3.

Does it make good strategic sense for Apple to be a competitor in the computer, digital music player, and mobile phone industries? Are the
value chain activities that Apple performs in computers, digital music players, and mobile phones very similar and “compatible” or are there
very important differences from product to product? Which of the three products lines—computers, digital music players, or mobile phones—
do you think is most important to Apple’s future growth and profitability? Why?

Apple designs, manufactures

and markets smartphones,
personal computers, Music
players, tablets, wearables
and accessories, and sells a
variety of related services.
 *Discovered the touch
screen technology for
iPhones on January 9,
2007.
* Quick adaptation of iTunes with iPod
lead to the dominance in digital music
industry.
Great confidentiality and data protection, which
limits the opportunity for developers to introduce
software compatible with Apple computers.
There are similarities in Apple’s value chain activities when
comparing its computer, digital music player and mobile
phone activities.

• R&D
• Operations
• Sales & Marketing
• Strong control in the digital music player industry.
• The market for digital music player is growing internationally.
• Highly competitive market for iPhones
• Performance in the computer industry.

• So, its iPod business is most likely to have the largest effect on
future revenues and earnings.
Five-Forces
Model
 Comparison between computers or digital music players industry
5 forces analysis for computers
• Rivalry among competing computer
manufacturers—a strong competitive force
• Threat of Entry—a weak competitive force
• Competition from substitutes—a weak
competitive force
• The bargaining power and leverage of suppliers—
weak for suppliers of commodity-like inputs; strong
for essential components such as microprocessors)
• The bargaining power and leverage of buyers—
weak for consumers; moderate to strong for
corporate buyers
5 forces analysis for digital music
players
• Rivalry among competing producers of digital
music players—a moderately strong competitive
force
• Threat of Entry—a weak competitive force
• Competition from substitutes—a strong
competitive force
• The bargaining power and leverage of suppliers—a
weak competitive force
• The bargaining power and leverage of buyers—a
weak competitive force