SWOT

Strengths

Weaknesses

Formidable competitive advantages

through horizontal and vertical
integration

High dependence on iPhone

and iPad product lines

Ecosystem
High average selling prices (ASPs) in an
industry characterized by declining
ASPs Significant growth rates and cash
flows

Market share in music

streaming vs. itunes
purchases.

Opportunities

Threats

Diversification of products
Apple Pay provides robust growth
opportunityPositive outlook for
smartphone and tablet markets

Operating in complex and

challenging environment
could impact market position
Premium pricing could limit
growth in emerging markets

Rising adoption of Apple products in the

enterprise market

Smartphone subsidy cuts

could impact shipments

Smart wearable devices market offers

robust growth opportunities

Xiaomi in Asian market

Products:
Apple is a platform: IOS based devics and services completely integerated.
Competitive advantage: Innovation, premium brand recognition,
Apple iwatch Competition: pebble, samsung gear, fitbit
Apple Pay market penetration competing with banks
Iphone in China
Iphone in last quarter vs. Samsung First time since 2011 Apple sold more iphones than
Samsung
Other:
Music Streaming Netflix? Pandora?
Beats acquisition << premium brand iphone like demand and pricing

Financials:

Cash Horde (how to use it?) << buy back :: Carl Icahn pressure to buyback shares. 180 Billion
Profit per device: Q4 74.5 Million with ASP of $698 vs Samsung $206
Tax implication http://en.wikipedia.org/wiki/Double_Irish_arrangement
http://www.bloomberg.com/news/articles/2014-09-30/crackdown-on-apple-in-ireland-opensfront-on-tax-avoidance-war
http://www.forbes.com/sites/leesheppard/2013/05/28/how-does-apple-avoid-taxes/
Tax evasion allegations
Ireland investigation

A look at Apple's main competitors in the worlds of wearables and mobile payments
Apple made waves Tuesday by entering two new business sectors at once: wearables and mobile payments.
The company announced the Apple Watch, a long-rumored smartwatch that will synch up with iPhones and offer
new fitness-tracking feature, and Apple Pay, a mobile payments service that will let users pay for things in physical
stores with a tap of their phone or watch.
Wearables and mobile payments are tech sectors that already have plenty of competitors, including heavyweights
like Google and Samsung, but have yet to reach true mainstream adoption. Apple will look to recreate the magic it
found with portable music players, smartphones and tablets, but its foes aren't likely to just accept being pushed to
the sidelines.
Here's a look at the current players in wearables and payments and how their efforts have fared so far:
Wearables
Samsung
The Product: Samsung has already bet big on smartwatches with its line of Galaxy Gear. The original Galaxy Gear,
released in fall 2013, served as an accessory to Samsung tablets and smartphones, offering a way to read texts and
other info relayed from the phone. The watch also sported a camera, an unusual smartwatch feature that the Apple
Watch doesn't have.
Success So Far: The original Galaxy Gear was widely panned in reviews, but the Gear 2 left a more favorable
impression. Samsung claimed that it shipped 800,000 of the original Gear in its first two months on the market, but it's
not clear how many of them actually sold to customers. According to market research group NPD, 500,000 total
smartwatches were sold in the U.S. between October 2013 and June 2014, and Samsung generated about $75
million in revenue from its portion of those sales.
Pebble
The Product: Startup Pebble proved that the smartwatch could be a viable product line when its 2012 Kickstarter
project became the most successful endeavor in the crowdfunding site's history back in 2012, generating more than
$10 million in donations. Now Pebble has grown from a clever idea into a well-established business that offers
smartwatches in a variety of styles. The company's watches link up with both iPhones and Android devices and are
fairly affordable with a starting price of $150.
Success So Far: Pebble says it has sold more than 400,000 smartwatches so far and has 15,000 developers
making apps for the device. According to NPD, the startup is second to only Samsung in smartwatch sales in the U.S.
But these numbers are paltry compared to the scale that Apple likely envisions for the Apple Watch.
Google
The Product: As with phones, Google will mainly take the fight to Apple in the smartwatch space via software.
Earlier this year the search giant unveiled Android Wear, a version of its Android operating system tailored specifically
for wearables. So far three watches make use of the software: the Moto 360, the LG G Watch and the Samsung Gear
Live.
Success So Far: The LG G Watch has earned solid reviews, but the sleeker Moto G disappointed critics when it
launched earlier this month. No word yet on sales of these products. Google may have higher aspiration for Google
Glass, its computerized glasses that are currently being beta tested in the U.S.
Fitbit
The Product: With Apple positioning the Apple Watch as a lifestyle device, the company will have to take on the
current juggernaut of life-improving wearables, the Fitbit. The popular electronic bracelets and clip-on devices can
track everything from miles jogged to quality of sleep. The products are cheap too, starting at just $60.
Success So Far: Fitbit has managed to fend off apparel giant Nike in the fitness wearables category and now easily
leads the market with almost 50% market share, according to research firm Canalys. Apple will have to convince
health nuts that its product is worth three to four times the cost of a regular health-tracking device.
Mobile Payments
PayPal
The Product: eBay-owned PayPal has been inching its way into physical stores for a few years now. PayPal has
services that allow you to easily split a restaurant check or buy a new outfit at Abercrombie & Fitch via its smartphone

app. The company also recently announced a new service called One Touch which will allow people to buy products
with a single button click across a wide variety of programs.
Success So Far: PayPal processed $27 billion in mobile payments in 2013, a 99% increase from from the year
before. The company has more than 150 million active accounts supplying a trove of credit card and banking info.
That's a big number, but it pales in comparison to the 800 million iTunes accounts Apple users have created, most of
which include credit card information.
Google
The Product: Google came up with a service very similar to Apple's three years ago. Called Google Wallet, the app
allows users to tie information for multiple credit, debit and gift cards to their phones, then use the mobile device to
pay for items at participating retail locations.
Success So Far: The Google Wallet app has been downloaded at least 10 million times from the Android store, but
the even the service's creators have admitted that it's not exactly setting the world on fire. The company's latest
strategy to introduce people to Google Wallet is linking it up with Gmail accounts to allow people to send money to
each other via email. With more than 425 million Gmail accounts currently active, the popular service could serve as
a trojan horse to to hook users on Google's payment platform.
Square
The Product: Square is best known for its credit card readers that are popular with small businesses, but the
company has designs on eliminating the credit card altogether with Square Wallet, an app that would allow for
purchases made without even the press of a button. The phone in your pocket would be able to communicate with a
retailer's payment equipment, and you'd just have to say your name to complete an order. The disruptive concept
received a lot of attention, partially because Twitter founder Jack Dorsey is Square's CEO.
Success So Far: Square gave up on the hands-free payment option earlier this year when it removed Square Wallet
from the Google Play and App Stores and replaced it with Square Order, a less ambitious app that basically works
like Seamless for grabbing take-out food. The company has reportedly postponed plans for an IPO as it racks up
losses, though Square has denied these claims.
~~~~~~~~
By Victor Luckerson

4 Ways Tim Cook Has Changed Apple As CEO

Contents
1.
Only Cook Could Go to China
2.
Goosing Apple's Stock Through Share Buybacks
3.
Diversifying Apple's Core Products
4.
Increasing Apple's Acquisitions and Partnerships
ListenSelect:
Section:
Business
Keywords: apple; iphone; ipad; tim cook; steve jobs; iwatch
When Steve Jobs stepped down as Apple's CEO on August 24, 2011, the company's future was anything but certain.
The tech giant had become the most valuable company in the world just weeks before, thanks to a decade's worth of
wildly successful new products like the iPod, iPhone and iPad. The disruptive devices were credited almost
exclusively to Jobs' genius, and consumers as well as Wall Street analysts wondered whether Tim Cook, his softspoken successor, could guide Apple even higher.
Fast forward three years and Cook has proved his doubters wrong. This week, he got quite the anniversary gift when
Apple's stock reached an all-time high, largely because of strong recent earnings reports and anticipation of the
iPhone 6, rumored to be announced this fall. Apple's new share price high is a sign investors are buying into Cook's
vision for the companys' future, which looks different from Jobs's.
Here's a look at four ways Apple has changed during the Era of Cook.

Only Cook Could Go to China

Jobs famously never visited China during his tenure as Apple CEO--that was Cook's job, who served as the
company's chief operating officer before Jobs stepped down. As CEO, Cook has taken a more hands-on approach in
the world's most populous country, visiting China multiple times to meet with government officials and survey Apple's
factories there. Even more important than the trips is the deal Cook inked last year with China Mobile, the world's
largest wireless carrier, to carry the iPhone. His focus on the country has paid off handsomely. China is now Apple's
fastest-growing sales market by far, generating $5.9 billion in revenue in the most recent quarter.
"There is no doubt [Cook] recognizes the fact that China will become Apple's number one market," Thomas Husson,
an analyst at Forrester, said in an email to TIME.
Goosing Apple's Stock Through Share Buybacks
Investors have long clamored for Apple to make better use of its massive $160 billion cash hoard. Jobs ignored a
suggestion by Warren Buffet to launch a share buyback program, but Cook has launched a massive share
repurchase plan to reclaim $90 billion in company stock. Such programs make investors happy by putting cash in
their pockets, while also improving a company's financial optics by boosting its earnings per share. The share
repurchase plan, which was expanded earlier this year, has helped Apple stock rally in recent months after tumbling
from an all-time high in September 2012. In fact, the company's 25% gain in stock price since purchasing $18 billion
of its shares in the first quarter of the year was the best return ever following a share buyback, according to
Bloomberg.
Diversifying Apple's Core Products
Part of Apple's financial success stems from the fact that it manufactures a relatively small slate of products that sell
on a massive scale. Cook has deviated somewhat from this strategy by introducing variants on the iPad (the iPad
Mini) and the iPhone (the iPhone 5c) that serve as smaller cheaper alternatives to Apple's flagship devices. Apple
doesn't break out the sales of individual products within the iPad and iPhone lines, but according to mobile marketing
firm Fiksu, the iPad Mini was the second most-used iPad as of April. More impressive than the sales is the fact that
Cook has been able to keep Apple's margins impressively high while adding new production costs.
"Jobs did a lot of the heavy lifting developing home run products such as the iPad and iPhone," says Bill Kreher, an
equity analyst at Edward Jones. "Cook has been able to extend the reach of those products, improving profitability."
Increasing Apple's Acquisitions and Partnerships
Apple made few acquisitions in the Jobs era, and they were generally small. Cook, on the other hand, has bought up
23 companies since taking the reins, according to Crunchbase. No buyout caused more waves than Apple's $3 billion
purchase of Beats Electronics, which was either a smart acqui-hire of Beats' music and marketing maestros or proof
that Apple has lost its creative spark, depending on your perspective. The purchase mainly showed that Cook isn't
afraid to seek help from outside his Cupertino headquarters. For more evidence, consider Apple's recently
announced partnership with former nemesis IBM to bring a suite of enterprise apps to iOS.
Make no mistake--investors are still clamoring for Cook to release a new product disruptive as the iPhone or the iPad.
Rumors persist that Apple will eventually launch an iWatch, or perhaps a pay-TV service to compete with cable. For
now, though, with iPhone sales climbing ever higher and investors' pockets being lined through a share buyback, Wall
Street seems content with Apple's trajectory.
"You have Steve Jobs, who was the innovator, the visionary, says Kreher, "and you have Tim Cook, who is a good
steward of the business and is an excellent executor."
PHOTO (COLOR): Justin Sullivan--Getty Images: Apple CEO Tim Cook walks off stage after speaking during the
Apple Worldwide Developers Conference at the Moscone West center on June 2, 2014 in San Francisco, California.
~~~~~~~~
By Victor Luckerson

This content is for personal, non-commercial use, and can only be shared with other authorized users of the EBSCO
products and databases for their personal, non-commercial use.

BUSINESS TECHNOLOGY

New Report Says Apple Is

Now the Worlds Biggest
Smartphone Maker

Jack Lin shi @jacklinshi

March 3, 2015

Chris McGrathGetty ImagesThe Apple iPhone 6 and 6 Plus at their launch at the Apple Omotesando
Store on Sept. 19, 2014 in Tokyo, Japan.

According to data from research firm Gartner

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Apple is now the worlds biggest smartphone maker in terms of worldwide sales at the end of last year,
according to a new estimate that puts its fourth quarter figures ahead of rival Samsungs numbers.
While Apple reported worldwide sales of 74.8 million smartphones during the fourth quarter of 2014,
areport by research firm Gartner published Tuesday estimates Samsung sold 73 million units during the
same period. If accurate Samsung doesnt report out its smartphone sales that would mean Apple
overtook Samsung as the worlds top smartphone maker by global sales for the first time since late 2011.
The new figures come on the heels of a recent report by Strategy Analytics that said Apple tied Samsung in
worldwide shipments during the fourth quarter, which includes sold and unsold smartphones.
Apples strongest sales tend to occur during Q4 due to its fall iPhone releases. Last years iPhone 6 and 6
Plus offered the sales push Apple needed to beat out Samsung, per Gartners data:

Authors:
Linshi, Jack
Source:
Time.com. 3/4/2015, pN.PAG. 1p.
Document Type:
Article
Author-Supplied Keywords:
apple
apple sales
Business
galaxy
huawei
iphone
lenovo
samsung
samsung sales
smartphone
world's largest smartphone maker
xiaomi
Abstract:
According to data from research firm Gartner [ABSTRACT FROM PUBLISHER]
Copyright of Time.com is the property of Time Inc. and its content may not be copied or emailed to multiple sites or
posted to a listserv without the copyright holder's express written permission. However, users may print, download, or
email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy.
Users should refer to the original published version of the material for the full abstract. (Copyright applies to all
Abstracts.)

Accessio
101358249

4 ways Samsung says it will destroy Apples iPhone 6.

Authors:
Snyder, Benjamin
Source:
Fortune.com. 3/13/2015, pN.PAG. 1p.
Document Type:
Article
Author-Supplied Keywords:
apple
iphone 6
mobile
mobile world congress
samsung
samsung galaxy
Tech
Abstract:
The company just took a bunch of shots at Apple. Here are four [ABSTRACT FROM PUBLISHER]
Copyright of Fortune.com is the property of Time Inc. and its content may not be copied or emailed to multiple sites
or posted to a listserv without the copyright holder's express written permission. However, users may print, download,
or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the
copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all
Abstracts.)

Full Text W
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4 ways Samsung says it will destroy Apples iPhone 6

ListenSelect:
photo-color:
Samsungs newest phones, the Galaxy S6 and Galaxy S6 Edge, could be iPhone-killers, writes VentureBeat . The
Korean electronics giant argues there are the four reasons why itslatest models could put a dent in iPhone 6 sales:
1. Design. Samsung has pumped up its design and engineering performance in the new phones.
But executives took it a step further on stage by talking about how certain unnamed companies like to spend a lot of
time designing what amounted to pretty baubles that have no real use to customers. Apple, cough, cough, Apple.
2. Battery. Samsung reportedly said at its announcement event that the new Galaxy have the ability to charge twice
as fast as Apples iPhone. Interestingly, BlackBerry recently unveiled its own newest phone, the BlackBerry Leap,
which it claims has a battery life of 25 hours.
3. Samsung Pay. Samsung said its releasing its own mobile payments service to rival Apple Pay. Samsung Pay will
be compatible with two times as many merchants than other competitors, it says.
4. Photos. Its no surprise that Samsung is touting its phones photo capabilities as better than Apples.
Samsung spent considerable time on stage doing side-by-side comparisons of photos and videos shot with the
Galaxy S6 and the iPhone 6 cameras. Guess which camera came out looking waaaay better? Yep, the Galaxy S6!
Samsung Electronics was as No. 13 on Fortunes latest Global 500 list. Apples ranking: No. 15.
http://fortune.com/2015/03/03/samsung-galaxy-s6-apple-iphone-6/
~~~~~~~~
By Benjamin Snyder

This content is for personal, non-commercial use, and can only be shared with other authorized users of the EBSCO
products and databases for their personal, non-commercial use.

3 rivals to Apple's
smartwatch ambitions

by

Verne Kopytoff

@vkopytoff

MARCH 9, 2015, 6:30 AM EDT

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The tech giant is trying to break into a crowded field of

wrist-worn computers. Here are some of the challengers
who have a head start.

With its upcoming smartwatch, Apple is trying to do what no other

company has with the upstart category of wrist-worn computers:
Create a hit.
The technology giant is hoping to make Watch, a device that displays
emails, tracks fitness activity and, of course, tells time, into a yet
another blockbuster product in line with the iPhone and iPad.
Executives will reveal more details about its capabilities on Monday in
prelude to Watch going on sale in April (Check out Fortunescoverage
of the event starting at 1 p,m. EST).
But Apple AAPL -0.81% is hardly alone in pushing smartwatches. A
number of manufacturers are also trying to solve the riddle to
varying degrees of success. Some of their devices look so clunky that
few people would be caught dead wearing in them in public. Others
are clumsy to use and offer little in the way of compelling features.
Virtually all are poor substitutes for the smartphone, which have big
enough screens to handle most basic online chores while small enough
for people to conveniently carry in their pockets.
Still, smartwatches may be useful or intriguing to buy, particularly for
those who like to be on the cutting edge. Here are a few options that,

unlike Apples Watch, are already on sale. But warning: Many

manufacturers plan to update their smartwatches in the next few
months.

Moto 360

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Courtesy of Motorola

In the latest generation of smartwatches, the Motorola's Moto 360 is

among the most compelling. Unlike many of its competitors, the watch
was designed with aesthetics in mind so it doesn't look like a miniradio glued to the wrist. It has a relatively attractive round steel frame,
a leather strap, and a clock display that can be set to eight different
faces. In terms of features, the watch tracks heart rate and acts as a
pedometer. When paired with a phone via Bluetooth, it can provide
vibrating alerts when new emails and Facebook friend requests arrive.
The operating system, Android Wear, also culls information from

Gmail, calendar and other sources for more intuitive alerts. For
example, you can get a heads up if you risk being late for a doctor's
appointment because of highway gridlock. Price: $250

Pebble Steel

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Facebook

Google Plus

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Share icons

Courtesy of Pebble

Pebble's Steel is a smartwatch without smartphone envy. The watch

has a retro feel without flashy graphics or touch screen controls. To
scroll up and down, users must press tiny buttons on the side of the
watch - a clumsy maneuver for people with big fingers. Information
shown on the screen is purely functional and displayed in black and
white only. You can forget about surfing the web at-large. A large
library of apps handles chores like tracking temperature, sleep and
distance run or walked. Users who pair the watch with their phone can
get buzzed when new emails arrive or when they get a phone call. The

design isn't exactly handsome. But it does the job with a relatively
unobtrusive and compact body compared to some competition.
Compatible with both Android phones and Apple iOS. Price: $200

Canaccord: Apple took home 93% of mobile profits last quarter.

Authors:
Elmer-DeWitt, Philip
Source:
Fortune.com. 2/20/2015, pN.PAG. 1p.
Document Type:
Article
Abstract:
Samsung had 9%. Microsoft lost money. The rest were lucky to break even. [ABSTRACT FROM PUBLISHER]
Copyright of Fortune.com is the property of Time Inc. and its content may not be copied or emailed to multiple sites
or posted to a listserv without the copyright holder's express written permission. However, users may print, download,
or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the
copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all
Abstracts.)
Acce
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Canaccord: Apple took home 93% of mobile profits last quarter

ListenSelect:
Samsung had 9%. Microsoft lost money. The rest were lucky to break even.
photo-color:
How did Apple, with 20% of the global smartphone market last quarter, manage to rake off 93% of the profit?
The math, as Canaccords T. Michael Walkley figured it in a note to clients Monday, is pretty simple:
Apple sold 74.5 million iPhones at an average selling price of $698Samsung shipped the same number of
smartphones plus 20 million dumb phones at an ASP of $206 apiece.
.
Nobody else is making any money to speak of. Microsofts smartphones ended up with -2% of the profit, if you can
imagine that. BlackBerry, Lenovo, Sony, LG and HTC were all lucky to break even.
This is demoralizing, wrote phoneArena s Daniel P., speaking for everybody but Apple.
Below: The two columns in Walkleys spreadsheet that had people scratching their heads Monday.
Click to enlarge.

Follow Philip Elmer-DeWitt on Twitter at @philiped. Read his Apple AAPL coverage at fortune.com/ped or subscribe
via his RSS feed.
http://fortune.com/2015/02/09/canaccord-apple-took-home-93-of-mobile-profits-last-quarter/
~~~~~~~~
By Philip Elmer-DeWitt

This content is for personal, non-commercial use, and can only be shared with other authorized users of the EBSCO
products and databases for their personal, non-commercial use.

Canaccord: Apple took

home 93% of mobile
profits last quarter

by

Philip Elmer-DeWitt

@philiped

FEBRUARY 9, 2015, 2:49 PM EDT

E-mail

Tweet

Facebook

Google Plus

Linkedin
Share icons

Samsung had 9%. Microsoft lost money. The rest were

lucky to break even.
How did Apple, with 20% of the global smartphone market last
quarter, manage to rake off 93% of the profit?

The math, as Canaccords T. Michael Walkley figured it in a note to

clients Monday, is pretty simple:

Apple sold 74.5 million iPhones at an average selling price of $698

Samsung shipped the same number of smartphones plus 20

million dumb phones at an ASP of $206 apiece.

.

Nobody else is making any money to speak of. Microsofts

smartphones ended up with -2% of the profit, if you can imagine that.
BlackBerry, Lenovo, Sony, LG and HTC were all lucky to break even.

This is demoralizing, wrote phoneArenas Daniel P., speaking for

everybody but Apple.
Below: The two columns in Walkleys spreadsheet that had people
scratching their heads Monday.

Click to enlarge.
Follow Philip Elmer-DeWitt on Twitter at @philiped. Read his Apple
AAPL coverage at fortune.com/ped or subscribe via his RSS feed.

http://fortune.com/2015/01/30/chart-of-the-day-how-apple-overtook-samsung-for-now/

Chart of the day: How

Apple overtook
Samsung - for now

by

Philip Elmer-DeWitt

@philiped

JANUARY 30, 2015, 10:18 AM EDT

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Samsung will probably be back on top next quarter, but

the damage has been done.

Apple investors have waited a long time to see a chart like the one
above, drawn by Creative Strategiess Ben Bajarin from smartphone
sell-through data provided by CounterPoint Researchs Neil Shah.
Both Shah and Bajarin expect Samsungs shipments will be back on
top next quarter. But it almost doesnt matter. The millions of jumbo
iPhones that Apple cranked out last quarter took the wind right out of
Samsungs phablet sales.

Or, for those who prefer more apocalyptic metaphors, heres

AppleInsiders Thursday headline: Apple Incs thermonuclear assault
on Samsung vaporizes Androids remaining profit pillar.
After years of failing to do much more than embarrass Samsung
Electronics in legal battles over patent infringement, wrote Daniel
Eran Dilger, with evident glee, Apple has rapidly obliterated
Samsungs mobile division profitability, rendering it as barrenly
unprofitable as every other Android or Windows licensee with razor
thin margins in the phone, PC and tablet market.

CounterPoints stats:

Click to enlarge.

Apple posted an all-time record for both revenue and sales for

iPhone with shipments at 74.5Mn during the quarter, a Y-o-Y increase

of 46.1%.

As a result it has become the No. 1 smartphone vendor and No. 2

Handset vendor first time ever in a single quarter.

Apples overall handset market climbed to 14.8% and the

smartphone market share climbed to 20.2% during 4Q 2014

Apple has raised the bar so high with record iPhone sales, ASP and

profits that not even the next five brands combined could achieve this.

iPhone 6 & 6 Plus dual flagship move with elimination of 32GB SKU

has allowed Apples iPhone ASP to shoot up to an all-time-high of

$687

Regionally, Apple recorded tremendous growth in key markets such

as China, India, Brazil, Korea, Japan with leading position in USA.

.

Follow Philip Elmer-DeWitt on Twitter at @philiped. Read his Apple

AAPL coverage at fortune.com/ped or subscribe via his RSS feed.
Watch more coverage on Apples blockbuster quarter from Fortunes
video team: