Apple the Consumer Electronics Industry

Apple

The consumer electronics industry is highly competitive. Firms compete both as differentiated players leaning heavily on branding, marketing and technological advantage (Toshiba, HTC, Nokia, Sony, Samsung, HP among others) and there are also a large number of cut-price brands, especially in laptops and smartphones. Firms compete aggressively for new business, and for access to critical distribution channels.

There is a reasonable amount of interconnection of the firms. Many companies in the industry have employees who have worked elsewhere, and many employees will leave large firms to start up their own companies if they have a good enough idea. In addition, because many companies specialize in different elements of products, they work together to bring those products to market. Even rivals have done this -- Microsoft and Apple have worked together before, for example. Many OEM suppliers in Asia produce goods for multiple different consumer electronics companies as well.

Apple has tremendous expertise in consumer electronics and marketing, two of the key success factors in this industry. The evidence for this is in the way that Apple has been able to repackage existing products (mp3 players, tablets, smartphones) in ways that hold much more appeal to consumers than the versions of those products on the market. Apple is able to bring these products to market because of its innovative culture. The company has traditionally had a top-down leadership structure around the vision of Steve Jobs, but has moved since Jobs' departure and passing to a model based more on a transformation to collaborative innovation, with more people in the company involved in the innovation process. The current leadership team is making this transformation relatively smooth. Most firms in the industry are not particularly visionary -- only the high end companies are developing product innovations. Many innovations actually come from the OEM manufacturers (better cameras, for example) or from third-party software developers.

The result of the innovation chain at Apple is that the company has delivered products that are not innovative, but are used and designed in innovative ways. The vertical integration is unique, the design is unique, and Apple's vision for how its products are used is also unique. Put together, the company is one of the most innovative in consumer electronics, and many firms follow Apple's lead. This has enhanced the company's reputation by positioning it as the innovator. With groundbreaking products, Apple also has a strong employer brand. The company therefore is able to attract top talent, on the idea that this talent will be put to good use in developing leading edge products.