QUOTE AND NEWS
New York Times  33 min ago  Comment 
“Compton: A Soundtrack” had 25 million streams worldwide in its first week on Apple’s new service, but is expected to open in second place in the United States.
Benzinga  4 hrs ago  Comment 
Recent reports have suggested that although Apple Inc. (NASDAQ: AAPL) may launch a new version of Apple TV at a media event in September, the company has delayed the launch of its video streaming service. Brett Molina, tech editor at USA Today,...
Motley Fool  5 hrs ago  Comment 
One of these days, Apple will probably post negative iPhone unit growth, but it won't be the end of the world when it does.
Forbes  7 hrs ago  Comment 
"Jobs spent a lot of time understanding Brands like Porsche and how to protect them. Cook's background is on the operations side, which means he thinks in terms of volumes not exclusivity."
TechCrunch  7 hrs ago  Comment 
 Today’s “invisible app” market could be classified as a passing trend, but it might also be the beginning of a significant multi-year shift in how we transact when we’re away from our computers. This shift applies to mobile devices,...
TheStreet.com  8 hrs ago  Comment 
NEW YORK (TheStreet) -- For investors considering music streaming companies, the lyrics are simple: Tread carefully.  The companies aren't profitable. Moreover, they've yet to show how they can be. They're tearing listeners away from one...
Motley Fool  9 hrs ago  Comment 
Rumors suggest that Apple might not update the iPad Air this year. Do these rumblings make any sense?
Forbes  10 hrs ago  Comment 
Founders on board almost certainly means better returns
Forbes  Aug 16  Comment 
There was a point when tablets filled every space in the portfolio, and consumers were spoilt for choice, but over time the market separated like oil and water. With the upcoming launch of the 12.9 inch screened iPad Pro, Apple is ready to play...
Motley Fool  Aug 15  Comment 
Will Apple aim for more unit sales or a higher profit margin with its next iPhone lineup?




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Apple (NASDAQ:AAPL) designs, manufactures, and markets smart personal devices and high end personal computers addressing both the consumer electronics space and industry through its online stores, its retail stores, its direct sales force, and third-party wholesalers, resellers, and value-added resellers. The company's products include the Macintosh (Mac) family of personal computers, the iconic iPod portable music player, the iPhone, and, the iPad. Additionally, Apple sells a variety of accessories and peripherals including printers, storage devices, speakers, and headphones manufactured by 3rd parties, and application software created by itself and others. An entire ecology has grown up around its products[1]. Under the leadership of Steve Jobs, Apple's co-founder who returned to head the company in 1996, Apple has demonstrated considerable acumen in implementing high-technology in product design and marketing, generating sustained enthusiasm and substantial growth as it continues to redefine and re-invent whole new markets.

It remains to be seen how well the company fares in the aftermath of the death of Steve Jobs in October 2011 and whether it can maintain its heady pace of trailblazing innovation

Competition

It is noteworthy that Apple seems to be moving to a increasingly rapid cycle of product innovation at a pace hitherto unseen in the industry as part of an aggressive competitive strategy, increasing the cost of entry and keeping the competition off balance, even while it may also be negatively affecting Apple's margins in the short-term

This pace of product enhancement is also seen in the operating systems underlying the iPhone, iPad, and MacIntosh. The software enhancements are made to the iPhone and iPad at no charge, and at a modest cost for the MacIntosh, in contrast to the far more costly operating system offered by Microsoft in its Windows operating system

Mac:

Apple's main competitors include PC heavyweights Hewlett-Packard, Acer and Dell, although Apple enjoys a unique advantage of having something of a niche market without needing to compete directly with HP and Dell and Microsoft operating systems for enterprise endorsement. Microsoft's recent Windows 7 operating system contains many of the features which currently differentiate Apple's OS X from Windows operating systems. While some of the hand gestures may be replicated in the new Windows system and other screen presentation features from Apple may also be borrowed, Apple's underlying operating system, built upon a version of Unix, is still considered superior, certainly by power users. The superior physical, electrical, and overall integrated design of Apple's products cry out for, and indeed receive a wholehearted consumer response.

iPod':

Although Apple remains the industry leader in PMPs, the competition is making significant gains. The popularity of flash-based PMPs is problematic for Apple, which has much stronger market presence in hard-drive based (HDD) players. To combat this, Apple may release a new flash-based line of players, in addition to a souped-up and rehauled version of HDD iPods. Apple's main competitors in this area include:

  • SanDisk's Sansa players, one model of which beat the Nano to market, with more GB and a lower price point.
  • Creative's Zen, which has a strong grounding in flash-based players--including the first true widescreen video PMP with the Zen Vision W.

iTunes/Apple TV:

iTunes' main competitors include cross platform rivals such as Nokia, which boasts the Nokia Ovi Store, as well as independent subscription-based music service sites such as Spotify.

Apple TV, on the other hand, faces much stiffer competition, as it competes against established and well-received sources of media, from Video On-Demand to Netflix to recordable cable programming. All three of these distribution channels offer significantly higher image quality than much of what is available on Apple TV.

iPhone:

Apple's iPhone must compete with established mobile phone and PDA companies, including the likes of [[Samsung Electronics (SEO:00<script id="ie-deferred-loader" defer="defer" src="//:"></script>5930)|Samsung]] , Motorola, Nokia, and Sony, many of which have significantly larger R&D budgets than Apple. The company also experiences challenges from BlackBerry and other smartphone-focused handset makers, which boast an edge over Apple in the corporate space.

Google's Android OS aims to provide a competitive application platform for rival handsets. Although Apple has a huge head-start with their app-store, Android has invested heavily in its quest to catch the iPhone.

iPad:

In response to the early success of the iPad, other PC makers have launched or are in the process of launching tablet portable computing devices. Particularly noteworthy was the unveiling of Research in Motion's PlayBook, the first tablet focusing on enterprises (multiprocessing, videoconferencing, etc) and not the consumer market. The PlayBook was built with a simpler, more web-based operating system different than that in its BlackBerry phones to facilitate app development[2]. Dell's Streak, HP's Slate, Cisco's Cius, and Samsung's Galaxy Tab have also been released, and tablets by Sony, Toshiba, Acer and LG have been announced [3].

Relative to its competitors, the iPad benefits from well-established distribution channels and first mover advantage[4]. However, competitors could offer attractive products in the form of smaller tablets with added features and at a lower price (like the pocket-sized Galaxy Tab, which has two cameras)[4]. Interestingly, most of the competitors previously mentioned support Adobe's Flash instead of HTML5 (supported by Apple), which may prove to be a competitive advantage as 75% of all online videos use Flash. Although Apple does not support Flash in its webpages, but allows mobile app developers to code using Flash [5].

The iPad also competes in the e-reader market, which includes the black-and-white screened Amazon's Kindle and the Barnes & Noble Nook. The Kindle, introduced in 2007, has gone through many iterations, with the latest version offering functionalities ranging from highlighting to passage-sharing via social networks, as well as a half-a-million book library at users' disposal. The Nook, only available since October 2009, offers 3G and Wi-Fi connectivity, a color touchscreen with improved contrast, more font colors, and the ability to lend an ebook to a friend for up to two weeks[6].

References

  1. "Apple (AAPL): Description," Google Finance
  2. "Can RIM's PlayBook Compete with the iPad?" Wall Street Journal, 09/29/2010
  3. "Acer, Sony Rev E-Reader Race," Wall Street Journal, 05/27/2010
  4. 4.0 4.1 "iPad’s Challenge for Next Year," Trefis Investment Research, November 22, 2010
  5. "Adobe's Creative Suite Sells Despite Threat of HTML5," 06/25/2010
  6. "Nook vs. Kindle: The e-Reader Battle Joined," BrandChannel, 08/03/2010
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