apple-swot-analysis

Apple SWOT Analysis In A Nutshell

Apple can leverage a strong consumer brand and set of successful products as a strength. Yet the company is still too reliant on the iPhone as a primary revenue stream. Though Apple is working to open up new markets as an opportunity, it has to make sure to sustain its stores’ sales.

Strengths

apple-business-growth-2019-2021
how-much-is-apple-worth
In 2022, Apple is worth two and a half trillion dollars. Apple generated over $191 billion from iPhone sales, in 2021, which accounted for over 52% of its net sales. Followed by services revenues at $68.4 billion, wearables and accessories at $38.3 billion, Mac sales at $35.2 billion, and iPad sales at $31.86 billion. 
  • Brand: Apple is among the most valuable recognized consumer brands in the world. With the ability to launch new, breakthrough successful products in the last two decades, Apple devices have become for millions of people part of their daily lives. This alone can make Apple still a viable company in the next decade.
  • Products: Apple products are still among the most innovative companies. It opened up new markets when it launched the iPod, the iPad, and the iPhone. And now it’s redefining the boundaries of new markets with other devices like wearables (Apple Watch) and other accessories (AirPods and glasses). If any of those products will turn out to be successful Apple can once again create a whole new category.
apple-value-proposition
Apple is a tech giant, and as such, it encompasses a set of value propositions that make Apple’s brand recognized, among consumers. The three fundamental value propositions of Apple’s brand leverage the “Think Different” motto; reliable tech devices for mass markets; and starting in 2019, Apple also started to emphasize more and more privacy to differentiate itself from other tech giants.
apple-mission-statement-vision-statement
Apple’s mission is “to bring the best user experience to its customers through its innovative hardware, software, and services.” And in a manifesto dated 2019 Tim Cook set the vision specified as “We believe that we are on the face of the earth to make great products and that’s not changing.”

Weaknesses

  • iPhone saturation: the iPhone has been an incredible success for Apple, however, it also is the primary revenue stream. And if the primary revenue stream slows down that affects the whole company. That is what’s happening as sales of the iPhone have reached saturation.
  • Lack of revenue diversification: the iPhone represented more than 50% of Apple revenues as of 2019, and while Apple sells other devices (Mac, iPad, iPod, and accessories), the company’s bottom line is still too skewed toward the iPhone. However, Apple has been able to diversify its revenues in the last few years.
evolution-of-apple
In this infographic, you can appreciate the evolution of Apple by looking at how the sales of its central products evolved in the decade 2008-18.

Opportunities

apple-business-strategy
When looking at the Apple Business Model, it is easy to assume that it is solely a product company, which sells devices that are beautifully crafted. However, there would have been no success for the Mac without its OS operating system. There would not have been iPod success without iTunes. And no success for iPhones without the Apple Store. What’s next for Apple’s success?
  • New strong accessory market: Apple’s revenues in accessories have been among the fastest-growing. This creates massive short-term opportunities for Apple, as the company keeps monetizing the customer base developed on top of the iPhone.
  • Other revenue streams with high potential growth: Beyond accessories, wearables might become also a segment with extremely high growth potential.
  • Opening adjacent markets with high potential: A whole new set of products, like Apple Glasses or accessories able to monitor the biometrical data of users, might become a whole new category for the company, thus opening great opportunities.

Threats

apple-distribution-strategy
In 2021, most of Apple’s sales (64%) came from indirect channels (comprising third-party cellular networks, wholesalers/retailers, and resellers). These channels are critical for sales amplification, scale, and subsidies (to enable the iPhone to be purchased by a larger number of people). While the direct channel represented 36% of the total revenues. Stores are critical for customer experience, to enable to provide the service business, and for branding at scale.
  • Competition, markets for the Company’s products and services are highly competitive and Apple is in the midst of aggressive competition in all areas of its business.
  • The supply of Components can also represent a risk. True, most of Apple’s product components are generally available from multiple sources, however, certain components are available from a single-source. This might make the production of new devices slower, less reliable and in any case, increase the cost of production.
  • Intellectual Property: If the company fails to protect its intellectual properties that can also become a future threat.
  • Performance of carriers, wholesalers, retailers, and other resellers: a major chunk of Apple’s distribution goes through indirect channels like carriers and resellers. Changed agreements or inability to fuel this channel might result in massive losses in terms of product distribution and sales.
  • Performance of direct stores: Apple has built over the years also a direct distribution system, where customers could purchase directly from those stores. While those stores have been the temples of Apple’s success. If the company will fail in attracting a continuous flow of customers in those same stores, they might become an unbearable cost, thus making the transition from temples to cathedrals in the desert.

Read more: What Is A SWOT Analysis, Amazon SWOT Analysis

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Related to Apple’s SWOT Analysis

apple-business-model
Apple has a business model that is broken down between products and services. Apple generated over $365 billion in revenues in 2021, of which $191.9 came from the iPhone sales, $35.2 came from Mac sales, and $38.3 came from accessories and wearables (AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch, and accessories), $31.86 billion came from iPad sales, and $68.4 billion came from services.
apple-value-proposition
Apple is a tech giant, and as such, it encompasses a set of value propositions that make Apple’s brand recognized, among consumers. The three fundamental value propositions of Apple’s brand leverage the “Think Different” motto; reliable tech devices for mass markets; and starting in 2019, Apple also started to emphasize more and more privacy to differentiate itself from other tech giants.
how-much-is-apple-worth
In 2022, Apple is worth two and a half trillion dollars. Apple generated over $191 billion from iPhone sales, in 2021, which accounted for over 52% of its net sales. Followed by services revenues at $68.4 billion, wearables and accessories at $38.3 billion, Mac sales at $35.2 billion, and iPad sales at $31.86 billion. 
apple-mission-statement-vision-statement
Apple’s mission is “to bring the best user experience to its customers through its innovative hardware, software, and services.” And in a manifesto dated 2019 Tim Cook set the vision specified as “We believe that we are on the face of the earth to make great products and that’s not changing.”
how much profit does apple make per iphone
It costs Apple $570 to make an iPhone 13 Pro, and the company sells it at a base price of $999 to $1499.
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