Apple Inc. Business Analysis Essay Example | Topics and Well Written Essays - 1500 words

Apple Inc. Business Analysis - Essay Example The reasons of investing as mutual fund manager in Apple are given, and the paper concludes with a summary of the business analysis. Apple Inc. Business Analysis. Company Background. Apple was incorporated in California in 1977. Apple Inc. and its subsidiaries develop, manufactures and sells its products including personal computers, media devices, mobiles, and digital music players. The Company also sells various related software, peripherals, services, networking solutions, and third party digital content and applications. Apple products and services comprise of iPod, iPhone, Mac, Apple TV, Mac, a portfolio of professional and consumer software applications, iCloud, the Mac OS X and iOS operating systems, and a variety of accessory, service and support offerings. The Company also sells and delivers digital content and applications through the App Store, iBookstore, iTunes Store, and Mac App Store. The company sells its products globally through its online stores, retail stores, and direct sales force, as well as through third-party cellular network transporters, retailers, value added resellers and wholesalers. Also, the Company sells various third-party iPod, iPhone, Mac, and iPod compatible products, including printers, application software, storage devices, headphones, speakers, and various other peripherals and accessories, through its retail and online stores. Apple sells its products to consumers, education, small and medium sized businesses, enterprise and government customers (www.apple.com). The Effects of Recent Economic Trends on Apple’s Business. The performance and operations of Apple depend significantly on global economic conditions. Uncertainty about worldwide economic conditions poses a risk as businesses and consumers postpone spending in response to unemployment, tighter credit, negative financial news and/or declines in asset values or income, which could have negative effects on demand for companies’ services and products (A ndreas, 2011). The Company usually increases prices on goods and services sold outside the United States; this is aimed to offset the effect of appreciating U.S. dollar in these markets, thus affecting the demand of Apple products. Other factors that affect the demand of Apple products and services include; conditions in the mortgage and real estate markets, increases in fuel and energy costs, labor and healthcare costs, unemployment, access to credit, and other macroeconomic factors affecting the spending behavior of consumers. Andreas (2011) notes that the global financial crisis and the debt crisis in Europe have led to new or incremental tightening of the credit market, low liquidity, and extreme volatility in fixed income, currency, credit, and equity markets. This has affected the Company’s business, including the financial instability of outsourcing trading partners or their inability to obtain credit to finance development and/or manufacture products resulting to prod uct delays. The crisis has also, has affected Apple customers, including channel partners by making them incapable to access credit to finance purchases of Apple products. Strategies of Adapting to Changing Economic Conditions. Economic recession provides opportunities to companies of starting new businesses, innovate and manufacture new products, and build and strengthen customer loyalty (Andreas, 2011). Apple operates in a highly competitive and highly volatile industry,