COMPETITOR #1: Apple Inc.
Apple Inc. operates in the computer industry with the total market capitalization of 16 billion and the net profit margin of 16.2%. Apple Inc. is the biggest player in the market according to its market capitalization ($611.7 B), while its closest competitors is Dell Inc. has the market value of only $17.0 B . and it occupies the 17th position in the Fortune 500 list for 2012 (Cable News Network, 2012). The company focuses on design, manufacturing and selling of personal computers, software, media players, mobile communication devices as well the services related to them. Apple targets a wide segment of customers that includes both final consumers and business users. The distribution network for Apple products includes own stores, third-party sellers (both wholesale and retail) as well as online stores. The current CEO of the company is Timothy Cook, who took the position after the of Steve Jobs, the legendary founder and a visionary of the company.
Apple was founded in 1976 in Cupertino, California. The company currently employs 60,400 people. The mission of the company is to “bringing the best user experience to its customers through its innovative hardware, software, peripherals, and services”. It emphasizes R&D, advertizing and marketing are the key elements of its strategy. Apple’s financial performance has been outstanding in the past years. In 2011 the company has registered 25,922 million of net income, which is an 85% increase as compared to the same period in 2010. The brand value of the company has also increased to $ 87.1 billion, bringing the company to number one in the Most Powerful Brands List (Apple Inc., 2011).
COMPETITOR #2: Dell Inc.
Dell is the biggest competitor of Apple in the Personal Computer market. It was founded under the name PC's Limited in 1984 in Austin, Texas. It is currently number 44 in the Fortune 500 list (Cable News Network, 2012). The CEO of the company is Michael Dell, who is also its founder. The company’s mission statement is “ to be the most successful computer company in the world at delivering the best customer experience in markets we serve”.
The company provides integrated IT solutions and manufactures computers, mobility, servers, storage systems as well as related products and services. The most profitable product groups for Dell are mobility and desktop PCs with the contribution to total revenues of 31% and 23% respectively. The core of Dell’s business is customer focus. The company targets several customer segments , however unlike Apple, Dell has stronger ties with large customers, such as corporate clients, governments, law enforcement agencies, and public institutions. In fact, Global Large enterprises are the most lucrative segment for Dell as it accounts for 30% of all the company revenues. However, private customers occupy an important place in Dell’s strategy and constitute 22% of the total revenues.
The year 2011 was quite successful for the company. Dell has celebrated largest single-year increase of revenue in its history with the total revenue of $62,071 million. The Net Income of the company in 2011 has also increased to $3,492 million, which is 32.5% higher than in the previous year. Dell’s Net Profit Margin increased by 1.3% reaching 5.6% even despite heavier investment in Research and Development by the company, which shows increasing commitment of Dell to innovation and product development. Dell’s liquidity shows a slight decline in 2011, as its current ratio is calculated as 1.34, in particular due to the increase of days in inventory from 9 to 11, however the liquidity level is rather stable, and shows an improvement if to compare to the level of 2010 (Dell, 2012).
COMPETITOR #3: Gateway
Gateway is a U.S. computer hardware company that is located in Irvine, California. It specializes in the manufacturing and selling of personal computers, servers, displays and accessories. It was founded in 1985 and in 2007 it was acquired by Acer Inc. The main customer segments targeted by the company are private consumers, small and medium businesses, government agencies and retailers. Gateway uses several distribution channels for selling its products, in particular retailers, and through direct contact with clients. The mission of the company is to “dedicated to making the experiences of buying, owning and using a PC convenient and trouble free for its customers”. The CEO of Gateway is James Coleman, who has been appointed in 2007.
As 100 percent of Gateway is currently owned by Acer Inc., most of the financial information is reported for the entire corporation. According to the 2011 Annual Report the whole corporation has registered $475,342 million of revenue, which is nearly 25% lower than in the previous year. Low earnings resulted in decline in Return on Assets and return on Equity, which in 2011 were equal to -2.28 and -7.77 respectively. Company liquidity has also declined in 2011 from 1.34 from 1.38. The situation in the first quarter of 2011 shows no improvement, as the current ratio has declined even further to 1.31. Moreover, Acer has shown a decline in inventory turnover and an increase in Accounts Receivable (Acer Inc., 2012). The abovementioned numbers however show little information about the performance of Gateway Inc., as Acer Inc. contains several rather heterogeneous companies within its portfolio.
Acer Inc. (2012, April 1 30). Acer Incorporated 2011 annual report. Retrieved from http://www.acer-group.com/public/Investor_Relations/pdf/Acer2011AnnualReports.pdf
Apple Inc. (2011, October 26). Form 10-k annual report. Retrieved from http://investor.apple.com/secfiling.cfm?filingID=1193125-11-282113&CIK=320193
Cable News Network. (2012, May 21). Fortune 500. Retrieved from http://money.cnn.com/magazines/fortune/fortune500/2012/full_list/
Dell. (2012). Dell Inc. selected financial data & ratios. Retrieved from http://i.dell.com/sites/doccontent/corporate/secure/en/Documents/132Qrtios.pdf