SWOT Analysis on Apple Company - Research Paper Example

? SWOT analysis on Apple Company Contents Contents 2 Introduction 3 SWOT Analysis 3 Strength 3 Weaknesses 4 Opportunities 4 Threats 5 Reference 7 Introduction Apple Inc., an American multinational corporation, incorporated in the year 1977 in California is one of the successful and largest technology companies in the world. The company designs the best computers in the world with iLife and iWork. It also leads the digital music revolution with its iTunes and iPods online stores. The company reinvented the mobile phones with its invention of App store and iPhone and has introduced magical iPad which is defining the future of the computing devices and mobile media (Apple Inc., 2011). SWOT Analysis Strength Apple has been known for its innovation strategy and is one of the most successful companies. The company is known for its innovation, its unique ability to design and develop the company’s operating systems. The strength of the company lies in providing the customers with new product and solutions with a superior ease of use. The company investment in the research and development along with marketing and advertisement also adds on to the list of its strength (Apple Inc.-a, 2011, p.1). The company products are in high demand for example, sale of iPod increased and about 100 million iPods were sold making it the fastest selling music player in history (Apple Inc.-b, 2011). The sale of its notebooks products are also very strong and represent a huge contribution to Apple’s income. Apple is one of the most influential and established brand in the world and thus has a set of loyal customers who advocates the brand. The brand not only attracts new customers but also retains them. Weaknesses It was reported that Apple iPod Nano had faulty screen. Apple has admitted that there was problem with its new iPod Nano due to a manufacturing problem. The company claims that this problem has affected less than a 10th of 1% of all the Nanos shipped (BBC News, 2005). The music industry have demanded to increase the price of its music downloaded file as many of the music industry makes money from iTunes rather than from the sales of the original CDs. According to Steve Jobs, Apple has made a sale of more than half a billion songs with its iTune Music store capturing about 82% of the market share in US (Cohen & MacCentral, 2005). The product life cycle of the products of Apple is very short and thus revenues depend on the launch of new products and services. Market share of Apple is behind from its competitors such as Microsoft. Opportunities As more and more consumers are getting individualistic and conscious about a brand, Apple’s opportunity is to target those set of consumers. Apple can introduce more new models to cater to the needs of its customers. Apple has an opportunity to develop its iTunes into mobile phone format. Downloads could be available through USB cables, new technology and strategic alliances which would offer a wide opportunities for Apple. The music can be downloaded from Podcasts and played on the iPods where the listener can subscribe for free and revenue can be generated from sales of various other downloads. Another opportunity lies with Apple is with the company’s smart phones. At present Samsung has outshines Apple smart phone thus giving an opportunity to Apple to come up with new features and capture the market share (Whitney, 2011). Since the PC and mobile industry is growing at a steady rate, thus Apple being one of the successful brands has a wide opportunity to explore and expand itself into other countries such as into Asia. There has been an increase in the demand for online music and other applications such as the cloud making a room for Apple to expand into these sectors and generate high revenue. Threats The biggest threat for Apple comes from the high level of competition from the technology markets. A successful market attracts competitors and Apple works hard on its Research and Development and in its marketing tool to retain its competitive position. The popularity of Apple product such as the iPod and Apple Mac are subject to demand and will get affected if the economy falter and the demand for its product fall. With a high substitution product effect the company might get affected in the future as wireless technology could replace the need of music player. SWOT analysis helps in overcoming the company weakness through its strength and using opportunities to overcome threats. Apple is known for its innovation, one such innovation is its GarageBand. This technology helps the user to create and records own song with the use of Apple’s multi touch interface. With regard to this context, Philip Schiller the Senior Vice President of Marketing reported that GarageBand has been a huge hit and the customers would love using this technology in their iPhone or iPod touch. Apple has a capacity of huge market growth and with the sale of its iPhone 4S it has been able to generate a huge revenue. On account of iPhone 4S, Philip Schiller commented that iPhone has sold over more than four million in just its 1st week of the launch and has proved to be a hit with customers across the world. After analyzing the fourth quarterly result of the fiscal year 2011, Apple made revenue of $28.27billion and net profit of $6.62 million. The CEO, Tim Cook announced that the company was thrilled with an outstanding fiscal 2011 and expected that the revenue would be $108 billion. The profits have come from the sale of iPhone and the company remains enthusiastic about its product line. Apple’s CFO, Peter Oppenheimer commented that the company was extremely pleased with the fourth quarterly result which earned a cash generation of $5.4 million. The CFO further added that the company is looking forward for the fiscal quarter of 2012 which is expected to be around $37 billion and also a diluted EPS of $9.30 (Apple Inc.-b, 2011). According to reports the share price of Apple declined by 2.6% to $385.22. The analysts reported that the drop may be due to big orders made by Apple to stock up components of iPhone 4S in advance which sold at a record of 4 million units (Turner & Ward, 2011). Thus it is advisable to invest in Apple as the decline would not affect much the shareholders as the company has reported to have a decent net profit in the current fiscal 2011. Reference Apple Inc. (2011). Investor’s relation. Retrieved on November 14, 2011 from http://investor.apple.com/faq.cfm?FaqSetID=6. Apple Inc.-a. (2011). Form 10-K annual report. Retrieved on November 14, 2011 from http://files.shareholder.com/downloads/AAPL/1507136785x0xS1193125-11-282113/320193/filing.pdf. Apple Inc.-b. (2011). Apple Press Info. Retrieved on November 14, 2011 from http://www.apple.com/pr/library/2007/04/09100-Million-iPods-Sold.html. BBC News. (2005). Apple admits to iPod Nano faults. Retrieved on November 14, 2011 from http://news.bbc.co.uk/2/hi/technology/4286294.stm. Cohen, P. & MacCentral. (2005). Apple unveils iPod nano, ROKR phone, iTunes 5. Retrieved on November 14, 2011 from http://www.macworld.com/article/46806/2005/09/special.html. Turner, N. & Ward, J. (2011). Apple Shares Slip amid Concern Product Shipments May Slow. Retrieved on November 14, 2011 from http://www.businessweek.com/news/2011-11-11/apple-shares-slip-amid-concern-product-shipments-may-slow.html. Whitney, L. (2011). Samsung outshines Apple in Smartphone shipments, market share. Retrieved on November 14, 2011 from http://news.cnet.com/8301-13579_3-57318644-37/samsung-outshines-apple-in-smartphone-shipments-market-share/. Read More