Apple Inc.
Feras Awwad
Apple is one of the world's principal producers of a product mix consisting of a range of electronics goods and gadgets, as well as their related software applications, in a broad range of different international industry segments. The company operates on an oligopolistic model and sells products that are relatively inelastic. A microeconomic analysis is used to discuss the relevant factors and make recommendations based on these insights.
Analysis of Apple Inc.
History of Apple Inc.
Supply and Demand for iPhone 7
Cost Structure
Apple's Market
Analysis of Apple Inc.
Similar to the path that Moore's law, the number of people and devices connected to the internet is growing at an exponential rate; although this trend could never mirror the advances in processing power that has been achieved, it is significant nonetheless. For example, in 2016, it was estimated that 3.4 billion people are connected to the internet which accounts for ~46% of the world's population (Number of Internet Users, 2016). Furthermore, Cisco has estimated that about 50 billion devices will be connected by 2020; which is based upon an earlier analysis in January that claimed 8.7 billion connected devices in 2012 (Danova, 2017). Apple Inc. is one of forerunners that has innovated at nearly every turn to provide well-designed products to consumers that enable them to always be connected via computer, tablet, watch, smartphone, etc.
The purpose of this analysis is to examine the business operations of the Apple Inc. organization from a microeconomics perspective and discuss how factors such as products supply and demand conditions, price elasticity of demand, cost of production, market entry barriers, market share, and market structure explain the performance of Apple in the computer market and industry. The paper will start with historical overview of Apple and conclude with data derived recommendations based on the analysis of the above factors suggesting how Apple could manage its future business operations to stay competitive in the computer market and industry based on the findings of this investigation.
History of Apple Inc.
Apple was founded in April 1976 by Steve Wozniak, then 26 years old, and Steve Jobs, 21, both college dropouts. Their partnership began several years earlier when Wozniak, a talented, self-taught electronics engineer, began building boxes that allowed him to make long-distance phone calls for free. The pair sold several hundred such boxes out of their garage (Apple Computer, 2017). Later that year Wozniak was working on the first Apple computer for a hobbyist club and eventually had local retailers ordering their computers.
Jobs also hired many local computer enthusiasts to assemble the computers and design software to supply the order (Apple Computer, 2017). Jobs wanted to a build a larger company to attempt to be competitive in the industry so with a business plan he consulted with Mike Markkula to invest in the company as Chairman. Within one year, the company's annual sales reached $1 million and became one of the fastest-growing companies in the US with their products carried by over 100 dealers. By the end of 1980, Apple went public selling 4.6 million shares at $22 each in a matter of minutes and offering 2.6 million more which quickly sold out by May that following year. Then, by the end of 1982, Apple became the first company to each $1 Billion in annual sales (The Human Relations in Management Business Essay, 2017). Although Apple's path took many twists and turns throughout its history, it emerged as one of the dominant industry players.
The company designs, develops, and sells consumer electronics, computer software, and online services. The company began to expand quickly after Steve Jobs implemented a strategy known as the "digital hub", which moved Apple's focus away from just the personal computer platform and began to include various peripheral devices as well such as mp3 players, watches, etc..The company's hardware products include the iPhone smartphone, the iPad tablet computer, the Mac personal computer, the iPod portable media player, the Apple smartwatch, and the Apple TV digital media player. Apple's consumer software includes the macOS and iOS operating systems, the iTunes media player, the Safari web browser, and the iLife and iWork creativity and productivity suites. Its online services include the iTunes Store, the iOS App Store and Mac App Store, Apple Music, and iCloud (Apple Inc. 2017). The evolution of Apple products is quite complex in regards...
Apple Inc. Supply and Demand Apple is a U.S. multinational company that specializes in manufacturing and marketing of electronic products. Top Apple brands include iPhone, iPod, Apple Computer, and iPad. Globally, Apple is ranked as the second largest global electronic company with over $215.6 Billion revenue at the end of the 2016 fiscal year. Apart from the company superior financial performances, Apple has enjoyed high demand for its products globally
Xbox Price elasticity Price elasticity: Xbox Price elasticity refers to the degree of responsiveness of consumers and suppliers to price changes: the degree to which the demand or supply of a good or service is affected by changes in price. Although, in general, demand goes up as price goes down and supply goes up as price goes up (and vice versa) for most goods and services, the degree to which this is true
Apple exists in an oligopoly market structure, wherein a small handful of companies control the market. Apple, along with Samsung, Microsoft, Alphabet (Google) and Nokia, essentially control the tech industry (smart phones, computers, portable devices, etc.). While smaller companies do exist, it is these larger companies that set the stage for prices, products and innovation. To what extent Apple’s current status as a blue chip stock may be representative of
Price Targeting Industry Customers usually complain that they purchased the same product or service at higher price than their friends did. This is actually the price targeting technique that sellers use in order to receive maximum profits or revenue. However, if the customers are aware of the actual price and sellers' technique then they can make a better deal. Price Targeting Price targeting is one of favourite techniques of vendors to earn more
The Apple II computer was successfully launched and the company began to take shape and in 1980 the company went public and was able to produce more money than any company since Ford in 1956 (Thirty years of apple). When the company went public it also created more millionaires than had ever been created up to that point (Thirty years of apple). There were several other computers that were released
Apple Industry Analysis Apple competes in the consumer electronics industry, predominantly on the hardware side, but also on the software side. The most significant product that the company makes is the iPhone, which accounts for $155 billion in revenue out of a total revenue of $233 billion. The Mac computers generate $25 billion, the iPad $23 billion, services $19 billion and "other" $10 billion. Most of other consists of software and peripheral
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now