SWOT Analysis of Apple in a Simplified Way

Apple Inc. is an American multinational technology company specializing in consumer electronics, computer software, and online services. Apple is the largest information technology company by revenue ( totalling $274.5 billion in 2020 ) and the most valuable company in the world as of January 2021.

Let us look into the Overview of Apple and then we can move on to the SWOT Analysis of Apple.

Overview of Apple

Apple Inc. is an American multinational technology company specializing in consumer electronics, computer software, and online services. Apple is the largest information technology company by revenue ( totalling $274.5 billion in 2020) and the world’s most valuable company as of January 2021. As of 2021, Apple is the fourth largest PC by unit sales and the fourth-largest smartphone maker. The company joins Amazon, Google (Alphabet), Facebook (Meta) and Microsoft in the Big Five of American information technology.

Apple was founded in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne to develop and sell Wozniak’s Apple I personal computer. The company was incorporated as Apple Computer, Inc. by Jobs and Wozniak in 1977, and sales of its computers, including the Apple II, grew rapidly. The company went public in 1980 and had immediate financial success.

Over the next few years, Apple launched new computers with innovative graphical user interfaces, such as the original Macintosh, which was heralded in the critically acclaimed “1984” commercial directed by Ridley Scott. The high cost of the products and limited application library led to problems, as did infighting between executives. In 1985, Wozniak left Apple amicably while Jobs resigned to form NeXT, taking some Apple employees with him.

Did You Know?

Steve Jobs’s Final Words Were “ OH WOW. OH WOW. OH WOW. ”

SWOT Analysis Of Apple

The SWOT Analysis of Apple includes its strengths, weaknesses, opportunities, and threats. And in this reading of the SWOT Analysis of Apple, we will examine this beauty and wellness company in terms of its internal and external factors.

S Stands For Strengths ( Internal Factor )

• Innovative Products: One of Apple’s main strengths over the years has been its innovative product line. Apple has introduced one successful product after another and that has been Apple’s great strength. It started with the MacBook, then the iPod, the iPhone, the Ipad, the iWatch. In short, Apple has covered almost everything a person “desires”.
• Leadership position: According to Wikipedia, Apple is the leading technology company in the world in terms of revenue generated. It is also the second-largest smartphone manufacturer. It is the first U.S. company to cross the $1 Trillion mark in 2018 and currently, Apple is the 2nd largest publicly traded company in the world after Microsoft. If that’s not the definition of leadership, nothing else is. Apple is way ahead in the leadership game.
• Brand equity: to be a leader, your brand equity has to be high. The Apple brand is the most valuable brand of any company in the world ( As of 2021 ). Brand value in 2021 was estimated at $263 billion.
• Design & Technology:  The best thing about Apple and the reason for its fantastic brand value is its design and the technology it uses. Apple’s product design has always been elegant and sleek. And at the same time, behind this exquisite design is a machine that provides ultimate performance. All this runs on macOS, another software that is known for its efficiency.
• Supply Chain & Distribution: Apple has 470 company-owned stores in 17 countries. Apart from these stores, the company sells through retail partners, online channels as well as other premium retail stores. Walking into an Apple-owned retail store is a fantastic experience. Apple has also introduced the Apple Genius Bar to solve customer problems right in the store. So Apple’s focus on its sales and service is legendary.
• Steve Jobs: One of the key factors and the leader of Apple is also a popular person in the technology industry. The way he led his people and the way he carried his life and the Apple brand with him is an inspiration to all marketers. Since 2011, his departure from this world, Apple has been led by Tim Cook, who has also shown his genius in growing Apple as a company.
• Profit Margins: One of the most important advantages of Apple as a company is the profit margins it makes on its products. As a technological leader with high brand equity, the results of Apple’s Swot analysis show that the company retains a substantial margin to invest in research and development and brand building. Moreover, the company’s pricing strategy is such that the price does not fluctuate in the market and you will always find Apple at the same price in different retail stores.
• Consumer focus: Apple always designs its products with consumers in mind, keeping the future in mind. They always try to imagine things that even the consumer can not imagine yet. Steve Jobs said, “If you ask the consumer what they want, they will want something else if you give them the same thing”. This ideology is the reason for Apple’s success.
• Also, Read BCG Matrix Of Apple in a Simplified Way.

W Stands For Weaknesses ( Internal Factor )

• Customer Satisfaction: As a leader since the 1980s, Apple has a large market share and consumer expectations are through the roof. People expect great things from Apple year after year and it’s not easy for anyone to meet those expectations.
• Incompatibility: A major problem with Apple as a company is that many of its products are not compatible with third-party software/accessories. So when you buy a product from Apple, you enter the Apple universe and have to stick to Apple exclusively. This has a huge impact on consumer decision making.
• Dependence: Apple has only 7-8 products in its portfolio as compared to the various products of its closest competitors Microsoft and Google. Therefore, Apple’s dependence on each of its products is very high. If one product fails, it means a 10% loss for Apple. Therefore, there is a general demand for Apple to expand its product portfolio.

O Stands For Opportunities ( External Factor )

• Apple Cars: With Facebook expanding with Instagram, Occulus Rift, Whatsapp and others, and Google expanding in 10 different ways, Apple naturally wanted to figure out some new products that Apple could bring to the market. Apple is now fixated on the Apple Car, which is expected to launch in 2020. As with any other Apple product, we can expect great things from the Apple Car.
• Technological advancement: In the technology industry, technological advancement is always an opportunity. And the one brand that we can expect to make the best use of technology is Apple. We can expect more advanced MacBooks, Iphones, Ipads and iWatches in the coming years.
• Growing Market: Apple is a growing company in a growing market. Equally important to the company is the rising GDP of developing countries, which increases the consumption of premium brands like Apple. Any company that grows needs a larger market base, and Apple is slowly building that market base by expanding its territories.
• iWatch and Apple TV: Two products that can further increase presence are the iWatch and Apple TV, both of which are geared for the future as digital presence increases. The Apple iWatch already has a 50% market share of smartwatches in the US.

T Stands For Threats ( External Factor ) 

• Smartphone Market Share: One of the biggest threats to Apple is market penetration by other brands in the smartphone market. Android eats up market share like nothing else and currently has a 47.5% market share while Iphone’s market share is 42%. Android is used by Samsung, HTC, Lenovo, and virtually anyone who wants to enter the smartphone market. Since Android comes from Google ( one of the most valuable brands), Apple needs to be prepared for smartphone competition.
• Laptop Competition: The MacBook is, of course, as good as it gets. But so is Dell, and so is Sony, and so is Lenovo. The competition in the laptop segments is getting bigger and bigger. Dell has launched some nice models over the years, including the Alienware model. So even though Apple is loved by everyone as a brand, the MacBook also faces stiff competition from other brands.
• Regulator’s: Many Governments and Companies sue apple over its anti-competitive practice which destroys their businesses.

SWOT Analysis Of Apple Key Takeaways

The SWOT Analysis of Apple Inc highlights where the brand currently stands and its threats in this era. Following the detailed SWOT Analysis of Apple Here are a Few Important Key Points.

• Strong Brand Image
• Show Off Culture

Suggestions:

Following the detailed SWOT Analysis of Apple, we have a few suggestions from Business Mavericks:

• Needs to focus on pricing Strategy

Apple STP & USP

• Segment: Individuals looking for stylish PCs and mobile devices.

• Target Group: Group with high income and an age between 20 and 40 years old

• Positioning: Apple offers very well equipped and functional mobile devices and computers that are easy to use

Apple USP

Apple focuses on high-quality products with exclusivity

Apple Products

• Apple iPhone
• Apple iPad
• Macintosh
• Apple TV
• iTunes
• iPod
• Apple Watch
• Homepod

Apple Competitors

1. Google LLC is an American multinational technology company specializing in services and products related to the Internet, including online advertising technologies, a search engine, cloud computing, software, and hardware. It is considered one of the top five companies in the American information technology industry, along with Amazon, Apple, Meta (Facebook), and Microsoft.

Google was founded on September 4, 1998, by Larry Page and Sergey Brin when they were graduate students at Stanford College in California. Together, they own about 14% of the publicly traded shares and control 56% of shareholder voting rights through supervoting shares.

The company went public in 2004 through an initial public offering. In 2015, Google was restructured to become a wholly-owned subsidiary of Alphabet Inc. Google is Alphabet’s largest subsidiary and is a holding company for Alphabet’s Internet properties and interests. Sundar Pichai was appointed CEO of Google on October 24, 2015, replacing Larry Page, who became CEO of Alphabet. On December 3, 2019, Pichai also became the CEO of Alphabet.

2. Samsung Group is a South Korean multinational manufacturing conglomerate headquartered in Samsung Town, Seoul, South Korea. It comprises numerous affiliated companies, most of which are united under the Samsung brand, and is the largest South Korean chaebol (business conglomerate). As of 2020, Samsung has the 8th highest brand value in the world.

Samsung was founded in 1938 by Lee Byung-Chul as a trading company. Over the next three decades, the group diversified into areas such as food processing, textiles, insurance, securities and retail. In the late 1960s, Samsung entered the electronics industry, and in the mid-1970s, it entered the construction and shipbuilding industries; these areas would determine the company’s continued growth. After Lee died in 1987, Samsung was divided into five business groups – Samsung Group, Shinsegae Group, CJ Group and Hansol Group, and Joongang Group.

3. Dell is an American multinational computer technology company that designs, sells, repairs, and supports computers and related products and services. It is owned by its parent company, Dell Technologies. Founded in 1984 by Michael Dell, the company is one of the largest technology corporations in the world and employs more than 165,000 people in the United States and around the world.

Dell sells PCs, servers, data storage, network switches, software, computer peripherals, HDTVs, cameras, printers, and electronics from other manufacturers. The company is known for its innovations in supply chain management and e-commerce, particularly its direct-sales model and its “build-to-order” or “configuration-to-order” approach to manufacturing, which delivers custom PCs configured to customer specifications.

Dell was ranked 51st on the Fortune 500 list until 2014. Currently, the company is ranked 34th on the Fortune 500 list. It is the world’s third-largest personal computer vendor by sales (as of January 2021), behind Lenovo and HP Inc.

4. Microsoft Corporation is an American multinational technology corporation that produces computer software, consumer electronics, personal computers, and related services. Its best-known software products are the Microsoft Windows series of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers.

Its best-known hardware products are the Xbox video game consoles and the Microsoft Surface line of touchscreen computers. Microsoft ranks 21st in the 2020 Fortune 500 ranking of the largest U.S. companies by total revenue and was the world’s largest software company by revenue in 2016. It is considered one of the top five companies in the US information technology industry, along with Amazon, Google (Alphabet), Apple and Facebook (Meta).

Microsoft (the word is a portmanteau of “microcomputer software”) was founded on April 4, 1975, by Bill Gates and Paul Allen to develop and sell BASIC interpreters for the Altair 8800. By the mid-1980s, the company dominated the personal computer operating system market with MS-DOS, followed by Microsoft Windows.

The company’s initial public offering in 1986 and the subsequent rise in its stock price produced three billionaires and an estimated 12,000 millionaires among Microsoft employees. Since the 1990s, the company has increasingly moved away from the operating systems market and made a series of corporate acquisitions. The largest of these was the acquisition of LinkedIn for $26.2 billion in December 2016, followed by the acquisition of Skype Technologies for $8.5 billion in May 2011.

5. HP Inc. is an American multinational information technology company headquartered in Palo Alto, California that develops personal computers (PCs), printers and related consumables and 3D printing solutions.

The company was formed on November 1, 2015, from the PC and printer divisions of the original Hewlett-Packard Company, with the company’s enterprise and services divisions renamed Hewlett Packard Enterprise. The split was structured so that Hewlett-Packard changed its name to HP Inc. and spun off Hewlett Packard Enterprise as a new publicly traded company. HP Inc. retains Hewlett-Packard’s pre-2015 stock price history and its former stock symbol, HPQ, while Hewlett Packard Enterprise trades under its symbol, HPE.

HP is listed on the New York Stock Exchange and is a component of the S&P 500 Index. HP is the world’s second-largest PC maker by unit sales, behind China’s Lenovo, as of January 2021. HP ranks 58th on the 2018 Fortune 500 list of the largest companies in the United States based on total revenue.