | IBM
Before digging deeper, let me share some interesting facts about the Apple:
| Did you know that in 2022, Apple’s 15 year old, factory sealed first generation iPhone was sold for $39000. Visit the Apple’s website, and see the price of Apple Mac Pro. It is selling for $54,247.99! But wait. It is not even close to the Apple’s most expensive product. The most expensive Apple’s product sold up till now was its first computer, sold in an online auction in 2019 for $459,000 (GB 371,250). |
Maybe it makes you wonder what makes Apple so successful. We have tried to decode the Apple’s secret success formula in our article- Apple’s Marketing strategy analysis | Secret behind Apple’s market Leadership.
And in this article, you will know about Apple’s key strengths and opportunities that make Apple so successful. The SWOT analysis of Apple Company also analyzes the weaknesses and threats that company is currently facing
2. Apple Company SWOT analysis
As per SWOT analysis of apple, there are various strengths and opportunities that provide a compelling strategic advantage over company’s weaknesses and threats.
Let’s learn about the key strengths, opportunities, weaknesses and threats that Apple is currently facing through Apple SWOT analysis:
2.1. Strengths of Apple Company
Apple’s success code lies in its key strengths. Let’s explore each!
2.1.1. Technology and innovation
What comes in your mind when you think of Apple? Its products, prices, luxurious brand image, its marketing strategy or the overall experience it offers to its customers?
Today, Apple has become a synonym of innovation and success. A key strength of Apple Company is its proven success record of introducing some highly successful innovative products that revolutionized the tech world. Here is a timeline of Apple’s highly successful innovations:
With high pace innovation and top notch technology, here comes Apple’s second key strength.
2.1.2. New product development
Apple does not wait watching the market response, and immediately start working on new product soon after launching one.
Tim Crook once said- “When we launch a product, we’re already working on the next one. And possibly even the next, next one”
However, Apple would have never gained so much success if it would have avoided what its’ customers expect in terms of design and quality.
2.1.3. Design and quality
Who knows the importance of design and quality better than Apple?
Look at the iPhone- a blend of creativity and simplicity. No make-overs that may overwhelm or distract the users. With simple, elegant yet creative design and high quality features- iPhone has become the epitome of class and status.
Apple’s target market does not compromise over quality, and Apple understands it well. This is the reason Apple customers rarely complain about the product quality.
While maintaining the design and quality, Apple keeps adding more products in its portfolio. Its well-diversified, and well-managed portfolio is another strength of Apple Company.
2.1.4. Well-diversified product portfolio
Another key strength of Apple Company is its well-diversified product portfolio. The company embraces the diversification strategy to promote its viability in intensively competitive market.
In 2018, Apple sold 52.5 million iPhones, which shows a meager 3 percent growth compared to last two years, but since 2016, Apple’s market share has whooping 81% market growth compared to 31% attained by S&P 500 in same time period. Apple’s wearables including Air-Pods, Headphones and Apple-Watch are having impressive double digit growth. Apple’s augmented reality glasses pair is a new addition in its existing portfolio.
Here, what makes product portfolio Apple’s key strength is that all its products consistently project the core brand values and image. Its wearables have bright future, and company is doing well in almost all product categories.
2.1.5. Expanding service portfolio
Other than expanding the product portfolio, Apple is strengthening its presence in service category as well. Year 2021 proved to be a huge success for the Apple’s innovative services that transformed the people’s lives around the world. Apple’s world-class service portfolio is keeping people inspired, informed, entertained and connected in post-pandemic world.
Following graph shows the consistent growth in revenue from Apple services, software and iTunes from 2013 to 2022:
Even the products with most desired features fail to succeed without effective marketing. Apple is known for its innovative marketing strategy, which is a main reason behind its successful product and service portfolio.
2.1.6. Innovative marketing strategy
Another key strength of Apple Company is its innovative marketing strategy. Apple case study teaches us some key lessons.
Apple avoids engaging in price wars, and its marketing efforts focus on unique value proposition. The emotional branding and storytelling technique sets Apple’s marketing strategy apart from its competitors. In UK, Apple has become the top story telling brand that builds strong emotional connection with its customers through its innovative marketing strategy, while its competitors are still struggling to make an effective use of emotional and storytelling marketing tactics.
A direct result of the above strengths is- loyal customer base, which is another valuable strength of Apple Company.
2.1.7. Loyal customer base
As per Statista, Apple attains the highest marks in customer loyalty in USA. Following graph shows Apple attains higher loyalty score than its closest competitor Samsung:
Once the customers enter in Apple’s tightly knit eco-system, stepping back becomes really challenging!
2.1.8. Market leadership
By maintaining a loyal customer base, Apple has successfully preserved its market leadership position in smartphone, as well as in wearable category. As per Wall Street Journal, despite the intense competition, Apple still wears the crown, though it can easily slip in coming decades.
2.1.9. Most valuable brand
Apple is world’s most valuable brand with total brand worth of $947.1 billion. It shows an increase of 55 percent from 2021 to 2022.
2.1.10. Strong financial positioning
Apple has consistently achieved its profitability and growth objectives over years. The September 2022 quarter showed the record revenue of $90.1 billion, and earning per diluted share of $1.29- both having 8% and 4% yearly growth.
Nothing in this world is perfect! Even the most innovative and successful tech giant- Apple is not without weaknesses. So, after knowing the strengths of Apple, now let’s have a look on some key weaknesses.
2.2. Weaknesses of Apple Company
Apple SWOT analysis highlights some key weaknesses of Apple Company, as discussed below:
2.2.1. Labor issues
Although, efficient supply chain is Apple’s one of key success reasons, but the same factor brings trouble to company. As per Business Insider, Apple recently received intense criticism for forced Uyghur labor. The company is also combating with child labor issues that are damaging its reputation (To know more- click here).
2.2.2. Production and supply chain problems
Another key weakness of Apple Company is difficulty in sourcing the materials, and then distributing them all over the world. A recent example is the global chip shortage issue that left Apple customers waiting for the new product. These production issues have brought steep rise in waiting time for iPhones, Mac-Books and iPads.
2.2.3. Incompatibility issue
Apple’s products are not compatible with other softwares, which limits its target market. Recently, Apple’s ‘error 53’ issue created a wide outrage among customers, as Apple started bricking its customers for their ‘offense’ of going to unauthorized repairers.
2.2.4. Patent infringements
Apple frequently faces lawsuits for patent infringements, which damages its reputation. Recently, Omni filed parent infringement case over Apple watch technology. Apple tried, but failed to escape from the infringement case. To know more about this case, click here.
2.2.5. High prices
Apple is well-known for its high prices. But recently, company raised its iPhone and iPad prices. An article published by Bloomberg mentioned that customers claim the Amazon and Apple conspired to raise the prices, which affected many customers.
2.2.6. Tracking allegations
Apple frequently faces the allegations of installing tracking apps, which hampered the customer trust. Although, this tracking issue is resolved in its latest phones, but it’s hard to regain the lost trust.
After knowing some important weaknesses of Apple Company, let’s take a look over external environment, and start external environmental scanning by identifying opportunities.
2.3. Opportunities for Apple Company
2.3.1. Consistent growth
There is consistent growth in the Apple’s target market. As per forecasts, Apple’s market share may increase by 20% by 2030. Global smartphone market is also expected to grow by 7% until 2030.
2.3.2. Green technologies
The growing popularity of green technologies is giving Apple an exciting opportunity to reposition itself as a responsible and sustainable tech-giant.
2.3.3. Wearable market segment
Global wearable technology segment will grow by 13.89% from 2022 to 2030. Apple is currently leading the wearable segment, and therefore, it can expect to have an impressive growth in upcoming years.
2.3.4. Streaming and communication services
The impressive growth in the streamlining services in the emerging economies due to growing young population presents an exciting opportunity to Apple. The company has already planned to enter in 52 emerging markets by introducing its music streaming services. The demand for communication devices is also rising, enabling Apple to explore new markets.
2.3.5. Cloud based services
There is steep rise in the use of cloud based services in post pandemic era. Apple can expand its iCloud range to leverage this opportunity.
2.3.6. Chip manufacturing
McKinsey considers Semiconductor industry to be the trillion dollar industry that will have tremendous growth by 2030. Considering the attractiveness of this opportunity, Apple has also started manufacturing its chips, and is giving tough competition to Intel. The company could expand its chip manufacturing operations to boost its market value.
2.3.7. Self-driving technology
Self-driving technology is on rise. According to BBC, drive less cars are going to change the world. Investment on drive less technology is grabbing the investors’ attention. Wall Street Journal discusses the partnership between Apple and Kia that will initiate production of 100,000 drive less cars (per year) by 2024.
2.4. Threats to Apple Company
2.4.1. Counterfeit products
Counterfeit products are on rise. Recently, Apple discovered many counterfeit products after spending more than nine months research. On Amazon, many counterfeit Apple lightning cables and power products were being sold. The company is likely to face this threat in future too.
2.4.2. Competition
The competition in the global tech industry is getting intense. Without giving a proactive response by exploring new markets, introducing new innovations, or revisiting pricing policy, Apple might lose its leadership position.
2.4.3. Russia-Ukraine war
The Russia-Ukraine war is has become a threat for many companies. According to Reuters, the decision to leave Russia can badly affect the Apple’s economic performance.
2.4.4. Rise in tariffs
Due to USA-China conflict, USA has imposed ban on Chinese imports. It has increased the Apple’s production costs, which resulted into a sharp increase in Apple’s products- the Guardian reported.
2.4.5. Pandemic after-effects
The pandemic after-effects and consequent supply chain disruptions may prevail in future. Apple’s 18% of revenue comes from China. Pandemic affect, and may continue disrupting the Apple’s operations in near future.
3. SWOT Apple Summary
SWOT analysis Apple Company
| Strengths | Weaknesses |
|---|---|
| • Technology and innovation • New product development • Design and quality • Well-diversified product portfolio • Expanding service portfolio • Innovative marketing strategy • Loyal customer base • Market leadership • Most valuable brand • Strong financial positioning | • Labor issues • Production and supply chain problems • Incompatibility issues • Parent infringements • High prices • Tracking allegations |
| Opportunities | Threats |
| • Consistent market growth • Green technologies • Growing wearable market segment • Rising demand for streaming and communication services • Rising demand for cloud based services • Chip manufacturing • Self-driving technology | • Counterfeit products • Growing competition • Russia-Ukraine war • Rise in tariffs Pandemic after affects |
4. Recommendations
Based on Apple SWOT analysis, the articles proposes following recommendations to Apple Company:
• Invest on green technologies to reposition Apple as sustainable and responsible brand
• Regain customers’ trust by resolving their concerns towards possible phone tracking
• Resolve labor issues and quickly respond to the forced labor and child labor allegations. Improve working conditions of people who work in Apple factories
• Invest more on wearable market segment, and reduce dependence on iPhones
• Strengthen positioning in streaming, communication and cloud based services
• Strengthen presence in chip manufacturing industry
• Invest on artificial intelligence and self-driving technology
• Actively respond to the counterfeit product threat as it can damage the company’s reputation as high quality brand
• Consider its customers’ concerns while taking the price increase decision
• Handle the competition by continuously exploring emerging markets, and experimenting with innovative/disruptive technologies
5. Concluding remarks
Apple SWOT analysis tells that the company is in a strong position, and is capable to exploiting opportunities and mitigating external threats by leveraging its strengths and overcoming weaknesses. The SWOT analysis presents a clear picture of company’s strengths, weaknesses, opportunities and threats.
Students, teachers, researchers, industry analysts and anyone interesting in knowing more about Apple may find this article useful.
This article takes a company specific view, and mainly focuses on Apple’s internal capabilities. To understand how external environmental forces are influencing Apple, take a look on our article- Apple PESTLE analysis.
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