Apple to observe exponential
growth through curious strategies
The world's fifteenth biggest company
in terms of turnover (Fortune Global 500, 2014) keeps gaining ground
and growing. The company has recorded a 53.4 billion dollar net
income for its latest fiscal year, that is to say an increase of 35%.
Apple's turnover has also highly soared to 233.7 billion dollars for
the same period. How can such a success be explained ?
Launching new products
As the holiday season gets closer,
Apple has counted on its new products. The company launched its new
iPhone 6 in September but has also announced the release of a new
iPad and Apple TVs, which may boost its sales. Nevertheless, the
iPhone stays the apple of the company's eyes and represents the most
profitable product. 9.9 million iPads have been sold during the last
quarter, which is considered as a decrease in this item's sales.
Expanding has also been one of
Apple's strategies to increase its income. The firm realised the
opportunity that existed overseas and got into the Chinese market,
which currently is its second biggest market following the United
States. Yet, Apple's activity is slightly in decline in Europe and
Japan.
To improve its supply, the company
plans to have 40 Apple stores in China by mid-2016 as the demand is
increasing. China's last quarter turnover represented 12.51 billion
dollars, in other words this figure is twice as much as last year's
turnover in China.
Nevertheless, the fact that most of
Apple's success is due to its iPhone is worrying. Even though every
new iPhone's launch is a great success, many criticisms can be heard
concerning the new smartphone, recently launched. It is said that
this new phone has no real innovation compared to the lattest. Basing
its growth mainly on one product could be dangerous and the company's
current CEO Tim Cook recently announced that the company wondered if
they would record a one or two-digit increase for the next quarter.
Saving money at all costs
Regardless of Apple's significant
income, it can save a lot of money thanks to its two subsidiaries.
Both are located in Ireland but one is domiciled in the Caribbean.
Even though this is controversial, this technique is legal and has
enabled Apple to pay 2% of its income in taxes in 2011. This
money-transfering mechanism enables Apple to save incredible amounts
of money.
However, the firm still meets its
customers' needs. Even though the new version of its key product, the
iPhone, is discussed, Apple keeps on satisfying thanks to innovation.
Each device launched has something which is new, even if iPhones
always keep their traditional design. A thin, customisable,
tactile-screened, high-priced phone is Apple's trademark. Yet, price
is not what dissuades customers from buying these devices. Apple's
difference may rest on the quality and luxurious image conveyed by
the company. Apple is now known to differentiate from others by
setting high prices and still attracts customers.
Thus, how can the company make so
many profits ?
A recent confidential document has
been released by the French operator SFR, in which Apple's
domineering strategy was explained. It was said that the firm forced
its major distributors to buy a planned amount of phones, which was
impossible to sell in normal conditions. This forced them to put the
iPhones in a better place in their stores. Consequently, the iPhone's
high cost had an impact on the other devices sold in stores. This is
why other brands' phones look very expensive. Then, when operators
had bought the phones, they had to make at least two sales assistants
available to iPhone promotion only. What's more, operators also have
to pay for Apple's communication campaign, which is why the
operators' logos are to be seen at the end of Apple's advertisements.
We could finally say that selling Apple's devices is kind of an
investment.
The giant high-tech designer has been
building its empire for many years and keeps on making profits. Even
if the world's major economies have been hit by crises, Apple still
attracts customers all over the world and it seems that nothing can
stop it from growing so fast.
Cecile H.
Sources: http://www.lemonde.fr/entreprises/article/2015/10/27/porte-par-les-ventes-d-iphone-apple-annonce-un-chiffre-d-affaires-en-forte-hausse_4798059_1656994.html
Sources: http://www.lemonde.fr/entreprises/article/2015/10/27/porte-par-les-ventes-d-iphone-apple-annonce-un-chiffre-d-affaires-en-forte-hausse_4798059_1656994.html
Many times, all the electronic products that I have had were Apple’s ones. I used to buy them and I will continue to purchase its products because Apple represents a sign of quality and success all around the world.
ReplyDeleteI have one of the first Apple IPod since I was 14 years old and it is still working flawlessly.
I’ve also noticed that sometimes buying Apple products in another country is cheaper. For example, I have a Mac laptop who came from the United States and it cost 200$ less than the price displayed in France.
The only problem with Apple is that the price is very high and you discover how are expensive the different equipment specific to Apple once you have already purchased it.
But as you said in your blog article, Apple is constantly innovating to face its competitors and I really appreciate this.
Laurine V.
I agree with you on the fact that Apple's iPod are high-quality products. I've had one for a very long time also and could experience the quality you were talking about. Yet, I have never had other Apple products, but quality is one of their trademarks. As you also said, high price is the main aspect in Apple's products. This may be dissuasive for many people, but Apple has managed to find its target, and then, to build its empire. I think Apple hasn't to be worried about its future, because its customers will always stay faithful to the brand, as you said in your comment. Thank you for commenting.
DeleteCecile H.
I think at the beginning when Apple entered into Chinese market, people bought it because of its high price and luxury outlook. After a period of time, people started to love it because of its outstanding fonctions and stable system. But according to my point of view, although it is obviously that Apple does a great job in their product expansion and it is still the leader in this field, its success should be own to the extraordinary potency of Jobs's personality. We couldn't deny that many Apple fans buy new Apple products each year consistently, not because they need a new telephone. They love the company's culture, they admire Jobs more than the product itself.
ReplyDeleteWang Yifan
I agree with the fact that many people tend to have bought Apple's product thanks to Steve Jobs. I think this is the main strategy of the brand : being attractive, and even looking attractive. I think this is one of the reasons why Steve Jobs was such an important CEO, he was eloquent and managed to convince people to buy its product without trying it, at least to make people want to buy it.
DeleteCecile H.
Hello Cecile,
DeleteI learnt quite a lot by reading your article! In my opinion, Apple devices are too expensive giving that the company paid only 2% of its income in taxes, in 2011. This is incredible I must say! They could easily resort to economies of scale in order to slightly decrease the price at least. Besides, I agree with you concerning Steve Jobs's ability to launch a brand which has become iconic.
Charlotte. L
Hi Chalotte,
ReplyDeleteThank you for your comment. I agree with you regarding Apple products price. That is even more shocking when you know how the company behaves with its distributors such as telephone operators. Yet, I think Apple is not the only big firm to do so. According to me, there are a lot of things that we don't know about big companies. By the way, the information that I talk about in my article were meant to stay confidential, which shows how companies hide their real activity.
Cecile H.
Hi Chalotte,
ReplyDeleteThank you for your comment. I agree with you regarding Apple products price. That is even more shocking when you know how the company behaves with its distributors such as telephone operators. Yet, I think Apple is not the only big firm to do so. According to me, there are a lot of things that we don't know about big companies. By the way, the information that I talk about in my article were meant to stay confidential, which shows how companies hide their real activity.
Cecile H.