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Apple Porters Five Forces 2018


By: Jonathan Kush & Patricia Nanjekhe


Apple is a technology company engaged in the design, manufacture and marketing of smartphones, tablets and personal computers. This report examines the global smartphone market, which has become highly fragmented into high-end and low-end players. Apple being a high-end market player faces competition primarily from Samsung. Nevertheless, by the end of 2018, Apples share of the global smartphone market had fallen to third, behind Huawei and leader Samsung. It is the first time Apple was not in the top 2 global smartphone firms since 2011. Apple has also continually lost market share in China, falling from top spot to 4th in 2018 as it battles low cost Chinese rivals. Using Porters five forces framework, this report examines the competitive environment in the global smartphone industry and how the five forces of competition including the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products and services, and the intensity of rivalry among competitors in the industry have impacted Apple. The report looks more importantly at the role these competitive forces are playing in Apples demise in China and India and why Apples strategic response has been to climb up the value chain by introducing an even more expensive iPhone. The question remains, will this work for Apple?


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