Apple Future: Apple Watch Apple Tv And/Or Apple Car Case Study Solution
TWOS Analysis
TWOS Analysis could be used to determine certain strategies for Apple. A brief TWOS Analysis of Apple is given in the Table 2. (Weihrich, 2017)
Table-2: TWOS Analysis
| Strengths | Weaknesses
|
|
| Opportunities | § Utilization of financial resources, technical expertise, rapid innovation process and strong brand recognition to expand into new markets by introducing either new products to current markets or new markets, or by introducing current products to current markets or new markets. | § Limited distribution networks resist the company to introduce new products at a large scale.
§ Dependence on high end market limits the company to target a large consumer base though expansion |
| Threats | § Strong brand recognition enables Apple to gain a potential market share even after the presence of large number of competitors in the market i.e. Smartwatch.
§ Rapid innovation process to avoid delays in introducing new products in the market which could result in technology theft. |
§ High market prices increases the competitive rivalry for Apple, as consumer can easily shift to the competitor’s product if the competitors became able to provide the same quality as Apple at lower prices. |
External Analysis
Apple Watch
Market Analysis
Before Apple, several well-known manufacturers including Samsung, Google, and Pebble etc. have entered the Smartwatch market. A wide range of differentiated smartwatch on the basis of materials, prices, specs etc. had been introduced in the market till the end of 2014. Google introduced its first ever Android Watch in 2013 which was followed by Samsung, Motorola, and LG etc. The Android watches allow the user to get notifications after connecting with any Android Smart phone.
These watches display text messages, emails, and incoming calls etc. from the user’s phone. Along with it, these watches include various fitness apps and support third party apps. Pebble- was the pioneer in Smartwatch which build a proprietary smartwatch OS in early 2013. It has a market share of 8%. However, Samsung was a market leader with selling 1.2 million watches in 2014. The Smartwatch market has a growing demand, but has limited sales i.e. 3.6-6.8 million units sold in 2014. However, analysts predict that the market would grow from 3.6 million to 34 million units in 2015 with Apple having a share of 50%.
Apple launched its Smartwatch collections in 2015 with similar features along with certain innovative features including;
- 38 different combinations to choose from
- Customizable digital watch faces
- Extremely accurate timekeeping engine
- Digital crown allowing user to scroll and zoom screen.
- Force touch enabling users to open additional options if pressed hard.
- Taptic engine altering user to different types of notifications.
- Siri: Voice activated assistant
Although, these innovative features allowed Apple to differentiate its watch from the other rivals in the market, but, Apple lacks behind in the features similar to the Android Watches. For example, the supported apps on Apple Smartwatch equals to 3500 approximately as compare to 4000 at Android Watch.
In-spite of these lacking, the initial launch for Apple was a great success and the initial stock was sold within hours. Apple’s estimated sales of Smartwatch in 2015 is 15 million that is more than double the total industry shipments in 2014. Like before, Apple has adopted the premium pricing strategy for its Smartwatch. The least expensive Apple watch price $349 that is more than the most expensive watches of the competitors like Samsung, Pebble etc.
Although, the launch was overall a success, but, the negative reviews over the performance of the Apple Watch along with a highest market prices raises several concerns for Tim Cook. If the lacking in the Apple Smartwatch would not be solved early, the company may lose its market share in this segment with the increasing demand for Android Watch. The company could try its best to justify its premium prices over the Android Smartwatch.
Porter’s Five Forces (Smartwatch)
Threat of New Entrants
Threat of new entrants in the Smartwatch industry is moderate due to the presence of high competition in the industry, along with a requirement of technical expertise and an experience in the field of technology.
Threat of Substitution
Threat of substitution for Smartwatch industry is moderate. Smartwatch could be substituted easily with the Smartphones. People may not prefer to carry another gadget for providing same type of notifications and services. However, in the increasing trend towards time saving, Smartwatch could be a potential product for the consumers.
Competitive Rivalry
Competitive rivalry in the smartwatch industry is high. Presence of Android watches with similar type of features along with a better performance pose an intense competitive rivalry for Apple. However, this rivalry can be pacified by resolving the user issues with Apple Smartwatch.
Bargaining Power of Buyer
Bargaining power of buyer in overall industry is high due to the presence of large number of competitors in the markets. However, bargaining power of buyer for Apple is low due to its strong brand recognition. It could be seen from the point that Apple has highest prices for its Smartwatch, in-spite of the fact, it has a potential market share in the industry.
Bargaining Power of Supplier
Bargaining power of supplier in the Smartwatch industry is low with the presence of a large number of suppliers and the bulk purchases by the giant players in the industry.
Apple’s Television
Market Analysis
Apple started its journey in television sector by introducing first-generation Apple-TV in 2007, which allowed users to consume their iTunes content on a TV set. However, its second generation, which was released in 2010 allowed the users to access, organize and stream the content easily. By early 2015, Apple has sold about 25 million TV boxes approximately. After the success of Apple box.
Steve Jobs and other executives at Apple founded a great opportunity and potential in the TV industry. They realized that the industry was still stuck in the 1970s models with a traditional user interface. Jobs aimed at providing integrated televisions, which would connect the TV with all other user devices like mobile phones etc.
TV industry was divided into two segments i.e. Programming and pay-tv services. Major players in the content building segment include;
- Viacom
- Disney
- Fox
- NBC Universal etc.
Along with these content builders, there are certain market players that distribute these contents through streaming or by means of traditional cable, broadcast and satellite services. These distributers include Comcast, Amazon, Hulu, Netflix etc.
The cable TV service prices were increasing with an annual 6% rate, along with increasing number of subscribers to online streaming with a decline in traditional pay-tv service subscribers. In spite of these factors, still 70-80% households were using traditional cable services. This shows that the online streaming services with an integrated TV has a great market potential for Apple............
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