- Apple’s iPhone. I have been using the iPhone right from the time the first iPhone was released into the market in the year 2007.
- Apple’s iPhone has revolutionized the smartphone market and made Apple the top technology company in the world. iPhone followed the success of Apple’s digital player iPod and helped in increasing the market capitalization of Apple above the US$ 500 levels. Just like other any other Apple’s products, iPhone offers good user interface and design perfection, which have made it an instant hit in the smartphone market. However, the competition from the cheaper Android powered smartphones has limited the growth of the iPhone in the market. It remains to be seen how the company would face this new competition in the market.
- Yes, I think Apple is a market oriented. Even though, Apple’s former CEO Steve Jobs always credited himself for introducing products that themselves did not know that they wanted, Apple had always kept the interests in mind. Several of Apple’s innovations like the iPod’s click wheel and the multi-touch UI used in iPhone and iPad were introduced keeping in mind the consumers’ desire for products with simple user interface.
When the iPhone 4, which was released in the year 2010, faced problems related to antenna reception, Apple had given a public apology regarding the reception problem and released a software update to fix it. Another instance was the failure of Apple Maps app, which was released in the market in the year 2012 with several problems. Apple’s CEO Tim Cooks apologised the public regarding the problem and quickly offered remedies to correct the errors.
- Apple mostly targets younger and tech savvy people in teenagers, young executives, university students, and kids. Apple prices its products at a premium than the competition, which makes them unaffordable for lower income populations in developing countries. However, several of Apple’s products are preferred by older people too. For example, the iPad has emerged as the preferred device for accessing the Internet by older population due to its simple UI. Apple’s stores are queued up by younger tech savvy people at the time of the release of new iPhone and iPad models.
- Product Strategy: Apple’s product strategy is to offer highly differentiated products to the customers by taking the existing technologies available in the market. Apple never introduced any new to the world products. Most of its products it entered like smartphones and tablet computers by it were released by other companies much before in the market. Apple excels in bringing out innovations that make it extremely simple for people to use sophisticated gadgets. With the iPhone, Apple had also successfully created an ecosystem of software application (apps) to be used on its devices. Apps have greatly extended the utility of Apple’s gadgets by several kinds of features to the iPhone aseasy access to the Internet. Apple bundles its smartphones and tablets with services like iTunes using which consumers could buy their favourite music, movies, and e-books.
Price Strategy:Apple follows a premium pricing strategy where most its products are priced at a premium that the competitors. Unlike other makers of top end technology products, Apple does not target the mass market dominated by cheaper products. The result of its strategy is that Apple enjoys a higher share of industry profits despite not having a significant market share. It enjoys an industry leading margin of 39 percent on its products sold.
Place Strategy:Apple has its own network of retail stores called Apple Stores where its products are sold. Its stores are architectural wonders and received several awards. Apple Stores As more consumers are now buying electronic gadgets online, Apple’s products are available for sale on its own website and the websites of major online retailers like Amazon and Wal-Mart.
Promotional Strategy:Apple uses both advertising and personal selling as part of its promotional strategy. Apple invests heavily in advertising and creates advertises its products across multiple media channels. The company also maintains absolute secrecy regarding its forthcoming products effectively creating much buzz regarding the expected features. About personal selling, Apple’s stores are manned by highly motivated and knowledgeable sales executives who personally assist the customers in their purchasing process. Sales staff at Apple Stores help people who are not so tech savvy in making choice regarding the purchase of advanced electronic gadgets.
- Apple operates in a highly competitive technology sector where the rival firms intensely compete. A number of macro environmental factors keep affecting the performance of the organization.
- Competitive Factors:
Apple is facing severe competition from players like Samsung and Google. Samsung’s Android based smartphones have been giving Apple a run for its money as they are relatively cheaper than the iPhone. As Android is a free operating system, it is now favoured by smartphone manufacturing companies around the world. While Android now powers 80 percent of total new smartphones shipped, iOS had a share of just 13.2 percent. Another major technology company Microsoft too has started stiff competition to Apple with its new Windows Phone OS.
The market for the gadgets made by Apple as smartphones and tablets is peaking out. Threat to Apple mainly comes from two quarters. The first is the low cost smartphone manufacturers based in China, who are churning out cheaper Android powered smartphones. The low cost of these devices is making more people to switch to these cheaper alternatives. The second threat is the emergence of wearable gadgets like smart watches and smart glasses. While other companies like Samsung and Motorola have started rolling out wearable gadgets, Apple is yet to announce a wearable gadget. Any delay in entering this emerging segment might pose serious problems for the dominance of Apple.
- Political & Legal Factors: As the company has its operations spread out across the globe, the company needs to operate in different kinds of political environments ranging from democracies like USA to single party authoritarian governments like China. Apple has been embroiled in lawsuits with other technology companies like Samsung. These lawsuits have put some of the features used in Apple’s products under threat and increased the legal costs for the company.
- Economic Factors: As the products of Apple are premium priced, any economic conditions will adversely impact the sales of the organization. For example, the global financial crisis of 2008 have impacted the sales of Apple as people reduced their spending on highly priced technology goods like iPods and iPhones.
- Technological Factors: Emergence of rival technologies similar to Apple’s multi- touch can adversely affect the business of Apple in the long run.
- Cultural Factors:As the world’s population ages, the number of people who would prefer the sophisticated technology products made by Apple might decrease. Decreased demand from ageing populations could put a strain on the business prospects of Apple.
Contributions
Yes, I do believe that Apple is a responsible corporate citizen. The company takes utmost care to ensure that its activities do not affect the environment adversely. Apple is the only technology company whose data centres are completely powered by renewable energy sources. All the products made by Apple also exceed energy guidelines. Apart from this factory audit of companies that supply components are regularly undertaken to ensure that the materials used to make them are non-toxic.
Criticisms
Despite being responsible to the environment, there has been no high profile society related corporate social responsibility activities (CSR) activities of Apple like contributing to development activities in poor countries that are known to me. The former CEO of Steve Jobs has never focused on CSR and only emphasized on creating world class technology products to its customers. Apple had been widely criticized by different stakeholders regarding its negligence of community development activities.
