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-net-profits-2015-2019
how-much-is-apple-worth
As of October 2019, Apple was worth over trillion dollars. Compared to other tech giants like Amazon, valued at over $869B, Google valued at 863B and Facebook valued at over $530 billion, Apple is primarily a product company, which made 63% of its revenues from the iPhone in 2018.
  • 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 leverages on the “Think Different” motto; reliable tech devices for mass markets; and in 2019, Apple also started to emphasize more and more about privacy to differentiate from other tech giants.
apple-mission-statement-vision-statement
Apple’s mission is “to bringing the best user experience to its customers through its innovative hardware, software, and services.” And in a manifesto dated 2009 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
  • 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.
  • 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 te temples of Apple’s success. If the company will fail in attracting a continous flow of customers in those same stores, they might become an unbearable cost, thus making them transition from temples to cathedrals in the desert.

Read more: What Is A SWOT Analysis

Read next:

Other resources for your business:

Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which target is to reach over two million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get in touch with Gennaro here