Apple Inc - What are Business Challenges?

 

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You know it very well that Apple Inc (Apple), a US-based giant multinational enterprise, is one of the largest technology-based companies operating globally and despite tough competition from its other tech-rivals which are making especially smartphones on low prices than Apple, but Apple has been increasing its revenue streams on consistent basis.

The main products and services of Apple include periodic releases of iPhones, iPods, iPads, computers, software, hardware, and online applications that are accessible through Apple Store, and company has successfully launched Apple Watch, TV, and developmental project regarding electric vehicle.

Company maintains global leadership position in the development and launch of high-tech, superior quality, but expensive products such as iPhones, electronic gadgets, computers which have so much popularity and wide range of brand loyalty of customers on global basis.

Customers of Apple feel themselves as special class of society whenever they decide to buy and operate iPhones and other device(s) with the name tag of company, particularly iPhones which are more popular in wealthy segments of society, businesspeople, and younger generations. 

Revenue especially in the segment of iPhones constitutes more than 50% out of total revenue of the business.

Relevant Statistics

Due to business competition on international scale, particularly in the segment of iPhones, total revenue of Apple continues to face continuous pressure. 

As per above given chart, at the closing year of 2023, Apple generated total revenue amounting to US$ 383.2 billion, that is 2.81% less than year 2022.

Business Challenges

Company has been facing tough competition from its other tech-rivals such as Samsung, Huawei, Xiaomi, LG, Oppo, Lenovo, HP, Dell, Asus, Acers, Google, Amazon, and Facebook in the categories of smartphones, computers, electronic devices, and various online applications respectively.

Apple’s competitors have been consistently innovating, designing, developing, and manufacturing smartphones, electronic gadgets, computers, and applications at less prices as compared to Apple, and they are effectively penetrating into the Asian, African, American, and European markets, so, they are well-positioned in reducing market share of Apple’s products, more importantly, in the segment of iPhones.

Social Challenges

You know that novel Coronavirus 19 pandemic has affected global economies in major parts of the world, so, businesses, social, and other economic activities either full or partly remained suspended from 2020 to 2021 and some parts of the economies of world are still facing side effects of partial lockdown or smart lockdown.

The whole world is still facing bad consequences of partial and full lockdowns which happened from 2020 to 2021, and nowadays, world is facing economic issues in the form of global recession, rising inflation, disruptions in supply chains, and more notably, shortages of food items and energy resources.

The rising unemployment, inflationary spirals, closures of small and medium-sized businesses in USA, Asia, Africa, and other developed parts of the world were unbearable for common consumers and businesses which happened during pandemic, so, now global societies cannot bear further economic pressures because of lockdowns, wars, periodic suspension of economic, and business activities on international scale at present and in future.

Under the current global economic scenario which has reduced purchasing power of common consumers, younger generations, and businesspeople, Apple’s products which are high-priced and these remain under constant threats from its cheaper producing tech-rivals, might face slow inventory movements for its products in the days to follow, especially iPhones.

Concluding Remarks

Now, you can understand that Apple Inc has business challenges as any big business giant faces, but a company which is significantly dependent on its single segment that is iPhones, needs to revisit its future strategic policies and should look other areas to diversify.

You might anticipate that common consumers having faced considerable declines in economic and business activities owing to worldwide pandemic, recessions, inflation, disturbances in global supply chains, and regional wars, so, consequently, you see considerable reduction in purchasing power of people worldwide.

Keeping in view of the above cited social, business, and economic factors, expensive high-tech products of Apple might face slow selling at retail level, in terms of number of units sold and revenue generation, so, consolidated business accounts of Apple Inc indicate tend to show decline because of tough business competition and other social challenges at global scale.

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