How international finance affects Apple?
Needless to say, Apple Inc. is one of the world’s most profit making multinational company and has its target market segment spread across the world, serving consumers with its wide range of computer electronics, computer software, and online services. Hence, international finance plays a crucial role in shaping the financial position of Apple Inc. in the global market.
The impact of international finance on Apple Inc. can be easily justified by the fact that the company is the second biggest brand worldwide in terms of its market share in the smartphone category. As a result, the performance of Apple is highly affected by the volatility and the downfall of the global economy. The trend can be observed with a sharp decline in the iPhone and iPad product range by 44% in the last quarter of 1Q16 and a decrease in its market share worldwide from 20.90% to 14.40% (Woollaston, Victoria., 2013).
The falling income of Apple Inc. in the last quarter has also resulted from the depleting market capitalization of Apple shares falling from 7.9% to $96.10 by the end of trading on April 26th, this year (Garg, M., 2015). Despite the decrease in its market share, Apple has stood strong owing to its high working capital ratio that allows it to expand its horizons. Moreover, a continued focus on their innovation strategies for which the brand is highly recognized in the world market, always makes them stand out of the rest.
Further, the recent partnership knots between Apple and SAP would highly scale up the sales for Apple products as, by default, the companies who use SAP would want Apple products for the mobile use of SAP (Loth, R., 2016). Considering all financial outcomes, overall, the deal comes out to be a win-win for Apple in the years to come.
References
Victoria, Woollaston. (2013). In Apple's astonishing 129% mark-up: Company makes £225 profit on every iPad Air it sells as research reveals it costs just £174 to make. Retrieved June. 05, 2016, from http://www.dailymail.co.uk/sciencetech/article-2488524/Apples-astonishing-129-mark-iPad-Air.html
Garg, M. (2015) Working Capital Management. New Delhi: Educreation Publishing from http://www.investopedia.com/stock-analysis/021015/understanding-apples-balance-sheet-appl.aspx.
Loth, R. (2016). In Evaluating a Company's Capital Structure. Apple Inc. Retrieved Month. Day, Year, from http://www.investopedia.com/articles/basics/06/capitalstructure.asp
