Case Study 8: Apple Inc. in 2010
By reviewing performances of each product line and analyzing the financial statements before 2010, we suggest Apple to keep all of its business segments, because personal media players and personal computers have played an important role in Apple’s longevity, and Smart phones and tablet computers are critical divers of revenues in the present and future.
First, personal media players product line should not be dropped since it was not only the driver of “hallo effect,” but also the leader of personal media player industry. Dropping this product line will cause adverse conjecture about the future of Apple and affect the stock price dramatically, because this business segment created “hallo effect,” helping other products of Apple became popular with customers in the past years, which means it was considered by publics as the icon product to Apple. In addition, there is no need to drop this line. Although there were a lot of producers in the digital music players industry, Apple held 73% market share in 2010, and none of rivals with very little market share in this industry can compete with Apple. Because of the significance and absolute predominance of personal media players, Apple should not drop its media players line.
Second, since personal computers is a potential market which has big growth space, and this sector is the main business for Apple, Apple should not get rid of this product line. With the worldwide recovering economy, the demand of personal computers is also growing. The company’s share has improved from 4% in 2005 to 8% in 2009. Particularly, modern businesses rely on advanced technology within producing, communication, and other system, therefore, companies and organizations will purchase new computers to replace aging ones in order to improve their productivities. Besides, as a result of improved living standard...