Free «Apple Inc. SWOT Analysis» Essay Sample

Apple Company engages in development, design and marketing of computer PCs, network solutions, servers, communication devices, software music players and related accessories. Apples portfolio of offerings entails iPod lines of portable digital music and video players, Mac Computing systems, iPod handsets and portable multimedia including computer devices. Its software applications include iLife, iWork, Mac and internet applications such as Quick time and Safari among others (Apple Inc., 2010). Apple's major operations are mainly done in the U.S. with the main headquarter at Cupertino, California. The company employs 34,300 workers and recorded a revenue of 42,905 million U.S. dollars during the financial year ended 2009 (Peers, 2011). This depicted increased revenue of 14.4 compared to the revenue received in the year 2008. According to the company's records, the growth of revenue was mainly due to increased iPhone handsets sales, digital content and iTunes Store applications. In the fiscal year ended 2009, the company made $11,740 million which was a 41% increase over 2008. The net profit then was a 34.6% over 2008. The company has since then adjusted its financial statements to reflect retrospective application of accounting principles (Peers, 2011).

Company Threats

IT companies like Apple are receiving threats from the very high competition in the technology market. Big and successful companies draw competition from all fields but the Apple Company has formulated strategies of shielding this mode of threat. It works hard on research and thus develops marketing strategies for retaining a competitive place. They enhance and update the popularity of iPod and Apple Mac since they are subject to demand. Apple Inc. Also receives threat from high product substitution effect in its innovation techniques (Sherr, 2011). This stems from the fast moving consumer market that ceases not to demand more from the company. This can be compared to the demands of iPod and MP3s in the current market that was not so in the yester years. Previously there was demand for CDs, DAT and Vinyl. The nest technology would automatically be different. This posses a challenge since the market demands an improved technology. As a result, there will be a scenario where wireless technology will in future replace physical music players.  


IPod has given access to a new series of segments than the other parts of the company's brands. The sale of the company's notebook products has also increased and thus presents a huge contribution to the company's income. Apple Company is a healthy and one of the most established IT companies in the world. It has a set of loyal customers who advocate for new brands (Apple Inc, 2011). Since brand is important for the company's establishment, it makes sure that all information from the customers is acted upon. The loyalty within the company means that Apple inc. does not only employ new recruit new customers, but it also retains them. The customers would frequently come back for more product and services (Eileen & MacVeigh, 2010).


It is reported in the SWOT analysis that the company's product iPod Nano has a faulty screen. It reported that it will replace all faulty items and commented that a batch of its products has screens that break under slight impact. This compares to the earlier problem with the early iPod which had faulty batteries. In the latter case, the company offered to replace all the batteries. Secondly, Apple is receiving pressure from Music Corporation to increase the price of music download files. This is because companies are making more money from the iTunes sold and downloaded by customers that what the music industry is receiving from the sales of the original CDs (Eileen & MacVeigh, 2010). Apple has sold more than 22 million iPod digital players and millions of songs through iTunes music stores. The company is at a hard place because it has pressure from the music stores and the consumers. If it makes the step, the action will be taken as a commercial weakness. Lastly, in the early 2005, the company reported that it would end up its long standing relationship with IBM for its chip supplies (Apple Inc., 2010). This move as depicted by industry specialists will confuse customers since Apple intended to switch to Intel.


Apple Company has a good opportunity to develop iTunes, music and video player technologies into the format usable by telecommunication handsets. For example, Rokr phone device developed by Motorola Corporation contains speakers with advance camera system. This is the same product that can be developed by Apple Inc. because it compares to the iTunes music stores which was developed in the phones to help users manage tracks that are stored in the handsets. Downloads are available in the handsets making it easy for users to download data through USB cables or through the internet (Sherr, 2011). The software in the hand sets is also able to stop and pause music when one is receiving or making a call. New technologies and alliances will therefore offer Apple Inc. opportunities to invent new technologies. Secondly the alliance would give customers the opportunity to download radio shows from the internet and play them later. Podcasts can be stored after download for future listening when played back through iPods or MP3 devices. Listeners only need to subscribe to podcasts and thus download and save information needed.

Steve Jobs

Board of Directors are worried about Steve Jobs leave because before the announcement of his leave, Apples shares have surged and crushed over the period due to rumours of his about his ill health. The company is worried because while Steve's health is an issue for investors, the top decisions and ideas presented at the managerial level has been the CEO's (Light,  2011). Without Steve, everything is going to be hard since the co-founder will no longer be contacted for decisions affecting the company. Investors on the other hand fear that without Jobs, Apple Company will not be able to sustain the desired growth of the previous decade. This has already seen the company branching out from Mac computers to iPhone and iPods.

An extended CEOs absence will cause a deterioration of investor. Jobs should disclose his health and the company's plan to shareholders because it is important for them to know the succession plan of a company. This enables them to assess whether the company would still have the energy to prosper or whether the company might be affected adversely by the vacancy in leadership. An extended CEOs absence would only shake the employee's confidence in the new acting CEO (Apple Inc, 2011). It would take time for the two groups to get to know and understand one another. The firm will be able to excel when the CEO is still ill because some decisions can still be shared by Job in his health be. The new CEO can still contact Job for advice on how to manage matters that are out of hand.


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