Apple Inc. Case Study

Abstract

Apple Inc. is one of the premier technological companies operating in both the U.S. and international markets. Focusing its attention on personal computers, digital media devices, mobile communication and electronic tablets, the company succeeds by offering innovative products. Apple exploits a loyal customer base that seems to grow with each new product released to the public. The company, however, does not operate without competition. This essay takes a close look at Apple's primary competitors and the strengths and weaknesses of the company's core offerings.

Apple's overall competitive strategy focuses around the company's commitment to bring the best personal computer, portable music devices, and mobile communications devices to professionals, educators, students and government agencies. The company sets to accomplish this through innovative hardware and software offerings, services, peripherals, networking solutions and third-party content and applications. Apple products are sold worldwide through retailers, online sales and third-party cellular carriers. (SEC Form 10-K, 2012)

The company prides itself on the differentiation of it products. This business strategy has helped to distinguish Apple as an innovative leader in the world of electronics. Apple achieves differentiation through extensive and thorough research and development, continuing to expand their platform for the "discovery and delivery of third-party digital content and applications," (SEC Form 10-K, 2012). The company delivers new technology through its digital media stores, offering customers immediate access to immerging technologies. This is a change in Apple's earlier strategies, which were to maintain internal control over all hardware and software used on Apple product. (Thompson, et al., 2010)

Although much of Apple's revenue comes from non-computer products, the company still sees personal computers as the core of its business. Apple's product line includes several desktop offerings and a handful of notebooks, each model geared towards specific users. The Mac Pro was designed for business users and professionals and the iMac for consumers and educational use: the Mac mini specifically for consumers. Apple's three notebook offerings, the MacBook Pro, MacBook and MacBook Air were designed with similar user groups in mind. (Thompson, et al., 2010)

Apple experiences major competition in the computer industry primarily from Hewlett-Packard (HP), Dell Inc. and Acer. HP, Dell and Acer offer generous computing packages for a fraction of the price asked by Apple for similar devices. Aside from price, the signature Apple operating system acts a deterrent for many consumers in the market for personal computers. The Macintosh operating system is a significantly different design than that of Windows, the system used on the majority of personal computers offered in the market. For consumers with no experience operating a Mac computer, this can be intimidating and not worth the hassle and additional cost of owning a Mac. (Thompson, et al., 2010)

Apple's other products, their digital media players and communication devices have been instrumental in helping Apple succeed in the sales of personal computers. The iPod, Apple's digital media player earned the company 73% of the digital music player market share in 2010. The iPod was innovative and radically different than current market offerings in its inception. The iPod's biggest competitor is the Microsoft Zune, offering the same ability to play music, and videos as well as stream content when connect to a wireless internet connection. The Zune, as well as other competitors to the iPod, offered the same characteristics for a much lower price. (Thompson, et al., 2010)

Perhaps the most successful of Apple's product line is the iPhone. Apple sold more than 270,000 iPhones during the first 30 hours of its release and was named Time magazine's Invention of the Year in 2007. The iPhone changed the mobile communication market as it offered something different than the basic-feature phones already on the market. Apple's primary smartphone competitor early on was the Blackberry, which also allowed consumers to check e-mail, surf the Internet and maintain appointments. What the iPhone offered on top of those primary features was the ability to listen to music, and download and use "clever and helpful Web apps," (Thompson, et al., 2010).

A competitive strength assessment reveals the strengths and weaknesses of Apple's core competencies and how they relate to competitors in the same markets. In the personal computer industry, despite high costs, Apple products remain strong. With an ever-evolving range of applications and streamlined processes made possible with programs like iPhoto and iMovie, iTunes and iWeb, Apple customers are provided with the best technology available on the market. Apple is also known for strong actions based on customer feedback. Other than high pricing, Apple shows weakness in compatibility. Most Apple