Political/ Legal factors The German government obligator ban Apple Inc.

devices (IPhone), which will not permit them to be sold their products in the German markets. The decision was in favor of its rivalry which marks a rare loss for the manufacture of the IPhone. (http://tntharri.wordpress.com/2009/10/01/apple-taking-a-byte-out-of-the-competition/ ). U.S Publicly Traded Corporation stated that in assessing the role of IPhone products in marketing is the subject to the laws of United States. There are some implications imposed by the US on companies that operate outside of the US. So in that case, Apple must fulfill objective theory of jurisdiction while dealing with customers or outside the US. The objective theory of jurisdiction means that Apple must comply with US laws even when doing business outside the US territory. (https://docs.google.com/viewer?a=v&q=cache:DnCG2GthsfsJ:web.hks.harvard.edu/publications/ge
tFile.aspx?Id%3D256+&hl=en&pid=bl&srcid=ADGEESiIgF5IHeZXSUEgIaMnl2O_Mf8yg2dWenm16N2j uFkzH6xAjiMjShPcYyoEmWLZqeK_FlzpsUe1UKLwWRTbIpnmyresnzLfW0ioGmw2pKpU3XZqJUuCQvjM The office dean of China s National Leading Group for Combating IPR Infringement and Counterfeits said that, We are working to change the relevant laws and regulations to increase disciplinary measures against law breakers so that they will bear the corresponding legal responsibility for their crimes of infringement and counterfeiting, 3ImmpijFiY4nvFw&sig=AHIEtbSit7wpX4yzw8N0O7yKxi_y68pCPw

). The office dean of China s National Leading Group for Combating IPR Infringement and Counterfeits said that, We are working to change the relevant laws and regulations to increase disciplinary measures against law breakers so that they will bear the corresponding legal responsibility for their crimes of infringement and counterfeiting,
http://www.bloomberg.com/news/2011-12-14/apple-mgm-resorts-steelers-chevronintellectual-property.html European Commission Regulation claimed that Apple iTunes disobey the EU competition laws; selling same product with varies prices, such as iTunes music download. A spokesman for the European Commission, expressed concern that Apple might be infringing the law by imposing territorial restrictions on music downloads. European consumers are only able to download music from the iTunes site in their country of residence and prices differ from country to country within the 27-nation European Union.
http://afp.google.com/article/ALeqM5gmnlrgq_NITt4LcgfYokGLeCzK_g http://www.theregister.co.uk/2007/01/23/itunes_slagged_again/

The $7.78 billion of software pirated in China last year while in U.S.A $9.52 billion. The alliance said that, 20 % of software in the U.S is pirated, while comparing with China 78 percent software pirated. http://www.bloomberg.com/news/2011-12-14/apple-mgm-resorts-steelers-chevron-intellectualproperty.html

Economic
The company s operation and performance depend on worldwide economic conditions. Uncertainty about global economic conditions poses a risk as consumers and businesses postpone or decline in income or asset values, which could have a material negative effect on demand for the Company s products and services. http://quote.morningstar.com/stockfiling/Annual-eport/2011/9/24/t.aspx?t=XNAS:AAPL&ft=10K&d=1bd5dc97370300875d50c3bd41b1e62a. The expected mobile phone usage for 2010 was 65.5%. The EU average GDP rate in 2006 was 2.8% and a common inflation was 2.2%. 63% of EU populace currently uses mobiles phones. According (http://www.itfacts.biz, 2011) stated that, EU populace buy a new phone each year. However, the populace of EU mentioned 132.84 millions, which means that every year new devices sold. However, China has the populace of 1,314 million, and leading single economy in the world. In 2006 the economy growth of China was 9.9% GDP. Moreover, in 2006 120 million mobile phone units sold. The total cell phone usage is 334.8 million. Xie, (2011) said that, global mobile phone sales climbed 25 per cent last year with total shipments reaching one billion units. Worldwide sales are expected to grow 20 per cent this year . The maturity of the market is also significant to be considered. China s 9.9% GDP growth together with only 25% creates good future market growth viewpoint.
http://www.itfacts.biz/?id=P8111%20MRKT%20620102%20Team%20B%20%E2%80%93%20Apple%E2%80%99s%20iPhone%20Page%208%20of%2036% 20Monday,%20April%2023,%202007 http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c 11-520862.pdf http://www.chinadaily.com.cn/china/2007-02/04/content_800710.htm

Social-Culture The demographic trends, lifestyle, leisure activities, and earning capacity of people are some of the social factors which affect the sales of iPhone. Social forces influence the behaviour

and purchasing style of people (Block, 2007). Apple has offered a unique product, iPhone which has been able to complement and benefit the lifestyle and behavior of people. There is no age bar for the product as it has become an integral part of people for all walks of life. It provides an ever comprehensive range of possibilities for the family including games, financial programmers and a mean to access internet and commercial networks.

Block, Ryan 2007, Steve muses on the industry, power Macs, Microsoft MP3 Players, Weblogs, Inc., viewed on 10 June 2006

Technology HTC announce that they will use Microsoft Corp Windows and Google Inc. Android software on its smartphones, which have took them to become leading smartphone market in last quarter. http://www.bloomberg.com/news/2011-11-23/htc-cuts-sales-forecast-on-competitionfrom-apple-samsung-1-.html The company s products and services compete in highly competitive global markets characterized by frequent product introductions, short product life cycle and rapid technological advances that have substantially increased the capabilities and use of mobile communication and media devices and other digital electronic devices. The Company competitors who sell mobile devices based on other operating systems have aggressively cut prices and lowered their product margins to gain or maintain market share. However, the Company continues to develop new technologies to enhance existing products and to expand the range of its product offerings through research and development, licensing of intellectual property and acquisition of third-party businesses and technology. Total research and development expense was $2.4 billion, $1.8 billion and $1.3 billion in 2011, 2010 and 2009, respectively.

http://quote.morningstar.com/stock-filing/Annualeport/2011/9/24/t.aspx?t=XNAS:AAPL&ft=10-K&d=1bd5dc97370300875d50c3bd41b1e62a

The collection bill also contains supply-chain mandates that will make it even harder for federal workers to use up-to-date technology. Deputy Secretary Lynn has pointed out that the iPhone took only 24 months to develop, but Pentagon procurement processes already take seven or eight years. Further delays would be intolerable. The U.S. government should take advantage of the innovative bargains developed by the competitive marketplace. http://www.bloomberg.com/news/2011-11-29/cybersecurity-demands-patches-not-vastbill-commentary-by-susan-crawford.html

Environment

Apple believes that improving the environmental performance of their business starts with their products. The careful environmental management of their products throughout their life cycles includes controlling the quantity and type of materials used in their manufacture, improving their energy efficiency, and designing them for better recyclability.

Apples ultracompact product and packaging designs lead the industry in material efficiency. Reducing the material footprint of a product helps maximize shipping efficiency. It also helps reduce the energy consumed during production and material waste generated at end of life. The chart below details the materials used in iPhone 4.

http://images.apple.com/environment/reports/docs/iPhone_4_Product_Environmental_Report .pdf

2. Porters five forces

2.1 Bargaining power of Buyers (HIGH) Liana Grey (2011) said that cell phone uses have information about which platform has more interesting applications. Liana also added that century 21 is not alone, In a survey conducted by AT&T earlier in 2011, 88 per cent of respondents expected to expand their mobile

marketing programmes over the next year, and applications are more important that the platform underneath, so buyers have strong bargaining power towards the platform. http://www.rew-online.com/2011/12/16/a-new-apptitude/

Bargaining power of suppliers (HIGH) Iphone has very unique specifications and is very distinct in sourcing its parts. One of the parts that can not be presently differentiated is the touch screen. According to jack EWING and Arik and Hesseldahl (2007) German company Balda outfit the iphone with its advance touchscreen. With the Chinese technology, Balda now makes glass-surfaced screens that are far more sensitive thinner and harder to scratch or smudge. This is some what of a gamble, as Balda was in some financial troubles. This makes Apple vulnerable for the first rule of power of suppliers. Balda is the only one who can supply the part. This is the Achilles heal of the iphone because there is no substitute currently.

http://www.businessweek.com/globalbiz/content/apr2007/gb20070405_436341.htm

Substitutes: (HIGH) There are alternative products that customers can be purchased over iphone. As mentioned in M-matrix limited (2011) M8 offer a competitive alternative, particularly in Asian market. Nokia, LG and Samsung offer alternative phone solutions. According to Forbes (2011) the price to the companies may dominate by the phone companies, LG and Samsung in particular are in good position to capatilize on early sales of touch phones and establish themselves.

http://www.forbes.com/sites/mobiledia/2011/12/13/samsung-challenges-apple-ships-300million-phones-in-2011/

http://m-matrix.en.made-in-china.com/company-M-MATRIX-TECHNOLOGYLIMITED.html

Market Rivalry among existing competitors (High)

As mentioned by Forbes(2011) Samsung emerged as one of the biggest challengers to Apple, shipping more than 300 million mobile phones in 2011, only the second company, after Nokia, to reach this milestone in a 12-month period. Samsung, which has a diverse lineup of devices, from the low- to high-end, running on both its Bada operating system and Googles Android platform, also produced the Samsung Galaxy S2, which analysts believe is the iPhones number-one competitor. The company said its Galaxy S and S2 smartphones powered sales, selling 10 million units each in 2011. The company has also exceeded the performance of its Android phone making competitors. Motorola, HTC and LG have all had varying degrees of success in 2011, but Samsung has separated itself from the pack by launching quality devices in the low-end market and becoming the first stop for customers looking for a high-end device thats not an iPhone.

http://www.forbes.com/sites/mobiledia/2011/12/13/samsung-challenges-apple-ships-300million-phones-in-2011/

Threat of new entrant: (low) Threat of new entrant is low because IPhone is already facing the most competition from imitators who sell similar of comparable device at lower prices, such as Samsung, HTC and LG rather than companies trying to enter the cell phone industry.

http://www.slideshare.net/Dominque23/iphone-marketing-reportdoc http://stevecheney.posterous.com/apple-the-platform-company http://www.slideshare.net/shwetaj/mobile-applications-7643425 http://www.forbes.com/sites/mobiledia/2011/12/13/samsung-challenges-apple-ships-300million-phones-in-2011/

3.0 Main opportunities and threats: use the analysis to identify and explain the key features and trends that have encouraged or restricted the growth in the industry over the last ten years.

One of the threat mentioned by Gerald Lynch is that customers thinks iphone4s have become uncool now, because they were expecting more than that. According to Gareth James,

Senior(2004) The integration of the Personal Digital Assistant (PDA) and the cellular phone into the Smartphone presents a considerable security risk. Many Smartphones are sold to corporate users who use them for business and personal tasks. The threat is serious that malicious code could destroy the device, gain access to sensitive information or access corporate networks illegally.In addition, packetized services, such as GPRS (General Packet Radio Service), and the move to 3G systems open up more vulnerabilities to hackers. With more open systems with rich content and applications accessible over the air, better security is needed to protect handsets. This article explores malicious code threats on the Symbian and Microsoft Smartphone platforms. According to Jon Brodkin (2011) Vulnerabilities in mobile Web browsers pose a major threat to cellphone security and could lead to an increasing number of successful attacks in 2012, researchers are warning. Both your smartphone's default browser and browsers embedded within apps are possible attack points. Mobile apps are increasingly reliant on Web browsers, Georgia Tech security researchers said in their Emerging Cyber Threats Report for 2012.

http://www.sciencedirect.com/science/article/pii/S1353485804001151 Gareth James, Senior(2004) http://arstechnica.com/gadgets/news/2011/10/smartphone-web-browsers-could-becomemajor-attack-vector-security-researchers-warn.ars Jon Brodkin (2011)

Opportunity: (TriceEdneyWire.com) - The African-American market offers the smartphone industry its best opportunity for growth. That's one of the conclusions revealed in a recent analysis by The Nielsen Company of the cellular phone users. As of the end of 2010, nearly one third (31%) of all mobile customers owned smartphones. These are cell phones with app-based, web-based operating systems, such as the Apple iPhone, Google's Android system and RIM's Blackberry http://nationalcongressbw.org/blacksandsmartphone.aspx

Market analysts predict that smartphones will outnumber PCs by 2013, and that they will be the most common device for accessing the internet. In 2010 we published a report about smartphone security. The report gives an overview of the top risks and opportunities for smartphone users, and we made recommendations for end-users, and IT officers to address these risks . http://www.enisa.europa.eu/act/application-security/smartphone-security-1

Key successful factors for the year 2011

Smartphone industry offers some significant benefits to users through the sophistication of the handset, in particular the quality of the display and the touch-screen user interface. The changes inside the handset are even more evolutionary, with the phones now having powerful browsers and software operating systems that offer very considerable development potential for the software industry. Software on its own is of limited value to the user. Provide information that can be accessed and manipulated by the software and then the phone is transformed into a powerful mobile information and communications device that is likely to change the way in which its users access information dramatically.

http://bir.sagepub.com/content/27/4/242.full.pdf+html

The mobile application store market is tightly linked with the explosion of smartphone penetration and usage by consumers worldwide. Apples App store has provided generous incentives to customers to download applications. However, it has also shown the path of success to its competitors. OEMs App stores serve applications for smartphone that were manufactured by the OEM. For examples, Black Berry and Palms.

http://www.booz.com/media/uploads/The_Rise_of_Mobile_Application_Stores.pdf