Company: Apple Inc.
CEO: Tim Cook
Year founded: 1976
Headquarter: Cupertino, California, USA
Number of Employees (FY2019): 137,000
Type: Public
Ticker Symbol: AAPL
Market Cap (Feb, 2020): $1.19 Trillion
Annual Revenue (FY2019): $ 260.17 Billion
Profit | Net income (FY2019): $ 55.25 Billion

Did you know?
In 2013, one of the original Apple computers was sold for more than $671,400 at German auction.

An Overview of Apple

Apple, Inc. is one of the most successful companies in the world. The company has been providing robust technology products and exceptional software services. Apple is headquartered in Cupertino, California and was founded by Steve Jobs.

Apple launched its first product ‘Apple 1 computer’ in 1976. Since then, Apple has grown exponentially in terms of products and services.

Today, one of the most successful products of Apple is the ‘iPhone’. In the year 2018, Apple sold 217 million iPhones. Tim Cook is the current CEO of the company.

SWOT analysis of Apple

Here’s a detailed analysis of Apple’s strengths, weaknesses, opportunities, and threats.

Apple’s Strengths

Most valuable brand – Apple is ranked # 1 for the 7th consecutive year by Interbrand – with a brand value of $234 billion.
Globally Iconic – Apple is one of the most reliable company when it comes to personalized advanced computers and smart technology devices. It has millions of loyal customers with steady increment.
Top Technology – Apple was the first to introduce some of the most innovative products that have changed the world (iPhones, iPads). Apple is still determined to build and craft better, more proficient technology devices.
Brand Of Choice – It isn’t big news that Apple is a demanded brand in corporate offices. Apple has a specific business page that offers top quality technology solutions for every corporation’s needs.
Proficient Research – Apple puts dedication into its product designs. Careful study is initiated and further research is performed to help understand customer needs and requirements.
Sustainability made Possible through Liam – Liam is an iPhone recycling robot that breaks down and dissects an iPhone. It strips them all the way down to a single bolt. Most parts of an iPhone can be reused. Liam is designed to yield as many reusable parts as possible. These reusable parts are then categorized and safely stored so they can be used for new manufacturing.
Expansion in services – Apple has been expanding its services portfolio for many years. For example, about 16% of Apple’s annual revenue ($46 B out of $260 B in FY 19) comes from its services, which is the second biggest contributor to its revenue after the iPhone (54% of its revenue).

Apple’s services include digital content stores, streaming services, iCloud, AppleCare etc. In addition, Apple has introduced many new services in 2019, such as Apple TV+ (launched in Nov 2019), Apple news+ and Apple Card (credit card services), Apple Arcade (game subscription).

Apple’s Weaknesses

High Priced Products – Apple’s products can be considered a luxury due to their premium prices. The products are priced for middle and high-income consumers. Low-Income consumers can’t simply afford Apple products. Due to their premium pricing, only middle or high-class individuals can afford their products.
Limited advertisement & promotions – Apple has solidified their grounds by establishing loyal customers, even with limited advertising resources. Apple marketing relies heavily on its iconic and flagship retail stores. Because of their success, Apple does not feel the need to have excessive spending towards advertisement in comparison to other big brands such as P&G, Coca Cola and Samsung technology.
Entering into area of non-competency – Apple is rapidly expanding into new services such as video content streaming, game streaming, credit card – competing with the dominant players such as Netflix, Disney, Citi, Chase, Paypal, etc. They might be entering into areas in which they lack competencies; remember the failure of Apple maps.
Incompatibility With Other Software – When a customer buys an apple product, they enter the Apple universe. Apple’s products do not support other software or technologies making them incompatible with other devices. Customers have to exclusively purchase Apple apps or accessories to continue using their Apple products.

Apple’s Opportunities

Consistent Customer Growth – Apple has been dominating the technology sector for years now. They provide top quality and cutting-edge technology that offers a breakthrough in customer experience. Their customer retention rate of 92% is phenomenal. Apple can always rely on the power of the internet for future opportunities to gain new customers and form new alliances.
Qualified Professionals – Apple’s researchers, developers, and product specialists are a team of highly qualified professionals that have years of experience in branding consumer products. With the expansion of their team, Apple can continuously build new opportunities.
Expansive Distribution Network – Apple Inc. has the opportunity to expand its distribution network. Currently, the distribution network that Apple has is very limited and leaves room for minimal growth. Apple can generate higher revenue and sales if it focused on creating an expansive distribution network. Furthermore, the company can benefit from diligent marketing and promotions.
Lack of Green Technology – Apple is yet to launch products that are created using green technology. The company has not yet implemented or participated in creating sustainable technology that is eco-friendly.
Smart Wearable Technology – Smart wearable technology will soon dominate the world. According to Forbes, smart wearable technology device sales will double by 2022. It will become a $27 billion+ market with 233 million unit sales. Apple has the opportunity to continue to grow beyond just Apple watch and AirPods into other wearable categories.
Utilize Artificial intelligence – To increase its profit margins and have a strong market position, Apple should utilize artificial intelligence. Recently, the company has extended its AI portfolio.

In the year 2017, Apple acquired Regaind, a French AI startup and DeskConnect, an AI tool. The former acquisition helps Apple to integrate intelligent search to the photos app on the iPhone, while the latter acquisition automates tasks by helping the consumers to arrange apps and features with a string of commands. The company should focus on extending its AI portfolio to have a strong foothold in the future.

Apple’s Threats

Coronavirus Outbreak – Apple is highly dependent on China for its manufacturing and supply chain. In addition, about 17 % of its $260 billion in revenue come from China. The coronavirus outbreak has significantly affected and may continue to disrupt about 32% ofApple’s annual revenue in the fiscal year 2020.
Apple Bullied By Counterfeits – Apple has become vulnerable to third world countries illegally utilizing the brand image to sell counterfeit products. The illegal dealers sell Apple counterfeit products at the same value as an original Apple product. Counterfeit products can make potential customers believe that it is a product made by Apple with low quality. big news can result in negative reviews and bad publicity for the company.
Increasing Competition – Although Apple as a brand has solidified itself, it still faces threats from competitors. With the advancement in technology, brands like Samsung,Google, and Dell are giving Apple tough competition. As the competition is getting stronger, Apple either has to introduce new technologies or revise its pricing policy to stay ahead of its competition.
Market Penetration – There has been a significant change in market penetration by other brands in the smartphone market. Companies like Samsung, HTC, and Lenovo are using Android software to create new smartphones. Currently, Android has captured 72.23% of the market share, while Apple has only 24.55% of the market share globally.
China Tariffs – US government has imposed a higher tariff on imports from China, increasing the overall cost of the products. Consequently, it adversely affects the gross margin on the products and may make the product more expensive for customers.
Lawsuits: 60 class-action lawsuits have been filed against Apple. Consumers were upset and baffled when Apple announced that it deliberately throttles CPU performance on iPhone models with older and degraded batteries.The tech giant said that it did so to prevent unexpected shutdowns. Despite the clarification, consumers felt betrayed because they that Apple does not believe in transparency. This led to a number of people filing lawsuits against the company. The first class-action lawsuit was filed on December 21st, 2017 and alleged that Apple’s actions not only negatively affect the resale value of their products but also forces its users to upgrade to newer versions prematurely.
Backdoor Mechanism – Apple has been under constant pressure by government agencies to unlock the iPhone via a backdoor, which means unlocking the encryption of the iPhone and giving access to its data.
In several instances, Apple has denied providing the backdoor mechanism because it can be exploited by the bad guys, which eventually exposes the security of millions of iPhone users.

Final Thoughts

Through this Apple SWOT Analysis report, one can learn the exclusive details of Apple. This SWOT report is ideal for case studies. This report closely examines Apple’s strengths, weaknesses, opportunities, and threats.