Apple Porters Five Forces Analysis

Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape the overall extent of competition in the industry. Apple Porter’s Five Forces are represented in Figure 1 below: Figure 1 Porter’s Five Forces   Threat of new entrants in Apple Porter’s Five Forces Analysis Threat of new entrants into consumer electronics industry is not substantial. The following factors, among others, determine the threat of new entrants into the industry to compete with Apple: 1. Massive capital requirements. Manufacturing technological devices and producing operating systems require massive capital investments. As illustrated in Table 1 below, the top players in the market invest billions of dollars in R&D in order to keep the pipeline of new products and services active. New market entrants will have to produce new products and services that will have to compete with products and services of top players that invest billions of dollars every year in R&D.   Rank Company R&D spending (USD) 1 Amazon 70.3 billion 2 Alphabet 38.1 billion 3 Meta Platforms 34.0 billion 4 Apple 25.3 billion 5 Microsoft 23.0 billion 6 Samsung Electronics 18.2 billion 7 Intel 17.5 billion 8 Roche 16.0 billion 9 Volkswagen 14.0 billion 10 Johnson & Johnson 14.0 billion Table 1 Top R&D spenders among technology companies in 2022   Moreover, capital is needed to obtain resources in general and to attract human resources and talented employees in particular. Accordingly, it is safe to argue that access to capital can prove to be a substantial entry barrier for new businesses. 2. Economies of scale. Economies of scale are substantial entry barrier into consumer electronics and tech industry. New players will find it difficult to compete with established global brands such as Apple, Samsung, Google and HTC that are able to gain cost advantage…