Strategy Group 2

Apple Inc. Analysis

TABLE OF CONTENTS

• Company overview

• Hardware

• Software

• Supply Chain

• Summary

• Q&A

COMPANY OVERVIEW

$532.18b

0

175

350

525

700

1981 1990 2000 2012

SHARE PRICE

HARDWARE

iPhone

Pros:

• Revolutionised the mobile phone

• 250m iPhones sold since inception

• The highest user engagement amongst all smartphone brands

iPhone

Vendor 2011 Q2 2012 Q2 Change

Samsung 17% 32.6% 15.6%Apple 18.8% 16.9% -1.9%Nokia 15.4% 6.6% -8.8%HTC 10.7% 5.7% -5%ZTE 1.8% 5.2% 3.4%

Others 36.2% 32.9% -3.3%Total 100% 100%

Smartphone Market Share

iPhone

Solutions:

• Invest more into R&D

• Integrate latest technology such as NFC, Wireless Charging

iPad

Pros:

• Created the tablet market

• Content consumption platform

• Over 100m units sold

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iPadCons:

• Strong competition from Microsoft Surface, Samsung Galaxy Tab & Google Nexus

• Blackberry Playbook for enterprise

• iPad Mini - small profit margins and might cannibalise iPad 4 sales

• iPad 4 launch was rushed

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iPad

Suggestions:

• Improve iPad Mini specs

• Cut down the production cost for iPad Mini

• Introduce more enterprise-level features (e.g. better video-conferencing)

iPod

Problem: Too many models & the market is shrinking

Solution: Streamline the diverse iPod portfolio

SOFTWARE

iOS

Pros:

• Apple mobile OS released in 2007

• Integrations with Twitter & Facebook

• Passbook App

• Improved Siri with restaurant info

iOS

Cons:

• Problem with WIFI connectivity

• Apple Maps disaster

• No radical updates

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iOS

Solutions:

• Hire top mapping experts to work on the Maps App

• Use crowd-sourcing to improve the map data

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MAC OS X

Pros:

• 3m downloads in 4 days

• Penetrated 10% users in 1 month

• Integration with Twitter, Facebook

• Positive reviews

MAC OS X

Cons:

• Slower speeds

• Problems downloading the OS

• Mac OS X now is vulnerable to viruses

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iTunes, iCloud...

• Acts as a hub for media and apps

• 30 billion apps sold as of Mar 2012

• iTunes generated $7.5b in sales in 2012

• Secure and safe - all data is encrypted

• Competitors: Amazon & Google Play

ACQUISITIONS

• Apple acquired a number of companies including

• FingerGesture

• Siri

• Anobit

• AuthenTec

SUPPLY CHAIN

FOXCONNPros:

• Low production costs

• Good quality production

• Large scale production ability

• Create a lot of jobs in China

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!

FOXCONNCons:

• 1000s of workers gone on strike over working conditions

• Factory shut in Northern China after a mass brawl

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ENVIRONMENTAL IMPACT

APPLE STORES

Strengths:

• Key element of strategy

• Hub for ecosystem

• $4.23 billion for the final quarter of 2012

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APPLE STORES

Weaknesses:

• Apple stores in only 6% of the world

• Competition from Microsoft, borrowed ideas: "Guru Bar”

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SUPPLY CHAIN

Solutions:

• Continue expansion into BRIC (Brazil, Russia, India & China)

• Review contracts with suppliers

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SUMMARY

•Invest cash reserves into R&D

•Continue to proactively target CSR issues

•Continue expansion into BRIC countries

•Keep the continuous collaboration across all devices

“We need to innovate our way out of this.”

-Steve Jobs

QUESTIONS & ANSWERS