Apple Inc. is a multinational American company with its headquarters based in Cupertino, California. The company designs develops and manufactures computer software, consumer electronics and personal computers. The best hardware products of the company involve Mac computer line, iPod music players, iPhone smart phones and iPad tablet computers. The company’s major software include OS x, iOS operating systems, a media browser known as iTunes, Safari, which is a common web browser, iLife, iWork creativities and Production suit software. The company was created in January 9, 2007, by Steve Jobs, Wayne Ronald and with the help of Steve Wozniak. The Company was incorporated as Apple Computer Inc. on the 3rd January of the year 1977. On January 9, 2007, retraction of the word computer made the company’s official name Apple. The company comes third in ranking among the world’s best information technology companies after Samsung Electronics and comes third as the world’s largest phone making company after Nokia and Samsung. In the year 2008, Fortune magazine ranked Apple Company as not only the United States of America most admired company but also the most admired company in the world. It maintained this status from the year 2008 to the year 2012.
However, the company has received several criticisms for its environmental and business environments. Several criticisms about its contractor labor practices came forward. By the onset of November in the year 2012, the company had 394 retail stores spread over in fourteen countries. The company earns the estimated revenue of 414 billion US dollars as per January 2013. On September 29, 2012, the company had 72,800 permanently full time employees and 3,300 contemporary employees all over the world.
Nonetheless, several factors affect the relationship between the supply and demand of the Apple products. The first factor is the fact that the price of the Apple products is relatively high; this limits the supply of the goods to the market. The price of the Apple products is high as compared to the median household income of the American citizens. For example, the price of an iPad ranges between 399 to 529 US dollars, whereas the median household income for the American citizens is 126 dollars. This highly limits the supply to only those people, who can afford to buy the products after accomplishing their basic needs such as food, shelter and clothing. Hence, it reduces the demand for the products and affects the profit negatively.
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The taste of the population also affects the relationship between the supply and demand of the Apple products. Apple, named the most admired company in the world between 2008 and 2012, makes the demand of its products rise. Most Apple products are luxurious and stylish. The majority of its products are also easily portable, have a relatively higher battery life than most of other companies products such as Android products. The public tends to admire such products, hence increasing the demand despite the cost. This, in turn, puts the company in a situation to try to increase the supply in order to meet the high demand for its products, hence making the company’s profits rise significantly. For example, the sales of iPad 4 topped 2 million since its launch on May 31, 2010 due to its high portability, low weight, long battery life and ease of use. This is because the current populations’ taste for computer products relies on such qualities of the products as being easily portable and having a long battery life.
The number of customers also favors the demand for the Apple products. Since there is a relative increase in the number of computer literate people across the world, Apple, being a computer manufacturing multinational company, has a very large market of selling its products. This increases the demand for the company’s products and forces the company to employ methods, aimed at increasing the supply to curb the high demand for the products. Being a multinational company, Apple has branches and retail outlets in many countries in the world; hence, the demand for its products increases.
The income of customers has a significant influence on the relationship between the supply and demand of the Apple products. The median wage for an average American citizen is 126 dollars. This makes most of the Apple products affordable by most of people living in the United States of America. However , the market and hence the demand for the Apple products in both developing and undeveloped nations is generally low due to the fact that most people in those countries live below a dollar or earn less than a dollar daily. This makes the price of the Apple products unaffordable to the majority of people living in such countries, hence, greatly reducing both the demand and sales of the company’s products.
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The price of competing products has a significant influence on the relationship between the supply and demand of the Apple company products. Competing companies, such as Samsung, Nokia, Microsoft, HP and many others, have their products generally cheaper than the Apple products. This makes the public opt for substitutions by other companies that have more affordable products. In the recent years, Apple has received stiff completion from the Android company that makes a similar electronic product, but at a cheaper and more affordable price. This reduces the demand for the Apple products, hence, having a significant influence on the profits the company makes annually. Many people prefer the Android products because of their close similarity to the Apple products, a substantially cheaper price.
Apple has an oligopolistic market structure, whereby the number of sellers is limited. Its unique products, such as the iPad, have little lookalikes in the market, such as Android tablets, which rarely match them. This market structure reduces the competition in sales, hence the company has an ample time to make profits and control the market. It, however, receives a monopolistic competition, whereby several other companies, such as Android, provide almost similar electronic products to the ones produced by Apple Inc., but which are not perfect substitutes. Hence, the company takes the prices of its competitors as given and ignores the impact of the price of its products on other companies, given the fact that the products are not perfect substitutes. Apple Company, hence, sets its own prices for its products, which even being higher than products of competitors, they still sale highly, because the products are more stylish and admirable. The only competition the company can receive in such a market structure is a non-price competition, in which the company has to maintain a high quality of its products as compared to similar products by other companies in order to beat the competition. A thing that the Apple Inc. has successfully managed to accomplish as far as now is concerned. The company almost attained the monopoly in terms of the production of portable computer tablets before the onset of Android tablets. The high quality of the company’s products provides a barrier of market competition. The Apple products come with a uniqueness that no other competing company has managed to counter.
Apple Inc. takes many risks, which are normal, given the fact that it is a large company. The fact that the company depends on other companies in terms of delivering its final product is such a high risk. The company depends on Foxconn Company that assembles its products for the final selling. This makes the Apple Company not be in a full control of its supply as the supply greatly depends on the performance of the assembly associate company, failure of which will, in turn, cause an inevitable fall in the supply of the company’s products. The company also relies on other companies in terms of making some components of its final products, for example, the iPad’s IPS displays are made by other independent companies such as LG, Toshiba and Samsung. This dependence is risky as the company highly depends on the performance of these other companies. The Foxconn company that assembles iPads for the Apple Company has received several accusations of having unsafe employee environment with a recent employee suicide after misplacing an iPhone 4, and an explosion caused by combustible dust in an iPad assembly line due to the poor ventilation. Foxconn Company has also received several condemnations of employee mistreatment. This will definitely affect the Apple Company, despite its recent naming as the world’s number one brand.
The company has, however, several chances to take advantage of the risks in terms of increasing its profits. The fact that it uses other companies to make the components of its final products can increase the quality of the products since the associating companies have the industrial experience in making the inclusions. However, it can also reduce the quality of the end products as such associating companies cannot be trusted enough to make the inclusions to the best of their capabilities. The assembling companies can also affect the Apple Company both positively in increasing the rate of assembly, hence increasing the supply, or reducing the supply, in case such companies are faced by their own internal problems.
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The Apple Inc. has experienced various business cycles since its establishment. Since the year 1980, the company saw a rise in sales and profits due to its inclusion of floppy disks as an easier way of saving data. However, the introduction of Apple 3 in May 1980 to compete IBM and Microsoft products was a general failure. The launch of the Macintosh in 1984 saw initial high sells for the products. The sales, however, declined with time due to the high price and the product’s limited range of software. The company experienced a decline between the year 1986 and 1997 with the introduction of the portable Macintosh that was to be as efficient as the desktop Macintosh. However, it had several disadvantages that reduced its sales; for example, it weighed as heavy as 7.5 kilograms and had only a 12-hour battery life. The portable Macintosh, however, was a success for the company despite its disadvantages. The portable Macintosh and the introduction of system 7 (an upgrade of the company’s software) were successes to the company marking its first golden age. Toward the end of the first golden age, the company started experiencing failures that came with the production of digital cameras, portable CD players, video consoles, speakers and TV appliances due to John Scullery’s unrealistic market projections. The company invested a lot of money in producing the electronics, which ended up having poor sales. The production of Apple 2 series also proved very expensive, basing on the poor Macintosh sales.
Nonetheless, the company experienced a return to profitability as from August 15, 1998, with the introduction of the iMac, which was designed by Jonathan Ive, who later designed the iPod and iPhone. The iMac had a modern technology and unique design; thus, it sold over 800,000 products within its first 5 months in the market. This paved way to the comeback of the company, which has seen a constant increase in sales since then.
Future growth of Apple Inc. depends on several factors. As long as the company maintains the high quality of its products, it will go on benefiting from high sales. However, it is essential to establish an independent assembly plant for the company to reduce the dependence on assembly companies, as well as set up manufacturing plants for inclusions acquired from other companies for the final product. This will ensure the independence of the company and, hence, increase the profits, and they will no longer depend on the performance of associating companies.
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