Company Overview
Company overview has been termed as one of the important aspects of all the certified companies. It plays a role of a tool that help in measuring the different operating conditions of a company. Apple Inc, company overview will focus on some important information about the company’s performance chart, issues affecting company, new establishments and the most important the company’s current market situation.
Apple Inc is an American company that come into its wellbeing by setting-up its place in the hardware manufacturing and software programming of devices. In 1998, company begin with a redesigned of iMac desktop and now the company went to a development of a series of popular consumer products that change whole perspective of a personal computing and media consumption. (Skemp, K, M, 2018 para 3)
Like other companies, apple inc has also came across some economic fluctuations in their year to year operating systems. To measure the most recent revenue data of apple inc, we will be comparing the revenue status for the year 2017 & 2018. As of 2017 we can see that apple generated a total rise in revenue for about $229 billion, this instant rise in revenue occurred due to an immense sale of iPhone with the launch of two new series including iPhone 7 & 7 plus. Along with iPhone Mac also recorded one of the best year positions by creating the highest revenue for the company. (V, 2018, para 9)
“If we measure the rate of revenue in terms of fiscal year we can find that in the end of September 2017 company reported with a revenue around US$229.234million which was a 6% higher than 2016. In 2017, the company approx. operating margin was around 26.8% and company net margin was around 21.1%.” (Apple, Inc, n.d)
Apple has been working with two important rules, that helps the company to operate with profits every year. Their first and most significant rule the company follow, is to keep the status of their product iPhone on the peak so that it can never lose its long-lasting features. And second most important rule is to public ate many new products that could help the world to visualize differently. Because of these certain reasons Apple has been able to maintain its position in the world technology market. (V, 2018, para 12)
As like other companies, Apple has also been coming up with some kind mergers and acquisition in its operating period. Recently Apple has own “Akonia Holographic” which is a private owned company in Longmont Colorado. Apple bought this company to launch a new line in its products chain related to holographic lens that could be used in making eyeglasses with a unique technology that could let the person know the information. Apple also started working with Texture that will provide the company magazines with digital subscription to around 200 magazines including a monthly fee. (V, 2018, para 19,20)
Swot analysis
Apple Inc has been a constant developing company who focuses on bringing their customers the most productive technology possible. Apple products go a long way by improving the technology lives of individuals and families and helping to better equip the work environment of thousands of company’s worldwide.
Strengths
Apple Inc has a growing network of products which target a large majority of society. Their innovative product line of computers, iPhone, tablets, iPad, and the newest addition of apple pay their allows customers to create accounts which can be readily available on any of their Apple devices, as all apple devices have the contemporary ability to link together. “Apple has presence across the main digital media devices of computing and mobile communications.” (Market Line Dec 12, 2018)
Swot weaknesses
Apple Inc thrives in their success of the high demand in the current market of technology. With this success comes the risk of failure within this highly competitive market. “The iPhone and iPad product lines together accounted for 70% of the total revenues in FY2017, and any decline in growth rates could impact the company’s performance.” This competitive market has companies striving for large profit. One of Apple Incs main weaknesses are their premium pricing for their products. “Apple products and services are priced in much higher level compared to competition and this is one of the main weaknesses associated with the brand.” (Research Methodology John Dudovskiy January 14, 2018)
Overhanging lawsuits from previous years seem to stand as another strong weakness for Apple Inc as well. “Apple faced a lawsuit, which alleges that the company did not disclose that there is a slowdown in software updates in older-model iPhone, which resulted in shortage of battery life.” Although this lawsuit came of effect after involving a large amount of customers Apple was then charged with fraud. “The lawsuit alleges that the company made a fraud promise through concealment and unfair business practices. In October 2017, Monster, a Japanese company filed a lawsuit against Apple. The lawsuit alleges that the company used Animoji, which is a trademark of emonster, to its iPhone X feature.” (Market Line Dec 12, 2017)
Swot opportunities
As the technology market has proven to be highly competitive with other leading-edge companies posing a true threat to the success of Apple, opportunities continue to be unveiled. The use of smartphones, and handheld devices has broadly risen and is expected to keep increasing in the near future. “The deployment of high speed 4G technology, and social media services are expected to drive smartphones adoption across North America. According to in house research, smartphone sales in North America are expected to increase from 1742 million in 2017 to 194.2 million in 2022.”
The innovative and cutting-edge adaptations to Apple Inc as in wearable devices like the apple watch has greatly improved sales and profit.
“According to in-house research, the wearable devices market size is expected to reach a value of $15 billion by 2026.” (Market Linie Dec 12, 2017)
Swot threats
While Apple is competing among other large companies, threats to the companies’ profits are to be expected. As apple Inc has companies all around the world the differences in currency pose a threat to Apples profit and success. “Apple operates in many parts of the world and is exposed to fluctuations in foreign exchange rates. The company reports financials in the US dollar and therefore its revenue is exposed to volatility of the US dollar against other functional currencies such as Swiss franc, British pound and Euro.”
PESTEL
Political Factors
Political factors are crucial and can completely alter Apple. These factors are ineluctable and could have a devastating effect on the company and can significantly change how well a business will run. These changes can occur both locally or globally which can greatly influence the company. Apple Inc is currently the largest taxpayer in the world, which can lead to problems and ultimately affect their business in the markets. Another important political factor is Apple Inc Manufacturing. The majority of their manufacturing resides in China. “Labor and raw material costs are lower in China which makes it an attractive location for production. However, with Trump government in America, things might change drastically. Trump had vowed to slap higher tariffs on China which could force brands like Apple to shift their production base to US. In case Trump acts the way, he decided, Apple would be forced to pay for the two nations’ political differences. In case China decides to apply stricter labor laws and raises the minimum wages, production costs could still grow for Apple.” (Pratap, A. (2019, January 13)
Economic Factors
Economic Factors are pivotal for a company’s success. Labor rights and national growth rates can cause a business to fail. Apple inc prices could be greatly affected by the increasing labor costs in China. Apple is known for their quality products which makes their pricing steep. This is a huge issue for Apple when trying to dominate the Indian market which right now is dominated by their competitors. “Increased competition has also affected Apple and it has lost a considerable market share to brands like Lenovo in Laptop and PC sales.” (Pratap, A. (2019, January 13)
Social Factors
Apple is seen as the leading innovating technology brand due to their development and transformative design. Which is why Social factors have been vital for helping Apple maintain its high global ranking. Globalization is crucial as Apple has become a premium brand around the world. Apple products are continuously going up in price and owning apple products is considered a “luxury” thus helping indorse the brand and increasing sales. “Over the last 10 years, Apple has aggressively expanded the areas where the Apple experience is part of daily 9life. By encouraging app builders but rigidly enforcing standards, Apple ensures that the universe of Apple-mediated behaviors continually expands.” (Moorman, C. 2018, February 16).
Technological Factors
Apple is an industry leader, their competitors are continuously trying to upgrade their products and design to duplicate Apples design. First Apple created the cloud and the App store which made their software and devices unique. However, their competitors soon after started to develop similarities within their software’s making Apple more “ordinary” no longer different from competing companies. In spite of that, Apple is constantly changing and maintaining effective production rates, logistics, and competitive edge by, constantly updating software’s and making new products which are each more advanced. Apple is continuously making new accessories which are able to connect and advance each existing product, making them very competitive. This is critical because once one Apple product is purchased there are many add-ons which usually causes regular customers. “Apple is not only the largest tech company in the world, but also the 9th largest company in the world. Though the company returns to the global top ten, Apple sits one spot lower than it did it 2016, where it ranked as the 8th largest company in the world.” (Moorman, C. (2018, February 16).
Environmental Factors
Apple Inc has proven that the environment is a key essential. They have demonstrated through their environmental plans that they will continue to maintain and evolve their business through energy efficiency. Apple is continuing to further their business by developing their own biogas fuel cell project. “Since 2011, our use of renewable energy has reduced the carbon emissions (CO2e) from our facilities operations worldwide by 54% and prevented nearly 2.1 million metric tons of CO2e from entering the atmosphere. In 2017 alone, we reduced CO2e by nearly 590,000 metric tons. Without renewable energy, these emissions would have more than tripled since 2011” (Environment – Climate Change. (Apple Inc). Apple also committed a total of 2.5 billion to the environment. “After the United States withdrew from the Paris climate agreement, we responded by issuing a $1 billion green bond for environmental projects, bringing our total commitment to $2.5 billion.” (Environment – Climate Change. (Apple Inc.). Apple’s main goal is to continue to improve their business through recycling and product efficiency.
Law Factors
Apple has entered into risky sectors from personal software devices, Apple pay and soon they will be entering the car manufacturing field, all of these fields could cause litigation. Apple has to pay attention to Copyright and intellectual property law, protection of customers private information including credit cards and/or personal matters which are all “securely” saved on their devices. If any personal information gets out Apple could be facing lawsuits. All business could be affected by new laws however, upcoming laws can have a variation of effects on businesses. Apple is especially delicate as it “depends on a variety of products covered by intellectual property laws, such as software and music, for much of its income. This leaves the company highly vulnerable to both piracy and litigation.” (Contributor, P. (2016, June 21).
Critical Issues
These SWOT and PESTEL analyses allow us to figure out some critical issues facing Apple Inc. as a company. There are some issues that Apple Inc. is facing, such as a legal dispute over authorizing rates and patent fees with Qualcomm, (Gaus, 2019, para. 2). Apple Inc. is hard-pressed in a nasty situation by filing countersuits by Qualcomm pointing Apple to steal trade secrets to give to Intel (Gaus, 2019). The long lawful query, results in losing investors’ confidence upon the company put a devastating effect on Apple’s goodwill and raising the competition to greater heights.
Consumer satisfaction is a huge step in every business. From the beginning, Apple placed the customer expectations on the top; so, with every updated version of the company’s product, the hope of people grew stronger and stronger. This makes it difficult for the company to meet the expectations of customers with a narrow product line leading to the shifting priorities of customers and gave a tough time to iPhone (Paez, 2019). One of the primary reasons behind the revenue drop is the premium pricing by raising the price of iPhone up to 23 percent making it extremely classy (Clifford, CNBC News, 2019).
To combat, these issues Apple starts working on lowering the price of its upcoming products. The problem with Apple premium push is that as the price rises, the number of buyers affording the product reduce (Wolverton, 2019). By lowering the price of its product, the company can re-establish its sales and profits and have a strong customer base.
Apple cannot have any control over the legal issues over Qualcomm patent dispute: however, it won one of its court cases against its opponent and its iPhone revenue once again start following an upward trend giving some relief to the shareholders.
REFERENCES
Skemp, K. M. (2018). Apple Inc. Salem Press Encyclopedia. Retrieved from https://proxy.ufv.ca:2443/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=ers&AN=89138900&site=eds-live
V. (2018). Apple Inc. at a Glance. Retrieved February 14, 2019, from http://www.vault.com/company-profiles/computer-hardware/apple-inc/company-overview.asp
Apple Inc. (n.d.). Retrieved from https://proxy.ufv.ca:2443/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=dmhls&AN=5B0A0C20-9BB6-4284-A575-AC0F2261F45C&site=bsi-live
SWOT
https://www.reuters.com/finance/stocks/analyst/AAPL.O
Apple SWOT Analysis. (2018, January 26). Retrieved from https://research-methodology.net/apple-swot-analysis/
Apple Inc SWOT Analysis. (2018). Apple Inc SWOT Analysis, 1–8. Retrieved from https://proxy.ufv.ca:2443/login?url=https://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=134100295&site=eds-live
PESTEL
Contributor, P. (2016, June 21). Apple Inc. PESTLE Analysis. Retrieved from https://pestleanalysis.com/apple-pestle-analysis/
Environment – Climate Change. (n.d.). Retrieved from https://www.apple.com/ca/environment/climate-change/
Moorman, C. (2018, February 16). Why Apple Is Still A Great Marketer And What You Can Learn. Retrieved from https://www.forbes.com/sites/christinemoorman/2018/01/12/why-apple-is-still-a-great-marketer-and-what-you-can-learn/#39fee2ed15bd
Pratap, A. (2019, January 13). Home. Retrieved from https://www.cheshnotes.com/2017/02/apple-pestel-analysis/
Wolverton, T. (2019). Here’s why Angela Ahrendts’ departure could be a good thing for Apple. Retrieved from https://www.businessinsider.com/apple-must-reverse-angela-ahrendts-luxury-brand-strategy-2019-2
Clifford, T. (2019). Costly phones, innovation and a saturated market snowballed Apple, analysts and investors say. Retrieved from https://www.cnbc.com/2019/01/03/costly-iphones-innovation-and-market-saturation-doomed-apple.html
Paez, D. (2019). Apple Wants to Move Past the iPhone, but It Won’t Be Easy. Retrieved from https://www.inverse.com/article/53409-apple-future-after-iphone
Gaus, A. (2019, January 02). Apple’s 6 Biggest Challenges in 2019. Retrieved from https://www.thestreet.com/technology/apple-biggest-challenges-14822208
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