SWOT Analysis of Apple Corporation 2013

Sun, 04/20/2014 - 10:27 -- Gulzar Ahmed

Introduction of Apple Corporation

Apple Inc. is an American multinational company. Apple Inc. is considered to be the most popular worldwide electronic company which designs, consumer electronics and sells personal computers. Headquarter of the company is located in U.S and the current CEO is Tim Cook. Apple Inc. annually revenue is $ 156.508 billion dollar and profit of the company is $ 41.733 billion dollars. More than 72000 employees are serving the customers around the globe.

The main competitors are Microsoft Corporation, Dell Inc, Amazon.com, Samsung Electronics Co, Cisco Systems, Inc., Google Inc. LG Electronics Inc, Dell Inc, Hewlett-Packard Company and many others.

Apple SWOT Analysis


1. Customer loyalty oath combined with expanding closed ecosystem. While at first Apple’s closed ecosystem was a weakness point for the company, it has changed since 2001 when it has introduced its iPod mp3 player. 1st Apple now has a full range of applications, product and software that are interlinked and support each other. 2nd new products and supplements will be released very soon (ITV), hence expanding the ecosystem. 3rd, Apple has a strong customer loyalty oath, which increases due to Apple’s closed ecosystem, the combination of Apple’s expanding closed ecosystem and customers’ loyalty oath increases the competitive advantage.

2. Apple is a leading innovator in mobile device technology. In 2012 Apple has been chosen third time as the most innovative product in the world. The strength of the company is producing innovative products to the market.

3. Strong financial performance ($10,000,000,000 cash, gross profit margin 43.9% and no debt). The financial performance of the Apple’s is one of the best among many companies. End of 2012 Apple Inc. Holds about $10,000,000,000 in cash, which can be used for solution of equations and buying back company shares etc. It also has higher gross profit than its main competitors, which is equal to 44.0%. Company has no debt and its not directly affected by credit markets or interest rates.

4. Brand reputation. Apple has a reputation of highly innovative, well-functioning, and well-designed products and sound business performance. According to 2012 the value of Apple brand is $76.5 billion and was the second most successive valuable brand in the world.

5. Retail stores. Apple’s stores are the most profitable stores in terms of sales. Apple’s retail stores ensure high quality customer experience, give direct contact with knowledgeable staff and increases the awareness of brands.

6. Strong marketing and advertising teams. Strong Marketing is one of the main functions in success of Apple brands. It can sell expensive products, build superior stores and advertise their products in a compelling manner.

apple swot analysis


1. Highly price. Apple’s products cost much more than its competitors devices. The price of the product is not justified. Apple products price becomes a weakens point because consumers can easily buy a similar quality product but in lower price.

2. Incompatibility with different OS. The OS and iOS X are quite different from each other OS and uses software that is unlike the software used in Microsoft OS. Due to such differences, both in hardware and software, users often choose to stay with their accustomed software and hardware (Microsoft OS and Intel hardware).

3. Decreasing market share. The lower market share Apple has, the lower it can influence its potential customers and persuade to jump them into using Apple’s closed ecosystem products.

4. Patent infringements. The firm is often accused of infringing other brands patents and has even lost some trials. This damages the Apple brand and its financial situation.

5. Further changes in management. Tim Cook becomes the new CEO in 2012 after loss of Steve jobs. Scott For stall and John Browett (chief of retail) left the company too and this will have a bad impact on company’s management.

6. Defects of new products. This is not recent Apple weakness but one that jumps out time to time. Some of Apple’s iPhone and iPod releases had clear faults and which disturbed sales of the products.

7. Long-term gross margin decline. Apple’s current gross margin is one of the highest in the electronic industry but analysts fear that due to increasing other component prices and competition current margins will not be retained.


1. High demand of iPad mini and iPhone 5. iPad mini and iPhone sales will increase Apple’s market share in the tablet market and, will  strengthen firm’s competitive advantage.

2. iTV launch. iTV launch will support Apple T.V sales and the products’ ecosystem. It will increase sales in TV market.

3. Emergence of the new provider of application processors. Samsung, is the main Apple’s competitor, is also the only provider brand of application processors for Apple’s products. Apple has to find a new way for the component but could not find yet. Nonetheless, new manufacturers with superior engineering capabilities are shining and it’s just a matter of time, when Apple will grab hold upon the opportunity of being less dependent on its competitors.

4. Growth of tablet and Smartphone markets. Growth of tablet and Smartphone markets is provide a good opportunity to expand firm’s share in these markets.

5. Obtaining patents through acquisitions. Apple brand lacks of some patents to retain its growth and the best way to acquire those patents is to acquire or merge with the firms holding them. In addition, Apple could also develop new skills and competencies in coming years.

6. Damages from patent infringements. Apple patents are often infringed by its competitors. Thus, collecting the damages from the competitors that are viable opportunities to not only increase the money reserves but to damage the competitor’s reputation and market growth as well.

7. Strong growth of mobile advertising market. Apple has developed iPad advertising platform, which allows advertising on Apple , iPod, iPad and iPhone  touch. The growth of mobile advertising market is an opportunity which could be further seized upon.

8. Increasing demand for cloud based services. Apple could expand its range of software and iCloud services as the demand for cloud-based services is expanding.


1. Rapid technological change. One of the most severe threats Apple and its competitors are facing is rapidly changing technological. Companies are under pressure to release new products quickly. This is especially hard when a business wants to introduce something fresh, innovative and successful. Apple was able to launch very innovative products to the market but at the moment, even Apple hasn't launched any new products (except iTV).

2. 2013 tax increases. In 2013 Tax increase negatively effect on Apple Inc.

3. Rising pay levels for Foxconn workers. Foxen is the manufacturer of Apple brands. Pay levels for Foxconn’s workers already grow 3 times from 2010 to 2012.

4. Breached IP rights. The companies that breach Apple patents not be discovered soon and may benefit from it, while weakening Apple product at the same time.

5. Price pressure from Samsung and some other over key components. Samsung has already asked Apple to pay higher payment for its application processors, this is just because of intense competition and no viable substitutes.

6. Strong dollar. Apple earned more than half of its revenues from outside the US. Dollar appreciation against other currencies reduces potential profits from other countries.

7. Android OS growth. Android OS is the key competitor for iOS in mobile device market. The dominance of Android decreases the power iOS over influencing consumers to join Apple.

8. Competitors moves in online music market. Online music stores, such as Wal-Mart, Amazon and online music companies or also faces threat for Apple.