One of the best ways to develop a picture of any company is with the SWOT analysis -- a look at a company's strengths, weaknesses, opportunities, and threats. Today, I'd like to focus on Apple (Nasdaq: AAPL), the Mac-, smartphone-, and music player-maker extraordinaire. Some people think the company needs improvement, while others like it just the way it is. Let's see why:
- Product development. Doesn't invent the market, but its products set high standards for the market.
- Design and utility. Sleek, not clunky. For instance, the desktop computer is part of the screen, not a separate box with wires; the iPhone has very few buttons and feels nice in the hand. Products are easy to use, almost intuitive.
- Marketing. Clever and takes advantages of people's frustrations with other hardware.
- Brand name.
- CEO Steve Jobs. Visionary and charismatic.
- Very proprietary and controlling. Won't open the operating system to outsiders to develop hardware to work with the products, keeping hardware sales to itself. While this keeps design control inside and up to standards, it has hurt wide adaptation of its hardware, especially computers, where it has a relatively small market share. Apple has veto power over Apps sold.
- CEO Steve Jobs. He has been described as a control freak and very demanding. When he dies, the company will take a severe blow. When his health was in the news, his secretiveness damaged the company's reputation.
- Not shareholder-friendly. Has abused option granting in the past and refuses to pay a dividend despite a huge (and growing) cash level, no debt, and gobs of free cash flow.
- Very loyal customer base which has expanded beyond the Mac-heads of the 1990s with the iPod and the iPhone. The iPad has had a very successful launch. This seems to be leading to more sales of computers.
- Has a well-deserved reputation for high-quality products that work smoothly. New products are generally well-received and have a built-in purchasing base.
- Move into other computer or media product spaces that are not served well. Can continue to design the standard-setter for those spaces.
- A new version of Apple TV could take advantage of today's more highly developed Web.
- Big ideas are easy to copy. Microsoft (Nasdaq: MSFT) copied the graphical user interface, and even Linux has a version. The touchscreen interface is being used in other phones (e.g. Android). Apps are being developed for other smart phones and devices.
- High-priced products. Apple priced itself out of the personal computer market, and that remains a problem. Other smartphones that look and behave similarly to the iPhone are less expensive.
- Google (Nasdaq: GOOG) is moving into Apple's smartphone space by giving away the operating system, and it has announced that it will also be moving into the TV space. Both companies are well-funded, so any battle between the two could be long and ugly.