Apple has once again demonstrated its staying power on the global technology scene, producing an impressive set of results for its second quarter of 2018. The company, with its economic output comparable to a medium-sized country, has continued to defy doubts in wall street with strong sales of 52 million iPhones and multiple votes of confidence from significant investors. Nowhere is Apple’s monopoly over our technological lives more visible than at university, where MacBooks seem to outnumber real ones, even in the library. But what is at the heart of this success?
One explanation is Apple’s business model; despite being sharply criticised by some as slow and sluggish, something in the strategy appears to be working. Rather than desperately pursuing growth at any and all costs, the firm takes big steps cautiously. Changes from one model to the next are rarely revolutionary, but build on the layout and features its customers have come to love. For true tech enthusiasts, the company has succeeded in turning incremental improvements (bigger screens, higher definition cameras and the introduction of fingerprint/face recognition) into events of global significance that merit televised launches and queues around corners.
They offer the seamless transition of music, apps, contacts and messages – as long as one is loyal to Apple…
The staying power of the firm also translates directly from the decisions of consumers themselves to stay with Apple. Integrated services such as iTunes, Apple Music and iCloud make up a smaller proportion of direct profit for the company, but are invaluable in retaining customers. Tapping into a global economic trend in which convenience has become almost as important as price, they offer the seamless transition of music, apps, contacts and messages – as long as one is loyal to Apple. In a busy world, many consider it nonsensical to even consider upping sticks. All of this has left the company with a massive global client base estimated to be in the region of a billion, with 65% of revenue being generated outside of the USA.
The result is an immense cash flow giving Apple even more scope to invest in research and development; just the other day for example it was reported that the firm is investing $10 million in an innovative new way of producing aluminium without greenhouse gases. Clearly whilst Apple is less adventurous than some of its Silicon Valley rivals, it is confident enough in its financial position to be making serious investments. As well as announcing a quarterly revenue of $61 million, Apple has announced plans to increase its stock repurchasing programme by a whopping $100 billion. The firm is clearly confident in its own performance, and external investors seem keen too with Berkshire Hathaway recently buying up millions of shares.
Despite their relatively expensive pricing, Apple branded products are roundly known for their quality, which seems to be delivering results even in the tough student market…
There is good reason for such confidence looking ahead into the future; Apple is winning among the younger generation. 80% of US teenagers now say they prefer the iPhone over Android counterparts according to a recent survey by the investment firm Piper Jaffray. With multiple student discounts, the company is reigning in consumers even on the most stringent budget. Those in full time education in the UK can enjoy three months of Apple Music entirely free, as well as 10% off all products in the Apple store. Despite their relatively expensive pricing, Apple branded products are roundly known for their quality, which seems to be delivering results even in the tough student market, in which iPhones must compete with stringent budgets and Purple.
Despite gloomy predictions and the lukewarm reception that initially greeted the iPhone X, it appears that Apple remains a force to be reckoned with. Who would have thought a few years ago that it would even be possible to price a smartphone at nearly £1000? All things considered though, the company’s continued success should come as little surprise.