Market Operations of Apple Inc. | Report

Running head: MANAGEMENT
Market Operations of Apple Inc.
Name of the student
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Table of Contents
Introduction:....................................................................................................................................2
Description of Apple:......................................................................................................................2
Products or services:....................................................................................................................2
Annual sales:................................................................................................................................3
Market share:...............................................................................................................................5
Description of product market in which Apple operates:............................................................5
Region of operation of Apple:.....................................................................................................6
Competitors of Apple:.....................................................................................................................6
Overview of other businesses of Apple:..........................................................................................6
Identification and explanation of at least 2 concepts that Apple uses to its advantage:..............7
Product differentiation:................................................................................................................7
Advertising:.................................................................................................................................7
Evaluation of how Apple might respond better to market challenges:............................................8
Explanation of any significant recent events or changes in the market affected Apple:.................8
Conclusion:......................................................................................................................................9
Reference:......................................................................................................................................10

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Introduction:
Multinational companies come heavily under the macroeconomic factors. Pacini et al.
(2017) mention that macroeconomic factors like changes in the laws and customer preferences
have strong impacts on the operations of the MNCs to the extent of their profitability and market
sustainability. The aim of paper is to explore the market conditions in which a chosen company
operates and how it responds to these conditions. The company chosen for the analysis is Apple
Inc., one the leading MNCs operating in the global information and communication technology
market. The country which would be considered for market analysis would be primarily the
United States of America, the home country of the company. However, the report may mention
the host markets of Apple wherever deemed necessary.
Description of Apple:
The following sections would delve into different aspects of Apple Inc.:
Products or services:
Apple is one of the world’s most valuable brands with a value of $ 205.5 billion as in
2019 (Badenhausen, 2019). The product line of Apple can be divided into Mac, iPad, iPhone,
video streaming, music services and television services. The most notable products of Apple are
iPhone and iPad. (Apple.com, 2020). The company markets its products using both brick and
mortar outlets and ecommerce platforms. The ecommerce platforms include both the portal
owned by the company as well as third party ecommerce portals like Amazon. The company also
provides after sales services to its customers (Idmsa.apple.com, 2020).

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Annual sales:
The annual sales of Apple is one of the highest in the global ICT market. The company
earned a net sales of $mn 213883 in products and $mn 46291 in services which amounted to a
total revenue of $mn 260174 in 2019. The financial statements of Apple Inc. show that the sales
of the products and services of the company have fallen compared to $mn 265595 in 2018. This
fall in revenue could be attributed to the fall in the shipment of Apple products compared to its
competitors like Samsung (Eadicicco, 2019).

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Figure 1. Excerpt of statement of operations of Apple Inc. till 2019
(Source: Apple.com. 2020)
Figure 2. Table showing revenue bifurcation of revenue of Apple markertwise

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(Source: Apple.com. 2020)
Market share:
Apple holds around 20% of the market share(Timesofindia.indiatimes.com, 2019). The
company faces competition from players like YouTube. As in 2018, Apple boasted around 50
million consumers (McIntyre, 2018).
Description of product market in which Apple operates:
Apple Inc. is one of the leading players in the global ICT market. The company holds the
top position in terms of smart phone. Its main competitors are Samsung, LG and Google. The
company holds a weaker market share in the music streaming platform compared to its position
in the smart phone market (Ibisworld.com, 2020). As per Yang, Ng and Ni (2017), oligopoly
refers to a market competition in which there are a small number of large players. The consumers
in these markets have to pay high prices for the products owing to presence of these small
numbers of players. The company owing to its vast product line operates in several segments of
the ICT market. For example, as far as the smart phone market is concerned, there are a small
number of leading players like Apple and Samsung (Eadicicco, 2019). Similarly, in the market of
video streaming, the main players are Netflix, Amazon Prime and Hulu (McIntyre, 2018). The
main players in the electronic hardware market are Apple, Samsung and Lenovo. Thus, in the
light of this analysis one can establish that Apple operates in a oligopolistic market. This is
because the market is dominated by a small numbers of players like Samsung. The consumers at
large prefer buying products from these leading firms and ready to pay high prices for these
products, which once again establish the oligopolistic nature of the ICT market.

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Region of operation of Apple:
Apple is one the leading ICT multinational company with operations in more than a
hundred nations other than its home country, the US. The regions in which the company operates
is divided into Americas, Europe, Greater China, Japan and the Asia Pacific region which
includes markets like Australia (Apple.com, 2020).
Competitors of Apple:
Apple Inc. faces stiff competition in all its product segments. The competitors of the firm
can be divided into two segments namely, strong competitors and weak competitors. The strong
competitors of Apple in the smart phone market are Samsung Electronics Limited, Huawei,
Xiomi and Oppo (Timesofindia.indiatimes.com, 2019). The strong competitors of Apple in the
hardware segments are Del, HP and Lenovo. The company faces competition from companies
like Amazon and Hulu in the video streaming segments. The weak competitors of Apple Inc. are
smaller firms marketing similar products as it like smart phones at lower prices. However, these
weak competitors are not able to provide superior quality products to the level of Apple.
Overview of other businesses of Apple:
Apple Inc. in order to expand its customer base and revenue generation collaborates with
firms from other markets to develop new products. For example, the company collaborated with
Nike, the global sports company to develop Apple Nike smart watch (Nike.com, 2020). This
ability to expand its business operations across diverse industries enables the company to retain
its competitive position in the global ICT market.

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Identification and explanation of at least 2 concepts that Apple uses to its advantage:
The following are the two economic concepts which Apple Inc. uses to its advantage to
retain its market position:
Product differentiation:
Apple Inc. adopts the strategy of product differentiation in order maintain its global
position. The product differentiation strategy of Apple enables it to differentiate its products
from its competitors. The company in order to differentiate its products from the products of its
competitors like Samsung, Apple has developed its own OS which is only compatible with its
products like smart watch. The consumers are not able to share information from Apple products
like iPhone with similar products of other companies (Hashim, Ying & Ahmed, 2019). This
product differentiation strategy of Apple as a result limits the consumers from using Apple
products with products of other companies like Samsung. This limitation reduces customer value
creation and often encourages customers shift to products of other companies like Samsung and
Oppo, which are based on Android OS and enable smoother information exchanges (Ascarza et
al., 2018). This factor has led to lower retention of customers which is evident from the lowering
revenue generation of the company.
Advertising:
Apple advertises its products aggressively in the global market in order to maintain its
position as that of a high-end ICT product marketer. The company advertises its products on
traditional advertisement platforms like magazines and television. The company also advertises
its products on digital platforms like its own official website and third party websites like
YouTube.

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Evaluation of how Apple might respond better to market challenges:
Apple Inc. comes under the impact of several macroeconomic changes and might respond
to these changes to strengthen its competitive position in the global ICT market. For example,
the iPHone platforms owned by the company comes under increasing threat of data hacking. The
smart phones manufactured by Apple are technologically advanced and are often used by
hacking to break into the OS of other smart phones and laptops to steal data (Su, 2019). These
illicit uses of Apple products are ultimately hampering the goodwill of the company and leading
it to lose customers. The company owing to the data hacking is facing legal risks. Apple should
respond to these two challenges namely, technological challenge and legal challenge by
strengthening its OS to make it impenetrable to online data hacking attempts.
The market demands for low priced smart phones with advanced features are expanding.
The products of Apple are though technologically extremely advanced, are extremely expensive
and beyond the reach of the middle and lower class customers, who form a bulk of the smart
phone customer base. The competitors of Apple like Samsung are able to market more affordable
smart phones which are technologically advanced (Eadicicco, 2019). Thus, these competitors are
able to poach customers from Apple which is evident from its fall in revenue generation
(Apple.com, 2020). The company should market a range of products which would be low price
to take advantage of the increase in market demand for low priced smart phone sets.
Explanation of any significant recent events or changes in the market affected Apple:
Apple has come heavily under the challenges like supply chain challenges which would
impact the business of the firm in the long run. One such challenge which the company is facing
is command of its toughest competitor, Samsung over its very product line. As per a contract

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signed between the two tech giants, Samsung would be the sole supplier of OLED panels for
iPhone in 2020 (Businessinsider.in, 2019). This clearly means that Samsung would have direct
control on the product strategy of Apple and would be in a position to regulate its profit by
lowering production of OLED screen for the latter. Considering the second significant change in
the market which is demand for low priced high-end smart phones, it is clear that Samsung is a
position to impact the very market position of Apple (Eadicicco, 2019).
Conclusion:
One can conclude that Apple is a market leader in the global ICT market. One cannot
deny the unmatched brand value it owns by marketing iconic products like iPhone. However, it
comes to the forefront that Apple is not adaptable to the market conditions in contrast to its
strong competitors like Samsung. The company should adapt to the growing demands of
affordable yet high end smart phones and market low priced versions of its products. The
company should acquire facilities to manufacture its own OLED to end its dependence on
Samsung. Finally, the company should enable exchange of data from its OS with other OS like
Android to become more customer friendly, It should also strengthen data protection on its OS to
minimize hacking.

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Reference:
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(2018). In pursuit of enhanced customer retention management: Review, key issues, and
future directions. Customer Needs and Solutions, 5(1-2), 65-81.
Badenhausen, K. (2019). Forbes.com. Retrieved 17 March 2020, from
https://www.forbes.com/sites/kurtbadenhausen/2019/05/22/the-worlds-most-valuable-
brands-2019-apple-on-top-at-206-billion/#2a01c4fc37c2
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https://www.businessinsider.in/tech/mobile/news/samsung-display-to-supply-oled-
panels-for-2020-apple-iphones/articleshow/72271455.cms
Eadicicco, L. (2019). Businessinsider.in. Retrieved 17 March 2020, from
https://www.businessinsider.in/tech/apple-just-got-bumped-down-to-4th-place-in-a-list-
of-the-worlds-top-smartphone-makers-heres-how-it-stacks-up-against-rivals-like-
samsung-huawei-and-lg/articleshow/70577820.cms
Hashim, S., Ying, E. L. Y., & Ahmed, S. (2019). Exploring the Strategic Role of Brand Equity
Towards Competitive Advantage in the Smartphone Industry. Asia-Pacific Social Science
Review, 19(3).
Ibisworld.com. (2020). Retrieved 17 March 2020, from https://www.ibisworld.com/united-
states/market-research-reports/the-retail-market-for-smartphones-industry/

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Idmsa.apple.com. (2020). Retrieved 17 March 2020, from
https://idmsa.apple.com/IDMSWebAuth/signin?
appIdKey=1ea5417fc564f453ff00699cf6d7f2b7c1dc865f65b9f6566cfc7f3ad9b595c5&pa
th=/asb2b/init.do%3Fsegment%3DDFL-SEG&language=US-EN&segment=DFL-SEG
McIntyre, H. (2018). Forbes.com. Retrieved 17 March 2020, from
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services-by-number-of-users/#3dcef33e5178
Nike.com. (2020). Retrieved 17 March 2020, from https://www.nike.com/apple-watch
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Su, J. (2019). Forbes.com. Retrieved 17 March 2020, from
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fear-over-massive-iphone-security-breach-in-shockingly-rare-rebuttal/#2bd43d2c8931
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Yang, L., Ng, C. T., & Ni, Y. (2017). Flexible capacity strategy in an asymmetric oligopoly
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