CHAPTER : 1

INTRODUCTION TO THE INDUSTRY

1.1 Industry Composition:

The technology industry is composed of companies that design, manufacture, or
distribute electronic devices such as computers, computer-related equipment,
computer services and software, scientific instruments, and electronic
components and products. Technology enables consumers and businesses to
thrive in a digital world.

The composition of this industry is very different from that of most others; due
to the brisk pace of innovation there is an unusually extensive investment in
research and development required. As a result, the industry’s workforce

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consists of a much larger proportion of engineers and other highly-skilled
technical workers, relative to other industries, especially since product creation
requires creativity, expertise, and precision. The technology industry also
employs a relatively large workgroup engaged in sales and promotion, as the
success of a new or improved product depends heavily upon consumers being
aware of, and interested in, the item. While most of the sales for this industry
occur in developed countries, most of the production of computer hardware
takes place in emerging countries where manufacturing and assembly costs are
lower.

1.2 History:
The technology industry is relatively young; its origins can be traced to the 1904
invention of the two-element electron tube. Developments such as the transistor
followed, as well as integrated circuits in the 1950s, and analog devices in 1960.
Many of these inventions were a result of military research. The 1970s brought
the invention of the integrated circuit board and the microprocessors that soon
followed, making home and personal computers a possibility in subsequent
years. However, until the internet was available to common consumers,
computers were not very popular. In the 1990s, when the internet was available
to all, there was an explosion in the use of personal computers. That explosion
made household names out of entrepreneurs such as Bill Gates and Steve Jobs.
The early part of 2000 saw a drastically reduced demand for computers, but in
2003 and 2004 the market experienced a turnaround as consumers sought
multi-tasking computers that could handle a myriad of photo, video, and audio
applications. Since then the technology has spread to mobile phones and tablets
that offer all the services of a normal stationary computer. Cloud computing has
revolutionised data storage and as a result devices are continually getting
smaller and more advanced.

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1.3 Leaders:
Contrary to what one might expect, most companies in this industry are small.
This is because, although the product may be complicated, only a small
investment is needed to fund the manufacture of many types of electronic
components, especially in the software segment of this industry. However, these
small companies are often bought by big revenue earners once they develop a
hit product. Among computer hardware producers, the top names are Hitachi
and Hewlett-Packard. Dell has been known for its direct-sale marketing
strategy, yet in the rough times for PC’s of late has seen a considerable decline.
The smaller companies that are not bought up must focus on differentiating their
products and developing the brand name to compete with the diverse portfolios
of the big companies.

As for software companies, Microsoft Corp., IBM, Google and Oracle Corp.
rule the roost. These companies should not sit too easily though since recently
consumer electronics products have been merging with products from the
computer industry, for example phones now have Internet capability, as do game
consoles, PDAs, and many other items. This convergence means that companies
can expect increased competition from industries who were not previously
direct competitors. Companies, such as Apple, have grown to be giants in their
own right by offering both hardware and software. This business model has led
other companies that have traditionally focused exclusively on software to also
enter the hardware production industry.

1.4 Trends:
By nature, the technology industry is constantly changing and evolving. On the
corporate level, mergers and acquisition are common practice since they allow
companies to combine their resources and knowledge in a highly competitive

3
environment. Computer companies now must compete with companies in the
consumer electronics and telecommunications markets as technologies become
increasingly integrated in many multifunctional devices.

Technology companies tend to go abroad to grow revenues, secure market

share, and gain access to low-wage workers. As a result, this borderless industry
challenges companies to manage a global workforce, currency hazards,
technology transfers, and a global supply chain, all the while responding to
governments and regulators. Aside from international supply of technology,
international demand for technological products is also increasing. International
sales account for a large percentage of hardware companies, specifically
markets in India, Japan, China, and other Asian locations.

One of the newer trends and arguably the future of the technology industry is
data collection and analysis. Various technological companies collect structured
and unstructured data from clicks on websites, to the length of your stay at a
particular location (on a GPS device), to the frequency you repurchase an item.
Most of this data is unstructured and hard to analyse but as analytics improve,
this data is transformed to create patterns in consumer behaviour, and will help
companies be proactive rather than reactive.

There are several issues of major concern to companies in the technology

industry. There is an enormous opportunity to generate sales on products
designed to run with, or on, the new operating system, as well as on products
that must be upgraded because they are not compatible with the new, more
advanced OS. The second major concern of computer software companies is
piracy. In the United States, estimates put the percentage of counterfeit software
being used around 20 percent. This proportion can be much higher as well,
depending on the country. The third is security. With the entrustment of personal

4
information and data, the industry has to face security issues such as system
failure, security breaches, intellectual property abuse, and reputational damage
from social media.

1.5 Future Outlook:

The technology industry creates quite a challenge for businesses; success
depends on innovation and can go as quickly as it comes. Companies can risk
their entire credibility on data breaches so it is important for them to build
secure networks and develop solid risk management plans. Challenges this
industry will face include the retirement of baby boomers, shifting pools of
talent, increasing technical skill needs, and regulations.

However, the industry is well positioned for growth available in emerging and
developed markets. The industry needs to focus on disruptive innovation as
demonstrated by cloud computing, mobile devices, and social media. These
innovations have been fairly recent new trends that will help companies reshape
their strategies to accelerate product development, operations, strategies, and
more. Technology companies should also focus on creating more user friendly
applications. Expansion in mobile devices and tablets is crucial as more people
retain portable devices and are looking for easy to use applications.

5
 CHAPTER : 2
INTRODUCTION TO THE COMPANY

Formerly - Apple Computer Company (1976–1977) ,

Apple Computer, Inc. (1977–2007).
Type - Public.
Traded as - Nasdaq: AAPL, Nasdaq-100 component, DJIA
component, S&P 100 component , S&P 500
component.
ISIN - US0378331005.

Industry - Consumer electronicsSoftware serviceOnline services.

Founded - April 1, 1976; 46 years ago in Los Altos, California, U.S.

Founders - Steve Jobs, Steve Wozniak, Ronald Wayne.

Headquarters - 1 Apple Park Way, Cupertino, California, U.S.

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Number of - 519 retail stores (2022).
locations
Area served - Worldwide.
Key people - Tim Cook (CEO), Arthur D. Levinson (chairman),
Jeff Williams (COO), Luca Maestri (CFO).
Revenue - US$365.82 billion (2021).
Operating - US$108.95 billion (2021).
income
Net income - US$94.68 billion (2021).
Total assets - US$351.02 billion (2021).
Total equity - US$63.09 billion (2021).
Owners - Berkshire Hathaway (5.56%).
Number of - 154,000 (2021).
employees
Subsidiaries - Beats Electronics, Beddit, Braeburn Capital, Claris.

7
2.1 Overview :
One of the world's favourite tech brands, Apple has a tight hold on its spot as
one of the tech Big Four. Founded by, and still led in the spirit of, the legendary
Steve Jobs, Apple products have found their way into seemingly every
household. The company only hires the best of the best, and looks for
whip-smart people who will push the envelope when it comes to what personal
technology can do.

2.2 About the Company :

Apple is one of the best-known tech companies of all time, one of the Big Five
of tech, and for good reason. From the latest iPhone to the original Apple
computer, the company has been an ingenious innovator of consumer
technologies since its first days out of a home garage. Founders Steve Jobs and
Steve Wozniak met through a mutual friend. It turned out to be a fateful meeting
that would change the path of modern technology forever. Steve Wozniak
created the original prototype for the Apple I computer—the first computer to
resemble the computer we know today—a model with a large monitor and a
keyboard. Jobs saw the prototype and quickly realised its potential. Together,
the two founded Apple Computers Inc. on April 1, 1976.

Apple offers consumer technologies of all kinds. Some of its most popular
products include the iPhone, iPad, Macbook, and Apple Watch. Apple has
147,000 employees in numerous departments, including retail, software
services, hardware, machine learning and AI, support and service, design, and
more. Apple also offers services like Apple Music, which launched in June
2015, and Apple TV, which launched in 2019. By 2021, Apple TV had
produced two Academy-Award-nominated features, Wolfwalkers for Best
Animated Feature and Greyhound for Best Sound. Apple also provides products

8
and services specifically curated for education, business, health care, and
government. After Steve Jobs left his post as CEO in 2011 prior to his death,
Tim Cook took on the role. As a top member of the Fortune 500, Apple is one
of the world’s largest technology companies and its catalogue of offerings
continues to grow.

Not only is Apple tech savvy, it's business savvy. Apple has made some huge
acquisitions and investments throughout its history. It acquired NeXT Computer
in 1996, Beats Electronics in 2014, Shazam in 2017, and Texture in 2018, just to
name a few. The company’s drive towards innovation is bolstered by its ability
to invest in companies like these that have greatly improved its catalogue of
technologies.

2.3 Vision :
Apple, Inc.’s vision, as found on their website, is “Apple is committed to
bringing the best personal computing experience to students, educators, creative
professionals and consumers around the world through its innovative hardware,
software, and Internet offerings”

2.4 Mission :
Apple, Inc.’s mission is stated on their company website and is the following:
Apple designs Macs, the best personal computers in the world, along with OS
X, iLife, iWork and professional software. Apple leads the digital music
revolution with its iPods and iTunes online store. Apple has reinvented the
mobile phone with its revolutionary iPhone and App Store, and is defining the
future of mobile media and computing devices with iPadVision Apple, Inc.’s
vision, as found on their website, is “Apple is committed to bringing the best
personal computing experience to students, educators, creative professionals

9
and consumers around the world through its innovative hardware, software, and
Internet offerings” Mission Apple, Inc.’s mission is stated on their company
website and is the following: Apple designs Macs, the best personal computers
in the world, along with OS X, iLife, iWork and professional software. Apple
leads the digital music revolution with its iPods and iTunes online store. Apple
has reinvented the mobile phone with its revolutionary iPhone and App Store,
and is defining the future of mobile media and computing devices with iPad

2.5 Product Profile :

1. AirPods 2. Apple TV 3. Apple Watch 4. HomePod 5. iPhone

6. MacBook Air 7. MacBook Pro 8. iMac 9. Mac Mini

10. Mac Pro 11. Mac Studio.

● AirPods :

Active Noise Cancellation for immersive sound. Transparency mode for

hearing what’s happening around you. A customisable fit for all-day
comfort. Magic like you’ve never heard.

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● Apple TV :

Apple TV is a streaming service featuring Apple Originals —

award-winning series, compelling dramas, groundbreaking
documentaries, kids’ entertainment, comedies and more — with new
Apple Originals added every month.

● Apple Watch :

Apple Watch can do what your other devices can’t because it’s on your
wrist. When you wear it, you get a fitness partner that measures all the
ways you move, meaningful health insights and a connection to the
people and things you care about most. And it’s always just a glance
away.

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● HomePod :

Jam-packed with innovation, HomePod mini delivers unexpectedly big

sound for a speaker of its size. At just over 8 centimetres tall, it takes up
almost no space but fills the entire room with rich 360‑degree audio that
sounds amazing from every angle. Add more than one HomePod mini for
truly expansive sound.

● iPhone :

The iPhone is a smartphone made by Apple that combines a computer,

iPod, digital camera and cellular phone into one device with a
touchscreen interface. The iPhone runs the iOS operating system.

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● MacBook Air :

MacBook Air is strikingly thin and brings exceptional speed and power
efficiency within its durable all‑aluminium enclosure. It’s the ultra-fast,
ultra-capable laptop that lets you work, play or create just about anything
— anywhere.

● MacBook Pro :

The new M2 chip makes the 13‑inch MacBook Pro more capable than
ever. The same compact design supports up to 20 hours of battery life1
and an active cooling system to sustain enhanced performance. Featuring
a brilliant Retina display, a FaceTime HD camera and studio‑quality mics,
it’s our most portable pro laptop.

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● iMac :

The iMac is a low-cost version of Apple Computer's MacIntosh . The

iMac was designed to attract people who have never owned a personal
computer and also to win back former Mac users who have moved to
personal computers.

● Mac Mini :

The Apple M1 chip takes our most versatile, do-it-all desktop into
another dimension. With up to 3x faster CPU performance. Up to 6x
faster graphics. An advanced Neural Engine yet for up to 15x faster
machine learning. Get ready to work, play and create on Mac mini with
speed and power beyond anything you ever imagined.

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 ● Mac Pro :

Power to change everything. Say hello to a Mac that is extreme in every

way. With the greatest performance, expansion and configurability yet, it
is a system created to let a wide range of professionals push the limits of
what is possible.

● Mac Studio :

Mac Studio is an entirely new Mac desktop. It packs outrageous performance,

extensive connectivity and new capabilities into an unbelievably compact form,
putting everything you need within easy reach and transforming any space into
a studio. And it all starts with your choice of the ferociously fast M1 Max or the
all-new M1 Ultra — the most powerful chip ever in a personal compute

15
2.6 Application of Porter’s strategy framework to Apple Inc. :
● Brief introduction of Porter’s strategy framework -

Porter’s strategy framework involves 5 forces– competitive rivalry, threat of

new entrants, threat of substitutes, bargaining power of suppliers and bargaining
power of buyers. The competitive rivalry is influenced by various factors
involved in the market growth rate, level of fixed costs, frequency of over
capacity, extent of product differences, strength of brand identities, cost of
exiting the industry, comparability of competitive rivals and some other aspects.
The threat of new entrants depends on the capital requirements, economies of
scale enjoyed by existing competitors, cost advantages enjoyed by existing
competitors, existing product differences, strength of existing product brand
loyalty, access to distribution channels, access to appropriate technology (Porter,
1997), access to long term supplies of raw materials and some other aspects.
The threat of substitutes depends on the relative price of substitutes, technical
comparability of substitutes, costs of switching, speed of technological
development in substitute industry and some other aspects. The bargaining
power of suppliers depends on monopoly power in supplier industry, degree of
differentiation of supplier’s product, costs of switching supplier, importance of
volume to the supplier, importance of supplier’s product to the industry and
some other aspects. The bargaining power of buyers depends on buyer volume,
availability of substitute products, costs of switching, concentration of buyer’s
industry, price sensitivity, product differences, buyer information and some
other aspects.

● The analysis of Apple Inc.’s 5 competitive forces -

Competitive rivalry: the competitive rivalry of Apple Inc. is medium. On one

hand, there are many famous brands that have great influence in the computer
market such as IBM, DELL, Lenovo, Sony and some other brands. These

16
brands provide various computers in different shapes, colours, functions and
some other aspects. And the computers suit different people such as students,
businessmen, common employees and some other people. And the computers
are at different prices, thus the computers can cater for the demands of different
social classes. However, it is well known that the price of Apple is generally
very high, and not all of the people can offer it. Therefore, most of the
customers may like to choose another brand’s computer. This will weaken
Apple’s competitive power. On the other hand, although the price of Apple’s
products is high, it is well known that the quality of the products is high and the
functions of the products have strong power. Thus many customers would like
to choose Apple’s products for the good functions. And in the aspect of
products, Apple has strong competitive power. Thus in the comprehensive point
of view, the competitive rivalry of Apple Inc. is medium.

Threat of new entrants: The force of the threat of new entrants is low. First of
all, Apple Inc. was established in 1976, and it has had more than 30 years’
growth. During the 34 years’ development, Apple has cooperated with many
companies that have great influence on the computer industry. The company’s
business idée and the quality of the products or services are well known by the
people all over the world. It can be said that Apple Inc. is the leader in the
computer industry. And there is no company that can surpass the position of
Apple in the computer industry. Moreover, the new entrants are usually the new
brands. These new entrants do not have any brand effect. Because the products
that they provide are not used before, therefore, they can not provide the proofs
for the customers and make them believe that the quality of the products is high
and the products are reliable and practical. The products of the new entrants
usually use the software and hardware that is produced by other companies and
applied in many brands’ products. There is no innovation that the new entrants
can provide. Therefore, it is difficult for them to attract customers and compete

17
with famous brands such as Apple Inc.. From these points of view, the force of
the threat of new entrants is low.

Threat of substitutes: the force of the threat of substitutes is medium. It is well

known that the products of Apple have great functions and high quality. The
production costs are higher than other brands. And the computers of Apple have
special functions that other brands’ computers do not have. That is because the
research and development skills of Apple are higher than other companies.
However, on the contrary, the substitutes such as the computers, mobile phones,
music players and some other aspects become more and more in the market.
There are some famous companies that provide similar products or services
such as Sony, IBM, DELL, and some other brands. The quality of the products
is also very good, and the functions can generally meet the common consumer’s
demands. Most importantly, the price of the substitutes is lower than Apple’s
products. Based on these aspects, the consumers may consider the substitutes
that can provide the similar services and cost lower. Therefore, the force of the
threat of substitutes is medium.

Bargaining power of suppliers: the bargaining power of suppliers is high.

Because Apple has its own fixed suppliers. The software, hardware, and some
other fitting parts are provided by the certain suppliers. Because Apple Inc. has
strict and high requirements on its products, thus the components must have
quality assurance. Thus Apple can not choose the suppliers at random. Based on
this, the suppliers display important and essential roles in the business of Apple.
Thus any requirements that the suppliers point out will have great influence on
the normal operation of Apple and its decision-making. Thus the bargaining
power of suppliers is high.

Bargaining power of buyers: the bargaining power of buyers is low. First of all,
the brand of Apple is popular with the people all over the world, the famous

18
reputation has already been set up in the whole world. Thus Apple Inc. has the
qualification to position its products and the price. Moreover, more and more
people are paying attention to Apple’s products because of their special
functions, and the number of Apple’s customers is rising. Although the price of
Apple’s products is high, many people would like to buy the products. In
addition, the new entrants and substitutes can not bring great threat to Apple,
which means that Apple can still occupy great market share (Segal-Horn and
Faulkner, 1999). Therefore, Apple will not adopt the strategy of reducing the
product’s price. According to these factors, the bargaining power of buyers is
low.

● The unusual aspects of the way Apple Inc. does business -

First of all, Apple Inc. cooperates with the companies that display great even
dominant roles in the industry such as IBM, Motorola, Microsoft and some
other companies. This cooperation will strengthen Apple’s competitive power
and comprehensive power, because it will obtain the support of its partners.

Moreover, Apple Inc. applies itself to the research and development of high-end
products which have special functions that other brands can not provide the
same services. Although this requires much cost, the products will achieve more
attention by people, and attract more customers.

In addition, Apple has its own management methods and business strategies. All
of these will help the company make a smooth and successful operation, and
achieve rapid development. Because the management and strategies deal with
the problems, and create new opportunities for the company to obtain
development.

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2.7 Apple Inc.’s Ethical Issues :

Apple has encountered many different ethical issues as an organisation during

their tenure. The issues have ranged from things such as child labor law
violations, workers natural rights being violated, workers low wage cases, to
unethical methods of hiring. These are some ethical issues that have come to
light; however, it would not be a surprise if there were more violations that are
still unknown. Apple was mentioned in a 2016 report, published by Amnesty
International, detailing how human rights were being abused in the mines of the
Democratic Republic of Congo. These mines supply cobalt, a key component in
the lithium-ion-batteries that are used in all of Apple's electronic devices. More
than 20% of cobalt is currently exported from the DRC. The work conditions in
these mines are brutal for those that are heavily involved and working and have
men, women, and children working night and day. The supply chain is what
links this activity to Apple and the final products that are distributed to its
consumers. The cobalt is collected from the mines and sold to manufacturers,
distributors and suppliers. These manufacturers, distributors and suppliers then
sell the cobalt to different companies including Apple. Amnesty International
contacted Apple regarding its findings of the working conditions in the mines
and Apple stated that they were currently evaluating whether or not the cobalt in
its products originated from the DRC. With regard to child labor, Apple stated
“Underage labor is never tolerated in our supply chain and we are proud to have
led the industry in pioneering new safeguards. We not only have strict standards,
rigorous audits and industry-leading preventative measures, but we also actively
look for any violations. Any supplier found hiring underage workers must 1)
fund the worker’s safe return home, 2) fully finance the worker’s education at a
school chosen by the worker and his or her family, 3) continue to pay the
worker’s wages and 4) offer the worker a job when he or she reaches the legal
age. Apple also stated, “We have been reporting on our supply chain for 10

20
years because we believe in transparency and the feedback that comes with it
makes us better. Of more than 1.6 million workers covered in 633 audits in
2014, our auditor’s uncovered 16 cases of underage labour and all were
successfully addressed. We take any concerns seriously and investigate every
allegation. It is a positive factor that Apple has a policy in place regarding
findings of child labor but only 16 cases have been documented. What if there
were more that we are not aware of and might have not been addressed? There
have been allegations made for several years now that child labor is an issue
with organizations like Apple. There have been lawsuits filed against four major
tech firms, including Apple, that involve salary and job mobility. These cases
arose through the finding of emails that were exchanged between Steve Jobs,
Eric Schmidt and other industry competitors discussing how they would not
poach each other’s valued engineers. Due to this deal workers were unable to
find another job at a different firm. This allowed salaries to be determined and
capped by employers; if employees are unable to move around and seek higher
paying jobs then the company can fully control salaries. The case received
considerable attention and involved high dollar amounts as well as specific
demands from both workers and employers. Another issue Apple has faced is
accusations of unethical hiring practices in its supply chain. When this issue
came to the attention of Apple, they quickly resolved it. Apple reported that its
supplier was using recruiters who were charging potential employees a fee and
Apple insisted that the recruiters repaid all employees who were charged the
fee. Workers who were charged this fee typically raised the cash by taking a
loan from the company that tied them to employers—a modern-day version of
the ancient practice of bonded labour. Apple made its suppliers return $4 million
dollars to its 4,500 workers. Individual’s rights shall not be violated and no
terms should be set with employees that violate their rights. Apple must
continue to evaluate and report on possible cases such as these. An undercover
investigation was conducted into factories in China where Apple products are

21
assembled. The investigation filming of Apple's production line showed
workers falling asleep at their positions due to working 16 hour shifts for 18
consecutive days. The undercover reporters found that standards were being
breached on the factory work floor. Apple has often claimed to protect its
Chinese workers from the violation of their rights but this documentary proves
that they have failed to do so the factory workers were still facing the harsh
conditions of twelve individuals in a room, twelve to sixteen hour work days,
over fourteen consecutive days working and denied requested time off Apple
denied these allegations and has stated that they will be further investigate.

Overall, unethical practices are becoming a continuous trend across all

industries. A nature that is unlikely to stop due to the money that is saved from
these unethical practices. The companies will continue to claim they are
investigating and looking into the claims but in actuality they will not be
completely addressing the problems. Could this be the cost of doing business on
such a global scale? Firms like Apple will continue to pay the fines, take the bad
publicity, and address some problems because in the end the fines and bad press
are cheaper than practising ethical behaviour in their factories around the globe.

2.8 SWOT analysis of Apple Inc . :

Here’s a detailed analysis of Apple’s strengths, weaknesses, opportunities,
and threats.

● Apple’s Strengths

a). Most Valuable Brand

Apple is ranked #1 position for the 9th consecutive year by Interbrand – with a
brand value of $408 Billion. Followed by Amazon ranked at #2 with a brand

22
value of $249 Billion, and Microsoft ranked at #3 with a brand value of $210
Billion.

b). Globally Iconic

Apple is one of the most reliable companies when it comes to personalised

advanced computers and smart technology devices. It has millions of loyal
customers with steady increment.

c). Top Technology

Apple was the first to introduce some of the most innovative products that have
changed the world (iPhones, iPads, AirPods). Apple is still determined to build
and craft better, more proficient technology devices.

d). Brand Of Choice

It isn’t big news that Apple is a favourable brand in corporate offices, especially
among creative professionals. Apple offers top-quality technology solutions for
every corporation’s needs. Professionals prefer high-performance technology
such as Mac Pro or iMacs for visual design, animation, video production, and
other creative work.

e). Proficient Research & Development

Apple puts dedication into its product designs. Careful study and extensive
research is performed to help understand customer needs and market trends.
Apple continues to invest a substantial amount of money in research and
development for future growth and a competitive edge. For example, Apple
spends $21.9 Billion (about 6%) of its revenue in R&D.

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f). Sustainability made Possible through Liam

Liam is an iPhone recycling robot that breaks down and dissects an iPhone. It
strips them all the way down to a single bolt. Most parts of an iPhone can be
reused.

Liam is designed to yield as many reusable parts as possible. These reusable

parts are then categorised and safely stored so they can be used for new
manufacturing.

g). Expansion in services

Apple has been expanding its services portfolio for many years. For example,
about 19% of Apple’s annual revenue ($68 B out of $365 B in FY 21) came
from its services, which is the second biggest contributor to its revenue after the
iPhone (52% of its revenue).

Apple’s services include digital content stores, streaming services, iCloud,

AppleCare, and payment services etc. Recently, Apple has introduced many
new services, such as Apple TV , Apple news , Apple Card (credit card
services), Apple Arcade (game subscription), and Apple Fitness+ etc.

● Apple’s Weaknesses

a). High Priced Products

Apple’s products can be considered a luxury due to their premium prices. The
products are priced for middle and high-income consumers. Low-Income
consumers can’t simply afford Apple products.

24
Due to their premium pricing, only middle or high-earning individuals can
afford their products.

b). Limited Advertisement & Promotions

Apple has solidified their grounds by establishing loyal customers, even with
limited advertising resources. Apple marketing relies heavily on its iconic and
flagship retail stores.

Because of their success, Apple does not feel the need to have excessive
spending towards advertisement in comparison to other big brands such as
P&G, Pepsi, Verizon, and Coca Cola etc.

c). Entering into Area of Non-Competency

Apple is rapidly expanding into new services such as video content streaming,
game streaming, payment services (credit cards) – competing with the dominant
players such as Netflix, Disney, Citi, Chase, Paypal, etc.

They might be entering into areas in which they lack competencies; remember
the failure of Apple maps.

d). Incompatibility With Other Software

When a customer buys an apple product, they enter the Apple universe. Apple’s
products do not support other software or technologies making them
incompatible with other devices.

Customers have to exclusively purchase Apple apps or accessories to continue

using their Apple products.

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e). Allegations of Tracking

Tracking users undermines trust. Apple has been accused of using tracking apps
in its phones, which revealed the precise location of users.

Even though the latest version of Apple’s phones gives users the right to decline
the tracking, trust is difficult to regain once it is lost.

f). Unfair Business Practices

Apple is under investigation for unfair business practices after receiving

payments to make Google’s search engine as the default search engine for its
Safari web browser. Collusion between the two giants makes it difficult for
rivals to enter and expand into the search engine market.

g). Integrate Stronger Parental Control Software

Parents allege that Apple’s parental control software isn’t good enough. And
that’s true because popular apps such as Instagram, YouTube, TikTok, etc., are
integrated with independent control systems, which make it a technological
nightmare to monitor and track children’s social media activity. Although Apple
and Google have both boasted that their parental control is the best, kids easily
find numerous ways to bypass those controls.

● Apple’s Opportunities

a). Consistent Customer Growth

Apple has been dominating the technology sector for years now. They provide
top quality and cutting-edge technology that offers a breakthrough in customer
experience.

26
Their customer retention rate of 92% is phenomenal. Apple can always rely on
the power of the internet for future opportunities to gain new customers and
form new alliances.

b). Qualified Professionals

Apple’s researchers, developers, and product specialists are a team of highly

qualified professionals that have years of experience in branding consumer
products. With the expansion of their team, Apple can continuously build new
opportunities.

c). Expansive Distribution Network

Apple Inc. has the opportunity to expand its distribution network. Currently, the
distribution network that Apple has is very limited and leaves room for minimal
growth.

Apple can generate higher revenue and sales if it focused on creating an

expansive distribution network. Furthermore, the company can benefit from
diligent marketing and promotions

d). Lack of Green Technology

Apple is yet to launch products that are created using green technology. The
company has not yet implemented or participated in creating sustainable
technology that is eco-friendly.

e). Smart Wearable Technology

Smart wearable technology will soon dominate the world. According to Forbes,
smart wearable technology device sales will double by 2022. It will become a
$27 billion+ market with 233 million unit sales.

27
Apple has the opportunity to continue to grow beyond just Apple watch and
AirPods into other wearable categories.

f). Utilise Artificial intelligence

To increase its profit margins and have a strong market position, Apple should
utilise artificial intelligence. Recently, the company has extended its AI
portfolio.

In the year 2017, Apple acquired Regaind, a French AI startup and

DeskConnect, an AI tool. The former acquisition helps Apple to integrate
intelligent search to the photos app on the iPhone, while the latter acquisition
automates tasks by helping the consumers to arrange apps and features with a
string of commands.

The company should focus on extending its AI portfolio to have a strong

foothold in the future.

g). Expand Music Streaming Services

The youthful population and rapid economic growth in emerging economies

offer immense opportunities for expansion. Apple is already planning to expand
its music streaming services to 52 emerging markets in Africa and the Middle
East.

h). Deliver Self-Driving Software Technology

The demand for autonomous cars is increasing rapidly. Apple has the expertise
needed to deliver self-driving car technology rather than fully-functional
autonomous or electric cars.

28
Apple has the opportunity to focus on delivering self-driving software
technology instead of building an actual car like Tesla does.

On a Bloomberg interview, Apple CEO Tim Cook says:

“ We are focusing on autonomous systems. And clearly, one purpose of

autonomous systems is self-driving cars. There are others. And we start to
see it as a mother of all A.I. projects. It’s probably one of the most difficult
A.I. projects actually to work on.”

i). Kia Motors to build Apple’s driverless car

Apple has partnered with Kia Motors (parent company – Hyundai) to assemble
driverless electric cars in Georgia. According to the Wall Street Journal, Kia
will begin production by 2024 and produce about 100,000 vehicles in the first
year.

j). Expanding into Chip Manufacturing

Apple announced that it’s going to start manufacturing its own chips and
semiconductors going forward, competing with Intel and Broadcom etc. The
tech giant is already on-boarding engineers for a new South California location.

Apple’s continually expanding silicone team to make next-gen wireless silicone.

The company’s chip manufacturing manoeuvre boosted its total market value,
propelling it close to $3 trillion.

29
k). Dominating in Smart Speakers

Apple is dominating the market for smart speakers. The tech giant’s HomePod
mini has been a massive success. According to a report by Strategy Analytics,
Apple now has a 10.2% market share after selling 4 million smart speakers.

l). Fitness Feature in Apple Watch

While the Apple Watch’s activity rings are a neat feature that allows you to
monitor your exercise routine and frequency, users say that it’s time Apple
incorporates a readiness score feature like the Oura and Fitbit.

One of the best benefits of a readiness score is that it helps prioritise when to
rest and recover. While Fitbit and Oura have had this feature for a long time,
Apple is yet to incorporate a feature like this, and users can only access this
feature via third-party apps such as AutoSleep.

● Apple’s Threats

a). After effects of Coronavirus Outbreak

Apple is highly dependent on China for its manufacturing and supply chain. The
recent events have significantly affected and disrupted its operations. In
addition, about 18 % of its $365 billion in revenue came from China (a big
market for Apple). The outbreak has significantly affected and may continue to
disrupt Apple’s business in coming years.

b). No Effective Countermeasure for Air Tags

While Apple’s AirTags are meant to help people find frequently misplaced
items using Bluetooth, the technology is also being used with malicious intent.

30
There have been a lot of instances where criminals have used AirTags to steal
cars and, worst, stalk people.

Apple commented that the Find My app will immediately let users know if an
unknown accessory is tracking them. However, there is yet to be a more
permanent solution.

c). Apple Bullied By Counterfeits

Apple has become vulnerable to third world countries illegally utilising the
brand image to sell counterfeit products. The illegal dealers sell Apple
counterfeit products at the same value as an original Apple product.

Counterfeit products can make potential customers believe that it is a product

made by Apple with low quality. big news can result in negative reviews and
bad publicity for the company.

d). Increasing Competition

Although Apple as a brand has solidified itself, it still faces threats from
competitors. With the advancement in technology, brands like Samsung,
Google, and Dell are giving Apple tough competition.

As the competition is getting stronger, Apple either has to introduce new

technologies or revise its pricing policy to stay ahead of its competition.

e). Market Penetration

There has been a significant change in market penetration by other brands in the
smartphone market. Companies like Samsung, HTC, and Lenovo are using
Android software to create new smartphones.

31
Currently, Android has captured 72.23% of the market share, while Apple has
only 24.55% of the market share globally.

f). China Tariffs

The US government has imposed a higher tariff on imports from China,

increasing the overall cost of the products. Consequently, it adversely affects the
gross margin on the products and may make the product more expensive for
customers.

g). Lawsuits

60 class-action lawsuits have been filed against Apple. Consumers were upset
and baffled when Apple announced that it deliberately throttles CPU
performance on iPhone models with older and degraded batteries.

The tech giant said that it did so to prevent unexpected shutdowns. Despite the
clarification, consumers felt betrayed because they believe that Apple does not
believe in transparency. This led to a number of people filing lawsuits against
the company.

The first class-action lawsuit was filed on December 21st, 2017 and alleged that
Apple’s actions not only negatively affect the resale value of their products but
also forces its users to upgrade to newer versions prematurely.

h). Backdoor Mechanism

Apple has been under constant pressure by government agencies to unlock the
iPhone via a backdoor, which means unlocking the encryption of the iPhone and
giving access to its data.

32
In several instances, Apple has denied providing the backdoor mechanism
because it can be exploited by the bad guys, which eventually exposes the
security of millions of iPhone users.

i). Mark Zuckerberg criticised monopoly of iPhone’s app store

In a recent webcast, Mark Zuckerberg, Facebook’s CEO, criticised Apple for its
monopoly on App Store and hefty charges.

Mark Zuckerberg states that:

iPhone App Store ” blocks innovation, blocks competition,” and “allows

Apple to charge monopoly rents.”

Apple charges a 30% cut for in-app purchases through its app-store. The
company is often criticised because a 30% cut is a significant commission for
small businesses or app developers.

j). Apple Motions for Case Dismissal

The CCI (Competition Commission of India) recently alleged that Apple is

eyeing for a complete monopoly, dominating with its app development in the
country. The CCI filed the complaint after going through numerous allegations,
stating that Apple is compelling developers to use its proprietary system, wiping
out existing competitors.

33
However, Apple responded by stating that the allegations are completely
baseless because they have a relatively smaller market share compared to
Google, which clearly dominates the Indian tech market. Apple has moved to
have the case dismissed.

2.9 Data and Table Analysis :

● Products and Services :

Products Services Brands

Mobile Communication Cloud Services iPhone

and Media Devices

Personal Computing Payment Services iPad

Products

Portable Digital Music Digital Content Mac

Players

34
 ● History :
History section provides information on new products, mergers, acquisitions,
expansions, approvals, and many more key events.

Year Event Description

2022 New In July, the company unveiled an all-new iPad Air

Products/Servi with A14 Bionic.
ces

2022 Others In June, the company, Disney and Amazon

submitted bids to become the new broadcast rights
owner of the National Football League.

2022 Corporate In June, the company expanded their operation in

Changes/Expa Catawba County, North Carolina.
nsions

● Latest Deals :

Announced Headline Deal Acquirers / Investors / Surviving Issuer/Partner/

Date Type Entity Target

June 29, Entrepre Venture SoftBank Group Corp; Sequoia Entrepreneur

2022 neur First Financin Capital Operations LLC; John First
Secures g Collison; Patrick Collison; Elad
USD158 Gil; Matt Mullenweg; Taavet
Million in Hinrikus; Scape Group Ltd;
Series C Magic Pony Technology Ltd.;
Funding Credit Kudos Ltd; Sarah Leary;
PassFort Limited; Reid
Hoffman; Matt Robinson; GV
Management Co LLC;
Bloomsbury AI; Nat Friedman;

35
 Lachy Groom; Sonantic Ltd;
Claire Hughes Johnson; Tom
Blomfield; Deeptide Ltd; a16z;
Sara Clemens

March 23, Apple Acquisiti Apple Inc Credit Kudos

2022 Acquires on Ltd
Credit
Kudos

February Apple Acquisiti Apple Inc A.I. Music

07, 2022 Acquires on Group
A.I.
Music
Group

● Competitor Comparison :

Key Apple Inc Alphabet Samsung Microsoft Dell

Parameters Inc Electronics Corp Technologies
Co Ltd Inc

Headquart United United South United United States

ers States of States of Korea States of of America
America America America

City Cupertino Mountain Suwon Redmond Round Rock

View

State/Provi California California Seoul Washingto Texas

nce n

No. of 154,000 163,906 98,557 181,000 133,000

Employees

Entity Public Public Public Public Public

Type

36
 ● Executives :

Name Position Board Since Age

Arthur D. Chairman Executive 2011 71

Levinson Board

Timothy D. Chief Executive Officer; Executive 2011 61

Cook Director Board

Luca Maestri Chief Financial Officer; Senior Senior 2014 58

Vice President Management

Jeff Williams Chief Operating Officer Senior 2015 58

Management

Katherine General Counsel; Senior Vice Senior 2021 57

Adams President Management

37
 Chapter : 3

MARKETING STRATEGY AND OF APPLE INC.

Marketing Strategy : A marketing strategy refers to a business’s overall game

plan for reaching prospective consumers and turning them into customers of
their products or services. A marketing strategy contains the company’s value
proposition, key brand messaging, data on target customer demographics, and
other high-level elements. A thorough marketing strategy covers the four Ps of
marketing: product, price, place, and promotion.

3.1 A Brief Overview :

Apple marketing strategy is based on the founder Steve Jobs’s philosophy that
customers do not always know what they want. Accordingly, instead of
conducting marketing research to identify customer needs and wants, the
multinational technology company prefers to install innovative features and
capabilities in their products, making customers want Apple products. Apple
marketing strategy expresses the brand in minimalist, yet highly efficient ways.

Apple 7Ps of marketing is marked with a particular focus on the product

element of the marketing mix and the company’s segmentation targeting and
positioning initiatives are aimed at targeting users of premium products.
Moreover, the marketing communication mix of Apple Inc. places greater

38
emphasis on print and media advertising and personal selling in Apple Stores
and the company rarely uses sales promotions as part of its marketing strategy.

3.2 Generally, Apple marketing strategy integrates the following :

1. Focusing on attractive value proposition:
Apple’s value proposition is “beautiful design that works right out of the box
with ever-smaller packaging” The world’s largest IT company by revenue has
been able to avoid price wars with competitors by emphasising its unique value
proposition in its marketing communication messages. Apple is a unique
company in a way that it is a design firm, a media platform, a publishing
company, a software powerhouse and a computer manufacturer – all at the same
time. Such a position allows the company to communicate its value proposition
to target customer segments in a cost-effective manner.

2. Effective use of product placement:

An important feature of Apple's marketing strategy is that the world’s largest IT

company by revenue does not use Pay-Per-Click (PPC) online ads with Google
or Facebook. Instead, marketing strategy relies mainly on two pillars – product
placement (especially with celebrities and in popular shows) and the buzz
created by positive reviews in the media.

The most notable cases of Apple’s product placement include the movies
Transformers 4, Birdman, The Verge, Birdman and Boyhood, as well as,
prominent TV shows such as Saturday Night Live and The Daily Show.

3. Positive reviews in the media

Apple systematically benefits from the buzz created by positive reviews in the
media – both, traditional, as well as, social media. The company achieves
positive reviews due to high quality and advanced features and specifications of

39
its products and services. Moreover, the multinational technology company
proactively contributes to the creation of positive reviews in social media. For
eg : Apple usually sends new iPhones to selected technology and mainstream
media outlets to allow them to publish reviews before the phones went on sale.

4. Storytelling through video and viral marketing

Storytelling through video and viral marketing is an important element of

marketing strategy for Apple. The world’s largest IT company by revenue
conveys its marketing message through aspirational storytelling that resonates
with members of the target customer segment. Famous “1984” ad, first aired
during 1984 Superbowl communicates the story of Apple as a rebellious
company that challenges the status quo.

“Share your gift” ad is a more recent example of storytelling by the tech giant,
where a young artist locks away her works in a box, until one day wind coming
through the window takes papers with her art to the town below. These and
other storytelling videos have proved to be viral and hugely popular with a
positive impact on Apple brand image.

Apple Inc. Report contains the above analysis of Apple marketing strategy.
The report illustrates the application of the major analytical strategic
frameworks in business studies such as SWOT, PESTLE, Porter’s Five
Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on
Apple. Moreover, the report contains analyses of Apple leadership,
organisational structure and organisational culture. The report also
comprises discussions of Apple business strategy, ecosystem and addresses
issues of corporate social responsibility.

40
3.3 The future strategic options for Apple Inc.

There are some major future strategic options for Apple Inc., thus the company
can obtain a more rapid and successful business and development.

● Cost leadership strategy

Cost leadership is the comparative advantage of the business compared with

competitors. If the cumulative cost of the value activities of the company is
lower than the cost of its competitors, it has cost advantage. If a company
knows about the cost difference between itself and its competitors, there are two
main ways to achieve cost advantage, one is to implement cost control to all of
the aspects of value creation, another is to restructure a new lower cost value
chain which is to use higher efficacy ways to design, produce and sale the
productions. Generally speaking, cost leadership strategy necessarily requires a
company to become the cost leader, but not to be a member of the companies
that compete for this position. Many companies have not realised this point so
that they have made great errors in planning the strategy. When not only one
company looks forward to becoming the cost leader, the competition between
them is very intense because each percentage point of market share is
considered essential.

This is a very important strategy for Apple Inc. Because Apple Inc. is a
worldwide famous company, and its business covers all over the world. Thus
the cost of the business arrangement is huge, which involves the employment
cost, raw material cost, technology research and development cost,
transportation cost, sale cost and some other aspects. Therefore, the various
costs occupy a great part of the company’s competitive power. If the company
does not pay attention to the power of the cost, and takes measures to reduce the

41
costs, it will waste more on the products or services research and development.
Moreover, if Apple Inc. has special strategic chains management: the
optimization of enterprise value chain, smooth supply chain management,
win-win chain and customer satisfaction chain, it will have rapid development.,
because these will support the cost leadership strategy. Apple Inc. may insist on
a ‘CHAMPS’ management policy, which is comprehensive and
consumer-oriented. Apple Inc. also can take the strategies that are
growth-centred, for instance, it can target one of the means of achieving
profits-cost leadership. If Apple Inc. takes full advantage of these strategies, it
will strengthen its competitive advantage.

● Market penetration strategy

Market penetration strategy is the development strategy that makes market

expansion, the strategy can be launched through expanding the production scale,
increasing production capacity, adding product features, improving product use,
expanding sales channels, exploring new markets, reducing product cost,
concentrating resources and so on. The strategy's core is reflected in two
aspects: one is to use the present products to open up new markets, another one
is to provide new products to the present market. Market penetration strategy is
special to the competitive strategy, it is a company development strategy that is
based on existing products and fully develops its market potential, also called
basic business development strate. Because market penetration strategy is
formed with existing products and existing market, the managers of the
enterprises should have systematic consideration of market, products and
marketing mix strategy so as to achieve the purpose of promoting market
penetration.

For Apple IncMarket penetration is one of the major strategies. Although the
company has occupied many markets all over the world, however, not all of the

42
markets can meet the company’s demands, in other words, the company can not
achieve its business objectives and expected profits. Therefore, the company
needs to take measures to promote the products in more markets and attract
more customers. Apart from the production of computers, the company also
produces cell phones, music players, and some other products. However, the
demands of the market and consumers continue to change, thus the company
should keep researching and developing new products and services, so as to
cater for the customers’ needs and meet their satisfaction. Moreover, in some
small cities, as the commerce is not very developed, and the people’s living
standard is not high, thus some famous brands, especially the products or
services that have high prices may not be provided in the small cities. However,
there will be some consumers who live in the small cities who would like to buy
the products of Apple Inc.. Based on this situation, Apple Inc. should promote
some products in the new markets, so as to expand the sale scale.

● Diversification strategy

Diversification strategy is a development strategy of operating the products or

service of more than two different uses. Enterprises can occupy and explore
more markets and avoid the risk of single operation with the diversification
strategy. The so-called product diversification means that the enterprise’s new
products are across a wide range of professions that may not be related to the
same industry. The general sense of diversification mainly refers to the
diversification of production. Diversification is different from product
differentiation. Product differentiation is the segmentation of the same market,
but essentially the same product. Production diversification is the same
company’s products into a heterogeneous market, it adds the kinds of new
products and enters new markets.

43
For Apple Inc., the diversification strategy is not a strange strategy. Because the
company has already taken the strategy to develop its business. At present, the
business scope of Apple Inc. refers to the computer industry, mobile telephone
industry, player industry and some other industries. However, the products in
the industries can not always meet the consumers’ demands. Because the
technology develops very fast, and the speed of electronic products’
regeneration is very fast, thus in order to keep in pace with the market’s
development and change, Apple Inc. should continue to research and develop
new products in different industries. Therefore, Apple Inc. can keep its
competitive advantages in the various industries. At present, Apple Inc. has not
done very well in this aspect, thus it needs to keep creating new products or
services in the various industries that it refers to.

These three future strategic options can be considered by Apple Inc., as each
option is suitable for Apple Inc. 's certain operation situations. If the company
can do something that is related to the options, it will get some help in its
business.

3.4 The evaluation of the contribution of ‘culture’ to the strategic

success of Apple Inc. :
First of all, Apple Inc. pays much attention to the management, especially the
leadership. The company has strict requirements on the leaders, and the
management of the company. The reason why the company can achieve such a
stable and smooth development is that it insists on ‘strict management’. This is
one of the important cultural factors in Apple Inc. It requires the people in the
management layer must have personal knowledge and skills to organise and
control the related work. Most importantly, the managers must have strong
ability to make decisions. From the company being established, the managers
continued to formulate the strict management system, thus the company can be

44
arranged in the order, and the operation can rely on the internal regulations. A
company’s business and development can not leave the effective management,
and the effective management can not leave the correct and exact
decision-making. Thus the company can make the most appreciated strategies to
do the business, and grasp the opportunities correctly and avoid the threats in
time.

Moreover, Apple has a reputation for fostering individuality and excellence that
reliably draws talented people into its employ. The company has a training
system and trains many talented employees every year. In order to recognize the
best of the company’s employees, Apple Inc. established the Apple fellows
program, providing reward to the employees who have made extraordinary
technical or leadership contributions to the individual computing while at the
company. The Apple Fellowship has provided much reward to many employees
who made special contributions to the company, and the reward also drives the
employees to work hard and try to bring more benefits to the company. This
kind of culture helps the company foster many talented people, and helps the
company encourage and drive the employees to require themselves strictly, and
become more professional, thus they can complete the mission perfectly, and
make more contributions to the company. The company values the employee’s
self-management. For instance, during a certain period, Apple Inc. did not
establish the rules and related regulations that required the working time, the
duties and the salary of the employees, on the contrary, it asked the employees
to plan these aspects by themselves. This kind of management can make the
employees have a better realisation of their own such as the professional skill,
knowledge, the physical energy, the intelligence, and some other aspects.
Therefore the employees can make a self management and improve their
comprehensive ability. In addition, Apple Inc. promises some employees to
choose to work either in the company or at home, and give them freedom to

45
participate in the meetings that are held by the company. The freedom of the
choices can provide the employees much convenience to arrange the work

and the daily affairs. Based on this, the company can obtain the employees’
loyalty and love, they may support the management methods of the
organisation, and have enough enthusiasm to work for the organisation, thus
they can promote the organisation’s development to a large extent. The culture
of employee management not only can promote the company to have a good
development and achieve more profits, but also can promote the employees to
have rapid growth and obtain more benefits.

Furthermore, Apply Inc. continues to make culture innovation. The company

always creates an environment that can motivate innovation. The company has
established some rules to encourage and promote the employees’ innovation.
Moreover, Apply Inc. provides the material and spiritual support for the
employees who can make the innovation such as the idea innovation, the
production innovation, the technology innovation and so on. During the process
of innovation, the company always gives much encouragement, and provides
attractive rewards to the employees who have made the innovation. According
to this, the employees will be aware of the importance of innovation, and they
may pay attention to the various aspects that may contribute to the product or
service innovation. During a certain period, Apple Inc. promises the employees
to do what they would like to do and make the behaviour according to their
interest. The employees do not need to obey the strict and hidebound roles or
regulations in the company, thus their thought is also restricted. Therefore, in
Apple Inc., the dream of enjoying the staff themselves can come true. By this
way, the employees can foster their interests by working full time, thus they can
have enough time and energy to create new things or new thoughts for the
company. Thus the company may collect more resources or thoughts to make
the innovation in the aspects of product, service, technology, management and

46
some other aspects. Therefore, the company can maintain the leader position in
the computer industry, strengthen the competitive power in various industries it
refers to, and keep in pace with the market’s change, and finally achieve more
profits and successful development.

In addition, Apple Inc. pays much attention to the customer’s feelings. The
company makes efforts to research the customer’s demands and collect the
related information as the product creation basis. One of Apple’s business
objectives is to meet the customer’s needs and satisfaction. Because the
customers are the consumers, and the profit is achieved finally from the
consumers. Thus the company very values the customer’s feelings about the
products or services that it provides. Apple continues to create new products so
as to cater for the customer’s different demands. The company provides the
products not only in the stores, but also sells the products online, this will bring
much convenience to the customers. The company also sets up many after-sales
departments, thus the customers can obtain the help any time if there are some
problems with the products. This kind of culture will help Apple Inc. to attract
more customers and obtain their loyalty.

3.5 Target Market :

Apple’s target market focuses on marketing to people with a few different

characteristics. Apple’s main target market is middle to upper class people
because usually this demographic has the means necessary to pay the higher
premium price for Apple products. These people are willing to pay a little extra
for quality and have the income to do so. 94% of Apple users are more affluent
than those who purchase other brands of mobile devices. Millennials are also a
huge target market for Apple as Millennials are typically hooked on technology
more than other generations and are seeing an influx of money. The average age
of an Apple customer is 35 – 44 and 1 in 4 people in the 18 – 34 age

47
demographic say they plan to purchase an Apple product within the next six
months. Apple also targets those who enjoy music. Apple’s products are all
focused on the iTunes store and the ease of music downloads. People who enjoy
music and want an easy way to store, share and purchase music are drawn to
Apple products. Also professionals in the media and design fields also find
Apple products to be preferable because Apple products pride themselves on
making creative functionality a key factor in all of their devices.

3.6 Markets and Distribution :

Apple has many retail and online stores where they sell their products, and
third-party products, directly to the customers. They also employ third party,
indirect, distribution channels to sell their products such as cellular network
carriers, wholesalers and retailers. In 2014 Apple Inc.’s net sales through its
direct sales channels accounted for 28% of their total net assets and 72% was
accounted for through their indirect distribution channels. Apple Inc. believes
that by employing knowledgeable salespersons they can enhance the sale of
their products. They believe these salespeople can convey to the buyer the
importance of the hardware and software integration and demonstrate the vast
capabilities of Apple products better to the consumer. Apple’s vast retail store
locations are typically located in high-traffic locations in quality locations in
order to better attract their desired customers. The stores are all designed to
simplify and enhance the products in order to ensure a high quality customer
buying experience and to attract new customers. Apple Inc. has also invested in
programs with third party sellers to enhance the display of Apple products at
their stores. This program is called the Apple Premium Reseller Program. Apple
has also committed itself to helping the education system by delivering
solutions to help educators teach and students learn. Apple believes that by
effectively integrating technology into the classroom students can have a higher
level of learning and achieve a higher level of education. Apple has designed a

48
range of products, services and programs to address the needs of education.
Apple also has a mobile learning platform that allows access to education
related materials through the iTunes U store. The iTunes U store allows students
and teachers to share and distribute educational material online. Apple sells
these products to educators through its direct sales force, third-party resellers
and its online and retail stores. Apple also sells its hardware and software
products to enterprise and government customers. Their products are favourable
in these markets because of their performance capabilities, productivity, ease of
use and seamless integration into information technology environments. Apple’s
products are compatible with most third party applications and services and the
product's tools enable the development and secure delivery of custom
applications . In July 2014 Apple announced a partnership with IBM to offer an
application called Mobile. First for iOS providing a new class of industry
specific mobile solutions. Apple also implemented AppleCare for Enterprise,
which is a new service and support product tailored to the needs of enterprise
customers.

3.7 Demographic Characteristics of Market :

Apple products are expensive, they have brand equity and are valued by the
customer, therefore, the Apple products are designed to appeal to the middle to
upper-income consumers, the people who appreciated the product and feel a
better user experience. The people or consumer, who can afford the premium
products of Apple, just satisfies their psychological needs. While the needs like
social and personal are also associated with it, when after using the premium
product they feel satisfied. Apple has value because it is ageless, every age
group could be attracted towards the product and can be appealing to all the
generations, and people can use the phone for different purposes.

49
3.8 Psychological Characteristics of the Market :

Customer’s loyalty and their passion too but the product is a great
psychographic advantage, the brand gives a sense of belongingness and
consumers are satisfied with it; Apple has become the priority. The
psychographic characteristics are related to the people who want to explore
technology like who are passionate in daily life and have recognized the
benefits of using Apple phones. A music enthusiast from age 12 to 35 is using
the product for 1000 items of the song, as they have recognized that it has
friendly-user software. Moreover, media designers are also attracted towards the
product because there are editing programs in it and one can make their own
video or create music etc, as they have recognized that it is an easy process with
Apple applications.

3.9 Promotional/ Advertising Plan :

Apple is the emphasis on the R&D as it is the marketing communication

strategy; Apple is focused on creating brand loyalty so the customer gets
satisfaction. Apple has designed the amazing commercials so the customers get
attracted towards the product, they do the market communication and Apple
customers can buy the product online through the Apple stores.

They have designed the promotional strategies so the consumers can easily buy
the product; the products are easy to use. Apple uses rigorous employee
training, in which they are trained on how to deal with the customer, it is called
a secret manual explaining. Online shopping via App stores, apple.com or
iTunes is interesting and simple for any customer. Apple also uses social media
which represent more opportunities regarding the awareness of the product and
services, how a product should be used and what are its amazing specifications.
The strategies are exactly designed to motivate the consumers; the tools used by

50
Apple include Facebook, Myspace, twitter etc. Apple wants to connect with the
maximum number of audience, with the combined blogs and communicating
with the masses.

The use of logos in the media is available by iTunes purchases by the

advertisement commercials, billboards, magazines etc. iCloud is also a tool that
is used by Apple for its consumers so the multiple Apple products simplify, and
Apple comes to know who is loyal to the brand and what products are in use.
Apple retail stores are there across the countries, Apple retail stores are located
in the shopping centres and in malls, and the advertisements are given on the
internet and press releases. Markets ensure the traditional advertising and the
public relation efforts so relationships get stronger, social media is the effective
source that is used by Apple to deal with its customers.

3.10 Apple Competitive Analysis :

Depending on product types and kinds, Apple has many different competitors
for example, from a mobile phone point of view; Apple’s iPhone competitor is
Android phone providers like Samsung, Sony etc. Apple’s iPad competitors are
Tablets providers like Samsung and Apple’s iTunes competitors are Google play
store. As Apple is achieving success with the help of technological innovation
and improvement, the number of competitors is also growing day by day and
trying to bring in technology and innovation like Apple to be a competitor.

● 4Ps’ comparisons with competitors:

Blackberry, Sony etc. These firms are competing with Apple with the help of
marketing mix, that is they are trying to bring in innovation in their products
and services and trying to lower their price by providing quality products and
trying to capture more customers with the help of product distribution and
placement. Lastly, they are competing with the help of different promotional

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strategies. Marketing mix or four Ps that is product, price, place and promotion
comparison is given below;

Product: Apple is known for different quality products that are; Apple iPhone
and iPhone series, Apple iWatch, Apple iPod, Apple iPad, Apple MacBook,
Apple iTunes etc. Apple is continuously bringing in innovative and
technological advancement in these products that force its competitors to bring
in innovation and technological advancement in products to compete with
Apple and to gain market share. Apple brings in innovation and advancement in
products based on the form of the products, quality of the products,
improvement in products, styles of the products, packing of products and
providing warranty and guarantee of products. On the other hand, Sony also
provides many quality products to its customers for example; televisions like
Bravia series, LCDs, Camera Series, Audio and video products, Electronic
components like Batteries, storage, hardDisks etc., computer and laptops and
gaming consoles, smartphones and tablets etc. each product by Sony has its own
quality, features and price and specifications. Samsung also has products and is
considered a big competitor of Apple. Samsung offers products like Tablets,
smartphones, Television, cameras, Washing machines, Microwave, laptops and
printers, refrigerators etc. Products by Samsung are high-quality products and in
the last few years, Samsung has performed well and has market share. In terms
of finance, Apple has gained more market share as compared to Samsung, Sony
and Nokia.

Price : Prices of Apple products are high as compared to the Samsung, Nokia
and Sony products. Apple is targeting high-class people and customers who are
big business men, successful professional and lead class people who can afford
these products. Apple’s product prices are high because they are providing high
innovative products, with high quality as well as style according to the demand

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of the people and customers. Apple Mac price is $1,299 Dollars and $1,599
Dollars based on the memory and storage capacity. Apple iPhone 6s price in
$649 Dollars and iPhone 6s plus price in $749 Dollars. On the other hand, Sony
provides Sony provides its Smartphone Xperia Z3 LTE in $679.99 Dollars,
Sony Xperia M4 Aqua IN ALMOST 199.00 Dollars and gaming console like
play station 4 in almost starting from #399 to $449 Dollars based on the
specification and game. These prices are lower than the products offered by
Apple. Nokia offers its customers like Nokia Lumia 650 in $119.00 Dollar,
Lumia 950 Xl Dual Sim in $649 Dollars and Nokia Lumia 950 Dual Sim in
$549 Dollars etc. these products have their own specification. Nokia also offers
Windows phones to its customers that currently are not as popular as the
Android and iPhone operating systems.

Place: Apple uses two different types of distribution systems in business that
are indirect and direct distribution systems. They have a wholesaling and
retailing system for the products, they make sure the product first releases from
their own personal stores than from other products or service providers’ shops
or buildings. They provide services to their customers online that are their
customers can buy a product online from their site and s from other retailing
sites like Amazon etc. Apple also has a warehousing system for their customers
that are near retailers and shops where customers can buy products easily. They
have a strong inventory management and transportation system. Their products
are also available internationally and considered some of the best products
worldwide. From the Sony point of view, they also provide goods and services
with the help of retailing, personal stores, franchises etc. Their products are also
available to the customer online and everywhere in the world. Sony also has
distributors all over the world, from Samsung point of view, they also offer
products at their own personal website where people can order their products

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online, they provide products to their customers at their own personal store, they
also have retailers and distributors all over the world. They are considered as the
big competitor of Apple in the sense of quality, product styles, price, availability
and continuous technological innovation .

Promotion: Apple is promoting its product with the help of advertising, by

building strong public relations, with the help of personal selling of products
and with the help of direct marketing of products. For the purpose of
advertising, they are using social media sites, newspaper, and print media for
promoting their products. They are using television media for the purpose of
advertising its product which is quite expensive and effective to attract a large
number of customers worldwide. They are also promoting their products online
on the internet at their own site or with the help of their distributors and
retailers. To build customer relations they also organise events and provide sale
promotions to their customers. Sony also promotes its products with the help of
s television media, in the last few years, Sony is promoting its product online at
social media sites and on the internet. They are also building customer relations
by sponsoring different events and providing free gifts to customers on
purchasing Sony products.

Nokia in the last few years largely promoted its windows phones with the help
of advertising on television media so that they can attract customers but the
demand of Android phone is increasing day by day the demand of windows
phone is decreasing day by day. Even with the large-scale advertising, Sony is
facing a downfall in the last few years. From the Laptop and gaming console
point of view, Sony is considered at no one place. The demand of gaming
consoles by the customers is increasing day by day, which makes them achieve
the competitive advan

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 CHAPTER : 4

RESEARCH METHODOLOGY

Research methodology simply refers to the practical “how” of any given piece
of research. More specifically, it’s about how a researcher systematically
designs a study to ensure valid and reliable results that address the research aims
and objectives.

For example, how did the researcher go about deciding:

What data to collect (and what data to ignore) .

Who to collect it from (in research, this is called “sampling design”) .

How to collect it (this is called “data collection methods”) .

How to analyse it (this is called “data analysis methods”) .

4.1 Objectives of study :

● Get an insight of educational products and gain knowledge of various

marketing strategies of Apple Inc.
● To analyse the market potential of existing centres and recommend a
promising client base.
● To understand the Swot Analysis of Apple Inc.
● To Analyse the Data.
● To gain knowledge about Apple Products.

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4.2 Method Of Data Collection :

There are 2 ways of method collection -

● Primary Data
● Secondary Data

Primary Data :

Data that has been generated by the researcher himself/herself, surveys,

interviews, experiments, specially designed for understanding and solving the
research problem at hand.

Secondary Data:

Using existing data generated by large government Institutions, healthcare

facilities etc. as part of organisational record keeping. The data is then extracted
from more varied datafiles.

“In This Project Only Secondary Data Has Been Used. The Sources Used
To Collect Secondary Data”.

● Books.
● Company’s Website.
● Weblinks.
● Magazines.

4.3 Method Of Data Analysis :

The tools used to analyse the data are -

● Table.
● Figure.

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4.4 Limitations Of Study :

● The data and information collected and analysed for the study is
secondary data which only allows us to draw conclusions based on the
study and findings of theoretical data.
● Time is an important limitation. Due to time constraints, only a limited
population is taken for the study.
● Focused on only one aspect of the company.
● Most of the Information was taken from secondary sources based on
previously printed data.
● Documents may lack authenticity– parts of the document might be
missing because of age, and we might not even be able to verify who
actually wrote the document, meaning we cannot check whether it's
biassed or not.

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 CHAPTER : 5
FINDINGS AND DISCUSSIONS

● In this competitive world, Apple is facing many competitors like

Samsung, Sony, Nokia, and Google.
● To compete with competitors, Apple is making effective strategies and
plans and bringing in innovation and advancement in their products and
services.
● Strategies to bring in innovation, product development, improvement in
the business and high-quality products and services are making its
customers more loyal.
● Strong research and development department and strong marketing
strategies are helping Apple to target its customers in the right direction
and helping to bring in improvement and changes in the business
according to the change in technological environment.

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 CHAPTER : 6
CONCLUSION

The main conclusion that we found to be the most interesting about Apple is
how they are very innovative and early adopters. Apple is usually the first
company to come out with a new product line before anyone else. This is very
risky but it seems to be working to Apple's advantage.
This shows that taking risks can sometimes make or break you and Apple has
great potential and has a lot to improve. Currently, Apple is demonstrating
negative aspects of TNCs, contributing to the international debt crisis through
exploitation of workers.
In a way, Apple is promoting the debt crisis in LDCs by accessing their labour
and raw materials on the cheapest possible terms.
If it is willing to play the role of a beneficial TNC, the global economy can
certainly benefit. Furthermore, people in the least developed countries, and the
environment, will benefit as well. This requires a change from all stakeholders:
the company itself, the consumers, the shareholders, and the workers.
It is important for a TNC to progress towards beneficial behaviour because this
can determine people's view on progressing towards further globalisation, as
influenced by neo-liberalism.
Apple’s marketing strategy, not surprisingly, continues to drive revenue and
growth for the company worldwide. Virtually any organisation could achieve
the same results if they apply some of the same tactics to the launch of new
products, and the promotion of existing products and services.

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 CHAPTER : 7

SUGGESTIONS & RECOMMENDATIONS

● Apple could greatly increase its sales worldwide, and become an

even better company than it currently is.
● There are several ways Apple can promote their products yet they
go by simple strategies such as personal selling, "word-of-mouth,"
and product differentiation.
● Apple is considered a shopping product, where people plan to buy
it after considering competitors' prices, it is priced as a prestigious
product in the technology industry.
● Apple has customers who like to keep up-to-date, especially with
Apple's innovative products. Apple's loyal customer base is one of
the largest in the industry and strategizing in a way that makes
them feel they are an exclusive member might make them happy to
spend more.
● Apple is a leader in the technology industry because they are
unique in what they do and they stick to their originality.
● Apple would also do great in product placement, as many
celebrities already use their products. But if it were seen on more
television shows or movies, it would be attracting more consumers
and other target markets.

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