Essay about AppleCase4490

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BUSMHR 4490: Spring 2015
Apple Inc. in 2012 Case

Group E:
Kejuan Johnson
Tallib Karaze
John Kelleher

Memorandum
To: Bruce Bellner
From: Group E
Subject: Apple Inc. in 2012 Case
Date: February 5, 2015

Introduction:
In today’s world, personal computers are a commonplace in most homes, but this this wasn’t always so. The first personal computer was developed just 40 years ago in 1975, so the industry is still a very young one. Despite its youth, the industry has evolved dramatically over time as new technologies develop. So, too, has Apple, Inc. developed and evolved over time. This constant development and evolution that has allowed Apple, Inc. to not only survive, but to thrive, in an industry that has seen so
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Thus, supplier bargaining power is low.

The only considerable bargaining power held by a supplier in the PC industry is that of IBM, whose central processing units control about 80% of the market today.

Intensity of Competitive Rivalry

The intensity of competitive rivalry in today’s PC industry is fairly strong despite high product differentiation. The five major PC manufacturers, in addition to others, are still in fierce competition to develop the most efficient and powerful computing tool at the lowest cost. The competition is evident through, as stated earlier, larger companies’ aggressiveness to buy out smaller companies with innovative technology.

2. How profitable are firms in the PC industry? How does this compare to Apple’s profitability? Use data from the case to calculate and compare profitability ratios for Apple with those of its closest competitors.

With regards to recent history, firms in the PC industry are typically seen as very profitable. Each of the seven largest firms has had positive net incomes in the previous years being studied (2004, 2006, 2008, 2010, 2011), with the exception of Nokia in 2011. Apple led the seven largest firms in net income in 2011, earning just fewer than 26 billion dollars with Microsoft very close behind. On average, Microsoft has the highest net income of just over 16 billion dollars with Apple trailing at just

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