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1. APPLE INC. SWOT
ANALYSIS 2017

2. SLIDE | 2
ABOUT APPLE
Name Apple Inc.
Logo
Industries served
• Computer hardware (Mac, iMac, Mac Pro, MacBook, MacBook Air)
• Computer software (iOS, OS X, Safari, iLife, iWork, iMovie, iPhoto)
• Consumer electronics (iPod, iPhone, iPad, Apple TV and Mac products)
• Internet (iTunes store, iCloud, App Store, Mac App Store)
Geographic areas served Worldwide (retail stores in 20 countries and online stores in 38 countries)
Headquarters Cupertino, California, United States
Current CEO Timothy Donald "Tim" Cook
Revenue (US$) 215.639 billion (2016) 7.7% 233.715 billion (2015)
Profit (US$) 45.687 billion (2016) 14.4% 53.394 billion (2015)
Employees 116,000 (2016)
Main Competitors
Samsung Electronics Co., Ltd., Amazon.com, Inc., International Business Machines
Corporation, Cisco Systems, Inc., Google Inc., Microsoft Corporation, Dell Inc., LG
Electronics, Lenovo Group Limited, Hewlett-Packard Company, Sony Corporation and
many other computer hardware, computer software, consumer electronics and
Internet companies.

3. Apple, Inc. business overview from the company’s financial report:
“The Company designs, manufactures, and markets mobile communication and
media devices, personal computers, and portable digital music players, and
sells a variety of related software, services, peripherals, networking solutions,
and third-party digital content and applications. The Company’s products and
services include iPhone®, iPad®, Mac®, iPod®, Apple TV®, a portfolio of
consumer and professional software applications, the iOS and OS X® operating
systems, iCloud®, and a variety of accessory, service and support offerings. The
Company also sells and delivers digital content and applications through the
iTunes Store®, App Store™, iBooks Store™, and Mac App Store .
SLIDE | 3
BUSINESS DESCRIPTION (1/3)
“ ”

4. • retail stores
• online stores
• direct sales force
• third-party cellular network carriers
• wholesalers
• retailers
• value-added resellers
SLIDE | 4
BUSINESS DESCRIPTION (2/3)
Our sales
channels
include
“ ”
Our
customers
are
• consumers
• businesses
• enterprises
• education institutions

5. The Company is committed to bringing the best user experience to its
customers through its innovative hardware, software and services. The
Company’s business strategy leverages its unique ability to design and develop
its own operating systems, hardware, application software and services to
provide its customers products and solutions with innovative design, superior
ease-of-use and seamless integration. The Company believes a high-quality
buying experience with knowledgeable salespersons who can convey the value
of the Company’s products and services greatly enhances its ability to attract
and retain customers. Therefore, the Company’s strategy also includes building
and expanding its own retail and online stores and its third-party distribution
network to effectively reach more customers and provide them with a high-
quality sales and post-sales support experience. The Company believes
ongoing investment in research and development (“R&D”), marketing and
advertising is critical to the development and sale of innovative products and
technologies.”[1]
SLIDE | 5
BUSINESS DESCRIPTION (3/3)
“ ”

6. Many of Apple’s competitors
have tried and still try to imitate
the success of Apple’s product
ecosystem, but fail due to not
having strong capabilities in
designing, manufacturing and
developing both hardware and
software, applications and
services.
SLIDE | 6
STRENGTHS
1. Unique ability to design and develop proprietary hardware, software, applications
and services
S W
O T
Figure 1. Apple’s product ecosystem
Source: Strategic Management Insight
• iLife
• iWork
• iMovie
• Final Cut Pro
• iTunes Store
• App Store
• iBooks Store
• Apple Music
• iOS
• macOS
• watchOS
• tvOS
• iPhone
• iPad
• Apple Watch
• Mac
• Apple TV
Hardware Software
Application
Software
Services

7. 1. Overreliance on iPhone sales
as a major revenue source
SLIDE | 7
WEAKNESSES
The iPhone generated
55.8% of the
company’s total
revenue in 2014.
This number grew to
63.4% in 2016.
Figure 6. Apple revenue breakdown by product 2016 (% share of total revenue)
Source: Apple financial report[1]
S W
O T
63%10%
11%
11%
5%
iPhone
iPad
Mac
Services
Other Products

8. 1. Augmented and virtual reality markets will be worth over US$140 billion by 2022
SLIDE | 8
OPPORTUNITIES
In 2016, the AR market was worth US$1.2 billion while the VR market generated
US$2.7 billion, making the combined market worth US$3.9 billion.[19]
Both markets are expected to be worth over US$140 billion combined by 2022.[20]
S W
O T
AR and VR will become very profitable growth markets
and Apple should take advantage of this opportunity.

9. 1. Smartphones and tablets are becoming a commodity, which could impact the
company’s gross margins
SLIDE | 9
THREATS
S W
O T
Smartphone Differentiation Points
Hardware Design Software
Additional
services
No longer offers enough differentiation
for iPhone
Offers some
differentiation
Main iPhone
differentiator

10. 1. Apple, Inc. (2017). Form 10-K for the Fiscal Year Ended September 24, 2016. Available at:
http://files.shareholder.com/downloads/AAPL/2456063358x8143945x913905/66363059-7FB6-4710-B4A5-7ABFA14CF5E6/10-
K_2016_9.24.2016_-_as_filed.pdf Accessed March 9th, 2017
2. Interbrand (2017). Best Global Brands 2016. Available at: http://interbrand.com/best-brands/best-global-brands/2016/ranking/ Accessed March
9th, 2017
3. Forbes (2017). The World’s Most Valuable Brands. Available at: http://www.forbes.com/powerful-brands/list/ Accessed March 9th, 2017
4. Brand Keys (2017). 2017 Brand Keys Customer Loyalty Engagement Index. Available at: http://info.brandkeys.com/acton/attachment/943/f-
0071/1/-/-/-/-/2017%20CLEI%20-%20Table%20of%20Categories%20and%20Winners.pdf Accessed March 9th, 2017
5. Edwards, J. (2016). iPhone users are abandoning their loyalty to Apple. Available at: http://www.businessinsider.com/iphone-users-abandon-
loyalty-to-apple-2016-11 Accessed March 9th, 2017
6. Epstein, Z. (2015). Apple Continues to Crush Samsung Where It Matters Most. Available at: http://bgr.com/2015/06/29/apple-vs-samsung-
brand-loyalty-survey-rbc/ Accessed March 9th, 2017
7. Singh, S. and Vakulenko, M. (2013). The Evolution of Handset Business Models: from Source of Profits to Distribution Channel. Available at:
https://www.visionmobile.com/blog/2013/08/evolution-of-the-handset-business-from-source-of-profits-to-distribution-channel Accessed March
9th, 2017
8. Samsung Electronics Co., Ltd. (2016). Consolidated Financial Statements of Samsung Electronics Co., Ltd. and Subsidiaries. Available at:
http://www.samsung.com/us/aboutsamsung/investor_relations/financial_information/downloads/2015/2015_con_quarter04_all.pdf Accessed
March 9th, 2017
9. Alphabet, Inc. (2017). Form 10-K for the Fiscal Year Ended December 31, 2016. Available at:
https://abc.xyz/investor/pdf/20161231_alphabet_10K.pdf Accessed March 9th, 2017
10.Microsoft Corporation (2017). Annual Report 2016. Available at: https://www.microsoft.com/investor/reports/ar16/index.html Accessed March
9th, 2017
11.1Canalys (2017). Media alert: China smartphone market hits its highest shipment total ever. Available at:
https://www.canalys.com/newsroom/media-alert-china-smartphone-market-hits-its-highest-shipment-total-ever Accessed March 9th, 2017
SLIDE | 10
SOURCES (1/3)

11. SLIDE | 11
SOURCES (2/3)
12.Apple, Inc. (2011). Form 10-K for the Fiscal Year Ended September 24, 2011. Available at:
http://files.shareholder.com/downloads/AAPL/3883149972x0xS1193125-11-282113/320193/filing.pdf Accessed March 9th, 2017
13.Apple, Inc. (2012). Form 10-K for the Fiscal Year Ended September 29, 2012. Available at:
http://files.shareholder.com/downloads/AAPL/3883149972x0xS1193125-12-444068/320193/filing.pdf Accessed March 9th, 2017
14.Apple, Inc. (2014). Form 10-K for the Fiscal Year Ended September 27, 2014. Available at:
http://files.shareholder.com/downloads/AAPL/3883149972x0x789040/ED3853DA-2E3F-448D-ADB4-
34816C375F5D/2014_Form_10_K_As_Filed.PDF Accessed March 9th, 2017
15.Market Watch (2016). This is why Apple iPhone sales are tanking in China. Available at: http://www.marketwatch.com/story/apple-is-performing-
terribly-in-china-but-its-not-because-of-the-economy-2016-04-27 Accessed March 9th, 2017
16.Fast Company (2017). The Most Innovative Companies of 2017. Available at: https://www.fastcompany.com/most-innovative-companies/2017
Accessed March 9th, 2017
17.Fast Company (2012). The Most Innovative Companies of 2012.Available at: https://www.fastcompany.com/most-innovative-companies/2012
Accessed March 9th, 2017
18.Haan, C. (2017). The World’s Most Innovative Companies. Available at: https://www.forbes.com/innovative-companies/#153fecad1d65
Accessed March 9th, 2017
19.Merel, T. (2017). The reality of VR/AR growth. Available at: https://techcrunch.com/2017/01/11/the-reality-of-vrar-growth/ Accessed March 9th,
2017
20.Markets and Markets (2016). Augmented Reality and Virtual Reality Market by Device Type. Available at:
http://www.marketsandmarkets.com/Market-Reports/augmented-reality-virtual-reality-market-1185.html Accessed March 9th, 2017
21.Roberts, H. (2017). UBS: Apple already has 1,000 engineers working on AR in Israel and a new product may appear on this year's iPhone.
Available at: http://www.businessinsider.com/ubs-apple-1000-engineers-ar-2017-2 Accessed March 9th, 2017
22.Morris, D. Z. (2017). Tim Cook Thinks Augmented Reality Could Be as Big as the iPhone. Available at: http://fortune.com/2017/02/11/tim-cook-
augmented-reality/ Accessed March 9th, 2017
23.Webb, A. (2016). Hey, Siri, How Will Apple Keep Up with Google and Amazon? Available at: https://www.bloomberg.com/news/articles/2016-
06-10/hey-siri-how-is-apple-going-to-keep-up-with-google-and-amazon Accessed March 9th, 2017

12. 24.Grand View Research (2016). IVA Market Size Projected to Reach $12.28 Billion By 2024. Available at: http://www.grandviewresearch.com/press-
release/global-intelligent-virtual-assistant-industry Accessed March 9th, 2017
25.IDC (2016). Fitness Trackers in the Lead as Wearables Market Grows 3.1% in the Third Quarter, According to IDC. Available at:
https://www.idc.com/getdoc.jsp?containerId=prUS41996116 Accessed March 9th, 2017
26.Markets and Markets (2016). Wearable Medical Devices Market by Application. Available at: http://www.marketsandmarkets.com/Market-Reports/wearable-
medical-device-market-81753973.html Accessed March 9th, 2017
27.PwC (2014). Health Wearables: Early Days. Available at: PwC Health Research Institute (2014). Health wearables: Early days. Available at:
http://www.pwc.com/en_US/us/health-industries/top-health-industry-issues/assets/pwc-hri-wearable-devices.pdf Accessed March 9th, 2017
28.Morgan, D. (2016). U.S. multinationals eye foreign profits tax break with Trump win. Available at: http://www.reuters.com/article/us-usa-election-tax-
companies-idUSKBN1352UK Accessed March 9th, 2017
29.Niu, E. (2017). The Most Cash That Apple, Inc. Has Ever Had. Available at: https://www.fool.com/investing/2017/02/07/the-most-cash-that-apple-inc-has-
ever-had.aspx Accessed March 9th, 2017
30.Specout (2017). Compare Smartphones. Available at: http://smartphones.specout.com/ Accessed March 9th, 2017
31.Barrett, B. (2016). It’s Fine If the iPhone Looks the Same. In Fact, It’s Better. Available at: https://www.wired.com/2016/09/fine-iphone-looks-fact-better/
Accessed March 9th, 2017
32.IDC (2016). Smartphone OS Market Share, 2016 Q3. Available at: http://www.idc.com/promo/smartphone-market-share/os Accessed March 9th, 2017
33.IDC (2017). Tablet Market Woes Continue as Growth in Detachable Tablets Takes Its First Vacation During the Holiday Season, According to IDC. Available
at: http://www.idc.com/getdoc.jsp?containerId=prUS42272117 Accessed March 9th, 2017
34.Identity Theft Resource Center (2017). Data Breaches Increase 40 Percent in 2016, Finds New Report from Identity Theft Resource Center and
CyberScout. Available at: http://www.idtheftcenter.org/2016databreaches.html Accessed March 9th, 2017
35.Mello, J. P. (2016). 2017: More Apple Security Flaws, Cyberattacks, Hacktivism. Available at: http://www.technewsworld.com/story/84192.html Accessed
March 9th, 2017
SLIDE | 12
SOURCES (3/3)

13. SLIDE | 13
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BUY APPLE, INC. SWOT
2017