STRATEGIC EVALUATION COMPETITIVE POSITIONING MARKET ASSESSMENT CATEGORY OPPORTUNITIES BRAND STRATEGY OPERATIONS RECOMMENDATIONS
BRAND STRATEGY
Building the Apple name
A
key to the success of Apple Inc has been its unified approach to the consumer experience creating an ecosystem around its core products consisting of:
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BRAND STRATEGY
Apple Inc’s hardware
A
pple Inc designs its hardware in a polished minimalist look. While usually not a record setter in terms of hardware performance, the company’s devices are slim, ergonomic, user-friendly and tend to command a price premium over most competing products.
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BRAND STRATEGY
Apple Inc’s software
The iOS mobile operating system is centered around media consumption and third party applications. The platform was a significant departure from smartphone platforms of 2007 when it was launched, as it focused on user friendliness instead of native productivity applications and multitasking.
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STRATEGIC EVALUATION COMPETITIVE POSITIONING MARKET ASSESSMENT CATEGORY OPPORTUNITIES BRAND STRATEGY OPERATIONS RECOMMENDATIONS
OPERATIONS
Productions and sourcing strategies
All manufacturing operations outsourced to third parties
Apple outsources the manufacturing of all its products. The majority of the manufacturing is conducted by a small circle of large suppliers including: Samsung Corp, Hon Hai Precision Industry Co Ltd and Quanta Computer Inc.
Amid litigation over patent infringement with Samsung Corp and the bad press Hon Hai Precision Industry Co Ltd received over a string of worker suicides, it is increasingly likely that Apple Inc will broaden its supplier base with possible candidates including LG Corp and Taiwan Semiconductor Manufacturing Company.
Final assembly conducted by Apple and selected outsourced partners
Apple owns a manufacturing facility in Cork, Ireland, which is used primarily for the final assembly of Apple products such as iPods, iPhones, etc.
Other outsourced assembly operations are located in the US, China, the Czech Republic and South Korea. Warehousing, distribution and other operations
Apple owns one warehousing facility in California, USA, and outsources warehousing operations in the rest of the world.
Company headquarters are located in Cupertino, California, and there is also a data centre in Newark, California, with a second data centre expected to be opened in North Carolina over the next few years.
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STRATEGIC EVALUATION COMPETITIVE POSITIONING MARKET ASSESSMENT CATEGORY OPPORTUNITIES BRAND STRATEGY OPERATIONS RECOMMENDATIONS
RECOMMENDATIONS
Hardware diversification
Low-cost smartphones |
Fitness-orientated line of iPods |
Ultratablets |
he iPhone has performed well since the device was initially launched in 2007, but with the emergence of a wide variety of Android phones, Apple Inc risks missing out on growth in smartphone demand among low- income consumers in developed markets and mainstream consumers in developing countries. Affordability will be key for consumers especially in markets where phones are primarily bought outside of service contracts. The absence of low-cost mobile phones is the main threat facing the company over the foreseeable future as smartphone growth is shifting to developing markets.
ith sales of portable media players expected to continue falling, Apple Inc along with its major competitors shifted their focus to smartphones and tablets. This leaves an opportunity to take advantage of the growing health and wellness trend with a line of media players that incorporate GPS and biometric sensors to track and aid workouts. Apple Inc remains the leader in portable media players and has a significant following among young, urban consumers making it more likely than not that a line of Apple-branded, fitness- orientated portable media players would be successful.
he iPad has been successful in 2010 and managed to maintain an edge on the competition in 2011, but the market is fast developing and the emergence of low-voltage touch-orientated clamshell computers will likely present a significant challenge forcing tablet manufacturers to concentrate more on facilitating content creation and productivity in tablets, rather than just content consumption. This will likely require a hybrid laptop/tablet device that incorporates the functionality of a laptop and the battery performance portability of a tablet.
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RECOMMENDATIONS
Filling the gaps
Aside from diversifying its hardware line-up, Apple Inc needs to address two major shortfalls in its current strategy to stay competitive in the long run. While Apple Inc has been successful in the consumer market, it risks becoming complacent in the current business model and leave room for competing platforms by leaving two key areas unaddressed:
iOS: Focus on security
While the company’s success in the consumer market has driven revenues since the launch of the iPhone, its sub- standard security credentials have largely kept it out of securing major enterprise and government contracts.
BlackBerry-branded products are certified for transmission of sensitive data by regulatory agencies of most major governments and NGOs like NATO. Apple Inc largely ceded the enterprise and government market to Research in Motion Ltd, as it focused on the consumer market, but rapid comodisation of smartphones will continue squeezing hardware margins making enterprise-orientated products and services increasingly attractive.
Move into in-home
On the consumer side of the market, the iOS ecosystem is missing a key component: in-home content delivery. The company has released Apple TV, but without support for 1080p video and a limited content library the set-top box is far behind competitors like Boxee and Roku.
The lack of a compelling in-home content delivery system leaves room for Google Inc’s Android 4.0 to enter the market and create a unified experience with a single platform running on smartphones, set-top boxes, internet-enabled TVs and tablets.
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REPORT DEFINITIONS
Definitions
istoric value data are given in US$ year-on-year exchange rates, unless otherwise stated.
orecast value data are given in real (constant), US$ terms using fixed 2009 exchange rates, unless otherwise stated. istoric volume data are given in '000 units, unless otherwise stated.
rofile coverage:
Portable Computers
Laptops: Personal computers (PCs) meant for mobile use and must incorporate an external power source, usually a rechargeable battery pack.
Other Portable Computers: includes mobile internet-enabled devices that do not fit the definitions for laptops and netbooks capable of multimedia playback and running software applications.
Portable Consumer Electronics
Portable Media Players: portable players that support digital audio, video playback, text and images. Portable Media Players includes: E-Book, Portable MP3 Players, Portable Multimedia Players, Other Portable Media Players.
Smartphones: a device capable of voice communication over a cellular network that fulfills all three of the below criteria:
Has an identifiable operating system (e.g., Android, BlackBerry OS, iOS, Symbian, Windows).
Allows installation of software applications.
Has a screen size of <5”.
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