Porter's Five Forces Analysis - Bargaining Power of Supplies Analysis

Porter’s Five Forces Analysis

Bargaining power of supplies analysis

Iphone is consisted of many parts such as variety types of semiconductors and processors from many suppliers such as Agere Systems, Inc., Ambit Microsystems Corporation, ASUSTeK Corporation, ATI Technologies, Inc., Broadcom Corporation, Cypress Semiconductor Corporation, Freescale Semiconductor, Inc., Hitachi Global Storage Technologies, Hon Hai Precision Industry Co., Ltd., IBM Corporation, Intel Corporation, and Toshiba Corporation.

Whereas Apple need many specific parts from variety suppliers, Apple is still has high bargaining of supplier. Because of many parts on product is common used in the market such as semiconductors and professors. In the other words, Apple can buy from difference suppliers that they can give the same product and price. For example, according to APPLE COMPUTER, INC. , company stated that it intent to transition its Macintosh computers using the PowerPC G5 and G4 microprocessors, which are currently single-sourced, to Intel microprocessors by the end of calendar year 2007 because IBM which is the sole source that provide PowerPC G5 and G4 microprocessors could not delivery the product on time. Apple also stay strong competitive by buying products from suppliers in large volume. For example, according to techcrunch.com, APPLE COMPUTER, INC. buys iphone from Foxcoon, which is a iphone assembly manufacturing, 800,000 units per week. Moreover, Apple iphone itself can stay strong competitive in the market by the software that Apple developed by itself.

Bargaining power of customer analysis

Bargaining power of buyer is Medium. Because, Apple’s iPhone is a unique product and it has good quality and service. Besides most of iPhone users have brand loyal to Apple. They always choose Apple’s product such as iMac, iPod, etc. Each of products have a good connection to be easy to use. For example, If you have iMac, iPhone can be connected directly to download music without installing any software. For the price, iPhone set a good price for users. If users do not have a 2-year-contract with AT&T, they need to pay $699, but if they make the contract, they only need to pay $199(Apple 2010). It is a good price for users.

The threat of new entrants analysis

As we know, Apple have a lot of product, like iMac, iTune, iPad, iPhone, everyone want to share these market. But, it’s hard for new competitors. Because Apple has a strong brand loyalty & brand value. Every time when Apple going to release new product, it launch people attract. Even more, a lot “Apple” fans going to buy it just because it is Apple‘s product. Apple catches people’s eyes. That’s why it is too hard for new entry.

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