Company Overview
Apple Incorporated is an American international company that is renowned for the manufacture and distribution of computer software, televisions, smartwatches, iPhones, iPods, laptops, and personal computers. This firm also offers a range of online services and is classified among Facebook, Google, and Amazon (Giant technology companies). Apple’s software products include an array of operating systems for its smartwatches, Mac personal computer, iPads, television, safari web browser, and professional applications such as Logic Pro and Final Cut Pro (Nagamia, 2015).
Apart from the sale and distribution of software and consumer electronics, this company offers a collection of online services that include Mac App Store, iTunes Store, iMessage, Apple Pay Cash, Apple Music, and Apple Card, among others. This firm was established in 1976, with its primary objective being the production and sales of personal computers (Nagamia, 2015). By 1980, this corporation had recorded significant financial growth due to the high demand for computers.
However, Apple’s products were fairly expensive compared to Microsoft’s, resulting in stiff competition. This called for the restructuring of operations and products and service diversification. The need to overcome competition led to Apple investing in the consumer electronics and mobile phone sector, marking the advent of iPhones.
Today, Apple is popular because of the quality of its products and financial success. As per Apple Inc. (2018), in 2018, this company’s annual net sales stood at $265 billion, making it one of the most profitable firms worldwide. Indeed, Apple is considered the biggest technology business internationally in terms of returns and among the most important companies globally. The increased growth of the smartphone industry has led to this firm investing in the mobile phone sector.
Today, Apple is ranked as the third-biggest mobile phone producer after Huawei and Samsung. In August 2018, this corporation was declared the first American public firm to be worth over $1 trillion (Apple Inc., 2018). Presently, Apple has recruited at least 123,000 permanent employees and runs over 504 retail outlets across the globe (Apple Inc., 2018). Additionally, it manages the world’s biggest music store dubbed iTunes.
A study conducted in 2018 revealed that there were over 1.3 billion Apple products in circulation globally (Apple Inc., 2018). Apple’s electronics and software are renowned for their quality, earning this business a reputation as the most priceless brand. Nevertheless, this multinational company does not lack its fair share of shortcomings. Many people criticize Apple for dealing with contractors that are notorious for violating labor laws. Moreover, this firm is condemned for resorting to unconventional methods in a bid to overcome competition and failure to adopt environmental practices.
The manufacture of iPhones comprises three phases which are design, component, and assembly. As per Nagamia (2015), all of Apple’s products are designed from a central location in California. iPhones are manufactured from a myriad of components that are sourced from different countries. Presently, this company deals with over 500 suppliers spread across the United States, Europe, and East Asia (Apple Inc., 2018). Components like chips, memory, application processors, and the display are manufactured in Japan, Taiwan, Germany, South Korea, and the United States. Three companies, Pegatron, Foxconn, and Wistron, are responsible for assembling iPads and iPhones.
The majority of Apple’s iPhones are manufactured at Foxconn, with this plant assembling over 350,000 gadgets per day. On the other hand, Pegatron manufactures at least 50,000 iPhones daily. Recently, Apple reported that it had made about $3.36 billion in sales of iPhones globally (Feiner, 2019). Currently, this company sells iPhone 11 series in the United States, Australia, the United Kingdom, Canada, Japan, China, and Brazil, among other nations.
Overview of Major product
Contemporary models of iPhones have upgraded on a number of features, among them a camera and battery life. However, Apple has done little to improve on features such as security. In September 2019, the company released a series of iPhone 11, which was an improvement from the iPhone XR. Based on the features of these new models of iPhone, one can notice that the company is targeting the young generation, as well as professional photographers and individuals who use mobile phones for an extended period. In the past, many people, particularly the millennials, cited poor battery life as one of the reasons they did not buy iPhones (Eadicicco, 2019b).
Apple has considered these complaints in the production of its subsequent gadgets, making iPhone 11 series the latest model of smartphones with superior batteries. This move is aimed at ensuring that people can use the devices for long hours without having to charge them.
One of the features that most youths consider when purchasing phones is camera strength. iPhone 11 series comes with a powerful camera as a strategy to target individuals who fancy taking photos. Eadicicco (2019b) alleges that the latest iPhone 11 pro comprises triple-lens cameras that are invaluable to cinematographers. During the launch of this brand of smartphones, the management spent some time demonstrating how videographers can use the multiple lenses of iPhone 11 pro cameras to make films.
Moreover, Apple’s administration played a short movie that showed the phone’s proficiency in video recording. These presentations demonstrated that Apple was also targeting individuals such as socialites and Instagram influencers who earn a living through video shooting and editing. Below are images of the three models of iPhone 11 and users, respectively.
Product Features and Packaging
Mobile phone users consider numerous factors before purchasing smartphones, among them the price, features, Durability, and functionality. One of the reasons why many people decline to upgrade their phones is the cost of purchasing a superior device. A study by Apple found that customers were sensitive to the features of new models of smartphones (Eadicicco, 2019c). Some clients argued that mobile companies were doing little to create novel and advanced phone applications, thus contributing to most people holding onto their old mobiles.
Others complained that even though companies like Samsung were trying to come up with cutting-edge features such as folding displays, these applications did not meet consumers’ expectations and were too costly. Apple has considered all these complaints in the development of the iPhone 11 series.
The company’s technology team argues that this set of smartphones comes with numerous benefits to customers, including a larger battery, durable and strong screen, cameras with a capacity to record videos at night, versatile applications, and fair prices. As aforementioned, Apple targets mainly the millennials and professional photographers and videographers. These are individuals who use phones for a long time; hence they need gadgets that do not require constant charging, which could interfere with their operations.
One of the features of the iPhone 11 series that make these devices suitable for professional photographers and millennials is their toughness. These categories of customers comprise people who engage in dynamic activities that might result in them dropping their phones accidentally. Apple Company appreciates that most customers would wish to keep their phone screens unspoiled to facilitate their usage. Consequently, the corporation has emphasized sturdiness in the production of the iPhone 11 series. Apple has used strong glass to manufacture the screens of the iPhone 11 series, making sure that they do not crack if the phone drops unintentionally.
A CNet’s drop analysis conducted on these devices revealed that they could withstand an 11-foot fall onto a hard surface (Bell, 2019). Currently, the iPhone 11 series competes with Samsung Galaxy S10 globally. The two brands of smartphones have proved not only to be sophisticated but also durable. A test conducted to determine their capacity to withstand water damage revealed that Apple’s brand was superior to Samsung’s. Eadicicco (2019a) posits, “iPhone 11 series can weather being submerged in four meters of water for up to 30 minutes, while the Galaxy S10 can survive being dunked in up to 1.5 meters of water for at most half an hour” (par. 12). Therefore, Apple’s brand is suitable for outdoor use regardless of the weather, hence making it appropriate for photographers.
The iPhone 11 series has enjoyed positive reception because of its quality cameras. Bell (2019) alleges that the iPhone 11 pro and iPhone 11 Pro Max constitute tri-lens cameras that allow photographers to zoom and capture clear images. One may argue that quality Android gadgets and Samsung Galaxy S10 have these capabilities, not to mention a wide field of view. However, the fact that filmmakers have confirmed that a person can use iPhone 11 Pro’s multiple cameras to record video concurrently makes this brand better than its rivals (Kateliev, 2019). Indeed, videographers and photographers stand to reap numerous benefits from this latest series of Apple’s smartphones.
Apple is sensitive to customers who wish to purchase pocket-friendly phones that meet most of their expectations. The company has launched three models of the iPhone 11 series that are not only cheap but also comprise multiple features. The iPhone 11 costs $699 and comes with different storage specifications (Haselton, 2019). This model of smartphone is easy to identify because it comes in multiple colors. On the other hand, iPhone 11 Pro and iPhone 11 Pro Max are quite advanced and bear matted glass and stainless steel frames. These two brands of smartphones cost $999 and $1099 respectively and mainly target professionals who prefer gadgets with multiple applications that can help them discharge their mandates at workplaces.
Distribution
Distribution channels are critical to an organization because they facilitate sales and promotion of products and services. Globalization has contributed to stiff competition in the business world, prompting companies to look for multiple avenues of popularizing themselves and marketing their merchandise. Apple sells its products through direct and indirect channels. The company deals directly with customers through Apple stores which are spread across the globe. Wang, Wang, and Wang (2016) argue that the primary reason this corporation leverages Apple stores to sell directly to clients is that the channel enables it to offer a consumer experience.
Knowledgeable and experienced personnel manage these stores, allowing Apple to sell an array of complementary accessories. According to Wang et al. (2016), Apple stores are invaluable since they allow this company to influence consumers’ opinion of its brand. The stores bear unique architectural designs that invoke the ideas of quality and innovation in the mind of clients, making them purchase Apple products.
Apart from Apple stores, this multinational company sells its product and services through other avenues, including retailers, wholesalers, and telecommunication businesses. These channels assist Apple in expanding its market coverage. Today, one can buy any model of iPhone 11 from retail stores like Walmart, Sam’s, Best Buy, and Target. Most people may consider Apple stores as the main distribution channels for this corporation. However, an evaluation of the company’s financial records shows that these outlets contribute to 29% of Apple’s total sales, while the indirect distribution avenues cater to 71% of the net turnover. This signifies the critical role that retail stores and telecommunication firms play in the success of Apple incorporated.
Pricing
Organizations consider numerous factors when setting prices for their goods and services, among them the income level of the target consumers, nature of competition, input cost, and trade margins. Examples of pricing strategies that are at the disposal of companies include penetration, economy, scheming, and premium. Apple is renowned for using a minimum advertises price (MAP) strategy to sell its products through retail outlets.
As per Kozlenkova, Hult, Lund, Mena, and Kekec (2015), MAP regulations forbid dealers or resellers from quoting Apple’s products below predetermined minimum prices. This company enforces this pricing strategy by offering subsidies to its dealers and resellers. Kozlenkova et al. (2015) posit that Apple gives retailers like Best Buy, Target, and Walmart a marginal wholesale discount, thereby preventing them from lowering the prices of its products.
The small markdown does not contribute significantly to the profit margin of the retailers, hence discouraging them from offering discounts to customers. Eventually, Walmart and other retail outlets end up selling Apple’s products at prices close to those set by the producer. The application of a premium pricing strategy ensures that retail outlets do not compete with Apple stores. Moreover, it prevents unhealthy competition between dealers or resellers as they all sell products at comparative prices.
Currently, Apple sells its iPhone 11 at $699, while iPhone 11 Pro and iPhone 11 Pro Max go at $999 and $1099, respectively. The prices of these gadgets are relatively lower than those of Samsung Galaxy S10 models, which range from $900 to $1150 (Kateliev, 2019). The decision to reduce the cost of the iPhone 11 series was to target consumers who are price-sensitive. Apple has been known to manufacture expensive smartphones. However, this company is changing that culture after it realized that many customers take a long to upgrade or change their phones. The resolution to manufacture cheap mobiles without affecting the quality of their features is aimed at encouraging consumers to buy new smartphones frequently.
In spite of stiff competition in the smartphone industry, Apple’s iPhone 11 series, and indeed all its products, are not vulnerable to price volatility. This company manufactures quality products. Hence it guarantees clients value for their money. Apple has initiated a trade-in campaign as a tactic to persuade many customers to use iPhone 11 series smartphones. Currently, clients who wish to upgrade or change their phones are encouraged to trade them with an iPhone 11 model of their choice (Eadicicco, 2019c). However, this promotion strategy has not been effective as the value of old gadgets continues to decline rapidly, making it hard for customers to trade them for the new phones.
Promotions
Companies use different approaches to promoting their products, among them shopping vouchers, giveaways, and discounts. These strategies are meant to assist an organization in popularizing its products and increase sales volume. Apple uses advertising, public relations, and personal selling for marketing its products. This company advertises iPhone 11 series on online platforms like Google and news websites. Wang et al. (2016) posit that Apple ensures that employees have adequate knowledge of its products to facilitate personal selling. This company’s staff interacts with customers providing them with product-specific information with an objective of persuading them to buy the goods.
Presently, Apple is using advertising as the primary promotion strategy to market iPhone 11 series. Recently, this firm dropped a video that sought to enlighten potential customers on the benefits of purchasing its latest brand of smartphones. The primary goal of this video was to encourage customers to upgrade their phones. The advertisement made the previous models of smartphone look outdated by highlighting and emphasizing the new features of iPhone 11 series.
Apart from mentioning the tri-lens qualities of iPhone 11 Pro and iPhone 11 Pro Max, the video reminded customers that these phones were equipped with night mode, making it easy for people to take photos at any time of the day. Durability is a vital feature that customers consider when purchasing mobile phones. Therefore, Apple was keen to use this video to remind customers that its new series of iPhones can withstand exposure to water for up to 30 minutes. The use of video to promote iPhone 11 series is effective as it will help to create a lasting impression of this brand in consumers’ minds.
Product SWOT Analysis
Strengths
- The novel iPhone 11 series is fitted with superior camera, enabling users to take quality photos. The cameras contain lenses that assist one to capture a broad angle.
- Apple acknowledges the significance of having smartphones with advanced batteries. Thus, iPhone 11 series is equipped with quality batteries, allowing customers to use the gadgets for a whole day without charging them.
- Some mobile users may not have adequate time to charge their devices, hence they require good chargers. Apple’s iPhone 11 series models have 18-watt chargers which assist people to charge their phone within a short time.
- Durability is an essential consideration when purchasing a phone. Apple’s iPhone 11 series is fitted with a strong screen to ensure that it does not crack in case it falls accidentally.
Weaknesses
- One of the criticisms of iPhone 11 models is that they are heavy. It becomes difficult for users to stream videos for a long time due to wrist exhaustion.
- Apple has replaced the popular 3D Touch with Haptic Touch that requires users to long-press on the screen (Eadicicco, 2019a). A lot of customers complain that the removal of 3D Touch has hindered efficient operation of the new devices.
- Many people argue that Apple has failed to enhance the stylishness of iPhone 11 series. This company has done little to reduce the sizes of the notch and bezels, making the devices look less attractive.
- The Face ID authentication feature that comes with iPhone 11 series does not always work. Sometimes, people are forced to use passwords to log into the devices.
Opportunities
- People cite the size of iPhone 11 battery as the main reason these gadgets are heavy. Apple has a chance to lower the weight of these devices by manufacturing small but quality batteries.
- Companies like Samsung have proved that it is possible to reduce the size of notch without affecting the appearance of a smartphone (Eadicicco, 2019a). Hence, Apple has an opportunity to improve the class of iPhone 11 series by minimizing the notch.
- Google and OnePlus have showed that integrating fingerprint scanners into mobiles improves authentication process. Instead of Haptic Touch, Apple can incorporate this form of biometric to promote security.
- Apple has an opportunity to enhance the storage space of its phones. Currently, the highest storage size is 512GB.
Threats
- Samsung acknowledges the importance of manufacturing light devices. The company’s latest smartphone model weighs 20g less than iPhone 11, posing stiff competition to Apple brands.
- Many customers have expressed their disappointment for the removal of 3D Touch in the new devices. Currently, Android manufacturers are working on this technology, a move that will pose significant threat to the performance of iPhone 11 series in the market.
- iPhone 11 series encounters threats from Samsung Galaxy S10 which has a storage space of up to 1TB. This device also contains a microSD slot which allows users to increase their storage space.
Recommendations
The majority of customers across the globe are yet to know about the availability of iPhone 11 series. Apple has not been aggressive in promoting these latest devices. Apart from the short video that this corporation released detailing the features of its current models of smartphones, it has not leveraged other promotion strategies. There is a need for this firm to invest in public relations and advertising to aid in popularization of iPhone 11 series.
Promoting these gadgets on online platforms like Google and news websites will enable Apple to reach many potential clients. Additionally, this business requires exploiting public relations to influence consumers’ perception of the new mobile devices. Apple tried persuading clients to purchase iPhone 11 series through trade-in. However, this strategy has not been effective due to swift decline in the value of old devices. This company must change the policies which it uses to determine the worth of old smartphones to ensure that many customers qualify for trade-in.
Currently, many customers prefer Samsung Galaxy S10 to iPhone 11 series due to its weight. Some clients argue that the installation of big batteries in the three models of iPhone 11 contributes to their weight. Apple should consider investing in the production of small but efficient batteries to reduce the weight of its gadgets. It should reduce the size of the current batteries by at least 20g. The removal of 3D Touch in the latest models of iPhone has not augured well with many customers.
Most people allege that the introduction of Haptic Touch has interfered with the interface of the device, making it hard to operate. Apple should consider reintroducing 3D Touch in iPhone 11 series to enable customers to access frequently used applications with ease. Implementing these recommendations will enable Apple to increase the sales volume of these latest models of smartphone.
References
Apple Inc. (2018). Apple Inc. – Annual reports. Web.
Bell, B. (2019). The 7 best iPhone 11 features. Web.
Eadicicco, L. (2019a ). I’ve been switching between Apple’s new iPhone 11 and 11 pro – here are the best and worst things about using them so far (AAPL). Web.
Eadicicco, L. (2019b). How Apple’s new iPhone 11 pro compares to its biggest rival, Samsung’s Galaxy S10 (AAPL). Web.
Eadicicco, L. (2019c). Apple’s iPhone 11 pro launch is proof that the smartphone industry is going through a massive change (AAPL). Web.
Feiner, L. (2019). Apple’s iPhone sales beat estimates but still down 9% versus last year. Web.
Haselton, T. (2019). Apple’s iPhone 11 lineup gives people what they want: Cameras, battery life and a good price. Web.
Kateliev, P. (2019). First thoughts : iPhone11, pro and iPhone pro max vs Samsung Galaxy S10e, Galaxy S10, Galaxy S10+. Web.
Kozlenkova, I. V., Hult, G. T. M., Lund, D. J., Mena, J. A., & Kekec, P. (2015). The role of marketing channels in supply chain management. Journal of Retailing, 91(4), 586-609.
Nagamia, N. K. A. (2015). Apple Inc – A marketing analysis case study. MacEwan University Student eJournal, 2(1), 16-32.
Wang, Z., Wang, Y., & Wang, J. (2016). Optimal distribution channel strategy for new and remanufactured products. Electronic Commerce Research, 16(2), 269-295.