or weaknesses (W), and those external to the firm are opportunities (O) or threats



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Introduction:

An analysis of internal and external environment is very important part of the strategic planning process. Environmental factors internal to the firm usually are strengths (S) or weaknesses (W), and those external to the firm are opportunities (O) or threats (T). An analysis of these four environmental factors is referred to as a SWOT analysis.

SWOT Analysis helps in matching company’s resources and capabilities to the competitive environment in which it operates. SWOT Analysis helps a company to know where it stands

Apple iPhone is a flagship product of Apple which was launched on June 29, 2007. It is elegantly designed internet-connected multimedia smartphone that runs pioneering software under Apple’s OS X in a Unix Kernel and combines the features of smart phone , iPod , PDA, Camera and Computer. In addition to these features, it is basically an Wireless Internet Communication Device.

The iPhone has 3.5-inch touch screen display and one “home” button which is used to access functionality. It has touch screen as well as key board. Picture quality is extraordinarily good as iPhone has over 25,000 pixels per inch of resolution. IPhone has ambient light sensor which adjusts its display brightness automatically and thus increases visibility and saves power.

4GB model of iPhone was launched at $499 and 8 GB model at $599.



Technical Specifications:

Screen size

3.5 inches

Screen resolution

320 by 480 at 160 ppi

Input method

Multi-touch

Operating system

OS X

Storage

4GB or 8GB

GSM

Quad-band (MHz: 850, 900, 1800, 1900)

Wireless data

Wi-Fi (802.11b/g) + EDGE + Bluetooth 2.0

Camera

2.0 mega pixels

Battery

Talk / Video / Browsing - Up to 5 hours

Audio playback - Up to 16 hours




Dimensions

4.5 x 2.4 x 0.46 inches / 115 x 61 x 11.6mm

Weight

4.8 ounces / 135 grams

With the winning combination of features and excellent design, iphone is a revolutionary product. Being a product from Apple establishes it as an innovative product with reliable performance. Though priced little bit at higher side, iPhone has got advantage over competitors in the competitive market.



SWOT Analysis:

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The SWOT framework was described in the late 1960's by Edmund P. Learned, C. Roland Christiansen, Kenneth Andrews, and William D. Guth in Business Policy, Text and Cases (Homewood, IL: Irwin, 1969). It is an analysis of environmental factors important in strategic planning. SWOT Analysis helps in matching company’s resources and capabilities to the competitive environment in which it operates and helps the company in understanding its position in market.

SWOT Analysis of a consumer technology product is used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved with this product for the manufacturer.

When the analysis has been completed, a SWOT profile can be generated and used as the basis of goal setting, strategy formulation, and implementation.

The SWOT profile of iPhone is as follows:



1. Strengths

The iPhone has several features including look and feel accompanied by a mobile operating system which are its strength.  It has phone sensors that work with the multi-touch screen (Apple has got patent of it).   Good picture quality, Apple brand name, huge number of loyal customers of Apple are its strengths. Moreover, Apple is first to deliver in this arena of computer phones and it is perhaps greatest strength of iPhone.

Some of the important strengths  of iPhone are:


  • A product by Apple itself makes it a very reliable product.

  • Simple, easy-to-use design and concise product range attracts customers

  • The iPhone has several features that add to the strength of the product viz. unique look and feel, phone sensor, multi touch screen etc.

  • Apple is first to deliver in this arena of computer phones (unique product and first mover advantage).


2. Weaknesses

iPhone is not free of weaknesses. Though it is a unique product and got first mover advantage, there are some areas where iPhone is lagging behind its competitors.

Some of the weaknesses of iPhone are:


  • Limited product range, especially absence from low-end desktop and notebook markets, limit

potential market saturation and alienate some potential buyers.

  • General lack of regard for OSX and perceived higher costs make it difficult to achieve wide-spread adoption and limits the upside of market share.

  • iPhone is not a 3G device and will not work in technologically advanced countries such as Japan and Korea

  • Some of the features of iPhone are not impressive Viz. it has a sub par camera, standing at about 2 megapixels as well as its memory not being removable

  • High price ($500- $600)

  • Apple’s choice of distribution channel has also been construed as a weakness as they’re limiting it to only Cingular and Apple retailers.


3. Opportunities

there is huge demand of computing device as well as entertainment device. The iPhone tries to combine both powerful computing as well as entertainment into one system.  Mac OS applications for desktop can be seamlessly adapted for the iPhone. 

The iPhone has got enormous opportunity in presently not fully exploited market. Some of the factors creating opportunity for iPhone are:


  • Poor public perception of Windows Vista allows Apple to push OSX as an attractive alternative option for users.

  • Success of Apple iPhone provides Apple opportunity to attract customers to its Mac computers.

  • People are wanting more features in one device. iPhone has several features bundled in one device which makes it a unique product.

4. Threats

Nokia, Sony, and Google have entered the market or are planning to enter in near future with their respective products. It is the greatest threat for iPhone. Presently there are some products which are not exact substitute of iPhone but are near substitute. Smart phones are one popular example that stands to compete against the iPhone.  IPhone does not run on 3G network while Smart Phones do. This puts iPhone behind in the speed race. 

Here is a comparative study of iPhone Vs. competitors on factors:



Some of the threats iPhone will face are:



  • Shrinking global economy is likely to reduce demand for higher-priced consumer items.

  • Windows 7 seems well-poised to correct many of the flaws of Vista and offer a "clean slate" for public perception, discrediting one of Apple's major selling points (i.e., that it's not Vista).

  • The majority of threats come from other companies including Nokia, Sony, and Google with their respective products.

  • Smart Phone runs on 3G network also, and here iPhone is lagging behind.

  • iPhone would be attractive to business users but its price is considerably higher than that of Blackberries (40% higher). Since businesses are price sensitive, they may not prefer iPhone over competitive products in spite of having unique features.

Conclusion:

The iPhone combines computing and entertainment. It is having unique design features which give it competitive advantage over competitors. The brand Apple and loyal customers of apple creates huge market potential for iPhone. The iPhone uses operating system OS-X which is considered as better OS than Windows Vista.

But iPhone comes at considerably higher price than its competitor products. Target customers are business users who may prefer Blackberry or Smart Phones which come at lower price. Also, many big companies are entering market with their own products. They may create threat for iPhone. Also, in spite of having great features, iPhone does not run on 3G while Smart phones run on 3G. In countries like Japan where 3G is very popular, iPhone will lag behind competitors. Microsoft too has corrected many of the flaws of Vista in Windows 7 which will eliminate any advantage iPhone has at operating system front.

World is witnessing recession. USA has entered into deflation era. Economic Scenario is not better elsewhere either. With shrinking economy and job cuts, people will not prefer to spend on costly phones.



The iPhone is competing on differentiation. Apple should make iPhone available at lower price to fight competitors at price front. Also, launch of 3G version of iPhone will provide strength to it. As economy is reviving , demand for high end phones will increase. Apple has history of having leading and innovative products and iPhone will remain here for long time.
References:


  1. Bradford, Robert W., Duncan, Peter J., Tarcy, Brian. “Simplified Strategic Planning: A No-Nonsense Guide for Busy People Who Want Results Fast!”

  2. http://en.wikipedia.org/wiki/IPhone

  3. http://www.apple.com/iphone/

  4. http://en.wikipedia.org/wiki/Swot_analysis


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