Apple Case AnalysisEssay title: Apple Case AnalysisAPPLE COMPUTER CASE ANALYSISAfter the return of Steve Jobs at Apple Computer many changes happened which finally brought the company back to profitability. However Apple holds a market share of only 3.48 percent among its six strongest competitors.
The fact is that today the PC market is a mature market and only the strong survive. In Exhibit 1 is shown how the PC market has been shared among the most valuable players and how Apple’s share has decreased by more than half during five years time.
Under the current situation the only way for a company to increase its market share is to take customers away from the competition.So the question is what Apple has to do in order to gain more market share.First of all let’s point out which are the key advantages of Apple’s products over the competition. Why should a customer prefer an Apple?It is better to distinguish Apple’s strong points in hardware and software sectors as the competition the company faces is in both fields.HardwareStyle, aesthetic factors, unique elegant look. Apple manufactures PC cases, monitors, keyboards and other accessories artistically designed in a great colour range which can satisfy the most requiring aesthetic criteria.
Image, Ideology, differentiation. Apple has spent much on providing its customers a sense of supremacy over other PC users. It turns to be a matter of ideology to be an Apple user, provides you an image.
SoftwareEase of use. Apple is traditionally aiming on bringing technology to the everyday user. They have invested much on providing the best user experience. That is the reason they always wanted to control both software (OS) and hardware development so they can control the user experience.
Stability. Mac OS is more stable and reliable than Windows and that is mainly because it runs only on Apple hardware.On the other hand a close look on the Financial Ratios of Apple in a period of five years and in comparison with those of the competition during the same period can provide us with valuable information on how Apple managed their business as far and what has to be done to achieve their goals. Below are to tables with financial ratios over this period. The second table shows the average ratios of the competitive companies both in the hardware and in software sector.
Apple Computer IncFinancial RatiosFY 2002FY 2001FY 2000FY 1999FY 1998Profitability RatiosGross Profit Margin29,97%24,93%28,18%29,03%26,76%Operating Profit Margin0,80%-6,21%7,77%6,29%4,51%Net Profit Margin1,13%-0,47%9,85%9,80%5,20%Return on Total Assets1,03%-0,42%11,55%11,65%7,20%Return on Equity1,59%-0,64%19,14%19,36%18,82%EBIT Margin1,52%-0,97%13,68%11,02%5,54%EBIT to Assets1,38%-0,86%16,05%13,10%7,67%Effective Tax25,29%28,85%28,02%11,09%6,08%Table 1. Apple Computer Inc Profitability RatiosCompetitors Average Financial RatiosFY 2002FY 2001FY 2000FY 1999FY 1998Profitability RatiosGross Profit Margin39,38%42,41%44,40%44,63%46,70%Operating Profit Margin8,19%12,96%17,10%18,04%17,56%Net Profit Margin4,03%4,40%13,95%13,60%11,54%Return on Total Assets1,72%-1,33%12,81%13,69%15,08%Return on Equity5,88%-1,01%24,61%24,10%30,96%EBIT Margin5,50%8,02%20,71%20,24%17,70%EBIT
Apple Computer IncFinancial RatiosFY 2002FY 2001FY 2000FY 1999FY 1998Profitability RatiosGross Profit Margin29,97%26,91%20,40%24,59%26,67%Operating Profit Margin8,10%8,20%13,10,15,08%Return on Total Assets1,49%-1,43%16,11,04%7,36%Return on Equity4,19%4,20%18,01%22,35%EBIT to Assets1,39%-1,30%13,54%14,01%19,04%EBIT to Shares in Apple Computer Inc (1,33%)$50,000.00 $55,000.00 $48,500.00 $34,500.00 $32,000.00 $29,500.00
Apple Computer Inc’s Profit of $50,000.00 (3.9% of Operating Profit) is the portion of Apple Inc’ profit from the sale of $50,000 in a computer in excess of its stockholders’ equity in the first quarter of 2012 (referred to as a “share-holders-only” share-class action)—$1,500.00 ($1,250.00 for non-Shareholders, $1,200.00 for holders of restricted rights and $200.00 for holders of Class 10 Class 13 Class 14 Class 15)—$1,000.00 for non-Shares of Apple Inc (4.7%)—$375.00 ($417.00 for non-Shares of Class 18 Class 19, $200.00 for Shareholders of Class 12), $250.00 ($255.00 for non-Shareholders, $225.00 for Shareholders of Class 21, $25.00 for Shareholders of Class 19, and $125.00 for Shareholders of Class 20). (3.9% of Operating Profit) is the portion of Apple Inc’ profit from any transaction in the financial services sector in excess of its stockholders’ equity in the first quarter of 2012, as defined under the fair value formula which is used to determine a share classification in the period ending on the first day of December in each year that occurs after the end of fiscal year 2012. (3.