Apple Inc. Future Challenges

This assignment examines the future prospects of Apple Inc. within various product segments such as smartphones, laptops, tablets, and smartwatches. It discusses challenges faced by Apple, including conflicts with Qualcomm over royalty rates, competition from other brands, and the evolving market landscape. The report also explores potential opportunities for Apple, such as the impact of a successful Broadcom-Qualcomm deal on pricing, and the rising popularity of iPads as laptop replacements.

Running head: FUTURE OF APPLE INC.
Future of Apple Inc.
Name of the Student
Name of the University
Author Note

1FUTURE OF APPLE INC.
Executive Summary
Apple Inc. has been at the peak of innovative ideas, which give high customer value. This
report includes a case study on Apple Inc. and the challenges they will be facing in the future in
the smartphone, laptop, tablet and smart watch business.

2FUTURE OF APPLE INC.
Table of Contents
Introduction..........................................................................................................................3
Discussion............................................................................................................................3
Conclusion...........................................................................................................................4
Reference List:.....................................................................................................................5

3FUTURE OF APPLE INC.
Introduction
Apple Inc. is known for its huge product lines, which ranges from laptops to mobiles to
music stores. This report elaborates on the future of Apple Inc. in the market of smartphones,
smart watches, tablets and laptop business.
Discussion
Apple Inc. is famous for its revolutionary and innovative smartphones. These
smartphones provide high customer values as Apple boasts on the high quality of components
they use for their smartphones (Yi and Gong 2013). Apple has been focusing on manufacturing
the vital components of its smartphones like the phone’s screen because they want to rely less
and less on third party manufacturers for their phones. There has been an ongoing conflict
between Apple Inc. and Qualcomm over the high royalty rates for the chips and modems
provided by Qualcomm. Apple has implicated that they have to price their products at a high
price due to the unacceptable royalty rates. The royalty system has created quite a problem for
Apple Inc. as Qualcomm gets a part of the revenue generated for the innovations in IPhones.
Apple is opting for other suppliers like Intel for their modems. Qualcomm manufactures far
superior modems than Intel as seen in the two IPhone 7 versions one with Intel modem and
another with Qualcomm modem (Forbes.com 2017). Apple will create customer value loss if
they keep on using Intel modems in their phones. Broadcom on the other hand, has bid buy $103
billion to buy its rival chipmaker Qualcomm (Salinas 2017). This could mean that if the deal
happens, Apple will be able price its products at a cheaper rate as Broadcom is friendlier to
Apple Inc. Laptop Mag has put Apple at the top of its list in their surveys since 2010. In this
year, Apple dropped down to the fifth position. This is because of the new MacBook Pro’s touch
bar. Apple has been marketing their IPad as a replacement to MacBook (Murphy 2017). The

4FUTURE OF APPLE INC.
value of IPad might rise in the near future as the users opt for more portability. The smart watch
product lines of Apple will also be facing an up rise in sales with the new lines of watches with
glucose monitoring smart bands.
Figure 1: Quarterly IPad revenue of Apple
(Source: Murphy 2017)
Conclusion
Thus, it can be concluded that Apple Inc.’s future depends on the Broadcom-Qualcomm
deal succeeding, as they will be able to provide their IPhones at a cheaper rate and the IPad with
enough marketing from Apple might replace the MacBook.

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Reference List:
Forbes.com., 2017. Forbes Welcome. [online] Available at:
https://www.forbes.com/sites/aarontilley/2016/10/20/qualcomm-intel-modem-apple-iphone-7/
#7980ec622352 [Accessed 24 Nov. 2017].
Murphy, M., 2017. Apple really wants you to replace your laptop with an iPad. [online] Quartz.
Available at: https://qz.com/932089/apple-aapl-really-wants-you-to-replace-your-laptop-with-an-
ipad-pro-new-models-likely-released-in-2017/ [Accessed 24 Nov. 2017].
Salinas, S., 2017. A Broadcom deal could help fix Qualcomm's problems with Apple. [online]
CNBC. Available at: https://www.cnbc.com/2017/11/06/broadcom-qualcomm-deal-could-ease-
tensions-with-apple.html [Accessed 24 Nov. 2017].
Yi, Y. and Gong, T., 2013. Customer value co-creation behavior: Scale development and
validation. Journal of Business Research, 66(9), pp.1279-1284.