Apple Vertical Integration

Gartner reported that Apple is the clear leader of the tablet computer market according to his research until 2015 (Fontevecchia, 2011). In fact, Gartner’s research revealed that in 2011 Apple would sell 70 million iPads, which supersedes 2010’s sales by 300% (Fontevecchia, 2011). Furthermore, Gartner calculates iPad sells to hit 300 million by 2015 (Fontevecchia, 2011). Notably, “Apple iPad did to the tablet PC market what the iPhone did to the smartphone market: re-invented it (Fontevecchia, 2011, para. 2). The iPad performs tasks that were previously available on a computer, however, Apple iPads “deliver a richer experience around content consumption, thanks to the ecosystem they support” (Fontevecchia, 2011, para. 3). In turn, the

4). According to Gartner’s data, Google’s Android is another big player in tablet computers, however, the majority of Apple’s competition makes the mistake of “prioritizing hardware features over applications, services, and overall experience” (Fontevecchia,

possesses the strength of “Formidable competitive advantages through horizontal and vertical integration” (Apple Inc., 2015, para. 4). Furthermore, horizontal integration is evident in the multiple devices that Apple produces (Apple Inc., 2015). In addition, “Apple has a presence across main digital media devices of computing and mobile communications” (Apple Inc., 2015, para. 4). Also, “Apple through vertical integration connected the user experience across the devices” (Apple Inc., 2015, para. 4). Notably, Apple is competitive due to their content business, as well as strong software (Apple Inc., 2015). User dependence on iOS provides a competitive edge for Apple “that enables it to earn incremental earnings by offering all associated devices” (Apple Inc., 2015, para. 6). Lastly, Apple has been able to maintain high selling prices for their products in a market that has declining average selling prices, such as the market for Android devices.

Apple’s weakness centers around their “High dependence on iPhone and iPad product lines” (Apple Inc., 2015, para. 11). In fact, the combined revenues for the iPhone and iPad product line accounted for 72.4% of total revenues for 2014 (Apple Inc., 2015). Since the technology market changes quickly, the dependence of the iPhone and iPad substantiates a risk for the corporation (Apple Inc.,