BRAND ANALYSIS:

APPLE INC.

REVIEW 1
SUBMITTED ON 6.2.2022

SUBMITTED TO: PROF. GEMINI V JOY

COURSE CODE: MGT1036
SLOT: E2+TE2
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HISTORY OF THE BRAND PAGE 03

HISTORY OF APPLE.
Apple Computer was founded in 1971 by three college dropouts Steve Jobs, Steve Wozniak and
Ronald Wayne with a vision of changing the perspective of people towards computers.

FOUNDING OF APPLE:
After forming the company, the very first product that they launched was Apple 1,

a computer designed and built by Steve Wozniak. The initial fundings for this

project was were provided by Mark Markkula who was a millionaire and an angel

investor who also eventually became the second CEO of Apple Computers Inc. This

act of providing critical early funding and managerial support was proven to be

extremely helpful for the exponential growth of the company during the first five

years as the company grew with an average annual growth rate of 532%. Following

the huge success of the first product which brought in a total revenue of $117

million, Apple Computers released two new computers Apple I and Apple II. Apple,

I didn’t perform well in the market but on the other hand Apple II was a huge hit. It

was one of the longest running home computer series for 17 years straight with

over 4.8 million units sold.

THE ERA OF MACINTOSH:

Jobs was a man with far-sighted vision, he believed in innovation and developing

the products which were technologically advanced than the competitors at the

time. Jobs shifted his focus to GUI (Graphical User Interface) and came up with an

idea for Apple Lisa. Apple took a huge blow to its sales as Lisa didn’t perform well

due its high price. Only 100,000 units were sold and its production was eventually

discontinued. After Lisa proved to be a failure, it was repurposed as Macintosh a

product which Jobs and Wozniak were developing. Macintosh was the PC with a

GUI sold by Apple. Apple marketed the Macintosh by buying a $1.5 million

television advertisement which was aired between the Super Bowl in January

1984. This campaign helped to propel the sales for the first three months after the

release which gradually declined due to its high price.

HISTORY OF THE BRAND PAGE 04

They tried to improve the product with the addition of softwares like PageMaker

and LaserWriter but their strategy of maintaining high profit margins rather than

aiming the consumer market backfired as the PCs of the same quality were being

supplied to the market by the competitors for a much lower price. This led to the

change of their Chief Operating Officer who launched low-cost Macintosh models

which saw surge in sales. They went on to launch PowerBook (Macintosh Portable

redesigned) and System 7, an upgrade from the classic MacOS. This period saw

increase in the revenue and sales and was called “First golden age” of the

Macintosh.

THE RESTRUCTURING PHASE:

The positive impact of low-cost models exhausted the generation of high-end

gadgets. They pointed to diverse cost for diverse models, low-end Performa, mid-

end Centris and the expensive Quadra. This has driven disarray among the buyers

with respect to the models. Apple too, started looking into other markets like

video consoles, digital cameras, TV apparatuses and portable sound players. Amid

this period, Microsoft started to capitalize the market. Therefore Apple, IBM,

Motorola shaped the AIM alliance in which they would make a computing stage

utilizing their best innovations and technologies. Apple presented Control Mac,

which used Motorola’s PowerPC stage. After that point the then CEO Spindler was

replaced by Gil Amelio, as he failed to modernize products and MacOS. They

purchased NeXT, another Job’s company to bring him back and save them from

going bankrupt.

RISE OF APPLE:
Steve Jobs was invited back as an advisor and he eventually became the interim

CEO within a few months of joining. After joining back Jobs began to restructure

the company to build its status with the help of Jonathan Ive who was a

generational designer. They also associated with Microsoft to release the new

version of Microsoft office in the Macintosh. In 1998, the company launched ‘iMac’,

a refurbished and redesigned Macintosh which featured modern technology and

design which became a huge success. Following the success of iMac, Apple

obtained companies in order to create digital platforms for both consumers and

creators.
HISTORY OF THE BRAND PAGE 05

After Apple acquired SoundJam it modified its user interface and added some new

features and released its own music purchasing and streaming platform ‘iTunes’.

This was their first step in the music industry with many accomplishments to

follow, notably ‘iPod’. iPod is a portable audio player which was released in 2001,

100 million units of the audio player were sold within six years of its release. After

the launch of iTunes store in 2003, it became the biggest music retailer in the

world within 2 years.

MacBook, MacBook Pro and iMac were introduced with intel chips integrated into

them for the first time and they turned out be very successful products for Apple.

With such growth and expansion of the company their stock prices were just

skyrocketing.

THE INTRODUCTION OF iPhone:

Steve Jobs unveiled the first iPhone on January 9, 2007 and on June 29, 2007

iPhone was released. It completely changed the way view of the people towards

smartphones. It is safe to say that it revolutionized the smartphone industry. The

very next year I.e., 2008 Apple launched their very own App Store for their users to

install third party apps in iPhones. In almost a month, it hit the milestone of being

a billion-dollar business not only that by the end of the year Apple became the

largest mobile supplier in the world. Following the success of iPhone they released

a tablet with a very similar touch-based OS to iPhone and made it compatible with

the App Store and called it iPad. It turned to be a major hit just like the iPhone. In

the next few years, they released newer generation of iPhones with a polished

design and advanced features like video calling, multitasking, photo editing and so

on. Similarly, the new iPod, second generation of Apple TV (a service that provided

renting of movies and shows), new versions of MacBooks, Mac OS and Mac App

Store (App Store for MacBooks) were also launched. Finally, Steve Jobs resigned

from the company on August 24,2011 shortly before his death on October 5 of the

same year. Tim Cook became the new CEO of Apple.

APPLE AFTER STEVE JOBS:

'iBook' was the first product introduced after the demise of Steve Jobs. Jobs always

had a passion to change education system and textbooks, so an iOS app for it was

created. They then released the iPhone 4S and iPhone 5, which had Siri, one of the

first AI based voice assistants.

HISTORY OF THE BRAND PAGE 06

iPads of the third and fourth generations, as well as their mini version which had a

retina display (Apple’s high quality trademark display) was also released. After this

third generation of MacBook, Mac mini and iMac were also launched. With the

success of all these products the market capitalization of Apple surpassed

Microsoft’s and reached a staggering $624 billion. They also made their biggest

purchase 0f $3 billion dollars by acquiring ‘Beats’, a leading audio brand which was

founded in 2006 and provided a range of premium headphones, earphones and

speakers. Tim Cook also announced ‘Apple Watch’ which was a smartwatch packed

with features like health and fitness tracking, Siri, FaceTime calls, Apple Pay, E-

mail etc. On December 13, 2016 Apple released AirPods, they were the first pair of

headphones that were truly wireless. After the release of the AirPods people who

were using Apple products like MacBook, iPhones, Apple Watch and so on were

introduced to the Apple ecosystem. Apple ecosystem can be defined as a system in

which various Apple products interact with each other in such a way that it

drastically improves the user experience for those who have multiple Apple

products in their possession. Apple ecosystem was the first gadget-based

ecosystem that provided such seamless experience and it was something that no

other company had ever achieved till date. With such features and advances it

changed the way people interacted with their devices. Recently in 2020, they

launched new generation of MacBook Pro M1 and MacBook Air M1 integrated with

the M1 chips, the first computer CPUs ever designed by Apple. It is fastest and

most optimized 8 core processor ever launched. Even in the present era Apple is a

company that is driven by innovation, it is also the company that spends a large

sum of their funds in R&D (Research and Development). Recently it has become the

first giant tech to hit a market cap of $3 trillion. Apple is definitely a company that

can be labeled as the “game changer of the industry” because of what it has

achieved and way it has been changing the lives of people since the day it was

founded.
MILESTONES PAGE 07

MILESTONES.
Apple Computer Company was founded on April 1, 1976, by Steve Jobs, Steve Wozniak, and

Ronald Wayne as a business partnership.

Apple Inc. was incorporated by Steve Jobs and Steve Wozniak in 1976.

1977
Prior to or to January 1977, Apple Inc. was an idea started as a coincidence, but

the commercial effort to secure this idea was made on January 3, 1977.
Apple Computer, Inc. was incorporated on January 3, 1977, without Wayne, who

had left and sold his share of the company back to Jobs and Wozniak for $800

only twelve days after having co-founded Apple.

The Apple II, also invented by Wozniak, was introduced on April 16, 1977, at the

first West Coast Computer Faire.

The Apple 2 released in 1977 had great input from a designer known as Jerry

Manock.
In 1977, Steve Jobs came back to Apple Inc. as an interim CEO. On his return, he

started restructuring the company.

1980
One of the milestones in the history of Apple Inc. was its initial public offering

or IPO. The company became available for the public to invest in ,in 1980.
1984
It was the first time in 1984 when Apple released its first TV commercial.
1985
The outlook on Macintosh improved with the introduction of the LaserWriter,

the first reasonably priced PostScript laser printer, and PageMaker, an early

desktop publishing application released in July 1985.

Jobs resigned from Apple in September 1985 and took a number of Apple

employees with him to found NeXT Inc.

In 1985, President Steve Jobs wanted to work on Macintosh and provide it as

the solution to the business whereas the aim of CEO Sculley had an inclination

towards the Apple 2 generation computers.

MILESTONES PAGE 08

1989
In May of the same year, Apple's market cap exceeded that of competitor

Microsoft for the first time since 1989.

Till 1989, five different acquisitions were made by Apple Inc., thus adding to the

success of the company.

The Christmas season of 1989 is the first in the company's history to have

declining sales, which led to a 20% drop in Apple's stock price.

1990
During this period, the relationship between Sculley and Gassée deteriorated,

leading Sculley to effectively demote Gassée in January 1990 by appointing

Michael Spindler as the chief operating officer.

In October 1990, Apple introduced three lower-cost models, the Macintosh

Classic, Macintosh LC, and Macintosh IIsi, all of which saw significant sales due

to pent-up demand.
1991
In 1991, Apple introduced the PowerBook, replacing the "luggable" Macintosh

Portable with a design that set the current shape for almost all modern laptops.
1994
In 1994, Apple, IBM, and Motorola formed the AIM alliance with the goal of

creating a new computing platform (the PowerPC Reference Platform), which

would use IBM and Motorola hardware coupled with Apple software.
1996
In 1996, Spindler was replaced by Gil Amelio as CEO. Hired for his reputation as

a corporate rehabilitator, Amelio made deep changes, including extensive

layoffs and cost-cutting.

1997
The NeXT acquisition was finalized on February 9, 1997, bringing Jobs back to

Apple as an advisor.
On July 9, 1997, Amelio was ousted by the board of directors after overseeing a

three-year record-low stock price and crippling financial losses.

At the August 1997 Macworld Expo in Boston, Jobs announced that Apple would

join Microsoft to release new versions of Microsoft Office for the Macintosh,

and that Microsoft had made a $150 million investment in non-voting Apple

stock.
On November 10, 1997, Apple introduced the Apple Store website, which was

tied to a new build-to-order manufacturing strategy.

MILESTONES PAGE 09

1998
On August 15, 1998, Apple introduced a new all-in-one computer reminiscent of

the Macintosh 128K: the iMac.

In 1998, Apple purchased Macromedia's Key Grip software project, signaling an

expansion into the digital video editing market.

1999
The product, still unfinished at the time of the sale, was renamed "Final Cut

Pro" when it was launched on the retail market in April 1999.

The development of Key Grip also led to Apple's release of the consumer video-

editing product iMovie in October 1999.

2000
Next, Apple successfully acquired the German company Astarte, which had

developed DVD authoring technology, as well as Astarte's corresponding

products and engineering team in April 2000.

2001
Mac OS X, based on NeXT's NeXTSTEP, OPENSTEP, and BSD Unix, was released

on March 24, 2001, after several years of development.

On May 19, 2001, Apple opened its first official eponymous retail stores in

Virginia and California.

In July 2001, Apple acquired Spruce Technologies, a PC DVD authoring

platform, to incorporate their technology into Apple's expanding portfolio of

digital video projects.

The product, which was first sold on November 10, 2001, was phenomenally

successful with over 100 million units sold within six years.
A company that has grown by 15000% since 2001 should be doing something

that most of the others aren’t doing.

Since 2001, Apple's design team has progressively abandoned the use of

translucent colored plastics first used in the iMac G3.

2002
In 2002, Apple purchased Nothing Real for their advanced digital compositing

application Shake, as well as Emagic for the music productivity application

Logic.
2003
In 2003, Apple's iTunes Store was introduced.
MILESTONES PAGE 10

2006
On January 10, 2006, the new MacBook Pro and iMac became the first Apple

computers to use Intel's Core Duo CPU. By August 7, 2006, Apple made the

transition to Intel chips for the entire Mac product line—over one year sooner

than announced.
When Apple surpassed Dell's market cap in January 2006, Jobs sent an email to
Apple employees saying Dell's CEO Michael Dell should eat his words.
Apple also introduced Boot Camp in 2006 to help users install Windows XP or

Windows Vista on their Intel Macs alongside Mac OS X.

2007
During his keynote speech at the Macworld Expo on January 9, 2007, Jobs

announced that Apple Computer, Inc. would thereafter be known as "Apple

Inc.", because the company had shifted its emphasis from computers to

consumer electronics.
In an article posted on Apple's website on February 6, 2007, Jobs wrote that

Apple would be willing to sell music on the iTunes Store without digital rights

management (DRM), thereby allowing tracks to be played on third-party

players, if record labels would agree to drop the technology.

2008
The iTunes Store quickly became the market leader in online music services,

with over five billion downloads by June 19, 2008.

In July 2008, Apple launched the App Store to sell third-party applications for

the iPhone and iPod Touch.

Within a month, the store sold 60 million applications and registered an

average daily revenue of $1 million, with Jobs speculating in August 2008 that

the App Store could become a billion-dollar business for Apple.

By October 2008, Apple was the third-largest mobile handset supplier in the

world due to the popularity of the iPhone.

2009
Other record labels eventually followed suit and Apple published a press

release in January 2009 to announce that all songs on the iTunes Store are

available without their FairPlay DRM.

On January 14, 2009, Jobs announced in an internal memo that he would be

taking a six-month medical leave of absence from Apple until the end of June

2009 and would spend the time focusing on his health.

MILESTONES PAGE 10

2010
After years of speculation and multiple rumored "leaks", Apple unveiled a large

screen, tablet-like media device known as the iPad on January 27, 2010.
Later that year on April 3, 2010, the iPad was launched in the US. It sold more

than 300,000 units on its first day, and 500,000 by the end of the first week.
In June 2010, Apple released the iPhone 4, which introduced video calling,

multitasking, and a new uninsulated stainless steel design that acted as the

phone's antenna.
In October 2010, Apple shares hit an all-time high, eclipsing $300 (~$43 split

adjusted). Later that month, Apple updated the MacBook Air laptop, iLife suite

of applications, and unveiled Mac OS X Lion, the last version with the name Mac

OS X.
2011
On January 6, 2011, the company opened its Mac App Store, a digital software

distribution platform similar to the iOS App Store.

On January 17, 2011, Jobs announced in an internal Apple memo that he would

take another medical leave of absence for an indefinite period to allow him to

focus on his health.

In August 2011, he resigned from the position of CEO because of his health

condition.
On August 24, 2011, Jobs resigned his position as CEO of Apple.
On October 5, 2011, Steve Jobs died, marking the end of an era for Apple.
2012
On August 20, 2012, Apple's rising stock price increased the company's market

capitalization to a world-record $624 billion.

2013
In March 2013, Apple filed a patent for an augmented reality (AR) system that

can identify objects in a live video stream and present information

corresponding to these objects through a computer-generated information

layer overlaid on top of the real-world image.

Alongside Google vice-president Vint Cerf and AT&T CEO Randall Stephenson,

Cook attended a closed-door summit held by President Obama on August 8,

2013, in regard to government surveillance and the Internet in the wake of the

Edward Snowden NSA incident.

MILESTONES PAGE 11

2014
On February 4, 2014, Cook met with Abdullah Gül, the President of Turkey, in

Ankara to discuss the company's involvement in the Fatih project.

In January 2016, it was announced that one billion Apple devices were in active

use worldwide.
On May 12, 2016, Apple Inc., invested $1 billion in DiDi, a Chinese transportation

network company.
2017
On April 6, 2017, Apple launched Clips, an app that allows iPad and iPhone users

to make and edit short videos with text, graphics, and effects.
In June 2017, Apple announced the HomePod, its smart speaker aimed to

compete against Sonos, Google Home, and Amazon Echo.

In November 2017, Apple announced it was branching out into original scripted

programming: a drama series starring Jennifer Aniston and Reese Witherspoon,

and a reboot of the anthology series Amazing Stories with Steven Spielberg.
2018
In June 2018, Apple signed the Writer's Guild of America's minimum basic

agreement and Oprah Winfrey to a multi-year content partnership.

In August 2018, Apple purchased Akonia Holographics for its augmented reality

goggle lens.
Apple Inc. has made a profit of US$59.531 billion in the year 2018.
2019
On January 29, 2019, Apple reported its first decline in revenues and profits in a
decade.
Xerox granted Apple engineers three days of access to the PARC facilities in

return for the option to buy 100,000 shares (5.6 million split-adjusted shares as

of March 30, 2019) of Apple at the pre-IPO price of $10 a share.

2020
On May 14, 2020, Apple acquired NextVR, a virtual reality company, based in

Newport Beach, California.

STP OF APPLE PAGE 12

SEGMENTATION, TARGETING

AND POSITIONING

SEGMENTATION STRATEGY OF APPLE:

Analyzing Consumer Demand Patterns and Segmenting based on Consumer

needs:
Before Segmenting Apple’s Market, we need to analyze the Demand Patterns of

Apple’s Costumers and get a better understanding if the consumer demand

patterns are Homogenous, Clustered or Diffused. Before, it was clearly seen that
the demand pattern of Apple’s consumers was purely Homogenous meaning that all

consumers of Apple were having similar demands and expectations when it comes

to products that Apple was manufacturing. Premium quality, enhanced security,

better user experience, optimized user interface and all other hedonic sides of the

product were expected by the target audience of Apple thus clearly showing a

Homogenous demand pattern. However, after the penetration of Chinese

manufactures in the Consumer Electronics Business who were providing relatively

cheaper products, Apple lost its customers. After this, Apple planned on entering

the budget market and released iPhone SE, iPhone XR, iPad Mini and other product

in order to cater to consumers who are more concerned when it comes to budget.

These releases were a huge hit in developing countries where the market is a bit

more budget oriented. Thus, it was concluded that Apple’s Consumer Demand

Patterns were shifted from homogenous to clustered meaning that different

consumers had different expectations from Apple’s product some expected

premium quality and didn’t care much about the price whereas some expected

quality which was just good enough but at cheaper rates. Thus, according to

consumer needs Apple has two main segments one is the price focused segment

which Apple caters to by providing products like iPhone mini, iPhone SE models

and iPad Mini models where consumers can enjoy all features of Apple’s product at

a relatively cheaper rates and the other not so price conscious segment where

Apple provides iPhone Pro and Pro Max, iPad Air and Pro etc
STP OF APPLE PAGE 13

Segmentation Based on Profilers:

Since Apple follows a Business to Consumer based business model. Apple also

segments their market based on geographic, demographic, behavioral profilers.

I.Geographic Segmentation:
Initially, Apple’s main target market based on geographic locations was major

cities across North America. However now, Apple has transformed into a Multi-

National Company, the company has its presence all over the world. Apple is seen

to cater both to the US market as well as the international market thus occupying

the global market. Apple now already has its official retail stores in more than 25

countries which means that Apple is now not limiting its market based on

countries. However, since Apple’s products are pricy Apple caters to the sub urban

and urban areas more rather than rural areas. Thus, Apple focuses mainly in city

areas where the expenditure capacity of people is comparatively more than rural

areas.
II.Demographic Segmentation:
Apple develops its products and services based on the age, occupation, and

lifestyle of its customers so, Apple uses age and income as its primary variables

when it comes to demographics. Looking at the age group of customers, Apple has

specific products so that Apple can cater to all sorts of age groups. For teenager's

apple has products such as iPod where teenagers can listen to trendy music and

socialize with friends using various social media platforms. For College students

after the age of 18 Apple has offers and discounts on their iPad, Mac, and iPhone.

For adults iPhone, iWatch and Apple TV are frequently used which makes day-to-

day calls, navigation and helps to keep track of their health. Apple has products

with both masculine and feminine color options in their product thus satisfying

both male and female customers. Apple's product is also equipped with apps for

professional people be it for note taking such as Goodnotes5, for designing such as

Procreate and other apps with exclusive features on it.

ased on income Apple has always targeted the higher earning echelon. Apple being

an affluent brand known to develop unique and premium products, the pricing for

their product is higher than other Consumer Electronics based Company which

can be affordable only to the customers having a higher income level. Since

income is related to the lifestyle of consumers Apple’s loyal customers are usually

well-off individuals who are usually willing to pay a bit extra for technology,

services, and advanced design

STP OF APPLE PAGE 14

SEGMENTATION, TARGETING

AND POSITIONING

B. This segment of consumers not only focuses on the utilitarian part of the

product but also the hedonic part of the product which Apple caters to very easily.

By this we can conclude that Apple is fanatical towards targeting the upper to

middle class households who have that extra income to spend on luxury products,

new innovation and technology.

III. Behavioral segmentation
Apple has very loyal customer base so it enjoys customer loyalty to a great extent.

Most of the ‘hardcore’ Apple lovers are not only a fan of the product but also a fan

of the whole brand. We are also aware of the fact that ‘hardcore’ Apple lovers

defend the brand’s name and products like it's their own. The chances of Apple

retaining a customer is very high that’s why we always see that when person uses

an Apple product for some time, they are very less likely to back to the previous

brand that they were using rather they upgrade to the new generation of the same

product. This is something we do not notice much with other brands even though

their products are pretty good and even their prices are competitive.
Apple also has a very high number of “switchers”, i.e., people who switch from

android to IOS or from windows to Mac OS. People who have switched to IOS or

Mac OS often report that the user experience is very smooth, fluid, feature rich

and optimized. This statement itself clarifies that the Apple not only produces high

quality products but also deliver a premium experience to its users.

IMost of the people who own Apple products neither know about most of its

features nor utilize the features to its full extent even if they are aware about it

but still buy the latest Apple product as soon as it releases. Why? This is because

of the sense of achievement they feel when they buy the latest Apple product.
STP OF APPLE PAGE 15

The Possession of the product itself serves as a status symbol because Apple

products aren’t something that everyone can afford due to which it also indicates

the wealth of the users who are owning it. Especially in a country like India or any

third world the general populace’s mentality is very supportive of the fore-

mentioned effect.
IV. Psychographic segmentation
Unlike few Chinese brands who come up with the idea of ‘Budget smartphones’ and

follow the “Selling” philosophy of marketing, Apple is a brand that delivers

premium quality products without cutting corners or making compromises so it

targets the middle class and the upper-class people.

Apple targets the people who are willing to spend some money for the

performance and the ‘premiumness’ they have to offer, i.e., the aspirers. Despite

the fact that MacOS and IOS only make up to around 25% of the total OS usage

they still very successful because Apple is more geared towards serious and

ambitious people who need Apple’s top of the range products in order to

transcend. This concludes the analysis of Apple’s segmentation strategies.

POSITIONING STRATEGIES OF APPLE:

The easiest way to position yourself in a particular market is by creating a niche

environment that other competitors cannot provide, making your USPs stand out

more than ever. Market Positioning refers to the combination of efforts made by a

company to advertise and promote itself and the resulting public perception of the

company.
order to create brand-loyal customers, a company must seek exclusivity and the

way Apple manages to do that is by having a unique operating system, that works

only on other Apple devices, as opposed to the Android OS, which is readily

available on most smartphones.

This way, they have a unique user experience and interface that has been known to

stand out for many years now. There is no other industry that is constantly

evolving and repackaging into something newer than that of consumer tech. As a

key player in this sphere, Apple has to progressively update itself in terms of new

features and technical resolutions that are commonly used as metrics to measure

the quality of a smartphone. One of the key markers in the sentiments associated

with Apple products and their users is the tag of premium quality-its heavy price

tag and the general status quo of wealth and prosperity.

STP OF APPLE PAGE 16

It has positioned itself in such a way that regardless of its high cost, people who

don’t have the means of buying one still somehow manage to get one for

themselves because of the air of “sophistication” it brings to the user.

Apple’s brand identity of being a premium and exclusive experience has helped

them stand out so far, with the addition of new features with every update in its

OS. It now occupies the “white hot center” status in the world of personal

computing and portable/handheld smart devices, be it tablets, phones, or even

watches. In the world of marketing, the “White hot center is a market position

where all the customers have their attention at”. It's essentially the prime spot of

customer attention, and everyone is watching every step the seller makes,

eventually hoping to upgrade to their appliances soon. Apple has successfully

carved itself into this niche.

To understand the current market position of Apple, let us look at the basics:

Price, Product, Place, Promotion- the Fundamentals of marketing.

Pricing:
Priced much higher than the competitors in the market, Apple has carved a niche

for itself in terms of price comparison- as in, it is free of people wondering to

choose between Apple and other similarly priced brands because the only selling

point that they need to focus on now is the quality and the innovations.
Over time, these trends change, and it is the company’s prerogative to maintain

this position by playing their cards right, as IBM and Sony, companies that once

held this position are now nowhere to be found.

Product:
Even though currently there are products in the market that offer impressive

features and great resolutions, sometimes even better than Apple, they manage to

remain in the good books of customers owing to them maintaining the quality

standards they’ve set for themselves and constantly delivering it as well.

It is also noteworthy that upon product launch, some products were found to be

faulty such as the iPhone 3G, or the iPod scratches. However, they would

immediately recall all devices in the product line and then fix the problem before it

starts to affect their brand name. There is a consistency in the quality that the

customers have grown to desire and long for. There is no substitute for Apple’s

line of products, irrespective of whether other products can be used to conduct

the same tasks or whether they have the same features, because the experience is

unique to itself.
STP OF APPLE PAGE 17

Place:
Apple’s clever marketing has even made the process of purchasing Apple products

a part of the charm, or the experience, with multiple outlets opening up across

countries as opposed to most other companies choosing to primarily rely upon

internet sales or third-party outlets to sell their devices. This further adds to the

exclusivity tag that Apple users pride themselves upon, the feeling of being a part

of an elite circle.
Promotion:
Everyone recalls the iconic 1984 unveiling of the Macintosh computer, something

hitherto unseen for a consumer tech product launch, and soon followed suit by

other companies. The flair and grandeur that Apple product launches have, with an

exclusive guest list all add to its unique symbolic positioning. With ads that are

creative and targeted to promote new features, the customer knows exactly what

they're going to get before they have even made the purchase.
Other clever tactics include claims of low stock in the initial phase after launch,

causing a rush to buy whatever that’s sold.

Branding:
With the average consumer’s psychology associating higher prices with better

quality and features, Apple has successfully branded itself as a luxury commodity,

yet in a sector of products that are essential for the modern man, thereby never
running low on sales figures. Most people think of smartphones as a prudent

investment and choose to go for quality and don’t mind spending a little more than

their budget.
PESTLE ANALYSIS PAGE 18

PESTLE ANALYSIS
PESTLE analysis is used as a way of determining the bird’s eye view of the environments that any

given business has to operate in, especially in view of a new launch or a shift in company

philosophy or policy.

PESTLE stands for “Political, Economical, Social, Technological, Legal, and

Environmental” factors, and is generally a very good way of analyzing the internal

environments of a company. Given that Apple is a multinational corporation, all of

these factors become extremely crucial, and one or two may take precedence over

the others in specific segments. Historically, Apple has had to contend with

multiple economic shifts, legal battles, as well as policy-regulation changes

brought forward by different governments. It will help to use the given framework

of PESTLE to explore the same.

Political Factors:
Apple has worker and supplier contracts with many different countries around the

world, and any political unrest, including worker unionization, student-protests,

or policy changes, will inevitably bring a break in their supply chain.

Foxconn, arguably Apple’s biggest original device manufacturer (ODM) has come

under fire for terrible working conditions for their employees, and this brought

Apple’s contract terms to light. In a Guardian article by Brian Merchant, the

Chinese plant of Longhua was examined for the case of 14 worker suicides in 2010,

where high pressure, inadequate pay, and lack of benefits drove workers to fatally

injure themselves. Further, Foxconn has recently promised more than 13,000 jobs

in a facility at Wisconsin, but has since withdrawn its statements, now stating the

facility will be primarily for research and development, and may not give the same

economic lift to the area as predicted. This has resulted in backlash against the

company.
This also highlights the fact that, with more than 1.3 million people being employed

by Foxconn in China, and Foxconn being crucial to Apple’s production, the current

divide between the USA and China is bound to have its repercussions on the

company.
PESTLE ANALYSIS PAGE 19

Pother Apple supplier, this time a e-notebook ODM, Wistron has its import license

suspended under supposed claims of non-compliance with e-waste rules. Wistron

is another company that employs workers in Malaysia, and other South-East Asian

countries.
Further, the Russian government did not have a pleasant response to the CEO of

the company, Tim Cook, coming out as a member of the queer community. The

Russian government, has also been extremely vocal about their disdain for iPhones

in the hands of the common citizen, that they claim are “spying” on the country.

Further, the government has mandated that Apple install “Alternative Russian

Software” on all Apple devices starting January 1st, 2021. It is clear that a lot of this

is happening in tandem with the existing rift with China, and the coming out of the

CEO. Regardless, Apple still saw 1% growth in their sales in Russia in 2020.
Further, Apple has very active lobbying efforts, especially in the United States,

with more than 46 employees working as political lobbyists for the company, and

the lobbying budget only increasing every year. Given that this corporation is one

of the biggest US taxpayers, it is only fitting that they have the same level of

lobbying pull.
Finally, to consider the political factors with respect to India, it is clear that the

Indian government is striving for their Make-in-India efforts, and as of January,

2022, the government has asked for Apple to increase its production to 50 billions

USD in the next decade (5-6 years), and expand their market to also include

airpods, Macbooks, etc.,

Economic Factors:
Given that Apple sources a big part of its revenue from international markets (The

2020 Apple Annual Report gives a number of 59%), it only makes sense that a big

part of the financing of the company is predicting the changes in currency

exchange rates, interest rates, and keeping track of customer annual disposable

incomes in their respective countries. Given that the US Dollar is only getting

stronger, and the exchange rate is getting steeper, Apple has made a dedicated

effort in trying to hedge this currency rate.

In the same report mentioned above, there are also concerns with Apple's

exposure to credit risk, considering it relies on a number of third-party networks

for its distribution, and also sells to smaller businesses that are not insured or

covered by any banks or any resource of reliable strength.

PESTLE ANALYSIS PAGE 20

Apple has definitely expressed problems with the pandemic, and while there have

been no significant losses because of the company’s very large cash reserve

(around 200 billion USD), there is definitely the idea that the company’s future is

uncertain.
The changing interest rates will also steeply decline the value of the company’s

investment portfolio, further exposing it to credit risk.

Economic and political factors are often symbiotic, and Apple has definitely seen

an increase in cost of labor, because as mentioned earlier most of their production

partners have contracted labor in China, and the rates per hour have reached 6

USD and are only set to increase.

Given the healthcare costs, and reduction of disposable income during the

pandemic, Apple might just see repercussions in the way their customers are

choosing to purchase products. Further, changes in the larger economic

environment, owing to the pandemic, might itself adversely affect the company,

and can lead to considerable losses.

Social Factors:
The biggest socio-cultural force in favor of Apple is the increasing reliance of the

world on technology, especially mobile technology. As technology becomes

indispensable, so does the user connection with the same, strengthen. Apple is

known for its exceptional branding, smooth user experience, integrated cloud

infrastructure with other Apple products, and an interface that is unique to iOS.

Apple is not only seen as a premium product, but also as a symbol of status,

wealth, and social standing. Even with its higher price point, or perhaps because of

its higher price point (and its tie-in to wealth) Apple only sees an increase in sales.
Another trend in favor of the Company is the increasing use of social media, and

the youth favoring mobile devices (smartphones, airpods, smartwatches) because

of ease of access to social media. Social media also promotes Apple products not

only with brand deals and sponsorships but with influencers often using Apple

products as part of their “aesthetic” in their posts and reels.

Further, Apple has also grasped music, and how the music industry in and of itself

is expanding to occupy digital mediums better. iTunes is arguably the biggest

library (rivaled perhaps only by Spotify) of music, podcasts and other audio

material existing on the internet, that is exclusive to iOS and its consumers.
Apple has also grasped onto the online digital media content trend, launching

Apple TV+ their own streaming service in 2018, and is slowly building a database of

productions, to rival even its best competitors in the market.

PESTLE ANALYSIS PAGE 21

Environmental Factors:
Apple has openly established its pro-climate change stance, urging the US

government to comply with obligations of the Paris Climate Agreement from 2017.

E-waste is clearly a major problem with any measure of technological production,

specifically the large number of lithium batteries resulting from discarded tech

products.
Legal Factors:
The biggest Legal Factor Apple has had to contend with is definitely privacy laws

and regulations that the company has had to defend. Even recently, with the

debate around whether the company should legally hack into its iPhone to

demonstrate the threat of terrorism with Apple devices, has resulted in many

parties favoring the company’s stance of refusing to do so. Apple also has to

contend with multiple battles with smaller business and individual parties claiming

IP infringement on technology that the company has implemented. Whether the

claims are valid or not is immaterial, because the company still has to dedicate a

sizable amount of revenue and workforce to fight or settle these claims.

For example, Apple has faced backlash and sued over their in-app 30% fee for
distribution of digital content, both in India (in a case registered by a small non-
profit group) and in the European Union, because it has been argued that this

effectively bars other competitors from entering the market, and is also

unnecessarily exorbitant.
Technological Factors:
Both the Apple 2020 and 2021 Annual Reports state the imminent risk of

technological failure either due to natural disaster, or shutdown of networks will

spell disaster for the company. Further, from a production stand-point the

company itself has very little direct control over manufacturing, and quality of

manufacturing, as most of it is outsourced to firms that contract labor in Asian

countries
Further, the rapidly changing trends in technology can be both a boon and a bane

to the company. On the one hand, the favoring cloud infrastructure is a trend

Apple caught onto very early, introducing features like AirDrop, and this still

continues to be a huge opportunity for the company. Apple has its own design for

its hardware, operating system and more.

PESTLE ANALYSIS PAGE 22

However, there is fierce competition in the market, with almost similar features

(most android phones now allow you to connect to your other devices, Microsoft

and Google are racing ahead in developing better cloud infrastructure) and at a

better price point, and this is a threat that simply cannot be ignored. Further,

technological innovation can always race ahead of the company, and not only does

the company have to actively fund a Research and Development department, even

at the price of no actual returns or innovation, it also has to ensure to keep up

with industry trends and standards.

Apple also has the risk of IP infringement, as it is more difficult to fight these

battles in an aggressively changing environment, where every competitor has a

version of the same feature. For example, Apple has Siri for a voice assistant,

Google has Google Voice, Samsung has Bixby, Microsoft has Cortana, etc.,
It has the opportunity to expand its App Store, while having to fend off threats of

third party applications, or pirated copies (“cracked” apks) of the apps on their

store.
PHILOSOPHY PAGE 23

MARKETING ORIENTATION

AND PHILOSOPHY

Like any other Consumer Electronics Based Brand Apple Inc follows a mix of

different marketing philosophies but primarily is seen to focus on Product Concept

of Marketing and Selling Concept. Apple has always been product-centered and

because of this it has been successful in establishing brand loyalty, unlike any

other big players present in the market.

Apple's Product Philosophy:

Apple is always seen to focus on its product quality, performance and features of

the product rather than focusing on price and mass production. The Company

strongly believes that it can sustain itself through their approach of holding on to

high standards of quality. With a lot of big players in the Consumer Electronics

Market who are offering products at cheaper rates, Apple is getting or at least was
meant to get stiffer competitions but CEO of Apple Tim Cook believes that Apple is

nonchalant in this scenario and calls these lower-cost counterpart market as “Junk

Market.” According to him Apple does not cater to these sorts of markets and

doesn’t plan on creating products which can compromise Apple’s premium quality

while trying to make their products cheaper. Apple focuses on prioritizing quality

over quantity. While a lot of companies are throwing out a wide array of products

one after another in a very short interval of time, Apple on the other hand sticks to

focus on selected products and tries to enhance those selected range of products

every time they produce it. Apple believes that if they start doing what most

competitors are doing when it comes to production, they will be compromising the

quality of their product which can affect their target of being a brand that is

known to provide premium products.

PHILOSPHY PAGE 24

When it comes to statistics and numbers it is clearly seen that competitors of

Apple like Samsung are greater while taking unit sales into consideration but this

doesn’t seem to worry Apple because they are more fanatical towards creating and

sustaining their brand loyalty and position themselves in the market as a brand

which provides ‘Luxurious Products’ without worrying much about the price tag

attached. Thus, it is conclusive that Apple follows Product Philosophy at its core.

Apple's Selling Philosophy:

In order to obtain increased volume of sales Apple also carries out aggressive

selling efforts and comes up with different promotional efforts while selling their

products. After a product is developed Apple holds a grand launch event where

Apple explains why their product is unlike any other currently present in the

market. Moreover, when a consumer visits an Apple Store, Apple also aims to

provide an experience unlike any other competitors in the market, where users

can surf through their products as if they have already purchased that product

which in a way helps the consumers to familiarize themselves with the product.

This is a part of Apple's personal selling marketing mix. Apple also comes up with a

lot of promotions from time to time. For example: Apple gives discounts up to $200

to students if they are planning to buy an iPad or a Mac. Also, through the Apple

Education store, consumers can get free second-generation Air Pods when

purchasing a new MacBook or iPad. Apple also focuses on effective and aggressive

advertising of their products. Apple advertises its products on social media

platforms, websites and most prominently on YouTube. Apple is also present in

Google’s digital Marketing Network and has also been advertising its products on

technology news websites. Thus, through personal selling, advertising and

promotions Apple is also seen to comply with the Selling Concept of Marketing.