Executive SummaryThe purpose of this report is to outline the iPhone 13 product a major product of Apple Inc the multinational technology company, more specifically, to present the value
Reason for choosing the topic
Currently, consumer electronics, computer software, and online services – are products that have been competed by large corporations, many businesses, and companies, notably Apple and Samsung So how can you stand out among many competing brands? How does your product stand out and really differentiate from others so that your product reaches the masses and is accepted?
To answer these questions, let's look at the successes that Apple INC has achieved over the years below Apple Inc is an American multinational technology corporation headquartered in Cupertino, California , that designs, develops, and consumer electronics , computer software, and online services Apple is the world's largest technology company by revenue and one of the world's most valuable companies The company also enjoys a high level of brand loyalty and ranks as the world's most valuable brand.
From these achievements, people learn about: "what are the marketing mix strategies that the company has applied?", "Who are the customers they target?", "How have they met the needs of customers?",… These are also the reasons why the team decided to make a report on the topic: “The product's value, its market, customer segmentation, marketing mix, and SWOT with the iPhone 13 product from 2021 to the first quarter 2022.”
The research problem was solved by answering 4 questions:
Question 1:What are Market share and the revenue of Apple and its iPhone 13 product line? Question 2: What is the company's customer segment?
Question 3: What is the company's marketing mix applied?
Question 4: What is Apple’s SWOT?
Research purpose and tasks
This research aims to analyze Apple Inc.'s success through a comprehensive examination of its iPhone 13 product from 2021 to Q1 2022 By assessing the product's value proposition, target market, customer segmentation, marketing strategies, and strengths/weaknesses (SWOT), the study seeks to uncover the key factors that have contributed to the company's continued dominance in the smartphone industry.
Object and scope of research
Research object: All activities and problems related to iPhone 13 products
Scope: In order to give the accurate information, this report looks into learning about the product’s value, its market, customer segmentation, marketing mix, and SWOT with the iPhone 13 product from 2021 to first quarter 2022.
Structure
In addition to the introduction, conclusion, list of references and appendices, the content of the report is divided into 4 chapters.
Chapter 1: Market share and total revenue of Apple
Chapter 2: Customer segmentation and target segmentation of Apple Inc
Chapter 4: SWOT analysis of Apple Inc
Market share and total revenue of Apple
Revenue of Apple
Apple made more money than ever during the holiday season, and its growth during 2021 has helped the company add 150 million more active devices During an earnings call with investors last night, Apple CEO Tim Cook revealed that Apple now has 1.8 billion active devices That’s up from the 1.65 billion Apple reported a year ago (1)
Figure 1 Total active Apple devices, per company reports
Revenue in 2022: Apple had a record-breaking quarterly earnings for the company’s fiscal Q1 in 2022, posting $123.9 billion in revenue and record profits of $34.6 billion The iPhone had a big quarter thanks to holiday sales, and accounted for a staggering $71.63 billion in revenue alone (1)
Table 1 Apple quarterly revenue ( $ billion ) Revenue in 2021: (2)
Apple's iPhone revenue is up 35% year-on-year to $196 billion in 2021
Apple accounts for 44% of total global smartphone sales in 2021.
IPhone 13 demand continues to grow, helping Apple reach record sales of $ 196 billion in 2021, becoming the most successful smartphone brand globally by revenue.
Figure 2 Global smartphone revenue in 2021 (Resource: Counterpoint Research) (2)
Market share
Figure 3 Global Smartphone Market Share (Q2 2020 – Q1 2022)
As Apple’s most successful product, the iPhone is one of the most heavyweight players in the smartphone market, with dozens of millions of iPhones being shipped every quarter Indeed, when it comes to smartphone vendor share, Apple is the second largest smartphone vendor in the world after Samsung (3)
Despite dominating markets like Europe, India, and China, Apple's iPhone has now surpassed expectations by emerging as the global leader in the smartphone industry, according to insights from Counterpoint Research This growth is further bolstered by the brand's continued stronghold in the US market, cementing its position as the top smartphone vendor worldwide.
The global smartphone market declined by 8% YoY and 12% QoQ to 326 million units in Q1 2022.
Apple’s global smartphone shipments remained flat compared to Q1 2021 at 59 million units in Q1 2022 This was driven by strong demand for iPhone 13 series and the early launch of its first 5G-enabled SE Series which, even in a contracting market, helped push Apple’s market share to 18%, up from 17% in Q1 2021 Its quarterly shipment decline of 28% is primarily due to seasonality (5)
Figure 4 Global Smartphone Shipments (in Millions) (6)
Quarterly Market share of shipments
Table 2 Apple’s iPhone smartphone market share worldwide (6)
Apple generated $365 billion revenue, 52% came from iPhone sales in 2021 Apple is the second largest smartphone vendor in the world after Samsung in the first quarter of 2022
Apple is the leading smartphone market revenue by top 5-brands in 2021.
Customer segmentation and target segmentation of Apple Inc
Demographic segmentation of Apple
Apple focuses on marketing to people with a few different characteristics.
Apple's primary focus is on middle- and upper-class income people because these demographics are usually willing to pay slightly more for "a better user experience" (7) The other feature of the target market is that it constitutes of the young people who are sensitive to innovative products and are ready to pay premium prices for the new Apple products In addition, the target market constitutes of the wealthy individuals who can afford the products as they are sold at higher prices compared to other similar products in a competitive market.
Apple consumers range in age from 16 to 70 years old, depending on the product.
Apple is known as modern technology innovators, always seeing innovation as inevitable. Therefore, in recent years, Apple no longer focuses only on a certain age range, but instead divides the target age group based on the appropriate use of customers Since then, there are different product lines in different age ranges.
Specifically, Apple will focus on people who like to have fun with technology; Apple's diverse line of entry-level devices and tools is starting to appeal to people of all ages (7)
For example, iPod, iTunes, Apple Pay, app store, and iTunes store used by 18-30 year olds, can target music enthusiasts from an older demographic
Smart, compact devices are used more by people aged 20-45 (8)
And finally, users of apple watch, apple tv and accessories are aged 20-45+ (8)
In addition, thanks to their advanced technology, Apple can also target professionals working in the fields of communication and design.
While Apple's prices are typically higher (new iPhones could be $800 or new iPads close to
$2000), they can appeal to people of all ages and demographics due to their reputation for technological breakthroughs impressive, while still trying to focus on customer targeting (7)
According to US statistics, iPhone is most popular among 16 to 24 year olds, with the majority of people in that age group preferring iPhone over Android MacBooks are also popular among people aged 24–35, who mainly use them for work or study In fact, 75% of iPhone users are over 35 years old
Product market was not gender-dominated.
Men and women use iPhones in nearly equal proportions
According to 2019 Apple customer demographics, around 51% of all iOS users were female, while 43% were male It is the only major smartphone vendor with a majority of female users. (9)
Most of the Apple’s users are highly educated millennial They are career-oriented and lead an active social life Students, executives, managers, professionals are the primary target market of Apple Inc 64% of Apple product users tend to have college degrees They can say that the apple market is wealthier, more educated and older than the rest of the cell phone users as the company offers premium service (8)
Geographic segmentation of Apple
Geographic segmentation involves dividing the market into distinct regions such as the Americas, Europe, Greater China, Japan, and the rest of Asia Pacific By customizing marketing strategies to the unique characteristics and preferences of each region, businesses can effectively target and engage potential customers, leading to increased brand recognition and market share This approach allows companies to tailor their products, services, and messaging to meet the specific demands and cultural nuances of different regional markets.
Rest of Asia Pacific 26.3 Table 3 Apple revenue by region ($ billion) (10)
Figure 5 Apple Segment Breakdown Based on Apple's Q1 of 2022 ended Dec 25, 2021 (10)
Apple's largest geographical market is the Americas, which contributed over 153.3 billion dollars in 2021 and occupied almost 42% in all region’s total revenue in 2021.
During the first quarter of 2022, the Asia region played a significant role in Apple's financial performance, contributing over 37% to its operating income and 34% to its revenue This dominance over Europe highlights the growing importance of the Asia market for Apple, both in terms of growth potential and profitability.
Behavioral segmentation of Apple
Include the well-off individuals willing to spend more on technology products and services with advanced capabilities, functions, and designs With years of evaluating Apple's customers' characteristics, it has revealed that most of them tend to appreciate quality,performance, and design of tech products and services over the prices (10)
Psychographic segmentation of Apple
Apple is the best venue to see behavioral economics and psychology in action in the real world:
Apple, utilize psychographic segmentation to create a brand personality that fits into the perception of their users With psychographic data, Apple can communicate luxury, minimalism, and class to its target audience and also create marketing strategies for the different psychographic segments (12)
Their retail experience encourages feelings of ownership Apple revolutionized the way that people shop Going to the store is like going to a club At Apple, you are encouraged to play around with the computers and hang out, which promotes the Endowment Effect TheEndowment Effect says that when it feels like you own something, you tend to value it more.The longer people play around with your technology, the more customers feel like it's theirs— and the more painful it would be for them to give it up (12)
Table of customer segmentations for Apple's iPhone (11)
Type of segmentation Segmentation criteria Devices (iPhone)
Geographic Region US and international
Occupation Professionals, managers and executives Behavioural Personality Determined and ambitious
Benefits sought Sense of achievement and belonging
Speed of service, advanced features and capabilities
Psychographic Social class Middle and upper classes
=>However, Apple actually has tendency to break barriers in terms of customer segments Apple's concept of target customers is no longer limited to demographics, certain personalities or anything related to market segments Therefore apple's target customer is "Everybody".
This is also clearly shown through advertising and marketing content, they rarely use confusing technology terms Instead, there are sentences that all ages and classes can easily hear and understand immediately Thanks to that, Apple's customer base is also very diverse.
Marketing mix
Product
Products of the Apple brand always emphasize the difference from other brands The target is the user, meeting the needs of the customer.
The iPhone essentially launches a new product each year, replacing the previous ones Each version will have different design and quality characteristics Therefore, the team will study about the iPhone 13 product below.
To conserve important resources, they work to reduce the material they use and aim to one day source only recycled or renewable materials in their products Their product designs also consider the safety of those who make, use, and recycle their products, restricting the use of hundreds of harmful substances iPhone 13 is free of harmful substances like beryllium, brominated flame retardants, PVC, phthalates, arsenic in the display glass, and mercury. Rare earth elements: They use 100 percent recycled rare earth elements in all magnets, representing 98 percent of the total rare earth elements in the device.
Tungsten: They use 100 percent recycled tungsten in the Taptic Engine This represents 99 percent of the total tungsten in the device
Tin: They use 100 percent recycled tin in the solder of the main logic board and, for the first time, the battery management unit.
Plastic: They’re transitioning from fossil fuel–based plastics to those made from renewable or recycled sources For iPhone 13, they use 35 percent or more recycled plastic in 12 components The antenna lines also use upcycled plastic from bottles that have been chemically transformed into a stronger, higher-performance material. Gold: Apple is pioneering industry-leading levels of traceability in recycled materials to build a gold supply chain of exclusively recycled content For the first time, they’re using 100 percent certified recycled gold in an Apple product (iPhone 13)—now in the plating of the main logic board and the wire in the front camera and the rear cameras Apple has a plan They’ve been carbon neutral since 2020 By 2030, all their products will be too Their stores, offices, and data centers are already carbon neutral They’ve also eliminated the plastic wrap around the iPhone 13 and iPhone 13 Pro boxes, saving 600 metric tons of plastic
Energy efficiency: iPhone 13 uses 54 percent less energy than the energy conservation standard They design their products to be energy efficient, long lasting, and safe iPhone 13 uses software and power-efficient components that intelligently manage power consumption b) Product value:
Their most advanced dual-camera system ever.
Durability that’s front and center And edge to edge.
A lightning-fast chip that speeds up everything you do.
A huge leap in battery life you’ll notice every day.
In terms of design, the iPhone 13 still has an aluminum frame sandwiched between two glass panels
Overall, the iPhone 13 is different from the iPhone 12 in two points, the first is that the camera cluster is diagonal instead of aligned and the second is the rabbit ears that have been reduced in size.
All iPhone 13 models are IP68 water and dust resistant. iPhone 13 is available in 6 colors including pink, blue, black, white, red, and green.
The iPhone 13 and iPhone 13 mini duo have screen sizes of 6.1 inches and 5.4 inches, respectively The screen uses OLED technology with higher brightness than last year's iPhone
The hardware configuration of the iPhone 13 and iPhone 13 mini includes a new A15 Bionic chip that is up to 50% faster than the competition A15 Bionic is a speed-boosting, camera- elevating, reality-augmenting, power-optimizing, privacy-protecting, game-changing chip
In addition, the A15 Bionic chip also manages power more efficiently.
Outstanding graphics performance: The graphics processing ability of the iPhone 13 duo is also 30% faster than competitors
A15 Bionic also power Face ID, the most secure facial authentication in a smartphone 2x the storage: iPhone 13 starts at 128GB for all your photos and videos
No one does 5G like iPhone: The world is quickly moving to 5G Streaming, downloading — everything happens so much faster 5G is even fast enough for serious multiplayer gaming,sharing AR videos, and more With Smart Data mode, iPhone will downshift automatically to save power when you don’t need all that speed.
Behind the iPhone 13 is a pair of new 12MP wide-angle cameras with F/1.6 aperture and a new 12MP ultra-wide-angle camera The new wide-angle camera has a 47% larger sensor, so it can capture better light in low light conditions to reduce image noise. iPhone 13 is also equipped with image stabilization technology by shifting the sensor similar to last year's iPhone 12 Pro Max In addition, the iPhone 13 also has a new cinematic focus feature when shooting movies.
Apple's made the iPhone 13 far more powerful than its Android competitors thanks to its 5G-ready A15 Bionic chip
They designed a totally new architecture and turned the lenses 45 degrees to fit in their best dual-camera system ever – with its biggest Wide camera sensor They also made room for their sensor-shift optical image stabilization And they equipped the Ultra Wide camera with a faster sensor.
+New Ultra Wide camera reveals more detail in the dark areas of your photos +New Wide camera captures 47% more light for better photos and videos
+New sensor-shift optical image stabilization keeps shots steady even when you’re not
Cinematic mode automatically creates beautiful depth effects and focus transitions Just start recording and Cinematic mode will hold focus on your subject while creating a beautiful depth-of-field effect all around them You can even adjust the depth effect after you shoot Take a great photo without lifting a finger:
Night mode senses low-light scenes and automatically adjusts to take bright, clear photos with amazingly rich colors.
Portrait mode masterfully defocuses the background to emphasize your subject Smart HDR 4 now intelligently detects and enhances up to four individuals within a scene, optimizing contrast, lighting, and even skin tones individually for each person, resulting in stunningly detailed and realistic portraits.
Deep Fusion activates in mid- to low-light scenes It analyzes multiple exposures pixel by pixel to capture the subtlest textures, patterns, and details.
The Ultra Wide camera gives you a wide field of view even when you’re right up close to what you’re shooting So you can capture more of the scene without stepping back. b) Battery life of iPhone 13:
Despite having faster chip, brighter screen, and more advanced camera, iPhone 13 still has better battery life than iPhone 12.
+ Up to 2.5 hours more battery life on iPhone 13
+ Up to 1.5 hours more battery life on iPhone 13 mini
Apple has always been considered as an extremely outstanding name not only for the technology industry but also for the entire market, the strategies it has set out are always copied by many other brands However, no matter what, Apple's level is still at a pretty high level that no other brand can do Few people know that the marketing costs that this technology brand spends are very modest when compared to rival brands such as: Samsung,
Apple has always followed Steve Jobs' strategy, including 4 main milestones:
Prioritize profit over market share
Create a halo effect for all new products to build excitement
Thanks to the "top of the top" brand positioning of Steve Jobs, Apple has succeeded in building its image as an premium and quality brand in the market Since the launch of the brand and the culmination of the Iphone product that changed the world of the smartphone industry, the company has aimed at the high-end market and positioned itself as a brand with products labeled "Luxury" The price of Apple's products is always much more expensive than the competition, even in the portable market, Apple products have sky-high prices
According to Forbes, Apple is the world most valuable brand The contributor to the Apple brand strength is its design which is simple, good-looking and attractive.
The company positions its brand as a premium provider of products and services with high- quality and advanced functions and capabilities
Every part of the packaging is designed to be clean and direct The design is simple in a world of clutter and constant sensory over-stimulation Apple's iconic sensory experience is the expression of the absence of eye-grabbing colors and images And that minimalism is exactly the thing that attracts the eye
Price
Looking at all the products of Apple, you know that the brand delights its target market with innovative products They are superior to other brands in the industry, even when they offer premium pricing One of the justifiable reasons why Apple has premium pricing is its capability to create products with advanced technologies and features.
Value-Based Pricing Strateg or Premium pricing strategy is a premium product pricing strategy With this strategy, businesses price their products high to show that the product is of high value, luxury or high end Premium pricing focuses on the perceived value of the product rather than the actual value or cost of production Apple is a premium brand, so it has adopted a Premium product pricing strategy This is a typical pricing strategy of Apple when the company's products and services are priced at the highest price Although the price of Apple products is higher than other products, Apple still owns a large number of loyal customers due to its brand advantages, quality and durable products as well as providing user good experience.
Apple's product lines have a high value in the perception of customers, so the price of Apple products is also commensurate with the value it brings In addition, any product enhancements and additional features Apple introduces are based on the wants and needs of customers. b) Market skimming pricing:
Price skimming strategy: Apple has added a twist to the skimming strategy Rather than introducing their products at a high price and then lowering their prices later, Apple stakes out a price and then maintains and defends that price by significantly increasing the value of their products in future iterations Apple is persisting the skimming pricing strategy, the skimming pricing is to set a high price for the product in order to grab the maximum profit in the short term as the goal rather than to get the maximum sales (18)
Usually applied when businesses invent new products to grab the top of the market (initiators, innovators, and early adopters) After that, because the price is high, the number of buyers is not much, the business gradually lowers the price to get more new customers.
When it launched a product for the first time, taking advantage of customers' trust in its previous products along with customers' high expectations for the unique features and quality of the iPhone, Apple has always aimed at the high-end and brand loyalty customer segment in order to skim the profitable parts with the aim of maximizing profits in short time.
As for the old, unpopular or outdated product lines, instead of keeping the same price as when it was first released, Apple tends to reduce the price to skim the lower customer segments (early majority, late majority) with the aim of maximizing profit c) Psychology pricing strategy: perfectly applied across most Apple products in a sophisticated way.
Psychological pricing strategies exploit human psychology to influence buying decisions By setting prices with specific numbers, such as the "9-digit effect," businesses can create the perception that a product is more affordable than it actually is For instance, pricing a product at $99.99 instead of $100 can make it appear as a better value, even though the difference is negligible Apple has successfully employed this strategy, as exemplified by the iPhone 13 starting price of $799.
Price of products ending in 9: (19)
Many Apple products end with the number 9 They also often see this pricing in discounted products.
Odd-pricing effect is a common pricing method, hitting the consumer mentality that odd numbers mean cheap Besides, when looking at the price, consumers often read from left to right, this is the "left-digit" effect This is why 499 thousand VND feels cheaper than 500 thousand VND a lot of times what buyers see is number 4.
Accessories are usually priced at 19 USD: (19)
Apple seems to have an obsession with the number 19 when most accessories such as chargers, chargers and most recently screen wipes cost $ 19.
Besides, buying an Apple electronic product (with a value often up to 4 figures) plus a few $
19 items does not seem to have much impact on the total price of the product in the eyes of consumers.
Apple maintains a premium pricing strategy for its products without compromising on affordability By delivering an exceptional user experience, Apple differentiates itself from competitors and establishes a perception of value that justifies the higher price point This approach allows the brand to retain loyal customers who appreciate the superior quality and features offered in return for their investment.
Besides, after launching a new product line, Apple will stop producing the old line The purpose of this is to limit consumers buying old products at a cheaper price, while keeping Apple's price spectrum intact and ensuring the purchasing power of new items.
Divide products into many segments (19)
Despite the reputation of selling high-end products with high value, Apple also seems to be secretly expanding the market and attacking the mid-range segment.
This is the reason that Apple has launched many different phone lines
It can be seen that instead of creating a product for everyone, Apple sets prices and creates products according to segmented pricing, suitable for each individual customer.
Create a sense of excitement and anticipation for a new product (19)
According to Apple's late CEO, Steve Jobs, the "halo effect" is a key tactic for the company, generating excitement and anticipation around new product releases This effect is why Apple's launch events have become legendary, attracting global attention as the world awaits the unveiling of the latest innovations.
-Price of iPhone 13 start form $799
Figure 11 Price of iPhone 13 mini
Customers can get iPhone 13 for $33.29 (US) a month for 24 months or $799 (US) before trade-in, and iPhone 13 mini for $29.12 (US) a month for 24 months or $699 (US) before trade-in from apple.com/store, in the Apple Store app, and at Apple Store locations.
Customers can save up to $700 (US) on iPhone 13 and iPhone 13 mini after trade-in directly from the Apple Store online or at an Apple Store when they activate it with AT&T, T- Mobile/Sprint, or Verizon Terms apply Pricing for iPhone 13 and iPhone 13 mini includes a $30 (US) carrier instant discount that requires carrier activation.
Place
Apple is headquartered in Cupertino, California, United States However, the company has managed a strong global presence through local production facilities, R&D facilities as well as a global sales and distribution network that spans the entire world
As for iPhone sales worldwide, Apple is utilizing several sales channels including its website, company-branded stores, authorized sales partners, and other e-commerce websites in various markets including Amazon and Flipkart Its own website and retail stores play a central role in the distribution and sales of Apple products including iPhones throughout the world (20) The company also uses its own website for the marketing and promotion of iPhones and to drive direct sales to customers in key markets Customers can analyze the various models of iPhone including iPhone 13 models and the other previous models and compare their features easily on the Apple website.
Apple implements an aggressive approach in reaching out to premium target markets This means that it uses several sales channels for visibility and accessibility of selling its products to a global market These sales channels are as follows:
Apple stores Probably the most prominent IT company globally, Apple has more than 500 retail stores in 15 countries worldwide The brand strategically places its stores at high-traffic locations like urban shopping districts and quality shopping malls The interiors of every retail store are also strategically designed to be spacious where its customers can use the products and have generous assistance from customer service people (20)
Online stores Apple also has provided an official website where customers can access and purchase its products This is essentially fitting for those customers who do not have access to an Apple physical store (20)
Wholesalers Customers of Apples can also go to wholesalers as they can also be the source of essential parts of its services and products (20)
Retailers Apple also partners with authorized retailers for its products and services A few examples of them are T-Mobile and Mobile Guru in New York and Argos and Carphone Warehouse in London (20)
Third-party cellular network providers AT&T Inc., Vodafone Group, and Verizon
Communications Inc are a few of the cellular network carriers that sell Apple products which are also part of their packages (20)
Value-added resellers These are professionals tasked and authorized by Apple to provide market-specific and customized solutions to target customers (20)
Figure 12 Place of Apple There are many major distributors in the world for iPhone products Typically, there are some large and exclusive distributors of networks in the US such as: Verizon Wireless, Sprint, AT&T,
Not only that, but Apple also chooses other distributors around the world such as: Orange inFrance, MTS in Russia, T-Mobile in Europe.
Promotion (20)
“Promotion should communicate the benefits that a customer receives from a product, not just its features” – Apple
-Advertising : The company's advertising is intended to highlight the distinctive features of the products and their unique personality The press release at the time of the new product launch is also a clever way of advertising that Apple uses effectively (20)
Apple's marketing strategy is not solely focused on online channels and advertising Instead, the company employs a multi-channel approach, combining various platforms to achieve optimal results For instance, in Asian markets, iPhone advertisements were prominently featured on television, demonstrating a departure from exclusive reliance on online channels.
-Apple promotes their products through commercials and print ads, focusing on how their products are different from competitors Commercial ads run when a product is first launched and print ads will run throughout the product's life Apple is utilizing several sales channels including its website, company-branded stores, authorized sales partners, and other e- commerce websites in various markets including Amazon and Flipkart (20)
- Apple use Twitter to advertise their launch events and keynote each fall They recently partnered with Twitter to create a “Retweet for updates from @Apple.” which was a brilliant move in itself People want updates directly from Apple so they're going to retweet it…and give Apple more exposure on their event (20)
- There is one aspect of Apple's retail model that stands out the most: Apple doesn't offer discounts Apple has a no-discount pricing strategy with the products it sells in its own Apple retail stores This also holds true for Apple products sold in other retail chains like Wal-Mart,Target, and Best Buy (20)
SWOT analysis of Apple Inc
Strengths
1.1 Unique ability to design and develop proprietary hardware, software, applications, and services:
Apple Inc is able to deliver distinctive, innovative, and user-friendly products and solutions for its consumers thanks to its capacity to design and build its own hardware, software, applications, and services Customers choose to purchase and enjoy using Apple's premium products because they are distinctive, inventive, and simple to use products and services that seamlessly integrate into one Apple ecosystem It produces a competitive edge that no other company can duplicate, to put it another way Many of Apple’s competitors have tried and still try to imitate the success of Apple’s product ecosystem, but fail due to not having strong capabilities in designing, manufacturing, and developing both hardware and software, applications, and services (21)
1.2 Powerful brand supported by strong advertising and marketing capabilities:
Apple’s brand is the world’s most valuable and recognizable brand The Apple brand is valued at US$234.241 billion by Interbrand and US$205.5 billion by Forbes, respectively. The company has been able to achieve such strong brand recognition and reputation through its advertising and marketing capabilities For over 30 years, Apple has been significantly relying on an external advertising agency TBWA/Chiat/Day help for launching its marketing and advertising campaigns Apple has developed the most powerful brand in the world thanks to its skill in producing eye-catching marketing campaigns, exceptional advertising talents, premium-quality products, and capacity for excellent customer service (21)
Figure 14 Retention Rates in The Smartphone industry (21)
1.3 One of the most loyal customer bases in every major product market where the company operates:
Given that it lacks even a loyalty program, Apple has a remarkably dedicated consumer base. Customers laud the products of the company for their creativity, design, usability, dependability, and the prestige they communicate Because of this, even when there are more suitable or affordable alternatives on the market, people keep purchasing and using Apple products Apple has the strongest retention rates in the smartphone market From 2014 to
Apple's exceptional customer loyalty has been a driving force behind its success, as evidenced by research indicating the company's dominance in customer loyalty within the smartphone and laptop markets This unwavering loyalty provides Apple with a significant competitive advantage as it enables them to retain customers effectively, a feat that remains unmatched by its competitors.
Figure 15 Brand Keys’ Customer Loyalty Engagement Index (Apple’s market leader positions 2014-2017) (21) 1.4 Apple has one of the strongest financial positions:
Apple is the first company to reach a market capitalization of $2 trillion (22)
1.5 Apple’s retail footprint extends across the globe and is synonymous with high street retail:
These retail establishments adhere to a specified aesthetic of clean, slick store spaces served by professional, young, and hip sales staff, which makes the retail experience a draw all on its own They are located in high-value, high foot traffic regions (22)
1.6 Apple has a large gross margin since its items are high-end:
High-end materials and stringent supply chain regulations have helped Apple create a market for its goods where it can earn some of the greatest margins (22)
1.7 Apple manufactures five of the world’s top ten selling handsets: Apple held five of the top ten spots in smartphone sales (22)
Weaknesses
2.1 Over the past few years, Apple's innovation has stagnated:
Even though Apple has come to be associated with cutting-edge technology and offering electronic devices that include the best that the market has to offer, this has grown less and less true with time There have been fewer and fewer introductions of products with genuinely unique features (22)
2.2 Apple continues to sell its products at a premium price:
Even if innovation is not a major component of technology releases, Apple continues to price its goods higher than those of its rivals, even when those rivals' devices are more advanced technologically Long-term, Apple will struggle to hold onto its hard-won customers (22) 2.3 Apple is reliant on the high-end market:
Apple's reliance on the high-end market segment necessitates a strong focus on delivering premium products and services This is due to the high expectations of its affluent customer base, who expect to receive exceptional value for their financial investment Consequently, Apple must consistently strive to meet and exceed these expectations to maintain its position in the luxury consumer space.
2.4 Apple has been accused of unfair business practices:
Through updates that Apple periodically executes, it intentionally slowed down devices that were over a certain age and decreased the device’s battery life, making an upgrade seem worthwhile This encouraged consumers to unnecessarily upgrade their devices, leading to higher sales volumes Apple agreed to pay a $500 million fine for deliberately decreasing the performance of handsets to encourage consumers to upgrade to newer models (22)
2.5 Accusations of patent infringement continue to damage the reputation of Apple:
Apple has had several patent lawsuits filed against it since 2015 Apple was found infringing these rights by using patented technology belonging to various companies without the companies’ commercial rights being upheld Apple was ordered to pay $308.5 million for a patent infringement lawsuit (22)
2.6 Apple has experienced a drop in sales in China, one of its core markets:Apple experienced a 60% drop in year-on-year sales in China in 2020 (22)
Opportunities
Launch events and announcements about Apple products are always spread at breakneck speed In addition, the customer retention rate of this brand is also approximately 92% (23)
With this advantage, Apple can continue to dominate the market and increase this share by satisfying existing loyal customers and developing more innovative ideas (23)
Apple's current product lines only help it capture a certain part of the smartphone market The brand should add more products and services to its portfolio to be able to compete with other tech giants (23)
For example, Apple Pay is a pretty effective new addition, competing with Google Pay and other payment options that are already available worldwide (23)
Apple is poised to bolster its capabilities in artificial intelligence (AI), machine learning, and technology through strategic acquisitions By integrating the expertise and resources of acquired startups and companies, Apple aims to seamlessly incorporate these technologies into its products, elevating their functionalities and value This move not only strengthens Apple's competitive edge but also aligns with its commitment to delivering exceptional experiences for its customers.
For example, Apple managed to acquire Regaind Company, which helped Apple add ML to its native smartphone apps (23)
Apple has been dominating the technology sector for years now They provide top quality and cutting-edge technology that offers a breakthrough in customer experience Their customer rentation rate of 92% is phenomenal Apple can always rely on the power of the internet for future opportunities to gain new customers and form new alliances (24)
Apple’s researchers, developers, and product specialists are a team of highly qualified professionals that have years of experience in branding consumer products With the expansion of their team, Apple can continuously build new opportunities (24)
Apple Inc has the opportunity to expand its distribution network Currently, the distribution network that Apple has is very limited and leaves room for minimal growth (24)
Smart wearable technology will soon dominate the world According to Forbes, smart wearable technology device sales will double by 2022 It will become a $27 billion + market with 233 million unit sales Apple has the opportunity to continue to grow beyond just Apple watch and Airpods into other wearable categories (24)
To increase its profit margins and have a strong market position, Apple should utilize artificial intelligence Recently, the company has extended its AI portfolio (24)
In the year 2017, Apple acquired Regaind, a French AI startup and DeskConnect, an AI tool. The former acquisition helps Apple to integrate intelligent search to the photos app on the iPhone, while the latter acquisition automates tasks by helping the consumers to arrange apps and features with a string of commands The company should focus on extending its AI portfolio to have a strong foothold in the future (24)
Apple announced that it’s going to start manufacturing its own chips and semi-conductors going forward, competing with Intel and Broadcom etc The tech giant is already on-boarding engineers for a new South California location Apple’s continually expanding silicone team to make next-gen wireless silicone The company’s chip manufacturing maneuver boosted its total market value, propelling it close to $3 trillion (24)
Apple is dominating the market for smart speakers The tech giant’s HomePod mini has been a massive success According a report by Strategy Analytics, Apple now has a 10.2% market share after selling 4 million smart speakers (24)
Threats
4.1 Increased competition in the market
The smartphone industry is evolving, creating opportunities for new entrants Despite Android dominating the market with a 74.13% share, iOS holds a significant 24.79%, indicating that the market remains competitive The rise of open-source Android development by various brands further contributes to this diversification.
4.2 Corona virus outbreak and new global tensions
Most companies rely on manufacturing and set up their supply chains in China However, the outbreak of the Corona pandemic in early 2020 has caused a loss of up to 20% of Apple's annual revenue (as of April 2020) The company's expected revenue is expected to be from 63 billion to 67 billion USD, but now it is only 57 billion USD (ie 15-20% decrease in revenue) This could be a big threat to Apple if there is no timely solution to fix it in the near future Second, increasing tariffs on imports from China could lead to higher product pricing This hurt margins and forced Apple to raise prices even higher (23)
Apple is facing hundreds of lawsuits mainly related to customer experience, which say that Apple devices are getting slower and slower and CPU speeds are throttled According to recent news, Apple will have to pay $ 18 million to settle a lawsuit about slowing down or turning off FaceTime on older iPhone models (23)
Apple faces a challenge as third-world countries capitalize on its brand reputation by selling counterfeit products at the same price as genuine Apple products These counterfeits undermine Apple's image, as unsuspecting customers may误以为 they are purchasing legitimate Apple products, leading to negative reviews and damaging publicity for the company By exploiting Apple's established brand identity, illegal dealers in these countries are jeopardizing the company's reputation and potentially eroding consumer trust.
Despite its established brand recognition, Apple confronts ongoing threats from rivals Technological advancements empower competitors such as Samsung and Google, escalating the competitive landscape To maintain market dominance, Apple must either innovate with advanced technologies or adjust its pricing strategy to stay competitive in the face of intensifying market pressure.
There has been a significant change in market penetration by other brands in the smartphone market Companies like Samsung, HTC, and Lenovo are using Android software to create new smartphones Currently, Android has captured 72.23% of the market share, while Apple has only 24.55% of the market share globally (24)
US government has imposed a higher tariff on imports from China, increasing the overall cost of the products Consequently, it adversely affects the gross margin on the products and may make the product more expensive for customers (24)
60 class-action lawsuits have been filed against Apple Consumers were upset and baffled when Apple announced that it deliberately throttles CPU performance on iPhone models with older and degraded batteries The tech giant said that it did so to prevent unexpected shutdowns Despite the clarification, consumers felt betrayed because they that Apple does not believe in transparency This led to a number of people filing lawsuits against the company (24)
The first class-action lawsuit was filed on December 21st, 2017 and alleged that Apple’s actions not only negatively affect the resale value of their products but also forces its users to upgrade to newer versions prematurely (24)
Apple has been under constant pressure by government agencies to unlock the iPhone via a backdoor, which means unlocking the encryption of the iPhone and giving access to its data.
In several instances, Apple has denied providing the backdoor mechanism because it can be exploited by the bad guys, which eventually exposes the security of millions of iPhone users.
4.10 Mark Zuckerberg criticized monopoly of iPhone’s app store
Mark Zuckerberg, CEO of Facebook, criticized Apple for its monopolistic practices on the App Store, claiming it stifles innovation and competition Apple's 30% commission for in-app purchases has been a significant point of contention, with critics arguing that it excessively burdens small businesses and app developers Zuckerberg's comments underscore the ongoing debate surrounding Apple's control over the App Store and its impact on the tech industry.
4.11 Apple Motions for Case Dismissal
The CCI (Competition Commission of India) recently alleged that Apple is eyeing for a complete monopoly, dominating with its app development in the country The CCI filed the complaint after going through numerous allegations, stating that Apple is compelling developers to use its proprietary system, wiping out existing competitors (24)
However, Apple responded by stating that the allegations are completely baseless because they have a relatively smaller market share compared to Google, which clearly dominates theIndian tech market Apple has moved to have the case dismissed (24)
Figure 16 SWOT Analysis of Apple
Apple is the second-largest smartphone vendor in the world after Samsung in the first quarter of 2022 Apple is the leading smartphone market revenue by top 5-brands in 2021 Apple actually has a tendency to break barriers in terms of customer segments In recent years,Apple no longer focuses only on a certain age range but instead divides the target age group based on the appropriate use of customers Today, Apple Inc is increasingly attaching importance to and paying attention to environmental issues in addition to satisfying customer needs with modern, unique product lines of good design and quality That's why the company has launched products like the iPhone 13 series with environmentally friendly materials.Based on 4 factors: Small quantity of products; Focus on luxury; Prioritize profit over market share; Create a halo effect for all new products to build excitement, Apple Inc has priced its products through 3 main strategies These are Value-Based Pricing Strategy, Market skimming pricing, and Psychology pricing strategy From the analysis of Apple's SWOT matrix above, we can see that Apple has more opportunities and strengths than threats and weaknesses From this conclusion, we can predict that Apple can continue to maintain its position in the famous technology brands if the company knows how to make the most of the opportunities and advantages it has in the future In short, Apple Inc is one of the most successful technology companies of today As a company, every new business needs to learn.
(1) Tom Warren (2022) Apple now has 1.8 billion active devices The Verge Accessed on January 28 , 2022 th https://www.theverge.com/2022/1/28/22906071/apple-1-8-billion-active- devices-stats
(2) Ho Si Hoang (2022) Apple achieves unprecedented revenue in 2021, continues to lead the global smartphone market in terms of revenue Thegioididong Accessed on February 27 , th
2022 https://www.thegioididong.com/tin-tuc/apple-tiep-tuc-dan-dau-ve-doanh-thu-dien- thoai-toan-cau-1417492
(3) Federica Laricchia (2022) iPhone revenue as share of Apple's total revenue 2009-2022, by quarter Statista Accessed on June 10 , th 2022. https://www.statista.com/statistics/253649/iphone-revenue-as-share-of-apples-total-revenue/
(4) TEAM COUNTERPOINT (2022) Mobile Market Monitor Counterpoint Research Accessed on June 3 , 2022 th https://www.counterpointresearch.com/infographic-q1-2022- smartphones/
(5) HARMEET SINGH WALIA (2022) Global Smartphone Market Declined by 7% YoY Amidst Supply Constraints and Geopolitical Uncertainty in Q1 2022 Counterpoint Research. Accessed on April 29 , 2022 th https://www.counterpointresearch.com/global-smartphone- market-declined-7-yoy-amidst-supply-constraints-geopolitical-uncertainty-q1-2022/
(6) TEAM COUNTERPOINT (2022) Global Smartphone Market Share: By Quarter.
Counterpoint Research Accessed on April 29 th , 2022. https://www.counterpointresearch.com/global-smartphone-share/