Innovation and Brand Image of Apple, Inc. Industrial Analysis
The Industry
Apple, Inc. offers many services and products and thus, fiercely competes in several industries, which range from personal computers to entertainment and mobile payment systems. Apple, Inc. is one of the top companies in the computer manufacturing industry and competes with Microsoft, DELL, Sony, and Hewlett-Packard. According to the market research of IBISWorld (2017), US computer industry is in declining stage as both domestic and foreign markets are reaching saturation. This industry operates in a highly globalized market and thus, Apple has to differentiate its offering in order to make it stand out among the competitors’ products.
Smartphone production industry is another market dominated by Apple, which outperformed the other key players Samsung and Huawei. The company has managed to capture more than 103% of all profits in the smartphone industry in the third quarter of 2016. (Price, 2016) It was possible because certain companies, such as HTC and LG failed to make profits and actually lost money. Smartphone market is a growing and highly competitive industry, which means that Apple has to support continuous innovation in order to stay on top. According to the information of the International Data Corporation (2016), China and India are showing a mature growth pattern, which means that Apple can expect a reasonable slowdown in smartphone shipments. Nevertheless, Apple, Inc. has the highest profit margins in the industry due to the outstanding brand management and premium pricing strategy.
Apple, Inc. is also a major player in the entertainment media and applications industry. Apple and Google are the two key companies in this space with the Apple iOS running on its iPhones and iPods, and Google Android running on most competitor phones and tablets. It is a growing and consumer-centric market. (Cusumano, 2010) It is a significant source of revenue for Apple, Inc. and thus, the company has to develop a comprehensive strategy for this industry in line with other segments.
Dominant Economic Factors
As it was previously discussed, Apple, Inc. operates in several industries. Nevertheless, these industries are closely related and are affected by similar economic factors. The factor of technological innovation is the key element that affects the industry. Technologies are advancing each year making the competition within the industry fiercer. With the technology being core of these industries, upgrading facilities and building strong capabilities is the major factor for being successful in this market.
Number of the companies within the industry and the scope of competitive rivalry are also significant for Apple. The competition within the analyzed industries is extraordinarily cutthroat. The intensity of rivalry will be discussed in more details in the subsequent section. Consumer preferences affect the companies in the market because these industries are extremely customer-oriented. (Cleff, Fischer, Sepulveda, & Walter, 2017) Consumers have a lot of options when purchasing product, which pushes margins and profits down and forces Apple to follow differentiation strategy. The industry related to the informational technology is constantly …
