The Bargaining Power of Buyers is also an area that Apple has significant control over, as it has built up one of the most loyal and cost-insensitive customer bases there are in technology. Customers willingly pay over $500 for new iPads and will wait in line for days to buy them (Apple Investor Relations, 2012).

The next factor of New Market Entrants is an area of much activity globally today, as Asian contract manufacturers seek out opportunities to create iPad and iPhone clones (Apple Investor Relations, 2012). The new market entrants from Microsoft/Nokia alliance and the onslaught of Google Android-powered devices will also change the market landscape over the long-term as well.

Finally the Substitute Products also are a critical factor in the overall Five Forces Model analysis of Apple with counterfeiting flourishing throughout the region and online globally. There are also the low-cost contract manufacturers who are driving down the low-end smartphone marketplace today and making it...

All of these factors converge in the area of Competitive Rivalry, where the center of the analysis below shows the key success factors for Apple to remain competitive. Their leadership in operating system design and device integration is nearly unassailable at this point given the tight integration of the iTunes ecosystem for digital audio and video content. This ecosystem element of their competitive strategy is one of the most profitable in high technology today, generating nearly 30% of profits for Apple (Apple Investor Relations, 2012).
Figure 1: Apple Five Forces Analysis

References

Apple, Investor Relations (2012). Investor Relations. Retrieved March 28, 2012, from Apple Investor Relations and Filings with the SEC Web site: http://www.apple.com/investor/

Michael E. Porter. (2008, January). The Five Competitive Forces That Shape Strategy. Harvard Business Review: Special HBS Centennial…