Swot Analysis of Apple

Due to its exceptionality and innovation in its extensive array of products, Apple, Inc. is considered one of the most successful businesses globally. It offers robust technological products and outstanding software services. The multinational company managed to create a niche for itself when its co-founder Steve Jobs brought a transformation in personal computing.

Apple – an overview

Headquartered in California, the first product launched by Apple was the Apple 1 computer back in 1976. From that time onwards Apple has progressed tremendously in terms of its products and services. Nowadays, one of Apple's most popular products is the iPhone.

Apple's success can be attributed to its ability to employ its strengths in order to overcome weaknesses and threats and to take advantage of opportunities in the market. The SWOT analysis of a technology corporation provides strategic insights on how the company can encourage growth with its own strengths and the opportunities offered by the environment. The SWOT analysis structure can be considered as a strategic management decision-making tool that recognizes the major problems faced by the company, depending on the internal and external factors. This SWOT analysis of Apple describes the factors that affect the decisions and choices of the CEO Tim Cook as well as the managers in developing the company. Since Apple operates in different markets worldwide, it has to cope with various sets of SWOT factors depending on the regional situations.

Apple Strengths

As a first step of the SWOT analysis, we will have to take a look at Apple's strengths. Strengths are the attributes, tasks, and strategies the company already excels at. The strengths of apple are its brand identity, brand value, innovation, pioneering in technology, research focus, and top-quality customer experience.

Brand identity

One of the major strengths of Apple is its brand identity. Its products display striking design aesthetics, luxury, simplicity, originality, and creativity. Apple uses its brand to showcase a lifestyle. They have used this concept to market their products as not only gadgets but as a way to its vigilantly designed world.

Highly valued brand

With a market capitalization of 2.23 trillion USD as of April 2021, Apple Inc. is regarded as the world's biggest corporation in 2021.

Leading innovation and technology

Apple Inc. was the pioneer to present highly innovative products (iPhones, iPads) that have transformed the world. Apple is steadfast to develop and produce highly efficient technological devices.

Brand of choice

There is no doubt that Apple is a highly in-demand brand in corporate offices. Apple offers an explicit business page that presents high-quality technological solutions for every company's needs.

Competent research

Apple pays close attention to its product design. A meticulous study is done and further research is conducted in order to understand the demands and needs of customers.

Top-quality experience for its customers

Apple continuously follows a simple formula, that is, forming good customer relations with the aim of selling more products. As a result, a good customer experience would mean satisfied customers.

Establishing on this aspect of the SWOT analysis, Apple's strengths are tough to compete with, thus sustaining continuous dominance in the global market.

Apple Weaknesses

Apple weaknesses are the attributes, tasks, and strategies the company is yet to master or make it seem less appealing. Apple's weaknesses are its premium prices, the fact that different operating systems are not compatible with Mac, and the fact that its revenues are highly dependent on the iPhone and iPad.

Premium prices

The products of Apple can be regarded as luxury because of the high prices. They are priced for middle-income and high-income customers, meaning low-income individuals may not be able to afford them.

Different operating systems are not compatible

People who are used to other operating systems (OS) do not get a user-friendly experience when they switch to iOS. This is because when an individual switches from PC to Mac, they might find it overwhelming to use Apple's operating system in the beginning.

The revenues of Apple are hugely based on the sales of iPads and iPhones. Apple generated a revenue of $365 billion in 2020 and 52% of it was from iPhones. Overall , 194 million iPhones, 71 million iPads, and 20 million Mac and MacBooks were sold in 2020.

Based on the internal aspect of SWOT analysis, Apple's pricing and over-dependency on certain products impose restraints in the business.

Apple Inc.'s opportunities (external factors)

The next stage in a SWOT analysis is to look at external opportunities.

Expanding distribution network

Apple may avail the opportunity to expand and develop its distribution network. This emphasizes the fact that Apple needs to revise its distribution strategy. An expansion of the distribution network will facilitate Apple to be able to reach more customers worldwide.

Green technology

Apple has not yet introduced products that are made completely from green technology. It has not yet applied completely sustainable and eco-friendly technology to its production process.

Smart wearable technological products

It has been recognized that smart wearable products will be dominating the world shortly. As stated by Forbes, the sale of such products will double by 2022 and will be a market of $ 27 billion +. Therefore, Apple can exploit this opportunity to progress on top of Apple Watches and Airpods into different wearable devices.

Offer self-driving car technology

There is an increasing demand for autonomous cars. Apple can take advantage of its expertise to offer a self-driving software technology like an entirely functional autonomous car.

Apple Inc.'s threats (external factors)

Finally, we look at threats.

Impact of Coronavirus

Apple has a high dependency on China to manufacture and distribute its products. China is a huge market for Apple from where around 14.5% of its $ 274 billion revenue is generated from. The coronavirus has had a considerable impact and might continue to disturb sales in the near future.

Disrupted supply chain

The ongoing events (like the Covid-19 pandemic) have adversely influenced its operations. There was a decrease in Apple's annual revenue in 2020 because of the uncertainty in certain supply chain processes.

Issue of counterfeits

Intense competition

Even though Apple has strong roots, it faces threats from its rivals. With the development of technology and innovation, brands such as Samsung, Google, and Dell are giving intense competition to Apple. With this strong competition, Apple has to continuously launch new technologies or review the pricing policies in order to be ahead of its rivals.

Entering highly competitive markets

Apple is rapidly growing into new services, for instance, video content streaming with Apple Tv +, gaming, and simplified payment options with Apple Pay. It is competing directly with the already leading players like Netflix, Disney Plus, PayPal, etc.

Tariffs on China

The government of the USA has enforced high tariffs on goods from China, which will increase the total cost of the goods. As a result, it will negatively influence the profit margins and Apple products may become more expensive for customers.

Apple business analysis & recommendations

Apple is known for its innovation and high-quality products around the world. In contrast to the innovative products launched by Apple, not all of its products receive the same level of recognition. For instance, Apple Maps was a failure, in which the app showed users unreliable navigation and incorrect placement of popular landmarks.

In addition, one of the weaknesses of Apple's products is that they are expensive and exclude certain customer segments from buying them. Hence, the product is targeted at a minority of the world market. In contrast, it is this high-pricing strategy that generates high-profit margins for the company. This internal strategic factor can be considered as a key strength as it maximizes profits, even when sales are inadequate, for instance in the case of MacBook laptops. Moreover, to overcome the threat of high dependency on China for manufacturing its products, Apple may consider other low-cost developing countries for production and part of its supply chain.

Furthermore, the internal and external factors described in this SWOT analysis show that Apple Inc. has key strengths that can be used to address the weaknesses in an effective manner. With the help of its brand image and innovative processes, Apple can successfully create and introduce new technological products. Apple also faces the threat of intense competition and replication which affect players in the global market.

Nonetheless, a recommendation is that Apple should maintain the aggressive and swift innovative development of its products as technological innovations to lower the risk of replication. It may also consider partnerships with different distributors to enhance the overall reach of its products in the global market.

1. Business of Apps: Apple Statistics 2022