Apple SWOT Analysis – The Big Problem It Can’t Ignore

Corona virus Outbreak

Apple manufacturers like Foxxconn were forced as a result of the coronavirus in China. Additionally, Apple stores in China shut their doors creating a further problem. China accounted for $43 billion of sales in 2019, roughly 16.5% of total sales, but now sales have plummeted. Not only has Apple’s supply chain has been disrupted but retail across the globe has suffered from lockdowns in major markets.

Intensity of Competition

Smartphones are a crowded market where more and more consumer electronic companies have now compete. The strongest brand at the moment is Samsung, but the market for smartphones, music streaming, entertainment streaming is becoming more competitive. As an example, Disney used to license its content to Netflix but has more recently launched Disney+.

Asia has seen its own homegrown streaming video services such as Youku Tudou and Hooq.

New Disruptive Brands

Oppo which is largely unknown in the west has grown to become China’s top smartphone – a clear case of disrupting the established players. These disruptive newcomers could expand and erode Apple’s dominance by offering lower-cost phones with similar features to gran the lower end of the market then move upmarket with higher-end phones.

China Tariffs

The US government has imposed a tariff on imports from China. Inevitably this will lead to an increase in the overall cost of Apple products. This could create the perfect storm and along with coronavirus and talks of a downturn in the economy, even devoted Apple fans might seek solace in lower-cost smartphones.

Rising Costs in China

The cost of labour in China has and continues to rise as the China economy evolves. In turn, this could place further pressure on pricing at a time when Apple continues to push premium products over more economical versions.

Intellectual Property Infringements

Apple and Broadcom had to pay out $1.1 billion for infringing the California Institute of Technology’s patents. While Apple has money to pay for this, it brings into question their ethics and approach to intellectual property and the potential for related cases.