Apple's Competitive Analysis: Innovation and Market Challenges

This report provides an analysis of Apple's competitive environment, focusing on its key rivals such as Google and Amazon, and the challenges it faces in the market. The report highlights Apple's innovative products like the Mac, iPod, and iTunes, and their impact on the technology and music industries...Read More

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A tech company such as Apple encounters robust competitive competition from its rivals.
Thus, Apple’s rival possesses significant influence amongst themselves. It is crucial to identify
that Apple faces direct competition with other tech companies that are vendors of hardware and
software appliance such as Google (Saran, 2020). Hence, Apple is forced to adopt price-based
competition by avoiding low-end markets and manufacturing high-end commodities. Due to
Apple products finding a ready market, the company positions itself in the customers ‘minds as
high-end commodities with superior quality, excellent customer service, and special products.
Competitors
Pundits postulate that the success of Apple faces risks from companies such as Amazon.
As of the first quarter of 2018, Apple recorded revenues amounting to $53 billion and was
primarily from the sale of iPhones and other portable devices. However, when compared to
Amazon, but with the exclusion of the unique brand, the signature abilities of Apple no longer
have the leverage they commanded in the past. Moreover, the unique brand has lost its value
proposition, usurped by the accumulated trust via constant convenience. Hence, Apple’s
dominance faces general threats, however, the large shadow cast over the future of the company
is the Amazon (Friedman, 2020) . Apple is most likely to lose out since Amazon already possess a
significant share of Apple’s clients and industry agents tend to probe more regarding what
Amazon is likely to do compared to Apple. The exceptional service by Amazon coupled with
convenience-based technique has surpassed Apple’s commodity-first technique, offering

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Amazon easy access to emerging markets. In one of the studies, it was found that more than 15
million homes in the US already use smart speakers, mostly from Amazon Alexa gadgets.
Innovations by Apple
Apple is classified as one of the most valuable enterprises in the world and this year the
company will be turning 44. However, the company has built its wealth on a profound
foundation of innovations that transformed the lives of people from playing a vital role in the
development of a personal computer paradigm in the 1970s and 1980s to the wave of
smartphones that has been evident over the years. The products developed by Apple have not
only sold well but also led to the creation of emerging markets, industries as well as introducing
lifestyle standards. It is estimated that more than one billion appliances by Apple are in active
mode since 2016 across the globe.
The Mac
In 1984, Apple introduced the first Mac and this made Apple a premier enterprise. In
2015, the successors of Mac sold more than 20 million units and this generated revenue of about
$25.5 billion (Mullaney, 2020). The Mac model was featured as the first successful commercial
project characterized by a mouse and a graphical user interface (Fast Company, 2020). However,
researchers lament that Mac's international market share is approximately 7.8% and this means
that Mac is just like other computers is a subject of change of computing operations to mobile
gadgets.
The iPod and iTunes
iPods and iTunes were a major cause of disruption witnessed in the music industry. The
concept behind iPods and iTunes was to enable users to enjoy more than 1000 songs at their

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disposal where most of them have. As of 2014, it was reported that Apple sold more than 390
million iPods while iTunes sold roughly 350 billion songs within the same timeframe. Apple
launched the option that enables its users' stream music with more than 13 million subscribers.
Breaking up Apple
Ideology for not breaking up a big tech company is that a company such as Apple will
have to be split into many small companies. Breaking up Apple into many small units will
translate to an increase in operating costs where Apple will have to incur extra costs in setting up
new premises and hiring new employees which is an expensive affair (Pros and Cons, 2020).
Thus, Apple’s efficiency in handling its centralized business will be reduced to a greater margin.
Also, Apple's degree of innovation will face challenges due to fear of its subsidiaries leaking
information to third parties. Hence, Apple will be compelled to limit its degree of innovation.
Also, it is imperative to note that various locations of various degrees of efficiency and
innovation. Thus, breaking Apple into many business units in various locations will disadvantage
Apple from benefiting from efficiency and innovation.
In conclusion, Apple one of the major tech companies in the world has brought
innovations that have changed the way of life for most people spanning from Macs to iPod and
now smartphones. However, there are many competitors such as Amazon and Google that the
company competes with. Establishing a break up to reduce the monopoly power will only reduce
its efficiency and degree of innovation.

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References
Fast Company. (2020). Why Apple Is The World’s Most Innovative Company. Fast Company. Retrieved
from https://www.fastcompany.com/40525409/why-apple-is-the-worlds-most-innovative-company.
Friedman, L. (2020). Apple and its competitors: the circle game. Macworld. Retrieved from
https://www.macworld.com/article/2013001/apple-and-its-competitors-the-circle-game.html.
Mullaney, T. (2020). Apple product innovations that changed the world. Retrieved from
https://www.cnbc.com/2016/04/29/apple-product-innovations-that-changed-the-world.html
Pros and Cons. (2020). Pros and Cons of Breaking up the Big Tech Companies - Pros and Cons.
Retrieved from https://www.prosancons.com/structure/pros-and-cons-of-breaking-up-the-big-tech-
companies/
Saran, C. (2020). Apple faces strong competition from Amazon. Retrieved from
https://www.computerweekly.com/news/252446902/Apple-faces-strong-competition-from-Amazon