Apple Inc. is a multinational company that mainly designs, manufactures, sells and market consumer electronics and services. Apple Computer Company was founded in April 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne. In this SWOT analysis tutorial, we will conduct Apple SWOT analysis. We will try to find out major Apple’s strengths, weaknesses, opportunities and threats that affect its performance positively or negatively.
|Year Established||April 1, 1976|
Fabless silicon design
|Founder||Steve Jobs, Steve Wozniak, Ronald Wayne|
|Headquarters||1 Apple Park Way, Cupertino, California,|
|Net Revenue||$ 260.16 billion (2019)|
|Net Income||$ 55.256 billion (2019)|
|Products||Macintosh, iPod, iPhone, iPad, Apple Watch|
|Services||Apple Music, Apple TV, Apple Arcade, iCloud|
|Competitors||1. Microsoft Corporation|
2. Dell Computer Company
3. Samsung Group
4. Lenovo Group Limited
5. Hewlett-Packard Company
6. Sony Corporation
8. Huawei Technologies Co., Ltd
10. OPPO Electronics Corp
Apple Strengths in SWOT Analysis
Loyal Customer Base
One of the major strengths of Apple inc. is its loyal customer base. These customers rarely switch to other mobile brands. The main reason for Apple’s loyal customer base is its unique customer experience, simplicity and innovation. Apple has an outclass 87% brand loyalty across the US and European countries.
Brand Value and Reputation
Over the years Apple has recognized itself as the second most valuable brand in the world following behind Google. Apple brand value reached to $300.6 billion by 2018. In 2006 its brand value was merely 15.98 billion U.S dollars.
Innovation and Simplicity
Simplicity is in the DNA of this company. “Apple revolutionized the business of PCs, music, telephones and Tablets because everything revolved around and search for simplicity.” Apple products are simple and easy to use. Apple is always considered as most innovative company in the.
Though the brand is simple but innovative product line is considered as the major strength of Apple. For example, they introduced iPod, Macbook, iPhone and iPad. Every time Apple came up with innovation and simplicity.
Advertising and Marketing
Apple is considered the master of advertising since the old days of Steve Jobs. According to Communicus.com, Apple advertising performs better by creating a buzz about its upcoming products and upgrades. Its advertising is so powerful that creates a word of mouth campaign to build a better brand perception and increase the product desire.
High Profit Margin
If we look at the pricing element of the marketing mix, Apple is charging premium pricing strategy. Even with the low sales volume, it can avail high-profit margins and can invest in the brand building, Research and development activities. By doing this, Apple can not only increase brand awareness but also embrace technological advancement to keep a competitive advantage over its competitors. If you look at the graph below, Apple has maintained its revenue graph very well.
Apple Weaknesses in SWOT Analysis
Narrow Product Line
Apple product portfolio comprising 6 to 7 products. In this case, it has a limited portfolio as compared apple competitors like Dell, Samsung and Microsoft. Every product is contributing a portion to the overall revenue. Due to any reason, if a product was unable to generate its portion of revenue, it can affect apple revenue stream. A limited product-line is a major weakness of Apple.
High Customer Expectations
From the beginning, Apple revolutionized the tech market and customer expectations are on top. Customers expect hardware and software updates in every updated version of Apple products and services. It is difficult to meet these expectations all the time.
Apple Inc. is able to charge premium pricing and generate higher profit margin. On the other hand price-conscious customers switching to other brands like Dell and Samsung with the same specs products at reasonable prices. For example, in China, India and Pakistan people are switching to android phones like Samsung due to its high specs and considerably low price.
Apple Opportunities in SWOT Analysis
In this tutorial “SWOT Analysis of Apple” will discuss opportunities. For any business SWOT opportunities are external factors that can affect its performance. Following are the Apple Opportunities.
Apple Electric Car Project
Apple is a big player in the tech industry and always wants to fly high. The car project is known Codename “Titan” undergoing Research and Development phase. According to Wikipedia, there are rumors that Apple might enter the automobile market in 2020. Mostly Apple does not reveal any information about undergoing projects. But it is a huge opportunity for Apple to step in the Automobile industry.
Apple Watch series 1 was introduced back in 2015 and became a bestselling wearable device. A few days back in September 2018, Apple has introduced Apple Watch Series 4, it is redesigned having more communication, fitness and health. This watch series will increase its current market share of digital watches.
Apple TV is another great opportunity Apple should utilize. Ruko, Amazon and Google are the strong competitors of Apple TV. So far Apple has captured on 15% share, but it should not lose this opportunity.
Apple has the opportunity to expand its current distribution network. Limited distribution is a weakness for any company. It is a recommendation in Apple SWOT Analysis to expand its distribution channel reach potential customers in the global market.
Apple Threats in SWOT Analysis
Though Apple Inc. has some great success stories. It has outstanding great numbers in financials and markets. But still, there are threats to Apple that should be tackled strategically.
Apple TV Competition
One of the strongest threats to Apple is competitors of Apple TV i.e. Amazon, Raku, NVidia, Google and many more. These streaming devices are giving Apple a tough time in the Streaming Device competitions. Apple is so far able to avail only 15% market share.
One of the key threats to Apple is Dell which is a primary computer manufacturer. Dell has introduced the best Laptop Model like XPS which is giving tough competition to MacBook. Lenovo is another competitor of Apple in the laptop segment. HP is another name produces affordable computer product for the consumer around the globe.
There is no doubt that Apple’s best product is iPhone but unable to dominate the market. One of the alarming threats to apple from smartphone segment is a South Korean Company Samsung which is producing Samsung Galaxy and Notes. Over the years Android Samsung has reduced iPhone sales. Both having a tough fight but Samsung produces different types of smartphones that cover all budget levels. Other Android smartphones include Oppo, HTV, Sony Xperia. Android phones are giving a tough time to iPhone.