1. Globally renowned brand
Apple Inc.’s innovative product and service differentiation strategy has created its global brand equity. Finally, Apple’s proactive effort to connect with customers (Goldman, 2012) through simple and user-friendly product designs has played a vital role in increasing its loyal customer base.
2. Retail Strength
Apple’s products, including iPhone, iPad, iPod, iTunes, iCloud, Mac & Mac OS X etc. are sold through a strong network of several different channels; online stores, retail outlets and third party vendors like AT&T and Verizon.
3. Financial Strength
Tech juggernaut Apple is also financially very strong. Apple’s market capitalization as on 10th February, 2012 touched $462 billion, making it now worth more than Microsoft ($257 billion) and Google ($197 billion) combined in total market capitalization (Singh A., 2012)
1. Imbroglio of Litigation Issues
Apple has always been surrounded by patent infringement-related lawsuits, with the most recent one filed by Proview Technology – a Chinese company, involving the registered trademark “iPad” that it has been using on its several products much earlier than Apple (Smith D., 2012).
2. Incredibly High Prices & Demand-Supply Mismatch
As compared to Microsoft and other competitors, Apple’s products are high-priced. Also, managing the incredibly high demand for its products with adequate supply has been difficult for Apple. For example, the release date for iPad for outside U.S. markets was pushed back for about a month from the originally anticipated date, which Apple blamed on “unexpectedly high demand” (Hasseldahl, 2010).
3. Limited Compatibility of Products and Services
Apple’s products and services have limited compatibility with other devices. For example, the music downloaded using iTunes can be transferred to only Apple products like iPhone, iPad & iPod. Similarly, the iPhone does not allow any software to be installed on it unless it is downloaded from the App Store (McMurrer, 2011).
1. Growing Smartphones & Tablet PCs Market
A strong growth in smartphones & tablet PCs market continues to boost up Apple’s revenues. Apple sold 316 million units of iOS devices in 2011, as compared to only 122 million units of Macs sold collectively in the last 28 years (Whittaker Z., 2012).
2. Increasing Global Expansion
Apple is fast expanding into new markets, like Europe, Japan and Asia-Pacific, as indicated by $22 billion it earned in revenue from developing countries in 2011, as compared to $1.4 billion earned from the same markets in 2007 – straight 1471% growth in just 5 years!! (Constine J., 2012).
3. New Products Showing Potential
Apart from having undoubtedly killer weapons like iPhone & iPad in its artillery, Apple’s new products like the iCloud; that can quickly sync users’ data to their Apple products using a Wi–fi connection, are equally promising. Experts opine that iCloud can strengthen Apple’s position as a content distributor. Other potential products in the pipeline include the much awaited iPad 3.
1. Steve Jobs’ Death
Steve Jobs –– Co-founder & former CEO of Apple Inc. was the “strategic innovative intellect” behind every thought and action of the company, since its inception in 1976. His demise has left Apple orphaned, making industry veterans question the company’s ability to continue practicing the same innovation as before.
2. Highly Competitive Market
Apple operates in a dynamic market with experienced and resourceful players having the expertise to quickly create innovative products and services using new technologies. Its biggest competitor is Google’s Android, which unlike Apple has “open-source” as a potent USP. Surviving in such an environment, now, would require Apple to constantly remain on its toes, considering Jobs’ haunting absence from the company.
3. New Products Render Old Ones Obsolete
Apple’s new products compete with older versions in the same category. For example, the new iPad 2 directly competes with the old iPad. This causes the older versions to go obsolete, forcing Apple to offer deep discounts to sell off the piling inventory.
Singh A. (2012). Apple Now Worth More Than Microsoft, Google Combined: Is High Demand Of iPhone and iPad Accountable. DazeInfo.com. Retrieved from http://www.dazeinfo.com/2012/02/14/apple-now-worth-more-than-microsoft-google-combined-is-high-demand-of-iphone-and-ipad-accountable/
Smith D. (2012). Is iPad 3 in Jeopardy? Apple Could Lose $1.6 Billion in China Trademark Lawsuit. ibtimes.com. Retrieved from http://www.ibtimes.com/articles/294485/20120207/ipad-3-apple-billion-china-trademark-lawsuit.htm
Whittaker Z. (2012). Apple sold more iOS devices in 2011 than it sold Macs in 28 years. zdnet.com. Retrieved from http://www.zdnet.com/blog/btl/apple-sold-more-ios-devices-in-2011-than-it-sold-macs-in-28-years/69717
Constine J. (2012). Apple Made $22 Billion In Revenue On Developing World In 2011, Just $1.4B in 2007. techcrunch.com. Retrieved from http://techcrunch.com/2012/02/14/apple-made-22-billion-in-revenue-on-developing-world-in-2011-just-1-4b-in-2007/