An Investment Analysis on Apple Incorporated
Apple Inc. , formerly known as Apple Computer, Inc. , is an American multinational corporation that designs and manufactures software and hardware products in consumer electronics, such as “personal computers, portable media players, computer software, and computer hardware accessories” (Wikipedia 2007). It has its headquarters in Cupertino, California, and it has been known for very renowned products in computer electronics like the iPhone, the iPod, the Apple TV, the iLife, the iTunes Store, and the Mac OS X ‘Leopard’. It started out in April 1, 1976 as Apple Computer, Inc., when it introduced their very first product—the Apple I (Wikipedia 2007).
A year later, they introduced the Apple II microcomputer, and then in 1983, they introduced the ‘Lisa’, which is “the first commercial personal computer to employ a graphical user interface” (Wikipedia 2007). A year after that, the Macintosh was introduced, which has “a new user-friendly graphical user interface” (Wikipedia 2007). Its success in the Macintosh and Lisa led to other innovation and development, especially when it came to graphical interfaces and the operating system.
After the era of the Commodore Amiga and the Atari ST in the mid-‘80s, the ‘90s became a legend and the ‘golden age’ for the multinational company, as it introduced the PowerBook, the Apple Quick Take digital camera, the Palm Pilot, the iPhone, and later on, the iPod that has been the company’s “most successful product line” (Wikipedia 2007). The company has magnificently expanded to 165 retail stores in September 2006, wherein 147 of those are located in U. S. (United States Securities Exchange and Commission 8).
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This was after they attempted reinvention in the mid-‘90s, which paved the way for the Palm Pilot and the iPod. Products and Markets The current products these past few years include the iDVD, the DVD Studio Pro, and the Mac OS X of 2001—the year when the company opened its first retail store in America (Wikipedia 2007). It was also that year when Apple introduced the portable iPod, which is a digital audio player, as well as the iTunes Store, which offers music downloads for a cost of 99 cents per song, and also the PowerBook and the iBook (Wikipedia 2007).
By 2002, iPhoto and iLife were released, as well as the iMac G3, and the educational eMac (Wikipedia 2007). By 2003, the Power Mac G5 was released, and the following year, the Apple Cinema Displays and the low-cost Mac mini (Wikipedia 2007). By 2005, the company announced that it would begin manufacturing products with Intel, and this led to the 2006 MacBook Pro, which is “Apple’s first laptop with an Intel microprocessor” (Wikipedia 2007).
As of 2006, Apple Inc. ’s products can be divided into the following categories: (1) hardware products like the Macintosh computers; (2) music products and services like the iPod; (3) the peripheral products like the Apple Cinema HD Display; (4) the software products and computer technologies like the Mac OS X; (5) the Internet software and services like the Safari; (6) wireless connectivity and networking like the AirPort Extreme; (7) other connectivity and networking solutions like the FireWire; and, lastly, (8) product support and services like the AppleCare (United States Securities Exchange and Commission 9-16).
Its market is centered primarily on the sectors of education, creative, consumer, and business. Its distribution around the world centers on the wholesalers, the resellers, the national and regional retailers, as well as the cataloguers (USSEC 17). However, most of its customers can be found primarily in U. S. A. , wherein about 10% of the 2006 net sales were in the education sector of the U. S. (USSEC 17). For this, competition is drastically aggressive.
SWOT Analysis The company has specific strengths. 1. Its revenue reached $19. 3 billion as of 2006, while operating income reaches an amount of $2.12 billion (Wikipedia 2007). 2. It has been known for very renowned products in computer electronics like the iPhone, the iPod, the Apple TV, the iLife, and the iTunes Store. 3. There are strategic advances in product introduction plans, strategic inventories, coordinated product introduction, and manufacturing schedules. 4. Its services of an Internet retail store stretch the range of consumers globally. 5. Its marketing strategy focuses on important segments and industries like education and business, so that its customer base is distinctively devoted.
The company has been attached to very intelligent leaders like CEO and co-founder Steve Jobs, as well as designers and scholars like Jonathan Ive. The company has specific weaknesses. 1. Its strength lies primarily on the consumers of America. 2. Operating and financial condition are too dependent on the company’s ability to develop and innovate products and services. 3. The operational demands seek extremely creative and innovative means of gaining advantages, especially in the digital content and functional design.
Some of its components are uncommon to the rest of its personal computer and consumer electronic industries, especially the contemporary products. 5. Supply management and operation are negatively vulnerable to delays and time quandary, especially if the supply of needed materials is deferred. 6. It is a ‘seasonal’ business, with no guarantee that licenses can be obtained on ‘commercially reasonable terms’ (USSEC 19). The company has specific opportunities. 1. There are more countries and companies that are available for the expansion of retail stores, such as Intel and the country of France.
2. Competitors are unable to match Apple Inc. as “the market leader in online music services, with over 3 billion downloads” this 2007 (Wikipedia 2007). 3. The market offers a wide range of companies and/or products that can be purchased in deals, such as Nothing Real in 2002 (Wikipedia 2007). 4. People around the world are starting to distinguish the significance of having digital software and hardware devices. 5. Because nowadays, smaller is better, then the new age presents products that are more prone to physical damages and cracks. 6. Rapid technological advances both in hardware and software products, as well as in wireless connectivity and networking, characterize its market