apple case study conclusion

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How Apple Is Organized for Innovation

• Joel M. Podolny
• Morten T. Hansen

When Steve Jobs returned to Apple, in 1997, it had a conventional structure for a company of its size and scope. It was divided into business units, each with its own P&L responsibilities. Believing that conventional management had stifled innovation, Jobs laid off the general managers of all the business units (in a single day), put the entire company under one P&L, and combined the disparate functional departments of the business units into one functional organization. Although such a structure is common for small entrepreneurial firms, Apple—remarkably—retains it today, even though the company is nearly 40 times as large in terms of revenue and far more complex than it was in 1997. In this article the authors discuss the innovation benefits and leadership challenges of Apple’s distinctive and ever-evolving organizational model in the belief that it may be useful for other companies competing in rapidly changing environments.

It’s about experts leading experts.

Idea in Brief

The challenge.

Major companies competing in many industries struggle to stay abreast of rapidly changing technologies.

One Major Cause

They are typically organized into business units, each with its own set of functions. Thus the key decision makers—the unit leaders—lack a deep understanding of all the domains that answer to them.

The Apple Model

The company is organized around functions, and expertise aligns with decision rights. Leaders are cross-functionally collaborative and deeply knowledgeable about details.

Apple is well-known for its innovations in hardware, software, and services. Thanks to them, it grew from some 8,000 employees and $7 billion in revenue in 1997, the year Steve Jobs returned, to 137,000 employees and $260 billion in revenue in 2019. Much less well-known are the organizational design and the associated leadership model that have played a crucial role in the company’s innovation success.

• Joel M. Podolny is the dean and vice president of Apple University in Cupertino, California. The former dean of the Yale School of Management, Podolny was a professor at Harvard Business School and the Stanford Graduate School of Business.
• MH Morten T. Hansen is a professor at the University of California, Berkeley, and a faculty member at Apple University, Apple. He is the author of Great at Work and Collaboration and coauthor of Great by Choice . He was named one of the top management thinkers in the world by the Thinkers50 in 2019. MortentHansen

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Apple Five Forces Analysis & Recommendations (Porter’s Model)

This Five Forces analysis gives insights into the external factors influencing Apple’s success. Michael E. Porter’s Five Forces analysis framework is a strategic management tool for evaluating the five forces affecting the business organization: customers, suppliers, substitutes, new entrants, and competitors. This Five Forces analysis of Apple Inc. sheds light on what the company does to ensure industry leadership. Despite the negative effects of external factors in the competitive landscape of the computer software and hardware, consumer electronics, and online services markets, Apple’s mission statement and vision statement are fulfilled through relevant business goals and strategies. Based on this Five Forces analysis, the company addresses competitive forces and external factors through effective leaders, such as Tim Cook. This Five Forces analysis indicates external factors that Apple’s strategic efforts must focus on to keep its leadership in the industry.

Based on the Five Forces analysis model, external factors in Apple’s industry environment point to competitive rivalry or intensity of competition, and the bargaining power of buyers or customers as the primary forces for consideration in the company’s strategic planning. Nonetheless, all five forces influence the company’s business situation, together with the effects of other external factors, such as the industry and market trends identified in the PESTLE/PESTEL analysis of Apple Inc .

Summary: Five Forces Analysis of Apple Inc.

Apple’s generic competitive strategy and intensive growth strategies are partly based on competitive forces in the external business environment. These forces limit or reduce the firm’s market share, revenues, profitability, and business development potential. This Five Forces analysis points to the following strengths or intensities of competitive forces in Apple’s industry environment:

• Competitive rivalry or competition: Strong force
• Bargaining power of buyers or customers: Strong force
• Bargaining power of suppliers: Weak force
• Threat of substitutes or substitution: Weak force
• Threat of new entrants or new entry: Moderate force

Recommendations. Considering the results of this Five Forces analysis, Apple must focus its attention on competitive rivalry and the bargaining power of buyers. This external analysis supports the company’s current position of continuous innovation. Innovation and the business competitive advantages shown in the SWOT analysis of Apple address the five forces in the external environment, although much of the company’s effort is for strengthening its position against competitors and for attracting customers to its products. An applicable course of action is to intensify research and development for innovation to develop novel products that complement iPhones, iPads, and other current products. Apple can also improve its support and resources for software or app developers, to strengthen the company’s ecosystem of hardware, software, and online services against the competitive challenges identified in this Five Forces analysis.

Competitive Rivalry or Competition with Apple (Strong Force)

Apple faces the strong force of competitive rivalry or competition. This component of Porter’s Five Forces analysis model determines the intensity of the influence that competitors have on each other. In Apple’s case, this influence is based on the following external factors:

• High aggressiveness of technology firms (strong force)
• Low differentiation of many products (strong force)
• Low switching cost (strong force)

Competitors’ aggressiveness in innovation and marketing imposes a strong force in the information technology industry environment. In the market for consumer electronics, software, and Internet services, Apple competes with Google (Alphabet) , Microsoft , Samsung, and Sony . In the video-streaming market, Netflix , Disney , Amazon , and Facebook (Meta) compete with Apple TV Plus. This Five Forces analysis also considers other technology firms, such as IBM and Intel , which influence Apple’s competitive environment. Moreover, in terms of product differentiation, products in the market are generally similar in fulfilling specific purposes. For example, many popular apps are available for Android and iOS devices, and cloud storage services from different companies are similar and available to users on different platforms. In this Five Forces analysis of Apple, such a condition creates a strong force by making it easy for customers to switch to other sellers or providers. On the other hand, the low switching cost means that it is easy for customers to switch from Apple to other brands, based on price, function, accessibility, network externalities, and related concerns. The combination of these external factors in this part of the Five Forces analysis leads to tough competitive rivalry that is among the most significant considerations in Apple’s strategic management.

Bargaining Power of Customers/Buyers (Strong Force)

The bargaining power of buyers is strong in affecting Apple’s business. This component of Porter’s Five Forces analysis model determines how buyers’ purchase decisions and related preferences and perceptions impact businesses. In Apple’s case, buyers’ strong power is based on the following external factors:

• Small size of individual buyers (weak force)
• High availability of information to buyers (strong force)

It is easy for customers to change brands, thereby making them powerful in compelling Apple to ensure customer satisfaction. On the other hand, each buyer’s purchase is small compared to the company’s total revenues. In this Five Forces analysis of Apple, such a condition makes customers weak at the individual level. However, the availability of detailed comparative information about competing products’ features empowers buyers to shift from one provider to another. This external factor enables buyers to exert a strong force in the industry, although promotional strategies and tactics in Apple’s marketing mix (4P) can communicate tailored information to persuade customers to buy the company’s products. Thus, this part of the Five Forces analysis shows that Apple must include the bargaining power of buyers or customers as one of the most significant strategic variables in the business.

Bargaining Power of Apple’s Suppliers (Weak Force)

Apple Inc. experiences the weak force or bargaining power of suppliers. This component of the Five Forces analysis model indicates the influence of suppliers in imposing their demands on the company and its competitors. In Apple’s case, suppliers have a weak bargaining power based on the following external factors:

• Moderate to high number of suppliers (weak force)
• Moderate to high overall supply (weak force)
• Large size of some equipment and component manufacturers (strong force)
• High ratio of firm concentration to supplier concentration (weak force)

The global size of its supply chain allows Apple Inc. to access many suppliers around the world. In Porter’s Five Forces analysis context, the resulting high number of suppliers is an external factor that presents only a weak to moderate force against the company. Also, the moderate to high overall supply of inputs, such as semiconductors, makes individual suppliers weak in imposing their demands on Apple. However, some large suppliers, such as OEMs and producers of chips, significantly influence the industry. Nonetheless, in this Five Forces analysis case, the high ratio of firm concentration to supplier concentration limits suppliers’ power and influence in the industry. This external factor reflects the presence of a small number of big companies, like Apple and Samsung, in contrast to a larger number of medium-sized and large suppliers. Thus, this part of the Five Forces analysis shows that the bargaining power of suppliers is a minor issue in developing Apple’s operations management strategies for supply chain management, value chain effectiveness, innovation, and industry leadership.

Threat of Substitutes or Substitution (Weak Force)

The competitive threat of substitution is weak in affecting Apple’s computing technology, consumer electronics, and online services business. This component of the Five Forces analysis framework determines the strength of substitute products in attracting customers. In Apple’s case, substitutes exert a weak force based on the following external factors:

• Moderate to high availability of substitutes (moderate force)
• Low performance of substitutes (weak force)
• Low buyer propensity to substitute (weak force)

Some substitutes for Apple products are readily available in the market. For example, instead of using iPhones, people can use digital cameras to take pictures, and landline telephones to make calls. In this Five Forces analysis of Apple, such an external factor exerts a moderate force in the industry environment. However, these substitutes have low performance because they have limited features. Many customers would rather use Apple products based on convenience and advanced functions. This condition weakens the force of substitution in impacting the company’s business in this Five Forces analysis context. Also, buyers have a low propensity to substitute. For instance, customers would rather use smartphones than go through the hassle of buying and maintaining a digital camera, an analog phone, and other devices. This part of the Five Forces analysis shows that Apple does not need to prioritize the threat of substitution in management decisions for business processes, like marketing, market positioning, and product design and development.

Threat of New Entrants or New Entry against Apple (Moderate Force)

Apple Inc. experiences the moderate force or threat of new entrants. This component of Porter’s Five Forces analysis model indicates the possibility and effect of new competitors entering the market. In Apple’s case, new entrants exert a moderate force based on the following external factors:

• High capital requirements (weak force)
• High cost of brand development (weak force)
• High capacity of some potential new entrants (strong force)

Establishing a business to compete with Apple Inc. requires high capitalization. Also, it is extremely costly to develop a strong brand to compete with large companies, like Apple. These external factors make new entrants weak in this Five Forces analysis case of the IT business. However, there are large firms with the financial capacity to enter the market. For example, Google has already done so through its consumer electronics. Samsung also used to be a new entrant. These examples show that there are large companies that have the potential to directly compete with Apple Inc. in multiple markets. Thus, the overall threat of new entry is moderate. This part of the Five Forces analysis shows that Apple must maintain its competitive advantages through innovation and marketing to remain strong against new entrants’ moderate competitive force.

• Apple empowers small businesses to grow and serve their customers .
• Apple Inc. – Form 10-K .
• Apple introduces global developer resource for labs, sessions, and workshops .
• Apple scores record 13 Academy Award nominations .
• Jahan, S. A., & Sazu, M. H. (2023). Role of IoTs and analytics in efficient sustainable manufacturing of consumer electronics. International Journal of Computing Sciences Research, 7 , 1337-1350.
• Sforcina, K. (2023). Digitalizing Sustainability: The Five Forces of Digital Transformation . Taylor & Francis.
• U.S. Department of Commerce – International Trade Administration – Software and Information Technology Industry .
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Comprehensive Business Model of Apple

By Aditya Shastri

Quick Read   Explore the Apple business model in this comprehensive case study. Understand how Apple’s innovative products, strategic marketing, and operational excellence drive its success in the tech industry.

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Last time we uncovered the Marketing Strategy of Titan Watches . This time we’ll avert our focus to the business model of Apple, a global leader in technology, known for its innovative products and seamless ecosystem.

In 1984, Apple didn’t just launch a computer; it launched a revolution. The Macintosh wasn’t just a device; it was a symbol of innovation and user-friendliness. Fast forward to today, and Apple is synonymous with premium tech. From iPhones to iPads, their products are more than gadgets – they’re coveted lifestyle accessories.

Their secret? Apple’s business model with a relentless focus on design, user experience, and a seamless ecosystem. Their products are simple, intuitive, and just plain cool. This dedication to innovation has not only solidified Apple’s position as a tech titan but has also cultivated a fiercely loyal customer base. With over 100,000 employees dedicated to crafting ‘the best things on Earth,’ it’s no wonder Apple continues to shape the future of technology.

This case study on Apple company is a complete review of its mind-blowing business model, including an overview of its target market, services, statistics, and sales, etc.

About Apple

Source: Unsplash.com

Apple Inc., founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne in Cupertino, California, began as a personal computer company. Its mission is to provide the best user experience through innovative hardware, software, and services. Key milestones in its journey include the launch of the Macintosh in 1984, the introduction of the iPhone in 2007, and reaching a market capitalization of $3 trillion in 2022.

Apple’s commitment to innovation and design has established it as a global leader in technology, with over 1.65 billion active devices worldwide. The business model of Apple revolves around creating a limited number of highly innovative products that dominate their categories, such as iPhones and iPads, which account for 80% of active smartphones.

As the world’s largest sales aggregator, Apple continues to expand its market, having been ranked the world’s number one brand in 2016. Despite a smaller product portfolio compared to competitors like Samsung and Google, Apple’s strength lies in its capacity to outpace them through superior innovation and quality.

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Business Model Of Apple

The business model of Apple primarily relies on technology sales, but it encompasses more than just hardware.

Sure, the iPhone is the star of the show, but it’s just one act in Apple’s business model. The true magic lies in the seamless symphony between hardware and software.

That sleek iPhone in your hand? It’s designed to work flawlessly with AirPods that pop right in your ears and an Apple Watch on your wrist.

It all connects beautifully, creating a sticky ecosystem that keeps users coming back for more. As such, this strategic business model of Apple isn’t just about selling products; it’s about building a loyal user base invested in the entire Apple experience. And that, folks, is a recipe for long-term success.

Apple Business Model: Brand’s Market Share & Market Analysis

Apple holds a significant share of the global smartphone, tablet, and personal computer markets. In 2023, Apple captured approximately 27% of the global smartphone market and 36% of the tablet market (source: IDC). The business model of Apple leverages its strong brand loyalty, premium pricing strategy, and ecosystem of interconnected products and services. Market analysis reveals a growing demand for high-quality, user-friendly technology, which Apple continues to capitalise on with its innovative product line and continuous improvement in user experience.

Apple Business Model: Product Offerings

Apple’s product offerings include the iPhone, iPad, Mac, Apple Watch, and Apple TV, complemented by services such as the App Store, Apple Music, iCloud, and Apple Pay.

The company also provides accessories like AirPods and various software solutions. By focusing on integration and a unified ecosystem, and ensures a seamless user experience across all its products.

The continuous release of new features and innovations, like the M1 chip and Apple Fitness+, keeps the brand at the forefront of technology. These aspects are fundamental to Apple’s business model, driving its ongoing success and market dominance.

Apple Business Model: Target Audience

Source: Google

Ofcourse we cannot talk about Apple’s business model without first talking about it’s target audience.Apple’s success hinges on its ability to captivate a remarkably broad audience. Tech enthusiasts flock to their latest innovations, while professionals value the seamless integration of Apple products into their workflows. Students find Apple devices ideal for learning and staying connected, while general consumers appreciate the user-friendly interface and premium design across their product line.

This diverse target audience spans generations. The iconic iPhone, for example, transcends mere functionality; it’s a coveted status symbol imbued with cutting-edge technology. By addressing a kaleidoscope of consumer needs and preferences, Apple fosters a loyal customer base that continues to expand. With an impressive 1.5 billion active users and a culture of annual product launches. This business model of Apple makes sure that its market shows no signs of shrinking.

Their product ecosystem is a testament to this strategic inclusivity. From AirPods and Apple Watch to iMacs, iPads, and MacBooks, Apple caters to various age groups and lifestyles. Devices like the iPhone and iPad resonate with users aged 20-45, while services like iTunes, Apple Pay, and the App Store gain traction with the younger demographic (18-30). Apple TV and accessories further solidify their hold on the 20-45 age group.

This masterful blend of innovation and a customer-centric approach lies at the heart of Apple’s business model. It’s a powerful reminder of the importance of audience segmentation in today’s business landscape. Take a moment to reflect on your favorite brands – how do they leverage digital marketing strategies to reach specific customer groups? By delving into these digital marketing case studies , you can unlock valuable insights into targeting methods and marketing tactics that can propel your own business forward.

Business Model Of Apple: Funding & Investors

Apple has not required traditional funding rounds due to its profitability and cash reserves. However, its 1980 IPO raised $101 million, which was pivotal for its early growth.

Major investors include Vanguard Group, BlackRock, and Berkshire Hathaway. Apple’s strong financial health is reflected in its ability to fund research and development, strategic acquisitions, and shareholder dividends, ensuring sustained innovation and market leadership.

These factors are key components of the business model of Apple, which emphasises financial stability and continuous innovation.

Business Model Of Apple: Revenue Model

The Apple revenue model is diverse, with revenue streams from hardware sales, software, and services.

In 2022, Apple’s revenue model recorded sales worth $394.3 billion, with iPhone sales contributing 52%, services 19%, Mac 10%, and other products like iPad and wearables making up the rest (source: Apple). The services segment, including the App Store, iCloud, and Apple Music, has been the fastest-growing, highlighting the company’s successful shift towards recurring revenue streams.

Apple’s revenue model has been dividing its company into five sectors since 2018: iPhone, iPad, Mac, Wearable, Services, and Home Accessories.

The iPhone provides the most revenue for Apple, but both wearables and services, home and equipment have gained more prominence in recent years as Apple seeks to find new means of preventing stagnation in revenue. From $42.7 billion in 2009 to $156.3 billion in 2012, Apple revenues climbed considerably. In this period, Apple improved its production capacity greatly via its Foxconn partner, which allowed worldwide sales of the iPhone. It also saw the arrival of the iPad, which in its first year of sales added $19.1 billion in income.

The Board of Directors of Apple has declared a $0.205 cash dividend per share in the common shares of the Company. At the close of business on February 8, 2021, the dividend shall be due to registered shareholders.

Business Model Of Apple: Marketing Strategy

Apple’s marketing strategy focuses on premium branding, emotional appeal, and innovative advertising. The company uses sleek, minimalist designs in its advertisements and stores to reflect its product aesthetics. High-profile product launches and keynote presentations create buzz and anticipation. Apple’s marketing also leverages influencer partnerships and digital marketing campaigns to reach a global audience. The emphasis on user experience and storytelling sets Apple apart in its marketing approach.

1. Placing its product above anything else: Whenever it comes to Apple and its products, the brand has never failed to stand out. Be it its features, advertisement, or any digital medium promotion, it always has stood out. The placement of its products is distinctive in that they are bound to be noticed and eventually purchased.

2. Staying Focused Always to Optimize the Global Presence of the Company: The money that the company is spending on its products is why Apple never fails to astonish its customers. It is also focusing on providing some better services to its users so that there is no chance of them switching over to any other brands.

3. Integrated Business Model for Better User Experience: The company is focusing on its integrated model of UX so that the users seamlessly invest in their company by purchasing its products. It is also focusing on digital mediums like Apple TV so that the young generation is still in touch and is fascinated by them. Privacy is what Apple plays. Nowadays, privacy is at utmost priority, and hence keeping these user interfaces into considerations Apple plays its cards and succeeds in collecting an audience.

Apple’s success story is a testament to the power of well-crafted marketing. Their strategic approach offers valuable lessons for anyone interested in the field. Consider exploring the world of digital marketing – it equips you with the skills to connect with audiences in innovative ways and achieve remarkable results. Whether you’re seeking a foundational understanding or a deep dive, numerous resources are available, from introductory courses to an MBA in digital marketing course . We have all covered.

Apple’s Business Model: Value Proposition

Apple’s value proposition lies in its commitment to innovation, quality, and ecosystem integration. The brand promises premium, reliable products with cutting-edge technology and superior user experiences. Apple’s ecosystem, where devices and services work seamlessly together, adds significant value to its offerings.

The continuous focus on design, performance, and customer satisfaction ensures that Apple remains a preferred choice for consumers worldwide. This value proposition convinces clients that the products and services of the firm are superior to those of competitors, encouraging them to buy Apple products. When the iPhone 4 was released in 2010, it revolutionised the smartphone market with its unique design and iOS operating system, distinguishing it from competitors.

Apple’s strategy of integrating apps and partnerships with companies like Air Canada, Nike, and Facebook further strengthened its market position. The introduction of the iPhone 4 led to an incredible buying frenzy, exemplifying the strength and appeal of Apple’s business model.

Apple’s Business Model: Operational Model

Apple’s operational model integrates advanced manufacturing processes, supply chain efficiency, and stringent quality control. By sourcing components from multiple suppliers and assembling products in locations like China, Apple ensures cost efficiency and scalability.

The company’s robust logistics network guarantees timely delivery of products worldwide. Furthermore, the operational model emphasises sustainability, with initiatives to reduce the carbon footprint and promote recycling. These elements are crucial to the business model of Apple, demonstrating its dedication to innovation, efficiency, and environmental stewardship.

Apple’s Business Model: Strategic Alliances & Partnerships

Apple’s business model has been able to build strategic alliances with a variety of companies to enhance its product range and services. Collaborations with app developers, content creators, and tech firms broaden the capabilities of its ecosystem, offering users a richer experience.

Partnerships with healthcare providers and educational institutions integrate the company products into vital new areas, showcasing their adaptability. Additionally, alliances with suppliers and manufacturers ensure a consistent supply of top-tier components, upholding the brand’s high standards.

These strategic partnerships are fundamental to the business model of Apple, illustrating how collaboration drives its ongoing success and leadership in the market.

Business Model Of Apple: Technological Innovations

If there’s anything we’ve learned from this case study on the Apple company so far, it’s the fact that the brand isn’t just about shiny products; it’s a tech powerhouse fueled by innovation. They pour billions into research and development, churning out game-changing tech like the Retina display, Face ID, and the mind-blowing M1 chip. But it’s not just about the hardware – Apple’s software, from iOS to macOS, is equally impressive. This relentless pursuit of innovation ensures their products not only look good but perform flawlessly, keeping users hooked and coming back for more.

Just as Apple leverages technology to stay at the forefront, so can you. Digital marketing offers a powerful skill set applicable to anyone navigating today’s digital world. Enrolling in a top-rated online digital marketing course equips you with the knowledge and tools to craft targeted campaigns, connect with new audiences, and achieve your goals.

Feeling unsure where to begin? Consider attending a free digital marketing certification masterclass. This introductory session offers a valuable opportunity to explore the world of digital marketing and see if it aligns with your interests.

Business Model Of Apple: Corporate Social Responsibility (CSR)

Apple recognises that success extends beyond just the bottom line. Apple’s business model incorporates a strong focus on Corporate Social Responsibility (CSR) initiatives that encompass sustainability, education, and diversity.

Apple is committed to achieving carbon neutrality across its entire business, including the supply chain and products, by 2030. They actively promote renewable energy and resource conservation through programs like Apple Renew for device recycling.

The company supports educational initiatives through the ConnectED program, aiming to bridge the digital divide and empower future generations.

Apple fosters diversity and inclusion within its workforce, recognising the value of a variety of perspectives and experiences. By prioritising these CSR initiatives, Apple demonstrates its commitment to building a better future for all. This aligns with their company image of innovation and social responsibility, potentially fostering stronger customer connections in the long run.

Apple Business Model: Top Competitors Analysis

Samsung: Competes with Apple in smartphones, tablets, and wearables, offering a wide range of devices with diverse features.

Google: Competes in smartphones with the Pixel line and provides software and services that rival Apple’s ecosystem.

Microsoft: Competes in personal computers and tablets with the Surface line, and offers software and services like Office 365 and Azure.

Amazon: Competes in tablets with the Fire series and in smart home devices with Echo, offering a vast ecosystem of products and services.

Huawei: Competes in smartphones and wearables, particularly in the Asian market, with a focus on advanced technology and affordability.

Apple’s business model serves as a shining example of how innovation, quality, and strategic integration can propel a company to the forefront of its industry. Their diverse product portfolio, from iPhones and iPads to Macs and Apple Watches, caters to a wide range of user needs. Furthermore, Apple’s strong ecosystem of interconnected products and services fosters a seamless user experience, encouraging deeper customer loyalty.

The cornerstone of Apple’s success lies in its unwavering commitment to technological advancements. Their relentless pursuit of cutting-edge design and functionality, evident in breakthroughs like the Retina display, Face ID, and the M1 chip, ensures their products remain at the pinnacle of performance and user experience. This commitment to continuous innovation positions Apple as a transformative force, shaping the future of the global technology landscape.

So if you are by the concept of strong business models and their impact on success? Explore the links provided below to delve deeper into the strategies of other leading companies such as the business model of Nike and the business model of Amazon .

Online communications and technology are the future, especially when combined with effective marketing skills and strategies, driving substantial growth for firms aiming to become industry leaders. By enrolling in a free course on top-paying skills , you can learn to craft impactful and targeted marketing campaigns, gaining valuable insights into the burgeoning field of digital marketing.

If you are a resident of any of these places then check out the digital marketing courses in Navi Mumbai , digital marketing courses in Faridabad and digital marketing courses in Udaipur .

Or, if you want to take a step forward then consider reading our digital marketing blogs to find which of the listed institutes would be the best for you.

Thank you for reading this article! If you wish to add to the discussion, write your thoughts in the comment section below.

FAQs About Business Model of Apple

Apple's business model integrates hardware sales, software services, and a cohesive ecosystem, generating revenue from multiple streams.

Apple makes money through hardware sales (iPhone, iPad, Mac), services (App Store, iCloud, Apple Music), and accessories (AirPods, Apple Watch).

Apple's main products include iPhone, iPad, Mac, Apple Watch, Apple TV, and services like iCloud and Apple Music.

Apple's top competitors include Samsung, Google, Microsoft, Amazon, and Huawei.

Apple uses advanced technology in hardware (M1 chip, Retina display), software (iOS, macOS), and services (Siri, iCloud) to enhance user experience.

Apple's target audience includes tech enthusiasts, professionals, students, and general consumers seeking premium, user-friendly technology.

Apple holds approximately 27% of the global smartphone market.

Apple's CSR initiatives focus on sustainability, promoting renewable energy, recycling, and supporting education and diversity.

Apple's value proposition is its commitment to innovation, quality, and a seamless ecosystem that enhances user experience.

Apple markets its products through premium branding, innovative advertising, high-profile product launches, and influencer partnerships.

Author's Note: My name is Aditya Shastri and I have written this case study with the help of my students from IIDE's online digital marketing courses in India . Practical assignments, case studies & simulations helped the students from this course present this analysis. Building on this practical approach, we are now introducing a new dimension for our online digital marketing course learners - the Campus Immersion Experience. If you found this case study helpful, please feel free to leave a comment below.

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Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs...... [Read full bio]

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Apple Inc. in 2020

• Format: Print
• | Language: English
• | Pages: 31

About The Author

David B. Yoffie

Related work.

• December 2020
• Faculty Research
• January 2022

Apple Inc. in 2020 – Select Market Data

• Apple Inc. in 2020  By: David B. Yoffie
• Apple Inc. in 2020 – Select Market Data  By: David B. Yoffie

Apple Global Marketing Strategy 2024: A Case Study

Apple, one of the world’s leading technology companies, has established a global marketing strategy known for its innovative advertising campaigns, smart segmentation, and pricing strategies. By effectively segmenting the market and identifying key demographics, Apple aims to reach a diverse consumer base worldwide. The company’s target audience primarily consists of individuals aged 20-45, residing in urban areas with higher disposable income.

Apple’s target segment encompasses a wide range of professionals, including those in specialized software and design careers, managers, and executive-level workers. Additionally, Apple caters to various life phases, targeting bachelors, married individuals, students, teachers, and educational institutions. This broad approach ensures that Apple’s products appeal to a wide range of individuals with different needs and preferences.

Apple’s marketing strategy is centered around user-friendly experiences and minimalistic advertising. The company aims to create a seamless and intuitive user experience, allowing consumers to effortlessly engage with its products. Apple’s minimalistic advertising campaigns highlight the features and benefits of its products, appealing to a global consumer base that seeks simplicity and elegance.

Another essential aspect of Apple’s marketing strategy is emotional branding. The company leverages emotional connections to create aspiration and innovation around its products. By evoking positive emotions and associating its brand with cutting-edge technology and design, Apple has fostered a loyal customer base that aligns with its core values.

Apple’s international brand value is built on its relentless commitment to quality, design, and innovation. The company’s products are renowned for their superior craftsmanship and attention to detail, establishing Apple as a benchmark for excellence in the industry. This reputation has enabled Apple to establish a global presence and capture significant market share worldwide.

The visionary leadership of Steve Jobs has played a pivotal role in Apple’s success. Jobs focused on innovation, design, and user experience as the driving forces behind the company’s growth. His leadership style emphasized simplicity and perfection, resulting in seamless user experiences and groundbreaking products that revolutionized the technology industry.

Even after his passing, Jobs’ legacy continues to shape Apple’s innovation and industry leadership. His vision for simplicity, innovation, and user-centric design remains ingrained in Apple’s DNA, guiding the company’s direction and product development.

Apple’s global revenue in 2023 reached an astounding $383.29 billion, according to Statista. Operating in over 150 countries globally, Apple has successfully expanded its reach and gained a strong foothold in international markets.

Furthermore, Apple is committed to sustainability and aims to become carbon neutral by 2030. The company strives to minimize its environmental impact by reducing emissions and investing in renewable energy sources.

With an accessible online store available in over 40 countries, Apple ensures that customers worldwide can easily purchase its products and access vital services. Additionally, Apple has optimized specific products for regional markets, such as the iPhone SE 2020, which was designed to meet the needs of Indian consumers with support for two SIM cards and regional cellular bands.

Key Takeaways:

• Apple’s global marketing strategy focuses on smart segmentation and identifying key demographics.
• The target audience consists of individuals aged 20-45 with higher disposable income residing in urban areas.
• Apple caters to professionals, including those in specialized software and design careers, managers, and executive-level workers.
• The company targets individuals from various life phases, such as bachelors, married individuals, students, teachers, and educational institutions.
• Apple’s marketing strategy emphasizes user-friendly experiences and minimalistic advertising.

Apple Target Audience

Apple’s target audience encompasses a diverse range of individuals, primarily residing in urban areas. This includes people of all genders between the ages of 20 to 45. The target audience comprises a mix of bachelors and married individuals in various life phases.

The target audience for Apple products typically falls within the high income bracket, including working professionals, managers, and executive-level workers. These individuals value technology that aligns with their professional needs and enhances their productivity. Apple also targets professionals in specialized fields such as music, video, photography, and design, providing software and devices tailored to their requirements.

In addition to professionals, Apple products have gained popularity among students, educational institutions, and teachers. The portability and functionality of devices like iPads and MacBooks make them ideal tools for educational purposes.

Occupational Demographics:

Apple’s target audience includes individuals from various occupations, such as:

• Working professionals
• Executive-level workers
• Professionals in specialized fields (e.g., music, video, photography, design)
• Educational institutions and teachers

Key Demographic Information:

Apple’s marketing strategy focuses on providing users with a simple, stylish, and luxurious product experience. The company’s advertising and marketing campaigns are known for their storytelling, minimal design, and high-quality imagery. By understanding and catering to its target markets and audiences, Apple has created an international branding value through quality and minimalistic design.

Marketing Strategy of Apple

Apple’s marketing strategy is crafted to provide users with a superior, user-friendly experience. The company places a strong emphasis on intuitive designs and interfaces, ensuring that customers can seamlessly navigate their products. This commitment to user-friendliness extends to their advertising campaigns as well.

Apple’s marketing approach is characterized by minimalistic advertising, which focuses on showcasing the key features and benefits of their products without overwhelming the audience with excessive copy or complexities. By keeping their messaging simple and concise, Apple is able to communicate the value of their products effectively.

Another integral aspect of Apple’s marketing strategy is the use of product launch events. These events generate anticipation and excitement among consumers, creating a buzz around their new offerings. Apple leverages these events to introduce their latest products and build a sense of exclusivity around their brand.

Influencer marketing is also a key tactic employed by Apple. By collaborating with influential personalities in various industries, Apple is able to leverage their credibility and reach to expand their customer base. This strategy enables them to tap into new markets and attract customers who value the recommendations and endorsements of these influencers.

Furthermore, Apple understands the importance of delivering a seamless customer experience beyond the initial purchase. Their marketing strategy involves well-trained sales representatives and efficient online support, ensuring that customers receive the necessary assistance and guidance throughout their journey with Apple products.

Overall, Apple’s marketing strategy revolves around providing users with a user-friendly experience, implementing minimalistic advertising, hosting captivating product launch events, and leveraging the clout of influencers. By prioritizing these elements, Apple continues to position itself as a leader in the tech industry.

5 Key Takeaways From Apple Marketing Strategy

Apple’s marketing strategy encompasses a combination of innovative approaches that have propelled the brand to new heights. By analyzing market trends and consumer preferences through meticulous market research , Apple remains at the forefront of delivering products and experiences that resonate with its target audience. Here are five key takeaways from Apple’s marketing strategy:

1. Emotional Branding:

Apple understands the power of emotional connections in marketing. By evoking emotions such as desire, excitement, and aspiration, Apple creates a strong bond between its products and consumers. For example, the “Shot on iPhone” campaign appeals to users’ creativity and passion for photography, fostering an emotional connection with the brand.

2. Simplicity:

Apple’s marketing strategy revolves around simplicity. The company’s advertising campaigns and product designs focus on minimalism and ease of use. By presenting products in a clean and straightforward manner, Apple effectively communicates their value, making them easily accessible to a wide range of consumers.

3. International Brand Value:

Apple’s strong international brand value is a testament to its commitment to quality and design. With a brand value of approximately $880.5 billion in 2023, Apple has gained the trust and loyalty of consumers worldwide. Its focus on delivering exceptional customer experiences and innovative products has solidified its position as a global leader in the technology industry.

4. Market Research:

Apple’s marketing success can be attributed to its thorough market research. By diligently studying consumer preferences, technological advancements, and market dynamics, Apple identifies emerging trends and lucrative opportunities. This enables the company to develop products that cater to the needs and desires of its target market, ensuring maximum market penetration.

5. Environmental Responsibility:

Apple’s commitment to environmental responsibility is a key aspect of its marketing strategy. With carbon neutrality achieved for its corporate emissions and plans to be 100% carbon neutral for its products and supply chain by 2030, Apple showcases its dedication to sustainability. By incorporating eco-friendly practices in its operations, utilizing renewable energy sources, and increasing the use of recycled materials, Apple aligns its brand with the growing demand for environmentally conscious products.

Overall, Apple’s marketing strategy exemplifies the company’s ability to embrace market research, create emotional connections, simplify messaging, build an international brand value, and prioritize environmental responsibility. These key takeaways provide valuable insights into the success of Apple’s marketing efforts and serve as inspiration for businesses striving to make a lasting impact in the global market.

Visionary Leadership

Apple’s success can be attributed to the visionary leadership of Steve Jobs. As the CEO of Apple for two separate periods, from 1977 to 1985 and then from 1997 to 2011, Jobs showcased his enduring impact on the company. His commitment to innovation, design, and user experience revolutionized the tech industry and shaped Apple’s DNA.

Throughout his tenure, Jobs had an unwavering attention to detail and an obsession with perfection. He possessed a remarkable ability to predict and shape consumer preferences, driving Apple’s success to new heights. Under Jobs’ visionary leadership, Apple introduced groundbreaking products that transformed the way we interact with technology and set new industry standards.

One of Jobs’ key principles was the emphasis on simplicity. He believed in creating products and marketing messages that were intuitive and easy to understand. By focusing on designing products that offered a remarkable user experience, Apple differentiated itself from other tech companies of the time.

Moreover, Jobs recognized the importance of forging an emotional connection with consumers through Apple’s products. He understood that people don’t just buy products; they buy into the values and dreams associated with those products. This approach to marketing values and emotions, rather than just features, set Apple apart from its competitors.

Under Jobs’ leadership, Apple’s product launches were meticulously planned to generate hype and consumer anticipation. These carefully orchestrated events turned product releases into cultural phenomena, further solidifying Apple’s brand identity and fueling its success.

Furthermore, Jobs believed in a customer-centric approach to product development. He understood that to meet consumer needs and desires, it was essential to deeply understand and empathize with customers. This focus on delivering exceptional user experiences and solving customer pain points helped foster a fiercely loyal customer base and strong brand loyalty.

The visionary leadership of Steve Jobs played a critical role in shaping Apple’s brand identity. He placed an unwavering emphasis on sleek design and innovative technology, positioning Apple as a leader in the tech industry. Through his leadership, Jobs not only transformed Apple into one of the most valuable companies globally, with consistent revenue growth, profitability, and shareholder returns, but also championed social and environmental responsibility.

Today, Jobs’ legacy continues to guide Apple, inspiring the company to push the boundaries of innovation and design excellence. His visionary leadership remains ingrained in Apple’s culture, ensuring that the company continues to deliver products and experiences that captivate consumers and shape the future of technology.

Delving into Apple’s Global Strategy

Apple’s global strategy is built upon a strong foundation of differentiation, adaptability, and quality. The company consistently pushes the boundaries of innovation to offer technologically advanced, aesthetically pleasing, and user-friendly products that stand out from the competition. With a global presence in over 150 countries, Apple’s strategy revolves around tailoring its offerings to meet the unique needs and preferences of diverse markets.

A key aspect of Apple’s global strategy is its commitment to adaptability. The company recognizes the ever-changing dynamics of the international market and strives to stay ahead by continuously evolving its products and services. Whether it’s launching localized versions of its products or incorporating cultural nuances in marketing campaigns, Apple aims to create a personalized and relevant experience for its customers worldwide.

Quality is at the core of Apple’s global strategy. The company’s unwavering dedication to producing high-quality products has earned it a reputation for excellence. Apple’s commitment to quality extends beyond its products, as it also focuses on creating a diverse and inclusive work environment, promoting sustainability, and upholding ethical supplier practices.

As part of its global strategy, Apple leverages its wide acceptance, brand value, competitive advantage, and low imitation to solidify its position as one of the most valuable companies globally. The company’s marketing campaigns are known for their innovative approach, often integrating cultural nuances and local references to resonate with consumers in different regions.

Overall, Apple’s global strategy ensures that it remains at the forefront of the technology industry, continuously delivering products and experiences that delight its customers while maintaining its commitment to differentiation, adaptability, and quality.

Apple’s Global Branding Strategy

Apple’s global branding strategy combines standardization and adaptation to create a strong and recognizable brand identity. The company strives to maintain consistency in conveying its core values of innovation, simplicity, and elegance across all products, marketing campaigns, and customer interactions.

Apple’s global expansion into over 150 countries showcases its commitment to establishing a strong brand presence worldwide. By offering localized versions of its products tailored to specific regions, such as the iPhone SE 2020 optimized for Indian consumers, Apple demonstrates its adaptability and understanding of diverse markets.

The company’s global branding strategy is based on key pillars, including wide acceptance, brand value, competitive advantage, and low imitation. Through its innovative designs, user-friendly interfaces, and high-quality products, Apple has gained wide acceptance and built a loyal customer base globally.

Apple’s emphasis on brand value is evident in its commitment to accessibility, educational support, carbon neutrality, and supplier responsibility. These core values guide the company’s operations and contribute to its brand development, aligning with the growing consumer demand for sustainability and social responsibility.

Standardization is an essential aspect of Apple’s global branding strategy. It ensures a consistent brand experience for consumers worldwide, reducing marketing costs and enhancing efficiency in meeting diverse customer needs. This approach allows Apple to establish a unified brand image and maintain global brand recognition and loyalty.

At the same time, Apple recognizes the importance of adaptation to local markets and cultures. By incorporating cultural nuances in marketing campaigns and offering localized products, Apple resonates with consumers on a deeper level, strengthening its brand presence in specific regions.

Apple’s global branding strategy has been instrumental in its success as one of the world’s biggest technology companies. The company’s ability to maintain a consistent brand identity while adapting to diverse markets has solidified its brand recognition and loyalty, contributing to its global dominance and market leadership.

Apple’s Global Marketing Strategy

Apple’s global marketing strategy stems from its wide acceptance, brand value, competitive advantage, and low imitation. The company’s products have gained immense popularity and achieved global acceptance, attracting a loyal customer base with their innovative designs and user-friendly interfaces. Apple’s marketing success can be attributed to its effective branding strategy, impactful marketing campaigns, and unwavering focus on delivering high-quality products.

Apple’s marketing campaigns consistently emphasize the features and benefits of its products, effectively conveying their value to consumers. By creating a perception of exclusivity, Apple maintains its premium pricing and reinforces its brand value. Through various marketing channels, such as digital marketing , experiential marketing, and influencer marketing, Apple promotes its products globally, reaching a wide audience and creating brand awareness.

The company’s emphasis on simplicity, design, and innovation has contributed to establishing a strong emotional connection with its customers. Apple’s marketing campaigns aptly reflect the brand’s strategy, highlighting simplicity, elegant design, and groundbreaking innovation. By investing heavily in research and development, Apple ensures that its products are both aesthetically pleasing and highly functional, delivering an exceptional user experience.

Apple’s product strategy focuses on creating user-friendly and intuitive products, including a comprehensive lineup that includes iPhones, iPads, Macs, and Apple Watches. This diverse product range contributes to Apple’s global appeal and enables the company to cater to various consumer needs.

As part of its global marketing strategy, Apple operates retail stores in major cities worldwide, establishing a strong presence and providing customers with a high-end retail experience. Additionally, Apple diversifies its supply chain by sourcing components from multiple countries, such as China, the U.S., Japan, and Europe, ensuring a robust and efficient production process.

Apple also places great importance on protecting its intellectual property and has rigorous measures in place, including patents and trademarks, to safeguard its innovations in all operational jurisdictions.

While Apple has successfully implemented its global marketing strategy, it faces challenges in international markets. These challenges include regulatory compliance, economic fluctuations, and cultural sensitivity, which require the company to adapt its strategies accordingly.

Apple’s globalization strategy has resulted in increased market reach, brand consistency, and an innovation feedback loop. By strategically pricing its products in different markets and offering financing and trade-in options, Apple effectively manages economic fluctuations and ensures accessibility to its products.

Case Studies

Apple is renowned for its successful marketing strategies and campaigns that have resonated with its target audience. These case studies highlight the effectiveness of Apple’s innovative approach, market segmentation, and user-centric experiences.

iPod: Revolutionizing the Music Industry

One of Apple’s most iconic products, the iPod, revolutionized the music industry when it was launched in 2001. With its sleek design, user-friendly interface, and seamless integration with iTunes, the iPod quickly became the go-to portable music player for music enthusiasts worldwide. Apple’s strategic market segmentation and focus on targeting urban areas, tech-savvy individuals aged 20-45, and music lovers allowed them to capture a significant market share and dominate the portable music player industry.

iPhone: Redefining the Smartphone Experience

The iPhone, introduced in 2007, redefined the smartphone market by offering a seamless user experience, innovative features, and a stylish design. Apple’s marketing strategy for the iPhone emphasized simplicity, minimalism, and the exclusive user experience offered by the device. By targeting working professionals, managers, and executives, Apple positioned the iPhone as a must-have device for both personal and professional use. The successful marketing campaign focused on highlighting the iPhone’s features and benefits through captivating storytelling, demonstrating how it could enhance daily life and productivity.

iPad: Transforming the Tablet Market

When Apple launched the iPad in 2010, it quickly became a game-changer in the tablet market. Apple’s marketing strategy for the iPad centered around targeting urban areas and professionals in various industries, including design, photography, and video production. The lightweight and portable nature of the iPad made it a preferred choice for professionals on the go. Through its marketing campaigns, Apple highlighted the versatility and productivity-enhancing capabilities of the iPad, positioning it as an essential device for creative professionals.

“Shot on iPhone” Campaign: Showcasing User-Generated Content

Apple’s “Shot on iPhone” campaign exemplifies its ability to connect with its audience emotionally. By showcasing stunning photographs taken by iPhone users from around the world, Apple emphasized the exceptional camera capabilities of its devices. This campaign not only reinforced the idea that anyone could capture professional-quality photos with an iPhone, but it also fostered a sense of creativity and community among iPhone users. The “Shot on iPhone” campaign resonated with the target audience, showcasing the power and potential of the iPhone’s camera while highlighting the talents of everyday users.

Apple’s Global Tax Strategy

As one of the world’s most valuable companies, Apple has a global tax strategy in place to ensure legal compliance and optimize its financial operations. The company utilizes tax planning techniques to minimize tax liabilities and maximize profits, while adhering to the laws and regulations of the countries it operates in.

Apple’s global presence, operating in over 150 countries, requires a strategic approach to taxation. The company strategically structures its operations and takes advantage of tax incentives and loopholes available in various jurisdictions. By doing so, Apple aims to optimize its tax position while remaining in accordance with the laws of each country.

The company has faced scrutiny and criticism for its tax planning practices, particularly surrounding profits booked offshore. Apple has booked a significant amount of its offshore profits, totaling $252.3 billion, on which it has not paid any U.S. taxes. This is the largest amount among U.S. companies.

By keeping these offshore profits, Apple is effectively avoiding a substantial amount of U.S. taxes. It is estimated that the company is able to avoid $78.5 billion in taxes through this strategy. However, it is important to note that Apple maintains that its tax planning practices are legal and within the boundaries of the law.

In addition to its offshore profits, Apple has also faced tax-related controversies in Europe. European authorities charged Ireland with illegally cutting a special tax deal with Apple, granting the company a tax rate as low as 0.005%. This lowered Apple’s Irish tax bill by over $14 billion. The case highlighted the complex nature of international tax planning and the challenges faced by governments in regulating multinational corporations.

While Apple’s tax planning strategies have drawn attention, it is crucial to recognize that the company’s practices are not unique to the tech industry. Many multinational corporations employ similar tax planning techniques to optimize their financial positions within the legal framework.

Apple’s Global Tax Strategy in Numbers:

It is essential to understand that Apple, like many multinational corporations, operates within the legal framework to optimize its tax position while contributing to its continued growth and innovation. The complexities of international taxation highlight the need for ongoing discussions and efforts to address the challenges of a global economy.

Apple’s global marketing strategy has proven to be a key driver of its success in the technology industry. By prioritizing market research and targeting lucrative segments, Apple has been able to reach its target audience effectively. The company’s emphasis on user-friendly experiences and emotional branding has resonated with consumers, contributing to its global appeal.

Under the visionary leadership of Steve Jobs, Apple introduced groundbreaking products and prioritized innovation and user experience. This commitment to technological advancements and design excellence has solidified Apple’s position as a leader in the industry.

Apple’s diverse product lineup, including iPhones, iPads, Macs, and Apple Watches, has contributed to its global reach. With a strong emphasis on simplicity and innovation in advertising, Apple has maintained brand consistency across different markets. The company’s retail presence through Apple Stores worldwide offers high-end retail experiences, further enhancing its brand perception.

Despite facing regulatory challenges globally and economic fluctuations in different regions, Apple has adapted through strategic pricing and financing options. The company’s cultural sensitivity is evident through adaptable emoji skin tones and localized software options.

In conclusion, Apple’s global marketing strategy encompasses thorough market research, user-friendly experiences, emotional branding, and a focus on innovation. The key takeaways include the importance of simplicity in design and messaging, building an international brand value, and conducting extensive market research to identify lucrative opportunities. With its global reach and commitment to quality, Apple continues to set the benchmark for success in the technology industry.

What is Apple’s global marketing strategy?

Who is apple’s target audience, what is the marketing strategy of apple, what are the key takeaways from apple’s marketing strategy, who was the visionary leader behind apple’s success, what is the foundation of apple’s global strategy, how does apple approach global branding, what sets apple’s global marketing strategy apart from competitors, are there any notable case studies of apple’s successful marketing strategies, what is apple’s global tax strategy, what are the key takeaways from apple’s global marketing strategy, related posts:.

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Nina Sheridan is a seasoned author at Latterly.org, a blog renowned for its insightful exploration of the increasingly interconnected worlds of business, technology, and lifestyle. With a keen eye for the dynamic interplay between these sectors, Nina brings a wealth of knowledge and experience to her writing. Her expertise lies in dissecting complex topics and presenting them in an accessible, engaging manner that resonates with a diverse audience.

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Product Life Cycle (PLC) | Stages and Case Study of Apple

• What is Product Life Cycle (PLC)?

Product Life Cycle (PLC) is a model that illustrates how a product progresses through stages during its time on the market. It serves as a tool for businesses to understand how their products evolve and how to manage them efficiently. This concept plays a role in making decisions regarding product development, marketing strategies, pricing strategies, and distribution channels. In today’s paced world of business and innovation, it is crucial to grasp the Product Life Cycle (PLC).

Key takeaways from Product Life Cycle (PLC): The PLC is a concept in marketing and product management that helps businesses plan strategically and make informed decisions about their products. This cycle represents the stages that a product goes through starting from its introduction to its decline in the market. Understanding these stages allows companies to adapt their strategies effectively maximizing profits and ensuring long-term success for their products. Knowing the Product Life Cycle (PLC) enables businesses to derive the most from their marketing mix (product, price, place, promotion) and to make the distribution of resources appropriate for their products. By proper management of the product life cycle, businesses can gain a competitive advantage and make the best investment out of their money.

Table of Content

How Does Product Life Cycle (PLC) Work?

Stages of product life cycle (plc), 1. introduction, 3. maturity, case study of product life cycle of apple, importance of the product life cycle, advantages of product life cycle, challenges of product life cycle, strategy for product life cycle, international product life cycle, when to use the product life cycle, product life cycle (plc) – faqs.

The Product Life Cycle (PLC) tracks a product’s journey from introduction to decline. Before launch, a product goes through design and development. The PLC itself begins when the product hits the market (introduction). Here, marketing is key to building awareness and overcoming initial resistance. If successful, the product enters a growth stage with rising sales and brand recognition. Marketing efforts may shift to maintaining momentum. Eventually, the market becomes saturated (maturity). Competition intensifies, and companies may focus on cost-efficiency and product improvement. Finally, sales decline (decline), and the product may be withdrawn or replaced with a newer innovation. Understanding the PLC helps businesses tailor strategies for each stage, maximizing profits and a product’s lifespan.

The introduction stage signifies the entry of a product into the market. The initial stage is typically associated with an increase in sales since it involves introducing the product to consumers. During this phase, businesses incur expenses for marketing and research and development (R&D) as they strive to raise awareness and stimulate demand for their product. Companies need to invest in marketing and create distribution channels to ensure that their product is easily accessible to customers. The objective is to establish a presence in the market and generate interest. During this phase, pricing strategies often revolve around two approaches:

• Penetration pricing, where a lower price is initially offered to gain market share,
• Skimming pricing, where a higher price is charged at first to recover development costs.

The growth stage witnesses a surge in sales as consumers become more aware of the product’s existence and its advantages. This growth is fueled by word-of-mouth favourable reviews and effective marketing campaigns. In this phase, businesses strive to expand their market share by scaling up production and distribution. With the increasing demand, competition may intensify as new players try to capitalise on the opportunity. As the product gains recognition, pricing strategies might shift towards a competitive approach. Companies may also introduce variations or extensions of the product aimed at market segments.

The maturity stage represents the peak of sales and market penetration for the product. Competition typically reaches its point during this period, and attention shifts from attracting customers to retaining existing ones. Price stability and product differentiation become a feature of this stage. Ongoing marketing endeavours aimed at maintaining both market share and brand loyalty. Companies frequently make investments in improving their products, adding features, and implementing marketing campaigns to ensure their products remain relevant and competitive. Furthermore, they may explore opportunities in markets.

In the decline phase, sales of the product start to decrease due to changing consumer preferences, market saturation, or the emergence of alternatives. Companies must decide whether to discontinue the product or continue selling, it with marketing efforts. As existing inventory price reductions or discounts may be necessary, some companies may choose to reinvent or rebrand the product or find markets to extend its life cycle. Ultimately, the decision to withdraw or revive the product depends on its profitability and how well it aligns with the company’s strategy.

Introduction Phase

During the phase from 2007 to 2008, Apple introduced the iPhone, which brought about a significant transformation in the smartphone industry. To generate awareness and create excitement surrounding their product, Apple invested heavily in marketing and promotional activities. The innovative design and user-friendly interface of the iPhone captured the interest of tech enthusiasts. Capitalising on this wave of enthusiasm, Apple implemented a pricing strategy that involved charging prices initially.

Growth Stage

In the years that followed from 2009 to 2012, the iPhone experienced growth. Apple expanded its range of offerings by introducing models like the iPhone 3G, 4, and 4S. The launch of the App Store in 2008 played a role in fueling this growth by creating an ecosystem that catered to both developers and users alike. To meet increasing demand, Apple focused on scaling up production and distribution, while establishing partnerships with telecom carriers worldwide. Product differentiation also played a role during this stage as Apple offered storage capacities and introduced new features such as improved cameras and faster processors.

Maturity Phase

By 2013, the iPhone had reached maturity as it faced competition from Android-based smartphones. The market became saturated with options for consumers to choose from. To keep its position in the market, Apple put a lot of emphasis on improving its products. Released a series of iPhones, including the 5, 6, 7, and 8 models. They also introduced the Plus and SE versions. Alongside this, Apple carried on with its marketing campaigns that aimed to build brand loyalty and make sure customers were satisfied. Moreover, they expanded into markets, which helped solidify their position as a leading smartphone company.

Declining Stage

In years (2019 onwards), the iPhone entered a stage of decline where it faced obstacles, like market saturation and the rise of competitors. To tackle these challenges, Apple has adjusted its pricing strategies and introduced the affordable iPhone SE. Additionally, the company has heavily invested in services, like Apple Music, Apple TV+, and Apple Arcade to diversify its revenue streams and keep customers engaged. By focusing on refreshing its products and building an ecosystem around its devices, Apple has been able to prolong the lifespan of the iPhone and minimize the impact of market decline.

• Strategic Decision-Making: This will enable businesses to make informed decisions in regard to marketing, pricing, and product development by pinpointing the specific stage of a product: introduction, growth, maturity, or decline. For instance, during the introduction phase, heavy marketing is required to propagate brand awareness, while in the maturity stage, focus might shift to cost reduction and retention strategies for customers.
• Market Planning and Risk Management: Business establishments can perceive the market trends and plan their strategies accordingly because of their clear conception of the PLC. These proactive measures can assist in reducing the risks involved during product launches and ensuring that the most promising features are exploited.
• Product Innovation and Development: PLC framework helps businesses pinpoint opportunities for product innovation and development. As the product approaches maturity, firms will be able to introduce new features or new product lines based on customer feedback and changes in the market in order to remain competitive.
• Resource Allocation and Optimization: The PLC helps businesses allocate resources efficiently. During the introduction stage, when sales are low, heavy investment might be required in marketing. As the product reaches maturity and sales stabilize, resources can be shifted towards research and development for the next generation of products.
• Customer Satisfaction and Retention: Resource Allocation and Optimization: Customer Enjoyment and Retention: Understanding the customer needs and preferences at each PLC stage enables businesses to tailor marketing message and product offering to the customer’s desire in a bid to, in most cases, retain the customer before the maturity stage where competition may be cut-throat.
• Informed Decision-Making: The PLC model guides business decisions in the most effective way. If a company knows exactly where its product line falls within the PLC (whether at introduction, growth, maturity, or decline), then it allows for more specifically targeted marketing strategies, prices, and resource planning. For example, during the introduction stage, heavy marketing efforts might be called for brand recognition, while in the maturity stage, the efforts can be diverted to cost-effectiveness and brand differentiation.
• Improved Sales Forecasting: With the help of the historical sales data and industry trend analysis from the perspective of the PLC, businesses can make better sales extrapolation and eventually estimation. This helps inventory management, production scheduling, and resource allocation. For example, forecasting low sales during the decline stage would help decide a company whether or not to invest in product innovation or phase out the offering.
• Strategic Resource Allocation: The PLC assists businesses in resource allocation across their product portfolio. During the introduction and growth stages, resources might be directed towards marketing and sales to fuel product adoption. As a product reaches maturity, resources might shift towards customer service and production efficiency.
• Product Innovation and Development: Understanding the PLC can help businesses identify opportunities for product innovation and development. As a product hits maturity and competition begins to intensify, this product life cycle structure could trigger an examination of feature additions, product improvements, even new product lines in the efforts to hold onto market share.
• Profit Maximization : Businesses that strategically adjust to each PLC stage will keep their product going in order to maximize their profits. Some measures may include cost cuts during the maturity phase or product modifications in order to explore new markets during the declining phase.

The product life cycle (PLC) presents a roadmap of the product from launch to decline. It has notable value but, while each stage is vital, overcoming specific challenges is present at each. The difficulties businesses face at each stage of the PLC:

1. Introduction Stage:

• Market Awareness: Introducing a new product in the product saturated market is challenging. A brand, as well as its offering, must create awareness through a marketing strategy.
• High Initial Costs: At this stage, most of the expenditure was induced through research, development, and the initial production runs for most companies. It is important to balance and cover these costs with pricing strategies.
• Limited Distribution: Retailers may be unwilling to stock the company products especially with unproven recognition. Creating goodwill is one steep mountain.

2. Growth Stage:

• Company up with Demand: Businesses are faced with the challenge of scaling production to meet the overwhelming surge in demand from potential customers.
• Managing Rapid Growth:  Rapid growth also comes with a price, a price that the internal resources have a hard time coping with. In recruiting as well as training hired staff, stock keeping, and quality control.
• Competition: The success of the developed product attracts competition into the prospective market. The next frontier is to differentiate the product with its brand, innovation, and customer service.

3. Maturity Stage:

• Slow Sales Growth: Given a market that is beginning with a slowdown in market opportunities, it becomes increasingly saturated. Businesses must find ways to stall the maturity stage for long enough through means of product improvements, launching new marketing campaigns, or even penetrating a new market segment.
• Cost Pressures: Companies find a case presented by the increase in competition, where it is most likely a price war. One must be wary of different prices, and the product offers can sometimes be equal for different prices.
• Innovation Fatigue: Customers get used to the product and want it different. A business has to innovate to remain relevant.

4. Decline Stage:

• Falling profits: Sales and profits continue to erode, making it hard to continue investment in the product.
• Reducing cost: there is a need to look for cost channels into production or even outsourcing.
• Product Cannibalization: The entry of new products might end up eating into the market that the degenerating product was previously enjoying. Proper planning and positioning are required to avoid this.

These challenges can be prevented and strategies to handle them worked out in advance, thus optimizing the product life cycle for profitability.

The product lifecycle (PLC) is a key idea in marketing. It gives the stages through which a product passes since it is being introduced onto the market till its eventual decline. To maximize success and profitability of the product it is essential to understand this cycle and make specific strategies for different parts of it.

Four Stages of the Product Life Cycle (PLC):

• Introduction: This stage is marked by slow sales growth and high marketing costs, wherein efforts are to create awareness among consumers about benefits of a product and develop strong brand image.
• Growth: With the increase in consumer adoption rates, sales volume experiences a sharp rise leading to higher profits. At this point, companies should concentrate on expanding their market share as well as building loyalty among customers for their brands which may allow them even raise prices slightly if necessary.
• Maturity: When market saturation occurs along with no more sales growth; competitors become more aggressive thus mandating differentiation strategies or/and innovation. Usually these involve reducing costs; extending product lines while exploring alternative promotional channels among others.
• Decline: Due to changes in customer preferences as well release of new technologies that make some products obsolete; sales will dwindle followed by profits. In such cases organizations can opt to rake maximum possible earnings without pushing them back into further development; modify their offerings entirely so they best fit current needs and wants or even quit altogether.

Developing a good product strategy requires understanding the present stage of the product life cycle (PLC) through research and analysis. Companies need to be adaptable, allowed to adjust based on market changes, with long-term vision incorporating strategies to extend the PLC, such as innovation and new markets.

By understanding the Product Life Cycle (PLC) and implementing well-defined strategies for each stage, businesses can ensure their products achieve optimal market performance and maximize their return on investment.

The International Product Life Cycle (IPLC) is a tool for explaining how a product moves from one stage to the other in the different countries of the world market. The IPL is an extension of the product life cycle. While the latter emphasizes increased complexities at every stage, the former involves traversing the characteristics of each market.

International business can take advantage of using the concept of the International Product Life Cycle (IPLC) to design marketing plans and production concepts clearly and adequately approach issues surrounding the product. In other words, with the recognition of the stages in the different markets, a business can design and focus on a designated approach to the market and its surrounding dynamics.

Benefits of International Product Life Cycle

• Develop effective Global Marketing Planning
• Optimize Global Production and Sourcing Planning
• Entry Mode Strategies of International Expansion
• Life Cycle Extension of Products within Different Markets

Stages in the International Product Life Cycle

The product life cycle of the IPLC is a replica of the traditional product life cycle, and it generally includes four key stages:

• Introduction: The product is launched in a new international market, often the developed home country first. Here, the attention is on the building of an awareness level; an image for the brand is established and the education of the potential customer in regard to product features and benefits is made.
• Growth: When the product has started to be revolutionary in its initial market, it then gets introduced into the other countries. This stage involves the exponential sales development, the increased competition, and the demand for really effective production and distribution channels.
• Maturity: The period during which a product reaches peak sales in established markets, hence the focus shifts to sustaining its market share and profitability. Companies may engage in price competition, product improvements, or new marketing campaigns to keep the product’s life cycle going.
• Decline: Sales begin to slow down because of market saturation, new technologies, or changing consumer preferences. Perhaps companies must consider product redesigns, cost-cutting measures, or exiting the market altogether.

The International Product Life Cycle (IPLC) framework acknowledges that successful product launches abroad require considerations of several aspects: the right market selection based on economic development, infrastructure, and cultural preferences; adapting the marketing mix (message, price, distribution, and promotion) to resonate with each market’s nuances; and, lastly, as the product matures across different markets, so may production and sourcing strategies, which can even engage in outsourcing to clock in at the optimal costs achievable.

• Establishing Competitive Advantage: If you are going to introduce a brand new killer application, comprehension of the PLC will enable you to stage the entry. With proper marketing campaigns, you will be able to convey that your new product shakes the market or provides a big improvement over the previous offerings.
• Developing a Winning Price Strategy: PLC plays an important role in the determination of the appropriate prices. You could probably give introductory premium pricing a thought, should you be in the introduction stage to recover development costs and position the product as high-end. When the product enters the growth stage and begins to meet stiff competition, you could use competition or competitive pricing strategies. Finally, during maturity, you may cut prices or use bundled offerings as effective tactics.
• Developing a Targeted Marketing Approach: The PLC will dictate what you say in marketing and to whom with your marketing. In the introduction stage, you’ll primarily be looking to increase brand awareness and aid in educating potential customers on your product’s value. During the growth stage, it may switch to building brand loyalty in existing markets, or secure the same in new markets. Maturity often focuses on maintaining share and fending off competition.
• React Proactively Before Decline: The PLC framework helps you to anticipate the decline of a product and to act in response proactively. You can look toward products’ innovation, trying to find new markets to expand into or looking to phase out a product for the introduction of new products.

Understanding the PLC and its different stages businesses can make educated decisions regarding optimization of the marketing mix (product, price, place, and promotion) , strategic resource allocation towards high-growth products, and the opportunities to develop new products in order to extend the life cycle of a product.

The Product Life Cycle (PLC) is a framework that helps businesses navigate their product’s complex journey in the market. By understanding the four stages of introduction, growth, maturity, and decline, companies can make choices regarding product development, pricing, marketing, and distribution. Effectively managing a product throughout its life cycle can lead to success and a competitive advantage in today’s dynamic business environment.

What is Product Life Cycle?

Product life cycle refers to the journey taken by a product since it was released into the market up to the time it is taken off from the shelves. It has four main stages which include introduction, growth, maturity, and decline. These concepts are used by companies when making decisions on marketing, sales, and investment for each stage of their products.

Why Product Life Cycle is Important?

Businesses need to understand the product life cycle since it provides direction on how to change the marketing, pricing and resource allocation depending on whether the product is new, growing, mature or declining. Doing this enables them make more money and be able to plan for future products.

What are the Four Stages of Product Life Cycle?

There are 4 stages in its life cycle i.e. introduction, growth, maturity and decline. During introduction stage, a product is launched and its awareness is created among the people. In growth phase, sales of product goes up while market also broadens. Maturity is reached at this point where there is stiff competition among different firms for customers thus most companies concentrate on retaining their loyal buyers so as not lose them to other similar businesses operating within the same industry or sector. In decline phase, sales reduce either because old age catches up with it or when another newer one replaces it altogether.

How to Manage Product Life Cycle?

The effective management of a product’s life cycle requires knowing what stage it is at and adjusting the strategy to suit. This could entail increasing marketing efforts during the introductory phase, streamlining production for efficiency when the product reaches maturity, or planning for its retirement as demand wanes. Moreover, you can continuously enhance your offering by utilising customer feedback and data throughout its lifespan.

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Apple Business Strategy: Plans that made it a Multi-Trillion dollar Company

The study was first published on September 27, 2021, and then updated on September 18, 2023.

This strategy teardown compiles the ideas, innovations, technological research, partnerships, and, most importantly, the strategies responsible for Apple’s growth to such heights.   Moving forward, let’s go through Apple’s expertise in various sections.

However, before we move forward, here is a small intro about Apple.

On Friday, June 30, 2023, Apple became the first company in history to reach a $3 trillion market valuation. It stays ahead by half a trillion dollars from the second most-valued company on the planet- Microsoft. Apple is now the most profitable technology corporation in the world. 

Steve Jobs, Steve Wozniak, and Ronald Wayne founded Apple on the 1st of April 1976, bringing creativity to the table through their rendition of a personal computer. Apple is one of the world’s most popular and recognized labels. The company has experienced unparalleled revenue growth, from just $8 billion in 2004 to over $274B last year . This is more when compared to other technology giants out there today, such as Google ($181B) and Microsoft ($143B).

Apple’s growth could primarily be attributed to its business strategy. By combining its designing capabilities, hardware expertise, software prowess, and strategic acquisitions , the company has built an ecosystem that a user doesn’t want to leave. 

Vertical integration is another main reason that distinguishes Apple from the competition. It has reaped enormous benefits from the vertical model. It has always built, controlled, and manufactured all of its hardware and software. This inherent benefit assists the corporation in achieving a higher degree of synergy between its hardware and applications. Even the apps are tightly controlled to follow Apple policies. The company also increased its spending on the cost of sales and product R&D to $26,251 billion, which was less than 18% of its total expenditure.

“We have fierce competition at the developer side and the customer side. It’s so competitive, I would describe it as a street fight for market share in the smartphone business.” – Tim Cook, CEO of Apple Inc.

Apple’s business strategy consists of the following four elements:

• Focus on product design and functionality
• Strengthening Apple’s ecosystem
• Improving consumer service experience
• Reducing the business’s reliance on iPhone sales

As for the product and service categories, Apple Inc. includes iPhone, Mac, iPad, Wearables, Home and Accessories, and Services like iMessage, FaceTime, Apple Maps, etc.

This study explores Apple’s business strategy that will help you acquire some basic principles that could be applied to any kind of business, even yours. So, if you’d like the entire analysis in PDF form that you can download and save for later reading (or sharing with your friends), just fill out the form below, and we’ll deliver it right to your inbox.

Now, let’s dive deep into the reasons behind Apple’s success.

Table of Contents

History of Apple

These products and strategies helped apple win before the launch of the iphone..

While the iMac sparked Apple’s rebirth in 1998, the introduction of the iPod in Oct 2001 sent the company to the top of the world’s most valuable companies list. 

“With the iPod, Apple has invented a whole new category of digital music player that lets you put your entire music collection in your pocket and listen to it wherever you go,” said Steve Jobs, Apple’s CEO. “With iPod, listening to music will never be the same again.” We all know digital music players used to exist before the iPod, but as we know, Apple’s marketing is phenomenal at positioning its products.

The iPod was introduced as a part of Apple’s digital hub strategy . The iPod had unparalleled marketing and promotional exposure. Apple introduced a new kind of digital music player with the iPod, allowing users to carry their complete music library in their pocket and listen to it on the move.  

The device’s original edition was released with 5GB and 10GB capacities , beginning at just under £300. The iPod was a spectacular success, increasing Apple’s overall revenue from $1.9 billion in Q1 of 2000 to $3.2 billion in the same quarter of 2001. 

After dropping the price of the 5GB iPod to $299 in July 2002 and expanding compatibility to Windows, the iPod became the best-selling digital music player in history until smartphones came along. 

By 2004, it had established a strong market leadership position in the worldwide digital music player sector. Apple spent a lot of money advertising the iPod . The advertising, which featured shadows dancing to the rhythms of their iPods, could be found in print, on television, and on billboards. In a relatively short period, Apple established an iconic image for the iPod that drew both young and old people. The iPod period, which began in 2001, ended in 2014.   

With the introduction of iTunes in 2001, Apple opened up a vast new market sector in digital music, which it has now controlled for more than a decade. Customers worldwide flocked to iTunes because of the incredible value it provided, and music companies and artists benefited as well. Furthermore, Apple safeguarded recording companies by developing copyright protection that was not inconvenient for customers. While the company has dominated this blue ocean for more than a decade, as new online businesses entered the market, the issue for Apple has been to maintain its sights on the expanding mainstream market rather than competitive benchmarking or high-end niche marketing.

As iTunes’ success developed, so did its content offerings – one of the most important aspects of Apple’s digital domination was how it adapted what it learned from selling music to TV shows, movies, and, eventually, applications. The company created and employed a distribution strategy as well as a usage model to continue adding media to the three prongs of its ecosystem.  

Steve Jobs introduced the initial 15-inch MacBook Pro , Apple’s thinnest, quickest, and lightest notebook to date, in 2006. The MacBook was a tremendous hit with buyers, and it was one of the reasons that Mac sales were rising three times faster than PC sales.

The Apple TV , which debuted in March 2007, was praised for its attractive interface, painless setup, and overall ease of use – all of which marked a significant shift from prior network-based home entertainment systems. Almost a year later, the hardware remained the same, but a free software upgrade essentially gave the device a makeover. Apple subsequently reduced the price of the 40GB model to $229, while the 160GB model was reduced to $329. 

Apple’s award-winning computers, OS X operating system, and iLife, and professional apps continued to set the industry standard for innovation. It was also at the forefront of the digital media revolution with its iPod portable music and video players and iTunes online store, as well as its innovative iPhone entry into the mobile phone industry. 

In 2007, Apple entered the mobile market with the iPhone , which was widely praised for its unique design, touch-screen capabilities, and lack of a conventional keyboard.  

Apple Market Cap as of June 2023 – source

Apple’s Product Strategies After the Launch of the iPhone

After the launch of the first-generation iPhone, the company’s product strategy was very clear, i.e., ‘ Design a high-end smartphone in which the user experience is more important than making a slew of features available.’  

The iPhone was not the first smartphone to have a mobile Web, email, and touch-screen user interface, but it was intended to have a better experience than most smartphones. Another strategy was to have superior technology, which included the mobile operating system and the thousands of mobile applications available via the App Store. 

Before the launch of the iPhone, the annual revenue of Apple — in the year 2006 — was $19.3 billion, which increased to $24.4 billion in 2007 and $37.4 billion in 2008. And since 2008, iPhones have been Apple’s main source of revenue.

The launch became one of the most anticipated technological product launches in Apple’s history, owing to the company’s masterful media build-up. After the launch of the iPhone on January 9, 2007, the share price of Apple’s stock boosted and doubled to a value of $179.40 on January 9, 2008. The iPhone was described as a mix between its iconic iPod music player and a mobile phone programmed to browse the Internet.

Apple Inc. used the strong reputation of the Apple brand and the success of the iPod to penetrate the competitive cell phone market, a move that may have posed a possible challenge to the company as other firms launched smartphones with strong music storage and playback capabilities.

During the iPhone’s two-year growth phase, Jobs launched a campaign to secure a wireless company as the iPhone’s exclusive carrier. Customers who purchased an iPhone were forced to sign a two-year wireless deal with AT&T Inc. to make calls or access the phone’s other capabilities. Apple had even struck agreements with Viacom, Disney, Google, and Yahoo, all of which were carefully chosen to add internet applications to the iPhone.

Apple chose a promotion and delivery policy in European countries that were similar to its strategy in the United States. In France, it offered France Telecom’s smartphone affiliate, Orange, to be the sole carrier. Even in the United Kingdom, Telefonica’s telecom division, O2, was chosen as the sole cellular provider for iPhone customers with a two-year contract.

Apple developed a clear overall marketing strategy for the iPhone and successfully managed every aspect of the iPhone’s launch. Despite some shortcomings and pitfalls, the company was able to create a one-of-a-kind package for tech-savvy buyers interested in a hybrid mobile phone-music player and make those customers aware of the device through well-managed marketing campaigns and positive advertising. Both of these efforts significantly increased Apple’s stock price and solidified its status as a pioneer in consumer electronic gadgetry.

After the launch of the iPhone, the company adopted the strategy of patenting everything it does. The vigorous patenting helped shield Apple from competitors working on related technologies. It also provided Apple with a legal arm for the future. 

One of Apple’s attorneys explained, “We basically tried to patent everything … And we tried to patent it as many different ways as we could, even the stuff we weren’t 100% sure would go in a product.”  

Apple, too, has been chasing and implementing its design patents, endangering the whole technology industry. It has adopted a policy of patenting any tiny recognizable bit of its merchandise, including design patents, which protect a product’s ornamental appearance rather than its usable components. 

Presently, out of the total revenue of Apple Inc., the maximum revenue is generated from the sales of the iPhone. The iPhone sales continue to be the most significant contributor to their total revenue, routinely averaging over 50%! We’ll discuss their annual revenue breakdown further down in this article.

Now that we have covered the strategic aspects, let’s examine the company’s financial information, growth and revenue numbers for the last few years, and projected growth going forward.  

What does Apple’s Financial Growth look like?

Growth projection and market-related factors.

Under a realistic growth profile, Apple’s revenue is expected to grow by 9.66% over 10 years. Capital expenditures are estimated to be valued at $11 billion from 2024 to 2026 and $9 billion from 2027 to 2031. Also, over the 10-year forecast period, Apple’s earnings per share (EPS) are expected to increase by 10.68% . 

Apple’s growth would continue over the next 10 years, and while substantial risks do exist, early warnings and evaluations may efficiently monitor them. 

The following are some of the market-related factors that influence Apple’s growth projections:

• Due to increased demand, the Mac and iPad will flourish in the coming decade.
• High customer satisfaction scores with Apple’s products, 82/100 (2020 survey by MBLM).
• The App Store gives several benefits to users, such as privacy, curated quality applications, protection from malware and malicious scams, etc.
• Home and Accessories, Wearables, and Services provide opportunities for several decades.
• The future launch of new products, namely the Apple Car, AR/VR headset, and AR smart glasses.
• Increased anticipation for future iPhone models.

Revenue of the Last 5 Years (in $ Billion)

Apple’s annual revenue in fiscal year 2022 was $394.32 Billion, an 8% growth over the previous year. It’s less impressive than the 33% jump from 2020 to 2021, but it’s a positive trend nonetheless. Here’s the breakdown of Apple’s revenue in the last five years across its most notable business lines.

Apple’s iPhone sales revenue grew by 7% from 2021 and approximately 40% compared to 2020. Mac and services, like Apple Music and Apple TV, saw higher growth in 2021-2022, up nearly 14% year-over-year. 

Between September 2021 and 2022, iPhone sales accounted for 52% of the company’s total revenue! The 3-year revenue breakdown below provides more details .

Revenue Breakdown (Section-Wise) of the Last 3 Years

The last three annual reports of Apple suggest that the iPhone category had the highest revenue amongst all the categories of Apple. The breakdown of revenue for the last 3 years is listed below:  

• Apple currently has 2 billion active devices globally.
• Apple’s net expenditures in 2022 were $295.5 billion, leaving them a hefty $99.8 billion profit.
• The company’s new iPhone models released during the fourth quarter of 2021 were a massive success.
• Mac sales netted approximately $5 billion more than fiscal year 2021. Their new Mac Studio with the Apple M1 Max chip may have attracted people looking for powerful desk workstation upgrades.
• iPad Pro sales decreased from 2021 to 2022, leading to a relatively small reduction in revenue. This is likely because no other iPad lineup was noticeably refreshed during this period with notable features, except for integrating the M1 chip. In addition, Apple had said during this period that it had faced supply issues with the ‌iPad‌, which may have impacted sales.

The corporation has been vigorously investing in research and development to ensure an increased revenue stream. Let’s now look at Apple’s R&D strategy and the tech areas in which the company is increasingly investing.  

What does Apple’s R&D investment strategy look like?

The tech giant has vigorously invested in research and development to ensure an increased revenue stream. We observed that Apple continuously increases its R&D budget each year, with 2022 closing in at $26.2 billion, increasing by about $4 billion from 2021.

How much has Apple invested in R&D in the Past 3 Years (in $ Billion)?

• In 2020, several patents revealed that Apple focuses on wearables, fitness, and health innovations. Various wearable patents indicated that the company could target AirPods with biometric sensors, Apple Watch with UV tracking, motion recognition for AR/VR applications, machine learning experiments to allow autonomous driving, and incorporation of various existing devices with a vehicle.
• In 2021, they launched several noteworthy products. Perhaps the most disruptive of them was AirTag. These item trackers have quickly become so popular that Apple sold 20 million units within eight months of launch! Now, analysts claim Apple is projected to sell 55 million AirTags by the end of this year.
• In 2022, they introduced the Apple Watch Ultra to their product line. It’s their flagship wearable device with several top-tier features like a titanium build, two times brighter display, and a dual-frequency GPS system, among other things. Driven by this model, the Apple Watch accounted for 34.1% of total smartwatch shipments in 2022 and 60% of the revenue for the global market.

Which Tech Areas is Apple focusing its R&D on?

Apple Inc. had invested in further expanding  its research and development centers globally. The company had invested over half a billion dollars in research development centers in China alone. The company also concentrated on R&D centers in the United Kingdom, owing to their increasing emphasis on creating unique innovations to underpin its product designs, including A-series processors, W-series wireless chips, unique manufacturing, materials experience, speech recognition, machine intelligence, and many more.

These are the key areas where the company focuses its innovation efforts the most.  

Apple invests heavily in developing new hardware for its products. Their most recent and notable advancement has been with their M-series processors for computers to supplement their excellent A-series mobile chips. These have smashed benchmarks worldwide, delivering chart-topping performance and power efficiencies never seen before. They make some of the best pro-grade displays , too.

Apple’s software development efforts include creating new operating systems for their products, new applications, and services. All their software products are designed and optimized for their ecosystem, allowing seamless inter-device connectivity. This interconnected approach to innovation can be seen throughout their designs, like on this expansive 358-page patent they filed for the first iPhone’s multi-touch capability .

Artificial Intelligence

Apple also invests in artificial intelligence and machine learning to improve its products and services. They’ve made numerous acquisitions to enhance their in-house AI capabilities, which we will discuss further in this article. Their advanced machine learning algorithms enable many features, ranging from FaceID’s fundamental security to fun AR Animojis on Facetime calls.

Healthcare Technology

Apple has been expanding its focus on healthcare , developing health-related features for its devices, such as the Apple Watch. Alongside regular customers, Apple wishes to be the go-to choice among doctors and healthcare professionals as well. They’ve partnered with healthcare providers like Geisinger and Ochsner to provide a seamless way for doctors and patients to connect. Their CEO, Tim Cook, has often made it clear that healthcare is one of Apple’s top priorities as a business sector.

Augmented/Virtual Reality

Spatial computing is one of Apple’s lesser-known yet rapidly developing departments. Our research suggests that Apple has been working on an AR and VR-capable wearable device for nearly 16 years!

“The products that are in R&D, there is quite a bit of investment in there for products and services that are not currently shipping or derivations of what is currently shipping…You can look at the growth rate and conclude that there’s a lot of stuff that we’re doing beyond the current products.”   – Tim Cook, CEO of Apple Inc.

Which Core Innovation Areas Is Apple Majorly Focusing on?

For the tenth year in a row, Forbes magazine ranked the company as the most valuable brand in the world in 2020. Apple took second place in 2023, around $2 billion shy of Amazon in brand value. Nonetheless, Apple has risen to become the world’s largest company by market capitalization, not by attempting to become the largest smartphone provider but by becoming the most beloved. Apple, more than any other tech company, has always prioritized the end-user experience over anything else, not just the speed, storage capacity, or other technical specifications of its products.

Apple’s innovations are often incremental, with the company adapting its design expertise to the most recent consumer tech trends . Apple did not invent the MP3 player or the smartphone, but it went on to dominate both devices by emphasizing design, user experience, and brand cachet. The company has aggressively increased the domains where the Apple experience is part of daily life during the last ten years. 

Apple guarantees that the universe of Apple-mediated behaviors continues to grow by encouraging app developers while strictly enforcing rules. By reinventing product form factor and function, from computing in a user’s pocket to managing home electronics to reminding the calorie count or parking spot — all of these experiences are connected, integrated, and packaged in a single accessible ecosystem of complimentary items. 

Moreover, Apple has focused on innovation outside the core by developing the infrastructure required to support this ecosystem safely and frictionlessly (Apple Pay secure payments or biometric facial recognition since the iPhone X). 

We have mentioned before that Apple vigorously patented everything it did. After looking at the wide array of domains on which Apple works, it becomes important to examine the kind of patent portfolio Apple has accumulated over the years. 

What does Apple Patent Portfolio look like?

A company’s patent portfolio provides us with another set of lenses to find the core areas it has been focusing on for quite some time and what it plans to launch next. Let’s take a deep dive. 

Source: Insights;Gate by GreyB

With 72000+ patents (24000+ patent families) in its entire portfolio, Apple is one of the top patent filing companies in the world. It has more than 55000 patents that are still active. 

Looking at the filing trend, you can see the year 2007 saw a sharp increase. It was the same year they launched the iPhone. One can conclude that the iPhone is one of the reasons Apple invested heavily in securing its technologies. 

The Apple vs Samsung lawsuit is still one of the largest patent infringement lawsuits that happened in the tech industry. And that further pushed the consumer electronic gadgetry pioneer to invest more in patents. (See the growth in 2012)

One of the reasons for this growth is Apple’s consideration to secure its tech in more countries. As Apple is gaining more and more global markets, it is securing its patents in more and more jurisdictions. 

The US is the home market for Apple, so, naturally, the company has the most patents in the US. China is a crucial market for smartphone makers now more than ever. China has become more patent aware thus most of the big companies are trying to secure more and more technologies/patents in the country. Apple being one of the biggest technology companies, it makes sense that it has secured thousands of patents in China. 

The huge portfolio of Apple is categorized into 16 different technologies that the company uses for its products/services or future products. 

As a smartphone manufacturer, Apple researches heavily in the Telecom sector, which is also crucial for companies, especially when 5G is on the doorstep. 

Another interesting figure is of Apple’s design patents. The company focuses greatly on the design part, and the patent count is proof of how valuable product designs are for Apple. 

Apple has stopped working on its Autonomous Vehicle , but in the AR/VR space, we had a long-awaited announcement in June 2023—their Vision Pro headset. We’ll discuss this in more detail in the upcoming sections.

Further, Apple also has researched AI-assistant, which you can learn about here .

Moving forward, let’s go through Apple’s expertise in various sections.

What are the products and services responsible for Apple’s growth?

Design and functionality.

Apple’s competitive advantages include software control, hardware control, retail strategy, product differentiation, and, most importantly, Steve Jobs’ strategic decision-making. Since its foundation, the company has introduced simple-to-use computers to the market so that people would not face any issues while using Apple goods. Apple used both horizontal and vertical integration. It depended on its designs and refused to let third-party access to its hardware. Apple employed superior software, which aided it in increasing its market share. The company also provided a comprehensive desktop solution with hardware, software, and other components. Apple has always used typical designs for its products. 

Apple has over 4,000 design patents in its portfolio, which is a big number.

Consumer Electronics

Apple Inc., a computing and consumer electronics giant, is one of the world’s most recognizable and famous brands, with hundreds of its retail shops. A globally leading consumer electronics developer with key products including the iPhone, which runs Apple’s IOS operating system, personal computers (Macs), and tablet computers (iPads), all of which utilize Apple’s exclusive operating systems. Other notable products include the Apple Watch, AirPod, Homepod smart speakers, Apple TV streaming device, Beats headphones, and iPod Touch music player.

The company’s product strategy results in extremely high-quality products. It’s known as the “great product” strategy. 

Apple refuses to join the bandwagon other gadget makers employ by maintaining high-quality standards. The “great product” strategy emphasizes quality over quantity as well. 

While other manufacturers’ strategies include releasing items one after the other quickly and having such a diverse product mix, Apple opted to stick to what it does well.  

Smartphones (iPhones)

Since 2008, the iPhone has been Apple’s most valuable product and its primary source of income. Although Apple has expanded its product range with the Watch, AirPods, and services, the iPhone still accounts for 50% of its income. The company’s extensive relations with China, particularly in the manufacturing sector, are one of the key bear arguments. 

Most of Apple’s products are manufactured in China. While Apple has been expanding production into other countries, recent estimates suggest that 95% of the total iPhone supply still comes from China. Apple also has manufacturing facilities and assembly lines in other countries, such as the United States, Ireland, and Brazil.

Three of the company’s aforementioned contract partners, all of whom are situated in Taiwan, made relocation news in the summer of 2020:

• Foxconn began producing the iPhone 11 in India in July 2020 and had invested $1 billion in the nation.
• Pegatron established a subsidiary in India. 

The demographic of iPhone users changes a little each year. Here are some of the latest statistics on iPhone users:

• 51% of iPhone users are female, while males make up the remaining 49%
• The  16 – 34 age group has the highest number of iPhone users
• 35% of iPhone owners also have an Apple Watch
• The  average income  of iPhone users in the US is  85,000 USD

Its main competitors in the worldwide smartphone industry are Samsung and Huawei, with the business following the other two with a share of 13.5 % in the most recent quarter. 

In the second quarter of 2023, Apple’s global market share for the iPhone was 17%, while Samsung’s, Xiaomi’s, and Oppo’s market shares were 20%, 12%, and 10%, respectively. The company sold 845.3 million smartphones in the second quarter of 2023, while Samsung sold 53.5 million handsets. Xiaomi and Oppo, respectively, sold 33.2 million and 28 million units.

Apple’s iPhone is the market leader due to excellent hardware and software integration and control over both sides of the equation. Any Android app will lag in terms of speed and performance when compared to an iPhone app.

In 2021, Apple spent an additional $45 million on Corning, which manufactures the glass used in the iPhone, Apple Watch, and iPad. In May 2021, the company announced a $410 million grant to II-VI, which develops the technology for the iPhone’s Face ID and Portrait mode. 

With over 1 billion iPhones in use, Apple is the doorway to the most valuable clients in the mobile industry. In 2021, Apple has updated its iPhone software and allows consumers to choose whether they want to be followed for targeted adverts. 

Even though both iOS and Android have millions of apps in their app stores, developers still prefer the iPhone as the launch platform of choice for the latest new apps. Mario Run, for example, was released for iOS in December 2016 and Android in March 2017. Instagram for Android was released two years later for the iPhone.

The iPhone 15 lineup in 2023 builds upon the foundations set by the 14 series with additional features like USB-C replacing the lightning port, the dynamic island-inspired design on the 15 and 15 Plus, and the newer A17 Pro chip on the “Pro” models. Apple says the A17 Pro is the industry’s first chip to feature a 3-nanometer fabrication process.

And thankfully, the rumors about the USB ports being locked behind the MFi authentication layer were false. 

Smart Speakers (HomePod)

HomePod has experienced limited success in the Smart Speakers market. Apple trailed Amazon and Google in terms of unit sales . However , the release of the HomePod Mini has made significant advances, enabling Apple to double its share in the smart speaker market in 2021. According to survey results from Statista Consumer Insights, Amazon remains the clear market leader in the smart speaker segment in the United States. Apple took third place among the global smart speaker sellers as of Q1 2022.

Apple’s HomePod is the best-sounding wireless smart speaker today, and it can be operated by speech using the in-house virtual assistant, Siri. However, the HomePod is only worth considering if the owner possesses an iPhone and subscribes to Apple Music. In March 2021, Apple announced the discontinuation of the original Homepod after 4 years and indicated its focus on the mini Homepod it released last year.

Laptop & PC (MacBook and Mac)

Despite Apple’s shift in priority from PC to mobile, the Mac has remained a key component of the company’s product lineup. The company has maintained a core group of devices throughout the decade: the MacBook Air, MacBook Pro, Mac Pro, and iMac. Even after modifications and new models, its core has remained popular among many professional clients. 

In 2022, Apple had a 9.8% market share, following market leaders Lenovo, which had a 24.1% market share, HP Inc., which had a 19.4% market share, and Dell, which had a 17.5% market share.

When a customer purchases a Mac, that purchase is a philosophy as much as it is a piece of computer technology. The hardware and software are produced by the same corporation, and the laptops share an aesthetic sensibility with Apple phones and tablets. 

Macs are popular among music producers due to Apple’s high-end Logic Pro software and the user-friendly GarageBand program, both of which are free. Apple acquired Emagic, a music production software, on July 1, 2002, for $30 million as the foundation for these two apps.

In addition, other Apple-exclusive media software like Final Cut Pro and Pixelmator could convince photo and video editors to switch to Mac OS.

Apple Watch

Since its debut in 2015, Apple Watch has dominated the smartwatch industry, with a market share of 40% in Q4 2020 . 

According to Counterpoint Research, Apple Watch shipments increased by 19% between 2019 and 2020, reaching 33.9 million units in 2020. In Q4 2020, Apple Watch Series 6 and SE delivered 12.9 million devices. Further, markets such as India saw strong demand for Apple Watch Series 3 and 6 in 2020, with a growth of 144.3% in overall Apple wearable devices shipments. 

Apple dominated the market in 2022 with a 30% share, followed by Samsung at 10.1% and Huawei at 6.9%, among others.

The same trends are also reflected in  Q1 of 2023  when Apple is leading the market with a 26% share, and Samsung has a 9% share.

The Apple Watch is the greatest smartwatch on any platform in terms of appearance, message handling, activity tracking, app choices, and battery life. It is also water resistant to 50 meters, making it ideal for swimming and surfing. The Sleep app monitors the user’s sleeping habits and assists in creating a plan and bedtime routine to accomplish sleep goals. Apple is, in fact, making strides in the Healthcare sector with its Apple Watch.

Read Now: Apple in Healthcare: Top MedTech Acquisitions and How Can You Gain an Edge over it?

AirPod and AirPod Max

Apple’s AirPods have grown into a significant business for the company, with 114 million sold by 2020. A commodity that many saw as an expensive accessory has become common, with nearly every phone maker selling their own ‘hearable’ to compete with Apple. Apple was ahead of the pack in Q2 of 2022, holding 27.8% of the total market share. Samsung and Xiaomi followed up with 9.3% and 5.3% respectively.

Further, Apple released AirPod Max, Bluetooth over-ear headphones, in Dec 2020 with a price tag of $549. While Analysts estimated that AirPod Max won’t boost Apple sales because of a niche market, some expect that it could boost AirPod sales because of Apple’s Goldilocks strategy.

Cybart forecasts that Apple’s wearables segment, including the Watch, AirPods, and select Beats headphones, will generate $30 billion in revenue by 2021.

The five reasons why Apple built a strong wearables business are mentioned below:

• Early adopter: One of Apple’s guiding principles is to make technology more personal, and it began investing in wearables, including its silicon processors, in the early 2010s.
• Other corporations gambled on voice: Because few Large Tech businesses had Apple’s hardware competence, they bet big on voice (example: Amazon’s Echo) as the future computing paradigm. It appeared to be a bad gamble.
• Design expertise: People must desire to wear wearables, which requires design skills. Apple has a track record (and aptitude) for designing devices that consumers want to show off as much for its aesthetic as it does for its computational capabilities.
• Advantage of the supply chain: Wearable technology is built on top of smartphone components. Apple has capitalized on lessons learned and partnerships formed during the iPhone production process.
• Advantage of the ecosystem: Apple’s entry-level AirPods and Watch were around $200. Because the wearables effectively share computational power with the iPhone, it achieved these pricing thresholds.

According to Cybart, Apple’s wearables segment will likely reach $50 billion in the following year if present trends continue. 

Apple Silicon (Chipsets, Processors)

Apple announced that it would switch from Intel chipsets to its own Apple Silicon processors based on ARM in 2020. In keeping with this, the business released a new M1 processor and three products powered by it—the MacBook Air, MacBook Pro, and Mac Mini. A survey from market analysis firm TrendForce suggested that M1-powered Mac machines represented around 0.8% of overall laptop sales in 2020, months after the products became available for purchase. 

In terms of operating systems, Windows was the global leader in the laptop industry. However, due to the strong expansion of Chromebooks in 2020, Windows’ market share would fall below 80% for the first time in history. Windows is unlikely to regain lost market share immediately since its fall is predicted to continue. TrendForce predicts that the market shares of Windows, Chrome OS, and macOS will each settle at around 70-75%, 20-15%, and less than 10%, respectively. 

In 2020, Apple is anticipated to launch the first MacBook to utilize its silicon processor rather than Intel’s, allowing all its key product lines to run on the same architecture.

When considering Apple’s most notable purchases, two stand out:

• In 1997, NeXT Software was purchased for $404 million. The acquisition of Steve Jobs’ post-Apple venture, which featured the forerunner to iOS, returned Jobs to the firm he created.
• Beats for $3 billion in 2014: Apple’s largest acquisition was Dr. Dre and Jimmy Iovine’s headphone firm, which laid the framework for Apple Music.
• However, a third (and extremely significant) transaction set Apple’s mobile product roadmap: the $278 million acquisition of P.A. Semi in 2008.

According to tech analyst Ben Thompson, P.A., Semi gained the expertise and intellectual property (IP) “that would underpin (Apple’s) A-series of processors, which have powered every iPad and iPhone since 2010.” 

Apple introduced the Apple TV in March 2007. Much to everyone’s surprise, it was not an actual TV set but rather a box to offer services using the software. It was praised for its attractive interface, painless setup, and overall ease of use—all of which marked a significant shift from prior network-based home entertainment systems. 

The hardware remained the same almost a year later, but a free software upgrade essentially gave the device a makeover. Apple subsequently reduced the price of the 40GB model to $229, while the 160GB model was reduced to $329.

People still wonder why Apple never made an actual TV like Samsung or Sony. Even with enough expertise, there are multiple reasons why Apple didn’t enter the TV manufacturing business.

First, this industry’s margin is very thin, and Apple always focuses on making profits. Second, unlike smartphones or other consumer electronics, there isn’t much design to make it unique. You can find many identical TV designs from different companies. Third, Apple can provide a good user experience through its software, so it went for a box to provide better UX in any TV. 

Source: Apple

The box design remained the same throughout the years, but they made multiple changes to its remote. 

The iPod was one of Apple’s most successful products. It was a small device that let users listen to music on the go. However, it is now 2021, and despite having Apple Music on iPhones and even being accessible on Android and even smart TVs, Apple continues to offer the iPod Touch . One of the main reasons is that it is not an iPhone and is suitable for children. 

Further, iPod Touch uses iOS with the same inbuilt software. It’s basically an iPhone without cellular network connectivity. The user can play games, surf the internet using Wi-Fi, and can send messages using a web browser. 

Apple’s tactic is to prime iPod users to become iPhone users when they buy a smartphone. After using the iPod for two or three years, most users would want to choose an iPhone over other smartphone brands.

The iPod is part of the Apple ecosystem, which helps users stay in it even when they want to upgrade a device. 

AirTag, a compact and elegantly designed device that helps keep track of and find the stuff that matters most with Apple’s Find My app, was announced in April 2021 . AirTag, whether connected to a handbag, keys, backpack, or other objects, connects to the enormous, worldwide Find My network and can assist in recovering a misplaced item, keeping location data private and anonymous using end-to-end encryption. 

“We’re excited to bring this incredible new capability to iPhone users with the introduction of AirTag, leveraging the vast Find My network, to help them keep track of and find the important items in their lives.” – Kaiann Drance, Vice President of Worldwide iPhone Product Marketing of Apple

Dongles link headphones to charging connections, computers to TVs or card readers, etc. Dongles are a major business nowadays since it’s difficult to conduct many routine computer chores without them. This is owing, in large part, to Apple, which, in 2016, eliminated the headphone jack from the iPhone range and shifted nearly completely to USB-C connectors on its Macs. The newest iPhone isn’t the only Apple gadget that requires an array of dongles to function properly. 

A dongle is necessary to connect a MacBook Air to an Ethernet wire. A dongle is also required if the user wants to add a second screen to the computer or import images from an SD card. A USB to USB-C adaptor is required even if users put a flash drive directly into the MacBook. 

This causes users to accept the dongle as an integral part of their lives, allowing Apple to establish a sizable market for dongles. Apple, Belkin, and other accessory firms have established a massive market for these dongles, which Facts and Factors estimates will be worth more than $25 billion by 2027.

It is unknown how much Apple’s revenue is from Dongles, but considering the user base’s preferences and Apple’s dongle prices, it could be more than a billion dollars. 

Now, let’s move on to the core of all these products- Software.

For over four decades, Apple has been a Silicon Valley trendsetter. Apple’s competitors have widely imitated the Apple II, Macintosh, iPod, iPhone, and iPad. Apple’s success may be attributed in large part to the company’s obsessive attention to the user experience. The iPod first debuted in 2001, followed by the iPhone in 2007, and the iPad in 2010. Consequently, Apple earned about $40 billion in earnings in its fiscal year 2014. Apple is a design-focused corporation that prefers to create all aspects of a product — hardware, software, and internet services — in-house. 

Apple II computers were sold until 1993 when they were phased out in favor of Macintosh computers. Around 5 million Apple II computers were sold in total. The first Macintosh had significant limits. However, later versions were more powerful. In 1987, Apple introduced color to the Macintosh with the Macintosh II. The groundbreaking graphical interface of the Mac immediately drew several imitators. Apple debuted the iPod music player in 2001. More crucially, the iPod was compatible with iTunes, Apple’s jukebox software for the Mac, making it simple for users to transfer music from CDs to their iPods. Apple, too, capitalized on the iPhone’s popularity in 2010 by releasing the iPad, a tablet computer built on the same software. 

Operating Systems

Both Mac OS X and iOS originated from Darwin, an older Apple operating system based on BSD UNIX. iOS is a proprietary mobile operating system owned by Apple that can only be loaded on Apple devices. 

Apple’s iOS is a closed ecosystem, which implies that Apple creates both the operating system and the hardware, and no other corporation utilizes either of them to integrate with their services. It gives Apple an advantage over Android regarding hardware and software synchronization. In the case of Android, however, the hardware is manufactured by companies like Qualcomm and MediaTek (rather than Google), and the manufacturers create their own flavor that runs on top of Android. In addition, Apple allows users to offer 3D touch inputs with mini menu selections. The iOS devices are set up to detect pressure sensitivity on the screen and allow various input choices based on it. 

As of July 2023, Android occupies 70.9% of the mobile OS market, followed by Apple’s iOS at 28.36%.

The Mac OS was released in 1984 to power Apple’s Macintosh series of personal computers (PCs). The Macintosh heralded the age of graphical user interface (GUI) systems, inspiring Microsoft Corporation to create its own GUI, the Windows operating system.  

The interface is the most noticeable difference between the Windows and Mac operating systems. MacOS is perceived to be more basic, streamlined, and elegant, but Windows is considered to be more sophisticated and feature-rich, with more customization choices. 

The design styles for Mac and PC are vastly different. Whereas macOS has smooth edges and a consistent application across all apps, Windows has jagged edges and a UI that frequently changes across programs. As Apple has complete control over hardware and software, new security enhancements can be implemented on macOS. Similarly, Apple has a simple and comprehensive AppleCare service in place to assist consumers with any hardware issues. Newer Apple products have Touch ID functionality by default for system access, further protecting devices from fraudulent logins. 

Microsoft Windows had a  77.74% market share  for desktop operating systems (OS) as of July 2020. Apple’s macOS has grown in popularity over the years but is still a minor player in the desktop OS industry. Linux, the third most popular OS , has a tiny but constant market share. As of May 2021, OS X had a market share of 15.87% , while Windows had a market share of 73.54%, and Linux had a market share of 2.38%.

The WatchOS app experience differs from app experiences on other platforms in several ways. For example, because the Apple Watch is meant to be worn, the UI is tailored to wearers and provides a lightweight, responsive, and highly personalized experience. People commonly utilize the related experiences of a WatchOS app such as Apple complications, notifications, and Siri interactions — more than they use the app itself. 

The latest WatchOS 9 update reflects Apple’s goals in healthcare and personalization. Users can now see more information about their workouts on the screen. Turning the Digital Crown reveals metrics like Activity rings, Heart Rate Zones, Power, and Elevation. 

In healthcare, Apple has been at work for years, acquiring medtech startups and using its patented technology to strengthen its WatchOS ecosystem. For instance, most of the sleep-tracking technology on Apple Watch likely came from startups like Beddit, which Apple acquired in 2017. Through the acquisition, Apple also got rights to Beddit’s patents on crucial health features, such as a system for determining sleep quality and applying a pressure sensor .

Read More Here: Apple in Healthcare: top MedTech acquisitions and how can you gain an edge over it?

Apple devices are well-known for linking users to content. This sense of connection is anticipated from Apple TV, although it is not a product that the user can physically grasp or touch. Apple TV is a one-of-a-kind platform with unique specifications . TvOS apps can provide incredible experiences with great visual quality thanks to 4K resolution, Dolby Vision, and HDR10, as well as immersive sound thanks to Dolby Atmos. Furthermore, the Siri Remote provides access to three-axis gyro data, allowing users to build even more immersive gaming and interactive experiences.  

Tizen is the largest TV streaming platform globally among smart TVs in use, with a market share of around 13% as of the end of 2020, followed by LG’s WebOS with 6.4% market shares, Sony PlayStation, Roku TV OS, and Amazon’s Fire OS tied for third place. Apple TvOS had a market share of 2.7% as of 2020. 

Smart TV Streaming Device Market Share Worldwide As Of 2020 (%)

Apple’s machine learning teams are conducting cutting-edge research in machine learning and artificial intelligence . The team employs machine learning to educate their devices to comprehend the environment in the same way that humans do. Apple did a research study to investigate the feasibility of inferring accessibility for mobile apps from their display pixels.

Using a dataset of manually collected and annotated iPhone app screens, they trained a robust, quick, memory-efficient on-device model to recognize UI components. Due to this research, Apple launched the Screen Recognition function, which combines machine learning and computer vision to recognize and present material readable by VoiceOver for apps that would otherwise be inaccessible. 

Even in May 2021, Apple Inc. hired Samy Bengio , a former prominent Google AI scientist. The hiring will lead to the establishment of a new AI research team within Apple, led by John Giannandrea. Bengio pioneered the “deep learning” methods that underpin today’s AI systems for processing photos, audio, and other data types. 

Machine learning and artificial intelligence are now present in almost every aspect of the iPhone.

“I think that Apple has always stood for that intersection of creativity and technology. And I think that when you’re thinking about building smart experiences, having vertical integration, all the way down from the applications, to the frameworks, to the silicon, is really essential… I think it’s a journey, and I think that this is the future of the computing devices that we have, is that they are smart, and that, that smart sort of disappears.”  – John Giannandrea, Senior Vice President for Machine Learning and AI Strategy at Apple

Apple has made a practice of crediting machine learning with boosting specific functions in the iPhone, Apple Watch, or iPad, but it seldom goes into much detail. 

Apple has taken a more subtle and astute approach to AI. In its June 2020 announcements for iOS, iPadOS, and macOS, Apple hinted at various AI and ML-powered improvements and enhancements.

• The Apple Watch utilizes machine learning to identify motions and detect sleep. Users only need to wear the Apple Watch to bed, and it will track their sleep.
• The new handwashing functionality on the Apple Watch, which utilizes AI to detect when one is scrubbing the mitts and starts a countdown, is one of the greatest examples of Apple’s approach.
• One of the features in iOS that allow the iPhone to listen for things like doorbells, sirens, dogs barking, or babies crying is sound alerts. AI excels at picture recognition tasks, and recognizing both Chinese and English characters is an accurate model. 
• Apple HomeKit, a smart home solution, allows customers to use their smartphones to control and interact with connected gadgets. Users can utilize the HomeKit framework to provide a means for users to configure accessories and define actions to control them. Users may even bundle actions together and use Siri to initiate them.
• In iOS 14, Apple included a translation app. The app’s purpose is to provide translations from one language to another. Because of the inbuilt on-device machine learning, the Translate app works offline. The program includes various beneficial features while learning a new language and seeking to communicate with someone who speaks an anonymous language.
• Handwriting recognition is a difficult challenge for AI because the more natural a task is for humans, the more difficult it is for AI. In the most recent iPadOS update, when users draw anything with the Apple Pencil, the iPad can recognize their handwriting and, using Scribble, transform it into written text. It works in the same way that most machine learning does.

Artificial intelligence and its subset, machine learning, are being employed to improve the user experience in various Apple gadgets.

Comparison with Google, Amazon, Microsoft

Google paid $400 million for a DeepMind startup in 2014. This company provides various AI-powered solutions, ranging from picture and speech recognition to human simulation in video games. Google employs AI in various mundane tasks, including Gmail reply suggestions and sophisticated search algorithms. In addition, the business just released TensorFlow, a machine learning technology that is open to use by any developer. 

Google also has Google Assistant, which assists users in doing daily chores more effectively and timely. It is supported by a wide range of devices (Sonos speakers, Samsung smart TVs, and Philips Hue) and is one of the most extensively used AI solutions today. Duplex is an AI-powered voice that assists users in scheduling business appointments using Google Assistant. The most recent PAIR initiative from Google in AI is worth mentioning. PAIR is an acronym that stands for People + AI Research and attempts to make working with AI as pleasurable and helpful as possible.

When consumers think about Amazon in AI, the first thing that comes to mind is Alexa. This is another virtual assistant that can set alarms, send alerts, and communicate by speech and is supported by Amazon Echo Dot speakers. 

Amazon has lately launched the Alexa Shopping functionality. Customers may now use Alexa to place orders on Amazon. The assistant may add things to the basket, delete them, track their progress, and alert customers when they are delivered. Voice shopping reached $40 million by 2020; Amazon made a very smart move.

Microsoft Research AI is a Microsoft-founded organization dedicated to AI research and development. Since the corporation currently uses AI in its processes (Skype chatbots, data analysis, interaction with Cortana, and so on), it’s no surprise that it intends to increase its usage. 

In addition, Microsoft has been releasing AI-powered products through its Azure cloud computing service and working on AI integration into Office 365. By 2018, Microsoft had bought five artificial intelligence (AI) technology firms. Its most recent purchase was XOXCO, a software product design and development firm.

Apple has Siri, one of the world’s most popular virtual assistants. Siri was initially developed as an app and released on the Apple app store by Nuance Communications, Inc. in February 2010. Apple acquired it two months later, on April 27, 2010, for approximately $200 million. Siri was then introduced with the launch of iPhone 4S on October 4, 2011. 

It offers face recognition, which is entertaining to experiment with and improves security. Furthermore, Apple employs AI to identify fraud and improve battery usage, appearing to be an equal competitor.

Apple does not spend as heavily on AI as Google or Amazon. Second, it takes a fairly local approach, with its CreateML framework only operating on iOS devices, whereas most businesses train their ML models in the cloud. 

Since 2006, Google has invested over $3.9 billion in AI in disclosed transactions. Several organizations have invested money in acquiring AI startups up until 2018. Some of these businesses are Amazon ($871 M), Apple ($786 M), and Microsoft ($690 M). 

Acquisitions Related to AI

According to a report from GlobalData, Apple acquired around 25 artificial intelligence firms between 2016 to 2020. The various acquisitions that Apple made include: 

• Emotient (Jan 2016)

Emotient, a San Diego business developing artificial intelligence technology that scans facial expressions to determine emotions, was bought by Apple. Apple did not specify the details of the acquisition in the report.

• Flyby Media (Jan 2016)

Apple acquired Flyby Media, an augmented reality business that created technology that lets mobile phones “see” the world around them. Apple has been interested in virtual reality for several years. The purchase occurred shortly after Apple announced the hiring of a prominent AR/VR specialist, Doug Bowman. Apple may have been working on technology that will someday find its way to the iPhone, similar to Google’s Project Tango, which delivers computer vision to mobile devices.

• Gliimpse (August 2016)

Gliimpse, a health data firm, was purchased by Apple for around $200 million. Gliimpse allowed users to import their medical information into a single virtual environment. Apple’s incorporation of Gliimpse into its existing products appeared to be more evident, given that the business has been working on health-related software for some years now. It was simple to see how Gliimpse, with its structured data centered on individuals, would be useful in products such as HealthKit, ResearchKit, and CareKit. Thus opening a gateway for Apple in the healthcare sector .

• Turi (August 2016)

Apple purchased Turi, a machine learning and artificial intelligence business, for more than $200 million. The acquisition is part of Apple’s bigger push into artificial intelligence and machine learning. Apple’s ambitions for Turi’s technology are unknown, but the corporation has been expanding its Siri personal assistant and associated technologies to make a larger push into artificial intelligence.

• Tuplejump (September 2016)

Apple bought Tuplejump, a machine learning team based in India and the United States. The acquisition was motivated by Apple’s interest in FiloDB, an open-source project developed by Tuplejump to quickly apply machine learning ideas and analytics to enormous volumes of complicated data as it came in.

• RealFace (February 2017)

Apple has spent $2 million acquiring the Israeli company RealFace, a cybersecurity and machine learning business focusing on face recognition technologies. RealFace’s software employs exclusive IP in the realm of “frictionless face recognition,” which enables quick learning from facial traits.

• DeskConnect (March 2017)

DeskConnect, the start-up behind Workflow, was acquired by Apple. Workflow is similar to Automator, an Apple utility tool that comes with macOS Sierra but has no iOS counterpart. DeskConnect’s namesake cross-platform file-transfer tool was discontinued last month. Apple’s AirDrop, Handoff, and Universal Clipboard, among other services, were recommended by the firm.

• Lattice Data (May 2017)

Apple invested $200 million in acquiring Lattice Data, an AI firm. By acquiring Lattice Data, Apple was prepared to expand into machine learning and artificial intelligence. Around 20 engineers also joined Apple.

• SensoMotoric Instruments (June 2017)

SensoMotoric Instruments, a German provider of eye-tracking eyewear and systems, was acquired by Apple. SensoMotoric has created eye-tracking technology for virtual reality headsets such as the Oculus Rift, which monitors the wearer’s gaze and aids in reducing motion sickness, a major side effect of VR. Apple revealed a prototype set of “smart glasses” that would link to an iPhone and show the wearer “pictures and other information.”

• Regaind (September 2017)

Regaind, a French firm, was bought by Apple. Regaind had been working on a machine vision API for analyzing photo content. Apple used this technique to improve the Memories tab in the Photos app. iOS builds albums depending on events, location, and other factors. Using Regaind, iOS may search for aesthetically similar photographs, display the best image as cover art, and generate a recap movie with the finest photographs. Apple has integrated Regaind technology with the new Face ID sensor in the iPhone X, for example, to enhance animoji facial expressions.

• Pop Up Archive (December 2017)

Pop Up Archive, an Oakland-based online platform focused on developing tools to transcribe, organize, and search audio recordings, was bought by Apple. Apple, the long-dominating hands-off curator of the podcast world, has bought a technology aimed at boosting the knowability and sortability of the hundreds of thousands of broadcasts delivered via its Apple Podcast platform.

• Spektral (October 2018)

Apple invested over $30 million in Spektral, a computer vision business in Denmark that has worked on segmentation technology. Spektral’s initial application may have been the rather outdated world of school photos and the most prominent contribution Spektral might make to Apple’s photographic industry.

• Asaii (October 2018)

Apple invested less than $100 million in Asaii, a music analytics start-up focused on discovering new and rising musicians. The acquisition comes as Spotify, Apple Songs’s major competitor, expands its reach beyond conventional popular performers and supports unsigned musicians, who may now submit their music straight to the service.

• Silk Labs (November 2018)

Silk Labs, a firm focused on developing on-device machine learning software, had been acquired by Apple. The purchase perfectly fit Apple’s privacy-focused approach to artificial intelligence. Apple followed a similar approach to AI development, distinguishing itself from competitors such as Google, which collects large volumes of user data and analyses it on the cloud.

• PullString (February 2019)

PullString was acquired by Apple for around $30 million. This acquisition is a big indication of Apple’s plan to make Siri creation easier for iOS developers. The acquisition also provides Apple with extensive domain experience in voice app development, voice app designer and developer requirements, and the complexities of both Amazon Alexa and Google Assistant.

• Laserlike (March 2019)

Laserlike, a machine learning start-up, has been bought by Apple. Laserlike uses machine learning to collect massive amounts of data from the web and then give user-specific findings via an eponymous app. The transaction was made for an unknown purpose, according to Apple. Laserlike’s team may be trying to improve Siri’s long-struggling capacity to retrieve relevant information from the web.

• Lighthouse AI (March 2019)

Apple purchased Lighthouse’s patents for AI-powered home security cameras (eight patents and patent applications). Even the Lighthouse’s Co-Founders, along with about 20 employees, had joined Apple. Apple’s current emphasis on AI-driven home security systems is part of a broader tech industry embrace of so-called smart or connected homes, which include many AI-driven and machine-to-machine gadgets.

• Drive.ai (June 2019)

Apple bought Drive.ai in June 2019. Due to the agreement, hundreds of Drive.ai developers joined the tech giant’s top-secret Project Titan. Apple bought the company’s assets, including its self-driving vehicles.

• Spectral Edge (December 2019)

Apple invested an unknown sum in another UK start-up, Spectral Edge, in an apparent move to strengthen the iPhone camera. Spectral Edge created Phusion, a computer photography approach that employs infrared light that is invisible to the human eye to sharpen and restore color in smartphone images.

• Xnor.ai (January 2020)

Apple acquired Xnor.ai, a Seattle business specializing in low-power, edge-based artificial intelligence solutions, for around $200 million. According to the agreement, Xnor’s AI-enabled picture identification technologies might become standard capabilities in future iPhones and cameras.

• Voysis (April 2020)

Apple Inc. acquired Voysis, an Irish artificial intelligence firm, in April 2020 for an undisclosed amount. Voysis’ technology, which includes a platform that adds vocal interactions to digital shops, might be used to improve the understanding of what consumers say by Apple’s Siri speech assistant.

• Inductiv Inc. (May 2020)

Apple Inc. acquired Inductiv Inc., a machine-learning firm situated in Ontario, Canada. Inductiv created technology that employs artificial intelligence to automate the job of detecting and repairing data problems. This technology will be used by Apple in a variety of products and improve Siri data.

• Subverse Corp.(Scout FM) (September 2020)

Apple Inc. acquired Subverse Corp. (Scout FM), a start-up that makes listening to podcasts more like tuning into radio stations, to strengthen its service in the face of increasing competition from Spotify. While other podcast applications, such as Apple’s, allow users to select an individual podcast to listen to, Scout FM established podcast stations on various themes. Scout FM was popular among Apple device owners and could be linked with CarPlay. This interface shows on compatible car screens when an iPhone is connected to Apple’s Siri digital assistant.

• Vilynx (October 2020)

Apple Inc. invested $50 million in acquiring the artificial intelligence and vision firm Vilynx Inc. Vilynx technology might be adapted to Siri and Apple’s general search operations.

Apple Services

Apple has been working on different services to increase revenue, especially since 2018, when iPhone sales have been declining. Apple knew this was bound to happen, so the company employed several tactics to boost its revenue. One is simply increasing the price. 

Apple iPhone, iPad, Watch, and MacBook average prices have seen growth, which has helped Apple consistently increase its revenue. But that tactic was a short-term plan, and Apple Couldn’t rely on it for the long term. That’s where Apple services come into the picture. 

Apple has introduced several services in the past 6 to 7 years, such as Apple Pay, App Store, Apple News+, Apple Music, Apple TV+, Apple Podcasts, Apple Fitness+, etc. 

Apple generated $53.7 Billion in 2020 through its services, which accounted for 19% of total revenue. Surely, the number will keep growing in the coming years as Apple has a solid user base and is making the services a part of its ecosystem, which will help in user experience. 

iMessage is Apple’s instant messaging service for iPhone, iPad, and Mac devices. iMessage, which debuted with iOS 5 in 2011, allows users to share messages, photographs, stickers, and other content between any Apple devices through the Internet. iMessage is exclusively available on Apple devices. That implies users won’t be able to send an iMessage to their Android contacts. Apple prioritizes privacy, which is why everything users transmit as an iMessage is encrypted from beginning to end. This implies that no one can intercept or read it except the person to whom it was sent, even Apple. In reality, even if they have a smartphone, they cannot force their way into a user’s iMessages. No, not without a user passcode. Apple has been chastised by the US government for this same reason since it cannot, even if it wanted to, expose iMessages. 

Apple’s FaceTime is a video chat application. FaceTime was built by Apple on an open standard, which implies that it may be utilized across a variety of platforms and that other manufacturers may exploit FaceTime’s protocol. But instead, FaceTime was only available to customers of Apple products until recently. With the release of iOS 15, FaceTime is coming out of the Apple closet. The software giant is making it possible for people with Android phones and Windows laptops to hop on FaceTime calls — no iPhone required (well not really tho).

Before you jump to search the FaceTime app on the Play Store , here’s the catch- you won’t find it. Users can join a FaceTime call on their Android and Windows devices using a link, so long as the person scheduling or starting the call has an Apple device and an Apple account. It now has a market share of less than 0.01%. Zoom is the market leader in this industry, with a 39.66% market share, followed by GoToWebinar with a 20.64% market share, and Cisco Webex with a 16.48% market share. 

Apple Maps and Google Maps have transformed the way we locate destinations, discover local businesses, and share directions with friends. Both serve the same objective, although their navigation tools and interfaces differ slightly . Google Maps, which debuted in 2005, has been the leading mobile mapping service since the smartphone’s inception. Apple acquired Placebase on July 7, 2009, to build its own Maps application for iPhone and iPad. This app didn’t come until 2012 and was stuck with technical challenges for years.

With the introduction of iOS 13 and iPadOS 13, Apple gained a foothold. Apple Maps was upgraded to exclude third-party navigation data in favor of new data obtained exclusively by Apple. The new maps are significantly more precise and accurate, thanks to millions of miles driven in camera- and LiDAR-equipped automobiles, new high-resolution satellite photos, Apple staffers canvassing areas on foot with radar modules strapped to their backs, and plenty of aerial photography. 

Apple included routes for bicycles, routing for electric cars, congestion zones, and Guides for discovering the finest locations to visit in cities around the world in iOS 14 and iPadOS 14. Apple Maps is only available on Apple devices, including iPhones, iPads, and Apple Watches. It’s incorporated into all Apple-branded products, including Macs. It is not available on devices that are not part of the Apple ecosystem. 

According to the latest survey data from The Manifest in 2018, most smartphone owners use navigation applications, with the majority preferring Google Maps. It has a market share of 67% compared to 12% for Waze, 11% for Apple Maps, and 8% for MapQuest. 

Apple’s digital software distribution platform for iOS devices is known as the App Store. The App Store, which debuted in 2008, allows software developers to publish content designed exclusively for the iPad, iPhone, and iPod touch. Apps may also be downloaded for the Apple Watch through the iOS App Store. 

The App Store is more than just a shop; it is an innovative place dedicated to delivering incredible experiences. Much of it ensures that the firm’s applications adhere to the highest privacy, security, and content standards.  

As of the first quarter of 2021, Android users had a choice of 3.48 million apps, making Google Play the app store with the most available apps . With about 2.22 million iOS apps available, the Apple App Store stands second in the ranking. 

While the actual number of applications may vary since Apple and Google constantly delete low-quality material from their app stores, the number of applications has continuously increased over the years. 

Since 2008, the App Store has paid out more than $200 billion to developers.

According to mobile expert Horace Dediu, who provided even more current data, which are as follows: 

• $1.8 billion in App Store sales over the week between Christmas Eve and New Year’s Eve (+27% year on year)
• $540 million in App Store sales on January 1, 2021 (+40% year on year)
• 600 million: The number of iPhone users with an active subscription.

According to Apple, the App Store saw $643 billion in total commercial transactions in 2020, a 24% increase compared to 2019. At the present rate of growth, the indicated economic value might exceed $1 trillion within two years. 

Apple TV+ is Apple’s own TV and movie streaming service. It features award-winning shows, captivating dramas, ground-breaking documentaries, children’s entertainment, comedy, and more. Every month, new Apple Originals are added. The service is positioned as Apple’s direct competitor to Netflix, Amazon Prime Video, and Disney+ and will exclusively offer original programming via the existing Apple TV app, which is available on various platforms. 

Apple TV+ is available on a monthly subscription and is accessible across several devices via the most recent version of the Apple TV app. It provides ad-free, unique programming that has either been green-lit or created in-house by Apple. 

A family membership to Apple TV+ costs £4.99 / $4.99 per month. Apple’s services package, which includes Apple Music, Apple TV+, Apple Arcade, Apple News+, and Fitness+, was launched in October 2020. Apple TV+ is accessible on iOS/iPadOS devices and the Mac via the Apple TV app.  

A survey was conducted in May 2020 with Apple’s reader at Android Authority, ‘Which streaming service would they pick if they could only pick one?’ From this survey, it was seen that Apple TV+ captured less than 1% of the total vote. The majority of consumers complained that the library was just too small, while it would work better as a second or third membership for people who can’t get enough content. 

Position in the Market Compared To Others

Apple TV+ was marketed as a unique curated stream of entertainment available exclusively through the Apple TV app. Despite Apple’s investments in new movies and programming for its streaming service Apple TV+, the platform is still considered to gain a large success. During the fourth quarter of 2020, it was reported that Apple TV+ has only a 3% market share in the United States, trailing competitors such as Netflix, Disney+, and even Peacock.

Apple TV+ was not the most popular streaming service in the fourth quarter of 2020. Apple TV+ trailed Peacock, NBCUniversal’s streaming service launched in July 2019, with a 6% market share during the same period. Netflix maintained its 31% market share of streaming platforms in the United States, while Amazon Prime Video grew and drew close to 22%. Hulu came in second with 14%, followed by Disney+ with 13%, and HBO Max with 9%. 

In 2020, Apple had a terrible year because most productions were halted due to the COVID-19 pandemic. Apple TV+’s catalog is extremely modest in comparison to its competitors because it only includes original movies and series. Apple extended the Apple TV+ trial term to members who had previously completed the one-year free trial in January 2021. 

Apple is in a unique position since it both creates original video content and distributes third-party video bundles. Apple’s aim to become the “bundler of bundles” looks to profit when power shifts from one or two corporations to many others. Apple TV+, Apple’s streaming video service, was priced at $4.99 per month, which was less than any other major provider. 

As additional competitors plan to launch their services with larger video libraries consisting of famous series and movies, the firm was obliged to keep the pricing low . Within a few months of its inception, the one-year free trial had propelled Apple TV+ to the top of the streaming services. 

Apple’s Plan to Increase Its Streaming Business

Tim Cook, Apple’s CEO, announced the debut of video streaming, news subscriptions, and a credit card in 2019. Apple made a calculated move to enter the video streaming market, which is a slight departure from the company’s core business, which has garnered its brand recognition.

Furthermore, since Apple has broadened its horizons in the services category, the launch of a video streaming service appeared to be an opportune decision since this sector has a lot of untapped development potential.

• Online video streaming might be considered a replacement for television. In the United States, video streaming services have already surpassed television in terms of household penetration, with 69% of homes using a video streaming service.
• Apple has the economies of scale to enter this market with relative ease. It has significant client loyalty and may be able to gain clients more readily as a result of its loyal client base. Furthermore, with the aid of its existing products, the firm may effortlessly pull in its existing consumers on video streaming services.

Apple TV+ is less expensive than the majority of its competitors. It costs $4.99 per month, which is less than half the price of a standard Netflix membership, and it is free for the first year for customers who buy Apple gadgets. Even now, Apple has been collecting older movies and episodes for its TV+ streaming service, intending to build a back library of material that can compete with the massive libraries offered on Netflix, Hulu, and Disney+. According to sources familiar with the topic, the company’s video-programming executives have received presentations from Hollywood studios about licensing older content for TV+ and have purchased several episodes and movies.

It is predicted that in the future the company might acquire Disney . If Apple is serious about becoming a large SVOD player, which they may not be, abandoning Apple TV+ and redirecting its programming to Disney’s established streaming portfolio makes sense. Disney is the only studio large enough to propel Apple into streaming dominance, and it just so happens to fit Apple’s family-friendly image and public values. 

“Apple can easily push the Disney streaming apps onto every phone and make certain offerings free for everyone in markets that are underserved.” – David Offenberg, Associate Professor of Entertainment Finance in LMU’s College of Business Administration

Apple had planned to introduce augmented reality material to Apple TV+ as it sought new methods to attract and keep members, as well as generate interest in AR technology. Even the ‘Bonus content’ has been one of the numerous ways in which Apple has attempted to increase the value of TV+ and keep consumers enrolled. Apple is planning to launch podcasts based on existing TV+ series. Apple is planning to release a headgear that combines augmented and virtual reality in 2022, with an emphasis on gaming, media consumption, and virtual meetings. 

Apple Music

Apple Music was launched in 2015 and is a music streaming service that offers access to over 70 million songs. Its fantastic features include the option to download favorite tracks and play them offline, real-time lyrics, listening across all of your favorite devices, new music customized specifically for its users, curated playlists from its editors, and many more. All of this is in addition to exclusive and unique material.

Apple Music also includes live radio stations and connectivity with Siri, allowing users to operate most of their devices with voice commands. The Apple Music service not only allows one to stream any tune from the iTunes collection on demand, but it also allows one to access all of the music in one location on all of the devices, whether purchased from iTunes, copied from a CD, or downloaded from the web. Individual plans cost £9.99 (US$9.99) per month. A Family subscription, which can accommodate up to six people, costs £14.99 or $14.99 per month, which is less than Spotify’s equivalent. The University Student plan, which costs £4.99/$4.99 a month, is the final option. 

This streaming service now supports lossless streaming quality up to 24-bit/192 kHz! This app is available even for Android OS users to download and get a subscription, starting at only $1.19 or ₹99 per month. University students can get it even cheaper with free Apple TV+, making it one of the world’s best and surprisingly affordable lossless music streaming services. It’s unlike Apple to open up its ecosystem to other players, but audiophiles certainly appreciate this move.

Acquisitions and Collaborations

• On August 1, 2014, Apple acquired Beats Music & Beats Electronics for $3 billion. 

“Music is such an important part of all of our lives and holds a special place within our hearts at Apple. That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.” – Tim Cook, CEO of Apple

Beats Electronics began to employ Apple’s patented technology in various products following the acquisition, such as the W1 chip in select Bluetooth headphones. Apple shut down Beats Music at the end of the year in anticipation of the 2015 launch of Apple Music.  

• In Jan 2015, Apple purchased Semetric , a business that analyzes music data online. This agreement was reached to revitalize the development of iTunes and Beats Music. Apple’s interest in Semetric is most likely limited to the Musicmetric product, which might be used to reliably compute record label royalties for a music streaming service like Apple Music. After purchasing Beats for $3 billion last year, Apple wanted to extend its online music services with the acquisition. 
• Apple purchased technologies from cloud-based music platform Omnifone in November 2016 and employed at least a dozen (at least 16) former Omnifone workers. Omnifone provided “white-label” music services, which allowed businesses to provide their personalized music services to clients and subscribers. Many former Omnifone employees have gone on to work as software developers at Apple, presumably in areas such as iTunes and Apple Music. 
• In April 2021, Pinna, an on-demand audio entertainment service provider, announced collaborations with Apple . “Pinna is thrilled to be at the forefront of this exciting launch in collaboration with Apple.”, said Maggie McGuire, CEO of Pinna. Apple Podcast subscriptions will let them expand their worldwide reach even further, providing them with a unique ability to personalize channels to certain demographics and interests.    

Apple has joined a crowded, competitive field populated by banks and upstart fintech companies. During Apple’s 2018 quarterly earnings call, Tim Cook provided some insight into the company’s progress toward  becoming a financial player . 

Apple Pay transactions increased from the previous year to over 1 billion in 2018. Apple had been working on a credit card with Goldman Sachs and MasterCard. In 2019, Apple launched its Apple credit card in collaboration with Goldman Sachs and MasterCard.

According to the firm, Apple customers were able to sign up for the new card using their iPhones in the summer of 2019. It revolves around Apple Pay, the company’s mobile payment and digital wallet service, which debuted in 2014. 

Even though Apple was late to the credit card industry, its marketing prowess and dedicated client base allowed the business to expand very swiftly. Tim Cook, Apple’s CEO, indicated that more than 70% of U.S. shops accept Apple Pay and that around 40 countries had joined by the end of 2019.

• The Apple Card is more likely to put branded credit card issuers under competitive pressure than Goldman’s rival banks. Apple may continue to provide additional financial products to its customers, notably bank accounts, which are a good complement to credit accounts.
• According to Gene Munster of Loup Ventures, Apple Pay is still active on around 25% of all iPhones in the United States. This would hasten the adoption of Apple’s payment method since, unlike Apple Pay, the card could be used everywhere.   
• Apple also paid around $100 million to acquire Mobeewave, a payments start-up. The startup provides near-field communications (NFC) technology, which allows smartphones to be used as payment terminals. This technology enables mobile payment options such as Apple Pay and Google Pay. 

Apple Pay was launched in October 2014 and is an Apple Inc. mobile payment and digital wallet service that allows users to make payments in person, in iOS applications, and on the web using Safari. It is compatible with the iPhone, Apple Watch, iPad, and Mac. 

Apple introduced person-to-person Apple Pay payments using the Messages app on the iPhone and Apple Watch in 2017. As of 2019, Apple Pay has surpassed Starbucks to become the most-used mobile payment platform in the United States.

In 2020, the Apple Card had around 3.1 million users in the United States. Apple Pay also allows customers to make one-tap purchases within applications that have implemented the Apple Pay API. It is available on the web on iOS 10 or macOS Sierra or later devices. 

Presently, Apple Pay is accepted by more than 85% of retailers in the U.S. Apple Pay is also available at a variety of locations other than regular retail outlets, such as colleges, ballparks, non-profit organizations, Bitcoin payment providers, and ATMs from Bank of America, Chase, and Wells Fargo.

Apple Inc. announced Apple Card in August 2019 in collaboration with Goldman Sachs and MasterCard. It is a credit card with Apple Pay branding that gives 2% cashback on Apple Pay transactions. In addition to cash benefits for Apple Pay transactions, the card provides financing alternatives for Apple devices.

Apple Card functions similarly to a traditional credit card, but it is deeply integrated into the Wallet app, providing real-time views of the most recent transactions, a comprehensive overview of spending organized by category, and payment options optimized to encourage minimal interest. 

Apple also provides 3% cashback when using the Apple Card with Apple Pay to make purchases at Uber, Uber Eats, T-Mobile, Walgreens, Nike, and Duane Reade. Apple also intends to offer 3% cashback rewards to additional shops and applications in the future.    

What are the Potential Future Products of Apple?

Ar/vr/mr devices.

Apple is developing a range of augmented and virtual reality products that will be powered by a new 3D sensor technology. They announced Vision Pro , a new extended reality headset, on June 5, 2023. Interestingly, they never used the terms “virtual reality” or “augmented reality” throughout their presentation and marketing material. Instead, they’re calling this their first “Spatial Computer.” We’re well familiar with Apple’s tendency to create unique names for everything in their catalog.

Interestingly, we noticed one of their recently granted patents on this technology was filed back on May 4, 2007. It indicates that Apple has been working on this headset idea since the same year they launched the first iPhone! Say what you will about their walled-garden ecosystem approach; their vision (no pun intended) and relentless spirit of innovation are truly commendable.

This headset doesn’t need external controllers. You can control it using eye movement, voice, and hand gestures! The product even supports 3D video capture, allowing users to record and store memories like never before. 

Through the VisionOS interface on its immersive dual 4K displays, Apple may be positioning this headset as a future replacement for smartphones and other handheld computing devices. Looking at the company’s track record of delivering seamless tech integrations into its ecosystem, we believe that the Vision Pro would be a natural extension of everyday tech for an Apple user. 

Apple acquired SensoMotoric Instruments in 2017. The German provider of dedicated computer vision applications, SensoMotoric Instruments’ tech, was used in ARKit and likely made its way to the Vision Pro. In the same year, Apple acquired VRvana, an augmented reality headset startup, for $30 million. A number of the startup’s employees had joined Apple in California. Their work and expertise would have made their way to Vision Pro.

The product isn’t set to launch until early 2024 in the US, but its featured claims seem revolutionary in this niche. Its asking price of $3499 is undoubtedly a steep jump for most consumers, and Apple is aware of that.  Financial Times  reports that Apple has reduced its production supply goal from 1 million in 2024 to 400,000. This product may take some time to pick up speed for all but the most tech-savvy  consumers and early adopters.

Apple Glass

Apple Glass is expected to operate on Starboard (or perhaps glassOS), a proprietary operating system revealed in iOS 13’s final version. The augmented reality framework appears several times in code and text documents, implying that Apple is testing activation and application. According to Bloomberg, Apple Glass will be available in 2023 at the earliest. Apple is getting closer to releasing a VR headset that will compete with the Oculus Rift 2. 

According to Scoble, Apple will most certainly release AR glasses next year , giving it a 2-3 year head start on all competitors.

Apple’s objective is to personalize computers. The Cupertino firm has everything in place to launch an AR product to the masses:

• Hardware manufacturing competence and a stable supply chain allow for seamless integration with iPhones, AirPods, and Apple Watches.
• It comes with its operating system, chip, and App Store.

Because every buyer of these AR glasses will almost certainly have an iPhone, Apple can provide a lightweight product at a reasonable price.

Apple’s foray into personal mobility appeared to have begun in 2014 , with the announcement of Project Titan. This project involves the company’s efforts to bring a Tesla-style electric vehicle to market before the end of the decade.

The Apple Car project has had many lead changes and hundreds of layoffs during its development, but it is currently led by John Giannandrea, Apple’s Chief of AI and machine learning. Giannandrea took over from Bob Mansfield after Mansfield departed in 2020. 

In December 2020, it was verified that Apple is still working on a car and now aims to produce a vehicle in three to six years. According to Ming-Chi Kuo, an Apple analyst, a car would not be launched until 2025 to 2027. Ming-Chi Kuo, an Apple analyst, believes the automobile will be the company’s “next star product,” with Apple able to offer greater integration of hardware, software, and services than prospective competitors in the automotive business , thanks to Apple-designed processors made by TSMC.

“We’re focusing on autonomous systems. It’s a core technology that we view as very important. We are sort of seeing it as the mother of all AI projects. It’s probably one of the most difficult AI projects to actually work on.” – Tim Cook, CEO of Apple

Apple’s first car chassis might be built on Hyundai’s E-GMP electric vehicle (BEV) platform. The Apple Car will almost certainly be sold as an “extremely high-end” or “substantially higher” model than a regular electric car. Apple has been aiming for a game-changing design that might be employed in a future driverless car.

Apple is also working on a novel battery architecture that has the potential to “radically” lower battery costs while increasing vehicle range. The battery technology has been compared to “the first iPhone” and hailed as “next level.” Apple intends to use a novel “mono cell” design that bulks out the individual cells in the battery while freeing up room inside the battery pack by removing pouches and modules that carry battery components.

Apple is also developing a self-driving shuttle service known as ‘PAIL’ (Palo Alto to Infinite Loop). The shuttle service will transport staff between Apple’s Silicon Valley headquarters. Apple is collaborating with Volkswagen and will put self-driving software in Volkswagen T6 Transporter vehicles that will act as staff shuttles. 

In 2019 and 2020, speculations circulated that the project had shifted once again and that Apple was still pursuing an Apple-branded car. However, many speculations in late 2020 indicated that Apple is still working on a full-fledged Apple-branded automobile. This is primarily aimed towards customers, with ambitions to collaborate with an established vehicle manufacturer.

Under the secret name “Project Titan,” Apple had hundreds of people working on the design of an electric minivan. Steve Zadesky, Apple’s VP of Product Design, is leading this project.

Apple bought Drive.ai , a self-driving car startup, in June 2019. For its self-driving vehicle project, Apple engaged many Drive.ai professionals in engineering and product design. According to Axios, Apple bought the company’s assets, including its self-driving cars. 

Drive.ai vans are customized Nissan NV200s that operate in a restricted region near major sites and sports venues. This acquisition was made primarily to improve the company’s autonomous vehicle development effort.   

According to Morgan Stanley analysts, Apple spent approximately $19 billion on research and development in 2020, which equates to almost one-fifth of the overall R&D investment across the automotive sector (about $100 billion). 

By May 2020, 700 employees were working on Apple AV Tech in the Bay Area. 

What does Apple M&A Landscape look like?

Apple is well-known for its strict secrecy, especially regarding new iPhone releases. Apple has completed around 100 mergers and acquisitions in the last six years, the majority of which were done in secret. Apple has rigorous nondisclosure agreements in place and urges acquired staff not to update their LinkedIn pages. 

The top 10 major acquisitions that Apple has made are mentioned below:

Apple’s Top 10 Acquisitions

Acquisition of beats.

The highest amount at which Apple did an acquisition on August 1, 2014, was at $3 billion for Beats Music & Beats Electronics. This acquisition includes buying both Beats Audio hardware and Beats Music. One of the main reasons for this acquisition was the talent and reputation that Apple looks for when creating new products and services. Another relevant reason is Apple wanted to modify and uplift its iTunes. Therefore, Apple began acquisition negotiations with Beats just four months after their Beats Music service first debuted. Even Apple was impressed by the amount of revenue that Beats generated from their headphones.  

Acquisition of Intel Smartphone Modem Business

In July 2019, the acquisition of Intel Smartphone Modem Business for $1 billion was Apple’s 2nd largest acquisition ever. In this deal, Apple had acquired the majority of Intel’s smartphone modem business. This deal also included the transactions of intellectual property, equipment, and approximately 2,200 Intel employees joining Apple. The agreement aided Apple in acquiring a large portfolio of wireless patents from Intel. More than 17,000 wireless technology patents have been held by Apple, ranging from cellular network protocols to modem architecture and modem service. According to multiple reports, Apple intends to produce its modems for iPhones by 2022-2023, and this Intel contract will undoubtedly aid those efforts. 

Acquisition of Dialog Semiconductor

On October 11, 2018, Apple went under a deal to license IP, acquire assets and talent from Dialog Semiconductor to expand chipmaking in Europe at a deal of $600 million. The deal also involved more than 300 Dialog staff transitioning to Apple employees, becoming part of Apple’s hardware technologies team under Johny Srouji. In some cases, Apple will take over whole buildings formerly occupied by Dialog, and in others, they will co-locate in buildings where Dialog will continue to grow its own business.  

Acquisition of Anobit Technologies

In December 2011, Apple went under an acquisition with Anobit Technologies , an Israeli semiconductor startup. The deal was completed at approximately $500 million. The two main reasons for which this acquisition was made include the flash memory controllers of Anobit, which made a key component of all Apple’s leading products (from iPads and iPhones to MacBook Airs), and finally, the acquisition added a large team of chip engineers to the payroll. Flash memory has been a crucial piece of Apple’s technology puzzle.  

Acquisition of Texture

In March 2018, Apple acquired Texture , a digital magazine service by Next Issue Media LLC, for $485 million. The service provided subscribers with unrestricted access to their favorite titles for a single monthly subscription fee. 

“We’re excited Texture will join Apple, along with an impressive catalog of magazines from many of the world’s leading publishers. We are committed to quality journalism from trusted sources and allowing magazines to keep producing beautifully designed and engaging stories for users.”  – Eddy Cue, Apple’s Senior Vice President of Internet Software and Services 

Acquisition of Shazam

On September 24, 2018, Apple acquired Shazam to have more opportunities to explore and experience music. The deal was finalized at $400 million. 

“Apple and Shazam have a long history together. Shazam was one of the first apps available when we launched the App Store and has become a favorite app for music fans everywhere. With a shared love of music and innovation, we are thrilled to bring our teams together to provide users even more great ways to discover, experience, and enjoy music.” – Oliver Schusser, Apple’s Vice President of Apple Music 

In May 2018, Apple revealed that Apple Music had reached 50 million users.  

Acquisition of Next Software

Back in 1996, Apple acquired Next Software at a deal of $400 million. Apple paid approximately $350 million in cash and stock for the privately held Next to purchase that company’s shares and an additional $50 million to cover its debts. 

Since its technology was agile, Apple hoped that Next’s object-oriented, Java-enabled open software platform would greatly boost its Internet and intranet status. It also aimed to capitalize on Next’s enterprise role. 

“This is a complementary arrangement, and the pieces fit together better than any other alternative we looked at, and it will launch a new round of technology.”  – Gilbert Amelio, Former Chairman and CEO at Apple

Acquisition of PrimeSense

In 2013, Apple acquired PrimeSense , an Israeli-based pioneer in 3D sensor technology. The deal was completed at approximately $360 million. PrimeSense’s system could potentially be used in a variety of Cupertino devices. This acquisition was Apple’s second purchase of an Israeli company, as it bought Anobit in January 2012. Apple did not disclose the intentions behind the purchase of PrimeSense.   

Acquisition of AuthenTec

In 2012, Apple bought AuthenTec , a developer of fingerprint sensor technology, for approximately $356 million. The fingerprint technology used in mobile phones in Japan to authenticate mobile payments would help Apple bring those services to markets such as the United States. 

Apple also acquired the right to pay the company to license certain patents totaling as much as $115 million. AuthenTec’s authentication features would be integrated into Apple’s iPads and iPhones and potentially used as security measures for other features, such as non-mobile computer systems or cloud-based networks or services.  

Acquisition of PA Semi

In 2008, Apple acquired PA Semi , a chip designer, for approximately $278 million. This acquisition was a strategic move by Apple, as it aimed to continue to differentiate its next-generation handheld products amongst a growing fleet of competitors. Even the power savings offered by P.A. Semi’s designs may have been amongst the firm’s most compelling assets in Apple’s eyes. 

Now, let’s move forward to Apple’s top 5 Market regions besides the US.

What are Apple’s Top 5 Markets besides the US by Revenue?

Apple’s top markets besides the US by revenue include the regions from Europe, Greater China, Japan, and the rest of Asia Pacific. America’s high income is partly attributable to Apple’s good performance in its home market, the United States. Apple has by far the greatest market share among smartphone suppliers in the United States. 

Even though overseas sales account for a greater portion of Apple’s overall income, the United States still accounts for around 40% of Apple’s net sales.

During the years 2020 and Q1 2021, the annual revenue of Apple is divided into several regions, such as the U.S., Europe, Greater China, Japan, and the rest of Asia Pacific. The new iPhone 12 Pro and 12 Pro Max, now in their 14th iteration, continue to contribute to the success of Apple’s trademark product, helping push for year-on-year iPhone sales increase despite the COVID-19 pandemic. 

Apple gained 28% of the European market in the first quarter of 2020, making it the company’s greatest first quarter of the fiscal period. Even in China during the year 2020, Apple captured a market share of approximately 10.5% . In Q4 2020, Apple was the only brand that showed positive year-on-year growth in the China market that year. 

The following table shows the annual revenue:

Source: Statista

What does Apple’s Investment Landscape look like?

With the accelerating pace of technological change, investing in startups has become a key part of Apple’s corporate strategies. By doing so, they also tend to closely monitor their smaller brethren. Given below are the top 5 investments made by Apple.

Top 5 Investments Made by Apple

Apple has made several investments in startup companies globally. Amongst them, the top 5 investments include:

• In May 2016, Apple announced it had invested in a Chinese ride-hailing service, Didi Chuxing . Apple invested around $1 billion to help Apple understand the critical Chinese market. The investment gave Apple a stake in two burgeoning waves of technology: the sharing economy and car technology. Even Apple has been trying to reinvigorate sales in China, where it has come under greater pressure from regulators. 

“From a Didi point of view, we see that one, it is a great investment. Two, we think that there are some strategic things that the companies can do together over time. And three, we think that we’ll learn a lot about the business and the Chinese market beyond what we currently know.”  – Tim Cook, CEO of Apple 

• Even in June 2016, Apple and other firms backed unicorn Didi Chuxing Technology , which raised $4.5 billion in a fundraising drive to oppose Uber’s assault on the Chinese market. 
• On March 31, 2021, Apple invested $50 million  in UnitedMasters, a music distribution and data analytics company. The platform aims to democratize the music industry by allowing budding musicians to earn money and get distribution across various music platforms, including Spotify and Apple Music. This agreement marks the beginning of a strategic engagement with Apple, which will open up many new prospects for UnitedMasters artists.

“Steve Stoute and UnitedMasters provide creators with more opportunities to advance their careers and bring their music to the world.”   – Eddy Cue, Apple Executive

• In March 2016, Apple, together with Blackboard, Dropbox, Udemy, and other companies, invested around $2.3 million in Volley Labs , a learning technology firm. Volley’s primary goal is to provide technology that assists students, particularly those enrolled in advanced high school or college curricula, in understanding the content they are learning by surfacing relevant, machine-curated explanations from the web via their mobile devices. The Volley’s funders’ ultimate goal is to spare students from spending too much time “processing” material and redirect their time and energy to meaningful learning. 
• On November 21, 2015, Apple invested in God-i , a startup specializing in wearable devices, in the seed round. However, Apple exited from further investments in God-i.  
• On February 25, 2019, Apple and other investors  invested  $21 million in FreightWaves during a Series B funding. FreightWaves is a data and content forum that delivers near-real-time statistics to industry players.  

Apart from investing in smaller companies and startups, collaboration is another strategy opted by Industry giants such as Apple. Let’s look at the top 10 partnerships and collaborations Apple has made over the past years.

Top 10 Partnerships/Collaborations Made by Apple

The various top partnerships and collaborations that were made by Apple are mentioned below:

• In September 2020, Singapore’s government and Apple announced a collaboration on the health initiative LumiHealth, which would use Apple Watch. LumiHealth, developed in partnership with a team of physicians and public health professionals, encourages the use of technology and behavioral insights. Singaporeans might use their Apple Watch and iPhone to stay healthy and complete wellness challenges.

“Singapore has one of the world’s leading healthcare systems, and we are thrilled to be partnering with them to incorporate Apple Watch and LumiHealth into their holistic approach to well-being” – Jeff Williams, COO of Apple 

• In April 2020, Google and Apple announced a partnership initiative to use Bluetooth technology to help governments and health organizations reduce the transmission of the COVID-19 virus. With user privacy and security at the forefront of the design, both organizations would offer APIs in May that would allow Android and iOS devices to communicate with public health applications. Users could download these official apps from their respective app stores. 
• In October 2017, Apple and GE launched a collaboration to deliver powerful industrial applications that would provide predictive data and analytics from Predix, GE’s industrial Internet of Things (IoT) platform, to iPhone and iPad. The corporations announced the release of a new Predix software development kit (SDK) for iOS, providing developers with the tools they require to build their own powerful industrial IoT apps. 

“Together, Apple and GE are fundamentally changing how the industrial world works by combining GE’s Predix platform with the power and simplicity of iPhone and iPad.” – Tim Cook, CEO of Apple  

• In August 2017, Apple and Accenture announced a collaboration to help businesses revolutionize the way employees interact with consumers by developing new business solutions for iOS. Accenture Digital Studios would establish a dedicated iOS practice in key locations worldwide. The two firms would provide a new set of tools and services, including IoT, to assist businesses in unlocking new income sources, increasing efficiency, improving customer experience, and lowering expenses.  
• In September 2016, Apple and Nike unveiled the Apple Watch Nike+, the latest product of their long-standing collaboration. Apple Watch Nike+ has been the ideal running tool, combining exclusive Nike Sport Bands with the Apple Watch Series 2, including GPS, a two-times brighter display, 50-meter water resistance, a strong dual-core CPU, and watchOS 3.

“Apple Watch Nike+ takes performance tracking to a whole new level and we can’t wait to bring it to the world’s largest community of runners.”   – Jeff Williams, COO of Apple 

• In May 2016, Apple and SAP announced a collaboration to reimagine the mobile work experience for corporate clients of all sizes by combining powerful native apps for the iPhone and iPad with the better capabilities of the SAP HANA platform. 

“As the leader in enterprise software and with 76% of business transactions touching an SAP system, SAP is the ideal partner to help us truly transform how businesses around the world are run on iPhone and iPad. Through the new SDK, we’re empowering SAP’s more than 2.5 million developers to build powerful native apps that fully leverage SAP HANA Cloud Platform and tap into the incredible capabilities that only iOS devices can deliver.”  – Tim Cook, CEO of Apple 

• In 2016, Apple and Deloitte announced a collaboration to assist organizations to accelerate business transformation on iPhone and iPad. They would also collaborate on the creation of EnterpriseNext, a new service offering from Deloitte Consulting designed to help clients fully leverage the iOS ecosystem of hardware, software, and services in the workplace.

“Our dedicated Apple practice will give global businesses the expertise and resources they need to empower their mobile workforce to take advantage of the powerful ecosystem iOS, iPhone, and iPad offer, and help them achieve their ambitions while driving efficiency and productivity.”  – Punit Renjen, CEO of Deloitte Global 

• In August 2015, Apple announced a partnership with Cisco to build a fast lane for iOS business customers by optimizing Cisco networks for iOS devices and apps and integrating iPhone with Cisco corporate settings to offer unique collaboration on iPhone and iPad. 

“iPhone and iPad have become essential tools for the modern workforce and are changing the way work gets done. Together with Cisco, we believe we can give businesses the tools to maximize the potential of iOS and help employees become even more productive using the devices they already love.” – Tim Cook, CEO of Apple  

• In July 2014, Apple and IBM announced an exclusive collaboration combining each company’s strengths to improve workplace mobility by integrating IBM’s big data and analytics capabilities into iPhone and iPad. The collaboration would improve the integration of Apple’s machine learning framework, Core ML, with IBM Watson, resulting in strong insights that become deeper with time and use. The alliance would include exclusive IBM cloud services optimized for iOS, such as device management, security, analytics, and mobile integration.  
• In 2013, Square partnered with Apple to offer the new Square Stand, a point-of-sale system through Apple’s extensive retail network. The Square Stand is an iPad accessory that can connect to various devices, including cash registers, barcode scanners, and printers. In addition, the gadget has a built-in credit card reader. In 2016, the company announced a new collaboration allowing consumers to connect money saved on Square’s virtual card, Square Cash, to their Apple Wallet.  

Future Outlook

Apple has been doing more than good for a long time and has been saying since the company launched the iPhone. 

For the 10th consecutive year, Forbes magazine ranked Apple as the most valuable brand in the world in 2020. Apple’s great track record should continue as long as future management takes care of the brand and pushes it into new sectors. Apple’s breakthroughs are often incremental, with the company adapting its design prowess to the most recent consumer tech trends.

Looking ahead to ten years, the Apple of 2030 should continue to progressively enhance its hardware products while also introducing new ones such as Apple automobiles, AR/VR headsets, AR smart glasses, and so on. Apple will also broaden its brand to provide a suite of packaged consumer offerings.

In 2020, Apple executed an AR-related acquisition, acquiring NEXTVR for around $100 million. This decision was made considering AR’s future growth and vast applications and how Apple can take advantage of them. 

“When I think about that in different fields, whether it’s health, whether it’s education, whether it’s gaming, whether it’s retail, I’m already seeing AR take off in some of these areas with the use of the phone,” said Tim Cook on a podcast . “And I think the promise is even greater in the future.”  

Aside from possible smart eyewear, Apple is said to be working on self-driving automobiles. Besides these new, futuristic initiatives, Apple is projected to continue selling many iPhones, Apple Watches, iPad tablets, laptops, and desktops even ten years from now. By 2030, it’s feasible that Apple will have a version of almost every form of entertainment, financial, or other consumer service.

Apple announced an acceleration of its US investments, with plans to make additional contributions totaling more than $430 billion and create 20,000 new jobs throughout the country over the next five years, beginning in April 2021. Apple has increased its investment by 20% over the next five years, boosting American innovation and delivering economic benefits in every state. Tens of billions of dollars will be invested in next-generation semiconductor research and 5G innovation throughout nine US states.

“At this moment of recovery and rebuilding, Apple is doubling down on our commitment to US innovation and manufacturing with a generational investment reaching communities across all 50 states.” – Tim Cook , Apple CEO.

It is becoming undebatable that Apple has amassed enormous status and reputation worldwide. The capacity of Apple to retain and satisfy users inside its ecosystem is at the heart of its sustained success. In a realistic scenario, the future growth of Apple from 2022 to 2031 is depicted below:

• In this scenario, iPhone revenue will be moderately higher at the end of the 10 years than in 2021.
• By 2031, the Mac will grow only by 5%, the iPad by 8%, Wearables, Home, and Accessories by 20%, and Services by 15%. One new product introduction, Product X, will generate $10 billion in revenue by 2031.

Over 10 years, sales growth is 9.66%, a reasonable rate for a company of this size. The iPhone growth narrative is far from done, and a couple more upgrade cycles may drive a revival in growth over the following two decades. Even if App Store fees are reduced to 0%, Apple’s management will find another way to monetize service offerings. 

Authored By: Vipin Singh, Market Research

Next Read: Amazon Business Strategy: Insights of its operation and investment plan to become the top Fortune 500 company

Also Read: Airbnb expanding into social media? A peek into Airbnb’s expansion plan

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Table of Contents

Apple target audience , marketing strategy of apple, 5 key takeaways from apple marketing strategy, a case study on apple marketing strategy.

Breaking through with several inventions in the world of technology, Apple Inc. has been carving infinite milestones ever since its inception. Even though its innovations speak for themselves, this highly-valued giant corporation has invested heavily in its marketing team to soar high up as a tech maestro. Apple Inc. realized the role of brand marketing in the success of a venture from the start as a crucial way to connect with its target audience. This brand's marketing is so vigorously carried out and well-thought that it is often an inspiration and a place of research for marketing professionals. Here we bring you a well-curated case study on Apple's marketing strategy, the key takeaways to learn from this venture, and how to incorporate the same in your business and marketing strategies. 

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To understand its key strategies for marketing Apple products, let's first understand what Apple's target audience is like. Apple's target audience consists of middle-class and upper-class users who can pay higher for products that provide them with an incredible user experience. This means that these users have a higher disposable income and are willing to pay more for as high-priced products as Apple's. 

Let's take a look at Apple's target audience with this comprehensive analysis sourced from Business Research Methodology's report on Apple Segmentation :

Besides this primary classification, Apple also explicitly targets professionals working in specialized software like music, video, photography and all kinds of design careers. These working professionals prefer Adobe’s Final Cut, Photoshop and related editing software which work well with Macbooks and IPads than other operating systems. 

Even better, business professionals prefer Apple products such as iPods and Macbooks for their day-to-day work. Products like iPads and Macbooks are lighter and portable, so they are often selected by students (upper-class), educational institutions and teaching. 

Now coming to the marketing strategy of Apple, it is a combination of well-designed products with the right user experience, promotional campaigns, distribution, and pricing. Let’s take a look at all these features of Apple marketing strategy in detail:

Focus on Finer User Experience

Apple’s branding strategy is based on its stylish, more straightforward and lush products that focus on providing a user interface that is very simple to use and learn. They are lighter, easy to carry as well as durable. This minimal look and user experience makes it a perfect sell to its target audience, which comes from the middle to upper class.

Suave Yet Simple Advertising

Storytelling is such an essential part of every Apple ad as well as a marketing campaign. Often these ads focus on minimal design as well as high-quality images. They are either blended with music or a simple story. Apple consciously ensures that its advertising and marketing don’t use too much jargon or filler language in its ads. Instead, it shines a light on the product to let it speak for itself without showing what the price is like or using complicated words for its features.

Targeting the Right Markets

Apple is excellent at tapping into its target audiences like a genuine tech witch who knows their aspirations, preferences and pain points! Its market research is always on-point and crystal clear in its products, curation, and features. 

Here are the major critical takeaways from Apple Marketing Strategy:

• Tapping into your target markets and audience is the key to curating and selling user experiences that value the preferences of its people. 
• With simplicity and finesse in design, the right products with minimal designs and features can create a perfect impact for your brand.
• Incorporating emotion in your advertising and marketing can also help you connect with your audience better. 
• Don’t exaggerate the copy and conceptualizing of your advertising and marketing campaigns and prefer the “less is more” approach. Create shorter yet emotional and empathetic ads to captivate your target audience.
• When you create an international brand value through quality and minimal, sophisticated design, you don’t need to compete in terms of price. Instead, your price will set you apart for your user experience and design features.

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Apple Case Study - SWOT & PESTLE Analysis

A Brief Profile of Apple Inc Apple is regarded as the world’s most recognized and remarkable brand in the electronics field. Apple products have innovative and distinct features for each of its range of products. This multinational corporation is known for its unbeatable niche in the industry. It is has created a benchmark and revolutionized the world of personal computing since its formation. Steve Jobs and Steve Wozniak are the two college dropouts, who co-founded Apple. Today, In the IT industry Apple has carved its name on top as the world’s largest IT Company. It is world’s largest information technology company may that be in terms of total assets, revenue. It is also the world’s second largest company in the mobile phone manufacturing industry having with 115,500 employees(as of July 2016).

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For Apple case study , let us discuss some of the basic information about the company:

SWOT and PESTLE Analysis of Apple

In this Apple case study , the aim is to identify the internal as well as the external factors that have an impact on obtaining achieving high performances by Apple. From the study, the conclusion is if the company wants to continue to succeed the same way then it must consider macro and micro environmental factors. To determine these aspects from this Apple case study, data has been collected from a varied source like published paper, journals and many case studies, which were conducted by the company.To review Apple’s business operation framework there are two methods used for analysis –SWOT analysis for internal factors and PESTLE analysis for external factors that affect the performance of the company.

SWOT Analysis

SWOT analysis is the most popular and basic analytical tool for identifying internal strengths and challenges, and external available opportunities and threats for the assessment, enabling managers to scan the environment properly to organize everything more efficiently.SWOT stands for,

Opportunities

To improve an organization's strength, making sure its weaknesses have to be eliminated, grab the opportunities and foresee the threats. SWOT Analysis of Apple Strengths Leading innovator amongst the electronics brands: Since 2005, Apple has persistently been ranked at the top position on the in BDG's list of 50 companies because of its uniqueness in electronics devices. Apple is regarded as a leader for innovating products in the market like I Work (a presentation program) and iTunes Media Player (publishing photos, movies, organizing editing and music). Moreover, Apple has now become one of the biggest online retailers for streaming music, videos and software solutions. Apple has extended its coverage by reaching out to more customers.

Remarkable sales growth every year.

From the year 2016, Apple has observed high growth in its sales and that resulted into, Apple has prudently managed to be on top of the Forbes 100 Most Valuable Brands (2016) list having a total capital of $416.62 billion. In one year Apple is likely to wait for 38% revenue growth by the end of March 2017.

Annual Financial Report of Apple Inc. Fiscal Year October – September, all values are in USD

High brand recognition In Apple case study that to review the market broadly, Apple has invested $4.5 billion in 2013 for Research and Development as compared to $2.4 billion in 2011. Apple with the aim of targeting direct sales, it has located its branches in densely populated locations that can contribute to earn more revenues and to ensure more results that are terrific. For improving goodwill and brand recognition, it took over whole control of supply chain and provided a report of the code of conducts to the suppliers. The same practice is still maintained for which Apple has earned great trust from the customers who wait eagerly to get the latest version of Apple products.

Strong and effective marketing team: In Apple case study , CEB elucidated that to approach customers they furnished correct information to the customers about what they exactly looking for, instead of very complicated and multifaceted websites.This is exactly what Apple is doing since long while involving a simple process to market its products.

To have a better understanding of Apple case study , we can take the Mac vs. PC advertisement into consideration. There are two boys in this ad standing with a white backdrop, not discussing about its features in length, even not about price, no professional background voice over sort to give emotional pinch, not even telling about how to purchase MAC; just one focal point and that is MAC is better than PC in every sense.

Premium quality of customer experience In Apple case study, we will see how it pursues to make a magical solution to ensure the long-lasting relationship with the customers to increase its sale of products. In order to persuade undeniable or unbeatable trust of the consumers, Apple’s customer service follows the following steps:

• Reach to customers by giving a more personalized touch.
• Empathically identify and understand the customer’s need.
• Bring solutions to the consumers that are acceptable to them.
• Always first, hear the problems raised by the customers and then resolve it at your best capacity.
• Close the status of current visit of the customer by offering the return.

High price If Apple has one limitation then that has to be its high price. Many people pinpoint the brand for its prices however there are its fans that validate the state by labeling it as a ‘Premium’ gadget- maker. These fans justify by saying that this brand is for those who can afford to keep a pony. In other words, Apple is labeled as BMW, not as Ford. However, this has left a negative impact on its sales, as consumers have many options available other than Apple. These brands like Samsung, Microsoft, are much cheaper and offer most of the apple phone features and various. As per strategy analytics, Apple has faced loss in its customer base, as compared to 2012 from 93% iPhone user purchase has come down to 88% in 2013.Hence, every year its competitors are offering the customer by reducing prices or adding features similar to Apple.

Wrong prediction Steve Jobs founder of Apple anticipated that ‘No one' is going to use big phones. Clearly, his prediction was incorrect. Apple unsuccessfully predicted few brand’s futures like Phablets. Even after launching a tablet, Apple has not introduced big screen mobiles. Samsung has performed far better than Apple by launching its Samsung Galaxy Note in 2011 in place of Phablets. The craze and demand for big screen size smartphones are just increasing day-by-day.

Incompatibility of different OS Customers, who have been using any other operating system, find it very difficult to apt or comfortable to use iOS or OSX. The reason behind this is simple, it is not easy to switch to completely different oS after being comfortable with the one, like one switching to Mac from PC finds it practically difficult to use it for the first time. For instance, as in PC, an individual is in practice of using ‘Start’ menu, while in Apple the individual needs to use ‘Finder’ to find out all the apps, documents, and other files.

Market shares of Apple iPhone are declining According to a survey conducted to analyze the sales of smartphones in the year 2015, which was conducted by Kanter Worldpanel ComTech, the market share of Apple phones declined. As per the February findings of the survey, this decline in the sales continued for two months in the US, Japan, Germany, Great Britain, Italy, and Spain. Resulting in the loss of a significant number of the customer by the company. It was not even able to convincingly influence its customers to buy iPhones. Let us consider data comparing the declining market share of iPhones in different countries:

Over dependency on iPad and iPhone Income of Apple Inc. is prominently dependent upon iPad and iPhone sales. In the year 2013, 72.1% of its total income was from these two ranges of products. Eventually, the sales of both the products declined, which adversely affected the sustainability and feasibility of the brand.

A defect in new products

Apple confirmed about the manufacturing defect in iPhone 5sby giving the statement to New York Times. iPhone 5s users have faced multiple problems like poor battery life etc. Some problems were also observed in iPhone6 after its launch. However, the engineers of Apple resolved those problems immediately.

Rising demand for Apple products As per the recent studies, Apple products are gaining high demand, majorly for latest launch PowerBook and Power Mac products along with the new upgrade to Mac OS X. CEO of Apple Tim Cook said that the demand of new Apple Watch has been exceeding its availability or supply. Due to which many of pre-order deliveries pressed back to the month of May or later.Apple's loyal customers are eagerly waiting for new iMac line and iDVD products.

Rapid growth in the market of communication devices In one of the interviews, CEO Cook said that Apple products are not made for selling at low- cost or priced phones. It always aimed at selling high-end products. In the field of smartphones, Apple celebrates its growing demand in the market with each passing time even after having price difference from its competitors.

Worldwide share of Apple in SmartPhones

A wide undiscovered potential marketplace in commonwealth countries: Apple has not yet realized the prospect of growth in the electronics market. High level of possibility of earnings is possible in the middle-class strata of the commonwealth nations. Apple needs to take this fact into account that the UK is working on increasing proximity with the Commonwealth countries. Therefore, it is a great opportunity for Apple UK to gain the advantage by allocating itself in these member-countries’ markets.

Increasing cloud-based services It is predicted that forthcoming iCloud innovation will redefine the earnings of the company in future. In apple case study , it is suggested that Apple has a prospect of expanding its services or chance of adopting new strategies to engage new customers in these services to meet the high rising demands of services of iCloud.

Ever developing surroundings of electronic communication The world of electronic communication and its devices is consistently innovating in a complex structure. The company needs to maintain the pace; otherwise, its competitors will leave it behind in no time. As per apple case study , it is a potential and serious challenge in front of Apple and its market position in future. Communication market has robust competition and the company is compelled to introduce great designs and modifications in its products to meet the expectations of the customers.

Tax scandal and repute damage Involvement of Apple in tax sandal caused huge damage to its reputation. The news of its involvement in tax scandal went viral in no time. Apple kept a substantial amount of $44 billion of its earnings from reaching into the approach of the taxmen. The company tax perspectives are nil and minimal taxes are paid by it. To analyze the source of income from Apple’s foreign operations, the tax professionals had to make a guess.

Contravention of the intellectual property (IP) rights There was a flaw in company’s IP rights policy, due to which if there is any infringement of patent rights of Apple, then instead of being immediately notified about the theft, it gets to know about it after some time. As it always takes time to know about such activities, the result is it has to bear serious damages to its brands and services.

The growth of Android OS Data on sales of the year 2015 of Smartphones to consumers as per Operating System (Thousands of Units).

As shown in data, it is evident that the company has a serious threat of losing its customers to the Android operating system.

PESTLE Analysis In Apple case study, PESTLE analysis is done critically. PESTLE is the analysis of the external factors that play a crucial role in conducting an extensive research before starting up of a new project. The risk posed by the identified factors is assessed by the managers and application of the knowledge is ensured to make the constructive decisions for the company. PESTLE is composed of six significant factors, mentioned below:

• Technological
• Environmental

In contrast with SWOT analysis, it majorly focuses on the macro environmental external factors, which might affect the present or near future position and situation of the business.

PESTLE Analysis – Apple

Political Factors It is pertinent to know that Apple receives a major portion of its sales from outside the US. Sales contribution of Apple sales from outside the US is of more than $113.8, whereas, the sales income from the US is $68.8 billion. In the Apple case study, it is important to understand the amount of negative impact of any political disturbance or revolution on the company in its operating countries.

Suicide cases against the biggest Taiwan Supplier of Apple Several suicide cases were registered against its one the major supplier, Foxconn (a Taiwanese company). Due to this unexpected situation, Apple had to undergo immense political pressure. Several cases of suicide were registered against Foxconn in May 2010, claiming is responsible for the suicide of its employees. It was held responsible to compel its employees for long working hours, due to which two of its employees were forced to commit suicide. In another reported incident of one of the other Apple’s suppliers, 16 of the employees got injured.

Political disturbance in China China being a low labor cost country, manufacturing of Apple is enormously dependent on China. However, the troubled political scenario of China affects and disrupts its manufacturing every now and then. Due to which its manufacturing costs keeps on increasing. In addition, to promote the manufacturing within the US, the Chinese imports have imposed restrictions. In the Apple case study , the fact of impact and effect on apple, which is a US-based company, of the political bonds of the US government with the Chinese government is also taken in the account. One of the major concerns of Apple is that if it tries to get an alternative to production in China, it will increase the cost of production, resulting in an increase in prices of Apple products. In addition to it, Apple may face a major loss of market share in China, due to growing nationalism amongst the Chinese. In such condition, Apple may become a target to show protest against anti-Americanism in China.

The threat of terrorist attack Even though the UK government is a stable government, the risk of a terrorist attack is always there. It can leave a negative patch on the company. Apple is encountering the current political situation of growing tensions amongst the coalition of ruling and sagging government popularity.

Tim Cook Ban in Russia The CEO of Apple Tim Cook made a public acceptance of his homosexuality in the month October. This led to a suggestion on the ban on his visit to Russia by a lawmaker in Russia, who is popular for having a strict and harsh approach to gay propaganda.

Economic Factors Due to a situation like recession and other economic issues or crisis, the income of the company can adversely get affected. While in comparison with other businesses, Apple is likely to get affected badly, because of its premium class products and huge pricing.

Impact of global recession Apple witnessed a very slow economic growth in the year 2013 and 2014, this was the time of global recession in 2013. Apple was amongst those companies, who were the most affected ones during the global recession.

The decrease in sales because of the global recession

Economic challenges and difficulties of Europe In Apple case study , it is discussed that the change in the economy of Europe has affected Apple directly. It has led to a downfall in its revenues to 16%, during the third quarter of 2012, as compared to its revenue in the same period of the last year.

The increased inflation rate in the US The company reserved a huge amount of cash, which affected it during the increased inflation rates in the US. However, the company was sued by a cautious fund billionaire, David Einhorn, asking it to pay the dividends of $137 billion. It helped the company to use the abundant cash in paying the dividend.

Increase in labor cost in China It was a world known fact that for manufacturing of Apple products, China is the hub. However, now the government of China decided the minimum wages within the country, this led to increases the labor cost in China. Although, it depends upon the area to area and there are various other deciding factors like a house, food, overtime pay etc. While considering the official figures by Trading Economies in this Apple case study , increase in the wages was seen in some areas like Northern Hebei Province areas witnessed 22% rise in wages in past year, whereas Southern Guangdong city had 5% to 17 %wage rises. It is evident that rise in wages is affecting and causing an increase in the prices of the products of Apple. Furthermore, even if the company looks out for any other option or alternative to sort this, it will cost a fortune to the company.

Growing worth and value of the US dollar There is a rise in exchange rates, because of increasing value of the US dollar. The price of the products of Apple gets affected due to this increase in the exchange rates. Apple’s potential and key markets are countries like Europe and China, but the rising difference between the US dollar and other currencies of these countries like Euro and Yuan results in increasing the cost and making Apple products even more expensive. In normal circumstance, the revenue of Apple would have been higher by 800 points. This implies, if there was no such increase in the value of the dollar then Apple would have made revenue of $52.8 billion instead of recorded revenue of $49.6 in 2015.

Social Factors Due to globalization, various factors have contributed and marked a massive impact on Apple like the rapid increase in the popularity and usage of the virtual world, present lifestyle etc.

Defines the high –status lifestyle of an individual Everyone knows that Apple is the leading and premium brand in the world. It defines its own brand, this is that one name with which people across the world wish to move with. This is not about possession of an iPhone and iMac. It is desirable and wishes by the customers because of its unique selling proportion, innovative design, simple and straight marketing strategies of its products and high pricing of its products. Eventually, it has become a status symbol in the society across the world, due to its exceptionally high prices, making it affordable to the high class of the society.

Potential market share in the third world country The Apple case study suggests, in coming decades Apple has a huge scope of finding its potential market share in the third world countries like Africa. The people of these countries are unaware of the products of Apple. The company must formulate strategies to explore and penetrate its products in these unexplored, unapproached markets to understand new possibilities of generating revenues.

Moral factors of determining manufacturing process in China Some people may find the company that the company lacks social- consciousness and responsibility, as it carries out its manufacturing process in China, while it can be a job-creator for the home country. Still, it is attracted to China to get low-cost labor for its manufacturing. This factor may limit its appeal to some people.

Brand acquisition in lots of countries The brand made acquisitions like Embark Prime Sense and Topsy and alliances with Sony, Motorola, Philips, and AT&T, to attain customer satisfaction and fulfill the needs of the customers in the best possible manner. The company takes into account the social background of various brands.

Technological factors When it is about earning revenues, Information technology’s stakes are higher than any other industries. Apple is one of those rising industries who has grown with the time. It is proven that any company who wishes to earn well must innovate time to time.

The advantage of 760 China Mobile Subscriber In the year 2013, Apple revealed that it has made a deal with China Mobile to attract customers towards its iPhone, which was previously under the influence of other low-budgeted android smartphones. Through this deal, Apple could get a massive entry to the Chinese market and China Mobile’s 760 subscribers at very large level. As per the contract, Apple products iPhone 5, iPhone 5S are accessible in China at Apple retail stores and China Mobile.

Assessing the consumer’s minds As per the report of 2015, Apple spent $8.7 billion in its Research & Development that cost it for around 3% of the total company’s net sales. The purpose of these researchers is to understand the approach of customers by having the short product life cycle of the industry.

Preferences to screen size Its spectacular design is Apple’s unique selling point. Apple is committed to better designs and concepts. The edgy and attractive designs of Apple products are unbeatable to match for its competitors. However, with the time people are preferring the bigger screen sizes.

However, Apple’s last product iPhone 6 has merely 4.7” screen size, and iPhone 6 Plus has 5.5” display.

Competitors offering the same Samsung and Google are the main and strongest competitor of Apple who is catering products and services that were once apple's prime features. Google did not take a year to make payment app just like, Apple has offered. Almost within no time, Apple Pay has its competition from Google Pay. Google has shown that it has got the capability to develop the exact product, app or any service that can be a threat to the leading company Apple.

Limited market for new products Apple has a very limited customer base as it launches limited products for consumers. Along with these products like Apply TV has got really selected customers.

The growing menace of cyber crimes In this virtual era, Apple is not being up to the mark when it comes to the cybercrime as it is quite vulnerable and less protected for customers. When it is about safety and security Apple wins in it and takes away the competitive advantage over others.

Legal factors As legal aspects are concerned Apple becomes quite vulnerable as it deals worldwide that involves various legal factors and legal issues.

Domestic legal stress America, the homeland of Apple is causing its legal problems. In the last year, the company had to restore imports of some of its parts that are used in iPhone. The US government banned these parts.

Offering financial services by Apple Pay There are financial services, which are offered by Apple in the form of Apple Pay. Lately, it entered the highly regulated financial sector, which can take the company to increased regulation level. For rendering such financial services, it could lead the company to various litigations.

Breach of IP laws: Apple has a variety of intellectual property like Software and music that are produced by its brands. The major part of the revenues of Apple comes from the software produced by it. This makes it more susceptible to piracy as well as litigation.

Entering automobile industry Apple is all set to enter into the automobile industry. It is pushing hard its team to start with the production of electric vehicles by 2020. In the past year, the company has already invested $6.04 billion in research and development. The CEO Tim Cook is under huge pressure of shareholders to return the invested money. As per legal case filed against his company states that, the company is aiming to start a new campaign and is hiring the best of minds to develop the battery, though the company is starting from the scratch and hence in general phenomena to launch such a product at this stage a company requires time period of at least 10 years, Apple is rushing to launch it by 2020.

Environmental factors The company’s revenue can be affected badly because of varied environmental factors such as disposal.

Disposal of used or non-working electronic devices Apple is facing huge issues while disposing of all the electronic junk that is not required anymore or not in the condition of usage. Due to lithium contained batteries in its electronic items the company is going through massive hurdles while discarding them. It may cost a fortune to the company. As it involves environmental factors, Apple has to incur all the cost.

Pollution issue in China The growing pollution and environmental issues along with its various side effects, that manufacturing process, and facilities are the reason of concern for Apple. To ensure a reduction in environmental issues in the process and facilities, the company needs to spend more money on future processes. This will lead to increases in expenses at a great level.

Attempt to cut greenhouse effect increases cost of production in China In today's environment we are surrounded by harmful greenhouse gases and for reducing greenhouse gases and use of fossil fuel, China has come forward to take this commendable initiative. This initiative possibly could increase the rates of electricity in China. Resulting manufacturing costs might also increase for Apple.

Global warming As global warming is increasing rapidly, Apple may face the issues regarding transoceanic shipping. It is pertinent to mention here that it is the crucial aspect of the supply chain of Apple.

Increase in costs of electricity Dependability of Apple upon data centers and internet infrastructure makes it more susceptible to electricity rates. The company needs to carry out more expenses in the manufacturing processes.

Based on PESTLE analysis, in the next five years despite the challenges, Apple can prosper in the electronic device industry. The reason behind its assured success is it has a unique ability of always adapting to the challenging environment. Its distinct features like exclusive and unique designwin it the competitive advantage, which can be seen in its sales growth and rising revenues. Hence, it is appropriate to state that Apple is and will be in the years to come, be leader in the electronics industry.

References Apple Info.

[1]www.forbes.com/sites/susanadams/2015/12/08/is-apple-the-worlds-most-innovative-company/#1cadfd617557

[2]www.forbes.com/powerful-brands/list/3/#tab:rank

[3]www.marketwatch.com/investing/stock/aapl/financials

[4]www.forbes.com/sites/jaysondemers/2014/07/08/heres-the-simple-secret-to-apples-marketing-success/#19108e0d63ab

[5]www.forbes.com/sites/carminegallo/2015/04/10/how-the-apple-store-creates-irresistible-customer-experiences/#135b249f2a0c

[6]www.forbes.com/sites/chuckjones/2015/04/06/apples-worldwide-iphone-market-share-declining-except-in-china/#368e9d923165

[7]tech.firstpost.com/news-analysis/apple-admits-some-iphone-5s-devices-have-manufacturing-defects-107447.html

[8]www.bloomberg.com/bw/articles/2014-09-04/for-iphone-6-defects-apple-has-failure-analysis-team-ready

[9]techcrunch.com/2015/08/20/peak-android/

[10]www.businessinsider.in/Apple-Just-Reported-A-Record-Quarter-But-Analysts-Only-Wanted-To-Talk-About-The-US-Dollar-Heres-Why/articleshow/46044551.cms

[11]www.fool.com/investing/general/2015/07/24/heres-how-much-the-strengthening-us-dollar-hurt-ap.aspx

[12]www.phonearena.com/news/Heres-how-screen-size-preferences-have-changed-through-the-years-infographic_id71924

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Apple Organizational Culture and Structure: A Case Study

• To find inspiration for your paper and overcome writer’s block
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Need to analyze organizational culture of Apple corporation? Use this case study to get inspired! It focuses on Apple company culture, leadership, and the system of decision making.

Introduction

• Organizational Structure
• Organizational Culture
• Decision Making

Apple Inc is an American corporation that produces electronics, software, and many other online solutions. Steve Jobs and Steve Wozniak founded this company in 1976 as a small company specializing in software products. This company has experienced massive growth over the years to become one of the leading electronic companies in the global market. Its dedicated team of managers, strategists, and employees saw its brand ranked the best in the world in the year 2010 and 2011. The sales volume at this firm has been very impressive, especially because of its unique capacity to bring new innovative products to the market. The management of this firm has been keen on tapping special skills of its employees to the advantage of the entire firm. In this study, the researcher seeks to analyze the structure, culture, leadership, human nature, decision-making, and employees’ goals and objectives.

Apple Organizational Structure

According to Lüsted (2012), organizational structure defines the manner in which an organization is governed. At Apple Inc, the organizational structure is designed into three levels of top management unit. The figure below helps in defining the organizational structure at Apple Inc.

At the top management level of this firm is the board of directors who are responsible for all the strategic decision making processes. The chairperson and all other board members except three officers hold non-executive positions in this board. This means that other than their role as the board members, they do not hold any other executive position in this firm. However, they play an important role in policy formulation and approving major decisions that may have serious impacts on the firm. The other three board members who hold executive positions are the chief executive officer, chief operating officer, and the chief financial officers. These board members have specific executive roles to play besides sitting in the board as directors. The chief executive officer is the executive head of the firm that heads the firm in its quest to achieve strategic objectives.

Below these top executives are the departmental heads. They include the head of marketing department, head of the logistics unit, head of production department, head of the insurance unit, and the chief accountant. These departmental heads work very closely with the three top executives to ensure that the policies of the organization are implemented as per the desires of the shareholders of the company. Under the departmental heads are operational managers who are responsible for specific tasks within various departments in the organization. As mentioned before, Apple Inc is a multinational corporation that has successfully penetrated the global market. In order to ensure that its operations at the global market run smoothly, the top management has created regional heads under the office of the chief operating officer. These regional heads are located in various continental headquarters of this firm in Europe, Asia-Pacific, South America, and Africa. They work under the directives of the head of marketing department, but are answerable to the chief operating officer. These regional heads are responsible for the appointment and supervision of all the activities of representatives of Apple Inc in various countries under their jurisdiction. The junior most officers at this firm are the employees in various departments who do not hold any managerial positions at the firm.

Apple’s Organizational Culture

Organizational culture is one of the most important aspects of organization that the management of Apple Inc has been keen on defining. According to Lüsted (2012), employees form a very important aspect of a given firm. Sometimes it may be challenging to find a way of making them reason from the same perspective, especially for a firm that is operating in a global market such as Apple Inc. Organizational culture helps in defining the behavioral pattern of all the stakeholders within the firm. Every employee is able to determine what he or she should do and what should be avoided when handling various tasks within an organization. This way, the management unit is able to predict the possible cause of action that a given stakeholder will take when addressing various duties.

At Apple Inc, organizational culture is deeply rooted in the firm’s values and beliefs. One of the most important values of this customer is to maintain integrity in all its operations. This value has been instilled in all the stakeholders that it has become a cultural practice in this firm. Maintaining the integrity at this firm does not only involve avoiding bribery but also any other negative practices that are meant to give the firm undue advantage in the market over others.

In its value statement, Apple commits to deliver high quality products that meet the needs of customers in a unique manner. This value statement has defined the behavioral pattern of the employees not only at the production centers, but also in the entire production chain. According to Bach (2007), Steve Jobs created a belief among the employees of this firm that they can be perfectionists if they gave it a serious thought. This belief has had serious impacts on the behavioral pattern of the employees, especially those in the production unit. They are always keen on using their skills to develop unique products that they know will meet the demands of the diversified clients. It is out of this concerted effort of the employees that has made Apple Inc be classified as the most innovative firm in the world for three consecutive years (Lüsted, 2012). Cultural tolerance has been an important practice at this firm. Apple Inc employs people from varied cultural backgrounds. In most of the cases, these employees find themselves working within the same setting, making it necessary for them to integrate in order to achieve a common goal. The management has been keen on championing programs that are meant to enhance cultural tolerance and integration at the workplace. These values have worked closely to create a unique culture at this firm where employees work without any close supervision, and diversity is looked at as strength, not a source of rift within the firm. These forces have played a major role in enhancing the position of this firm as one of the top electronic companies in the global market.

Leadership in Apple

According to Lüsted (2012), leadership is one of the most important factors that define the success of a firm in any given organization. Apple achieved its success because of the leadership skills exhibited by its top management unit, specifically Steve Jobs. According to Gillam (2012), it is almost impossible to talk about Apple Inc without talking about the leadership qualities of Steve Jobs. It is important to analyze history of this firm briefly in order to understand the role of leadership. When this firm was established in 1976, Steve Jobs and his co-founders embarked on a serious program to expand the production capacity of Apple Inc. Although the three agreed to share the top management role, it was apparent that Steve Jobs was in control of the firm at this early stage. His management skills enabled the firm to expand rapidly. After a few years, it grew into a large company that had to be run by a board of directors. In 1985, a new chief executive was brought in to help in taking this firm to the next level. Mr. John Sculley was hired as the chief executive because of his wealth of knowledge in this industry.

However, his management strategies created confrontations between the new chief executive and Steve Jobs. At this time, Jobs was the head of production unit. The differences between these two executives became irreconcilable, and when the board of directors came in to address the issue, Jobs was demoted from his post as the head of operations of this firm. These developments forced Jobs to resign from this firm, opting to run his own firm. The era that followed the departure of Steve Jobs was very disastrous for this firm. The leadership under Mr. John Sculley failed to provide a lasting solution to some of the problems that the firm was facing in its expansion program. Mr. Sculley failed to come up with an effective strategy of integrating all the stakeholders and addressing their interests in the best manner possible. He did not stay at the head of this firm for long before he was replaced. Apple Inc realized the real success in the market after the return of Steve Jobs as the chief executive officer in 2007.

As Zylla-Woellner (2013) notes, Jobs was a visionary leader. Under his tenure at this firm, Apple had a flexible leadership structure that was keen to be the driver of change. The management encouraged the employees to be innovative in all their areas of work in order to improve their efficiency and productivity. Tim Cook, who replaced Steve Jobs at the helm of this firm, inherited this leadership structure.

Apple’s System of Motivation

Understanding human nature and motivation is one of the best ways through which a firm can achieve success in the market. According to Lüsted (2012), Apple Inc is one of the best employers in the United States because of its employee management strategies. In order to achieve success through employees, a firm needs a system that would allow it to maintain their levels of motivation in order to boost their performance. Having a team of motivated employees eliminate the need for constant supervision because workers will be self-driven towards achieving an overall success for their employer. Apple uses two main strategies to motivate its employees. The first strategy is the material benefits that employees earn based on their performance on a yearly basis. According to Zylla-Woellner (2013), Apple is running programs where every year, employees with exceptional performance are selected from various departments are then given financial rewards for their effort. The program has been a motivating factor to the employees because they know that their effort will always be noticed.

The firm also uses other non-monetary strategies to maintain the employees’ motivation. Before his retirement as the chief executive officer of Apple Inc, Jobs introduced a system where employees are promoted based on their performance. Other than academic qualifications, an individual’s performance in the market played a major role in his or her career development at the firm. The firm has also been using an integrated communication system to enhance free flow of information from the employees to the management and back. This has created an environment where issues affecting individual employees are addressed as soon as they occur. It has played a major role in boosting the morale of the employees.

Decision Making at Apple Inc.

Decision making process remains one of the most vital management processes in any organization. Like many other organizations, Apple Inc has been using new technologies such as Decision Support System (DSS) to guide the management when making important decisions (Lashinsky, 2012). However, Tim Cook introduced a new system of making decisions that is based on the views of all the stakeholders, especially the employees of the organization. In this system, every sub-department is expected to make decisions that will enhance their operational activities. The decision each sub-department comes up with must be based on the views of individual employees within that unit. The head of sub-department will then draw a report explaining some of the best alternatives to solving a given problem. The report from all the sub-department will be submitted to the head of that department will sit with his panel in order to evaluate the options that each sub-department has given. The head of the department will then compile a report, explaining why a given approach of solving problem was chosen among the alternatives provided. This report will then be presented to the top management unit that will then be expected to make decisions based on the facts presented before them.

Strategy formulation at this firm is always based on the systematic approach that has been defined above when making decisions. The management has always emphasized on the importance of using the information from the junior employees when formulating its strategies. These junior employees are always on the ground, and therefore, they understand the reality in the field. This makes it necessary to involve them in the strategy formulation process in order to come up with practical approaches of addressing different tasks at this firm.

Employees & Apple Corporate Culture

It is vital for the management to understand the employees’ goals and objectives in order to find a way of aligning them with the objectives of the organization. The management of Apple Inc has not performed well in this area of management. Although the firm has effective systems that are meant to enhance employee motivation in the firm, there is yet to be a strategy used by this firm to define the employees’ goals and objectives. This means that Apple is yet to find the best strategy of aligning these personal goals to the overall goals of the firm

Apple Inc is one of the most successful firms in the current global society. The success of this firm can be attributed to its effective management structure and a team of dedicated employees. Steve Jobs played a major role in enabling the firm to attain its current glorious position in the electronic market.

Bach, B. (2007). Implications of enabling technologies for Apple Inc: Cybermarketing & enabling technologies . München: GRIN Verlag GmbH.

Gillam, S. (2012). Steve Jobs: Apple icon . Minneapolic, MN: ABDO Pub. Co.

Lashinsky, A. (2012). Inside Apple: How America’s Most Admired–and Secretive–Company Really Works . New York: Grand Central Publishing.

Lüsted, M. A. (2012). Apple: The company and its visionary founder, Steve Jobs . Minneapolis, MN: ABDO Pub.

O’Grady, J. D. (2009). Apple Inc . Westport, Conn: Greenwood Press.

Zylla-Woellner, J. (2013). Business Analysis of Apple Inc . New Jersey: John Wiley.

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IvyPanda. (2020, June 22). Apple Organizational Culture and Structure: A Case Study. https://ivypanda.com/essays/apple-corporations-organizational-culture/

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How to write the conclusion of your case study

You worked on an amazing UX project . You documented every detail and deliverable and when the time came, you began to write a UX case study about it. In the case study, you highlighted how you worked through a Design Thinking process to get to the end result; so, can you stop there and now move on to the next thing? Well, no! There’s just one more bit left to finish up and make the perfect case study. So, get ready; we will now explore how you can write the perfect conclusion to wrap it all up and leave a lasting great impression.

Every start has an end – we’re not just repeating the famous quote here, because for case studies, a proper end is your last and final chance to leave a lasting great (at the very least, good) impression with whoever is reading your work (typically, recruiters!). Many junior UX designers often forget about the conclusion part of the case study, but this is a costly mistake to make. A well-written case study must end with an appropriate final section, in which you should summarize the key takeaways that you want others to remember about you and your work. Let’s see why.

Last impressions are just as important as first ones

We’ll go to some length here to convince you about the importance of last impressions, especially as we can understand the reason behind not wanting to pay very much attention to the end of your case study, after all the hard work you put into writing the process section. You are tired, and anyone who’s read your work should already have a good idea about your skills, anyway. Surely—you could be forgiven for thinking, at least—all that awesome material you put in the start and middle sections must have built up the momentum to take your work into orbit and make the recruiter’s last impression of you a lasting—and very good—one, and all you need to do now is take your leave. However, psychologist Saul McLeod (2008) explains how early work by experimental psychology pioneers Atkinson & Shriffin (1968) demonstrated that when humans are presented with information, they tend to remember the first and last elements and are more likely to forget the middle ones.

This is known as the “ serial position effect ” (more technically, the tendency to remember the first elements is known as the “ primacy effect ”, while the tendency to remember the last elements is known as the “ recency effect ”). Further work in human experiences discovered that the last few things we see or hear at the end of an experience can generate the most powerful memories that come back to us when we come across a situation or when we think about it. For example, let’s say you stayed in a hotel room that left a bit to be desired. Maybe the room was a little cramped, or the towels were not so soft. But if the receptionist, as you leave, shakes your hand warmly, smiles and thanks you sincerely for your custom, and goes out of his way to help you with your luggage, or to get you a taxi, you will remember that person’s kind demeanor more than you will remember the fact that the room facilities could be improved.

A good ending to your case study can help people forget some of the not-so-good points about your case study middle. For example, if you missed out a few crucial details but can demonstrate some truly interesting takeaways, they can always just ask you about these in an interview. Inversely, a bad ending leaves the recruiter with some doubt that will linger. Did this person learn nothing interesting from all this work? Did their work have no impact at all? Did they even write the case study themselves? A bad last impression can certainly undo much of the hard work you’ve put into writing the complicated middle part of your case study.

What to put in your case study conclusions

A case study ending is your opportunity to bring some closure to the story that you are writing. So, you can use it to mention the status of the project (e.g., is it ongoing or has it ended?) and then to demonstrate the impact that your work has had. By presenting some quantifiable results (e.g., data from end evaluations, analytics, key performance indicators ), you can demonstrate this impact. You can also discuss what you learned from this project, making you wiser than the next applicant – for example, something about a special category of users that the company might be interested in developing products for, or something that is cutting-edge and that advances the frontiers of science or practice.

As you can see, there are a few good ways in which you can end your case study. Next, we will outline four options that can be part of your ending: lessons learned, the impact of the project, reflections, and acknowledgements.

Lessons learned

A recruiter wants to see how you improve yourself by learning from the projects you work on. You can discuss interesting insights that you learned from user research or the evaluation of your designs – for example, surprising behaviors that you found out about the technology use in a group of users who are not typically considered to be big proponents of technology (e.g., older adults), or, perhaps, the reasons a particular design pattern didn’t work as well as expected under the context of your project.

Another thing you can discuss is your opinion on what the most difficult challenge of the project was, and comment on how you managed to overcome it. You can also discuss here things that you found out about yourself as a professional – for example, that you enjoyed taking on a UX role that you didn’t have previous experience with, or that you were able to overcome some personal limitations or build on your existing skills in a new way.

Impact of the project

Showing impact is always good. How did you measure the impact of your work? By using analytics, evaluation results, and even testimonials from your customers or users, or even your development or marketing team, you can demonstrate that your methodical approach to work brought about some positive change. Use before-after comparison data to demonstrate the extent of your impact. Verbatim positive quotes from your users or other project stakeholders are worth their weight (or rather, sentence length) in gold. Don’t go overboard, but mix and match the best evidence for the quality of your work to keep the end section brief and to the point.

Copyright holder: Andreas Komninos, Interaction Design Foundation. Copyright terms and license: CC BY-SA 3.0

User reviews from app stores are a great source of obtaining testimonials to include in your case studies. Overall app ratings and download volumes are also great bits of information to show impact.

An excerpt from a case study ending section. Here, text and accompanying charts are used to demonstrate the impact of the work done by the UX professional.

Reflections on your experiences

You can include some information that shows you have a clear understanding of how further work can build on the success of what you’ve already done. This demonstrates forward thinking and exploratory desire. Something else you can reflect on is your choices during the project. In every project, there might be things you could do differently or improve upon. But be aware that the natural question that follows such statements is this: “Well, so why haven’t you done it?”

Don’t shoot yourself in the foot by listing all the things you wish you could have done, but focus on what you’ve actually done and lay out future directions. For example, if you’ve done the user research in an ongoing project, don’t say, “ After all this user research, it would have been great to progress to a prototype, but it’s not yet done ”; instead, say, “ This user research is now enabling developers to quickly progress to the prototyping stage. ”

Acknowledgments

The end of the case study section is where you should put in your acknowledgments to any other members of your team, if this wasn’t a personal project. Your goal by doing so is to highlight your team spirit and humility in recognizing that great projects are most typically the result of collaboration . Be careful here, because it’s easy to make the waters muddy by not being explicit about what YOU did. So, for example, don’t write something like “ I couldn’t have done it without John X. and Jane Y. ”, but instead say this: “ My user research and prototype design fed into the development work carried out by John X. User testing was carried out by Jane Y., whose findings informed further re-design that I did on the prototypes . ”

What is a good length for a UX case study ending?

UX case studies must be kept short, and, when considering the length of your beginning, process and conclusion sections, it’s the beginning and the conclusion sections that should be the shortest of all. In some case studies, you can keep the ending to two or three short phrases. Other, longer case studies about more complex projects may require a slightly longer section.

Remember, though, that the end section is your chance for a last, short but impactful impression. If the hotel receptionist from our early example started to say goodbye and then went on and on to ask you about your experience, sharing with you the comments of other clients, or started talking to you about where you are going next, and why, and maybe if he had been there himself, started to tell you all about where to go and what to see, well… you get the point. Keep it short, sincere and focused. And certainly, don’t try to make the project sound more important than it was. Recruiters are not stupid – they’ve been there and done that, so they know.

Putting it all together

In the example below, we will show how you can address the points above using text. We are going to focus on the three main questions here, so you can see an example of this in action, for a longer case study.

An example ending section for a longer case study, addressing all aspects: Lessons, impact, reflection and acknowledgments.

Here is how we might structure the text for a shorter version of the same case study, focusing on the bare essentials:

An example ending section for a shorter case study, addressing the most critical aspects: Lessons, impact and reflection. Acknowledgments are being sacrificed for the sake of brevity here, but perhaps that’s OK – you might mention it in the middle part of the case study.

The Take Away

The end part of your case study needs as much care and attention as the rest of it does. You shouldn’t neglect it just because it’s the last thing in the case study. It’s not hard work if you know the basics, and here, we’ve given you the pointers you need to ensure that you don’t miss out anything important. The end part of the case study should leave your recruiters with a good (hopefully, very good) last impression of you and your work, so give it the thorough consideration it needs, to ensure it doesn’t undo all the hard work you’ve put into the case study.

References & Where to Learn More

Copyright holder: Andrew Hurley, Flickr. Copyright terms and license: CC BY-SA 2.0

Atkinson, R. C., & Shiffrin, R. M. (1968). Chapter: Human memory : A proposed system and its control processes. In Spence, K. W., & Spence, J. T. The psychology of learning and motivation (Volume 2). New York: Academic Press. pp. 89–195.

McLeod, S. (2008). Serial Position Effect

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• Published: 04 September 2024

Distribution patterns and potential suitable habitat prediction of Ceracris kiangsu (Orthoptera: Arcypteridae) under climate change- a case study of China and Southeast Asia

• Churui Li 1   na1 ,
• Guangfei Luo 1   na1 ,
• Cairong Yue 1 ,
• Lanzhong Zhang 1 ,
• Yunfang Duan 1 ,
• Song Yang 2 ,
• Zemin Wang 2 &
• Peng Chen 3  

Scientific Reports volume  14 , Article number:  20580 ( 2024 ) Cite this article

Metrics details

Ceracris kiangsu (Orthoptera: Arcypteridae), is greatly affected by climatic factors and exhibits strong adaptability, posing a serious threat to the ecological environment. Therefore, predicting its potential suitable habitat distribution provides a proactive theoretical basis for pest control. This study using the Biomod2 package of R simulated and predicted the current and future potential distribution, area changes, changes in the center points of suitable habitats, and niche shifts of C. kiangsu under two different greenhouse gas emission scenarios, SSP1-26 and SSP5-85. The results show that: (1) Currently, the high suitability areas for C. kiangsu are mainly distributed in Yunnan, Jiangxi, Hunan provinces in southern China and phongsaly province in northern Laos. In the future, the center of the suitable habitat distribution pattern of C. kiangsu will remain unchanged, primarily expanding outward from medium and high suitability areas. Additionally, significant suitable habitats for C. kiangsu were discovered in Southeast Asian countries without previous pest records. (2) Compared to the present, the overall suitable habitat area for C. kiangsu is expected to expand, particularly under the SSP5-85 climate change scenario. (3) In the SSP1-26 and SSP5-85 climate scenarios, the geometric center of the suitable habitat generally shows a trend of gradually shifting northeast. (4) Under different climate scenarios, the suitable habitat of C. kiangsu has highly overlapping, indicating that the suitable habitat of C. kiangsu in the invaded areas is broader than in its native regions. In conclusion, the research findings represent a breakthrough in identifying the potential distribution areas of C. kiangsu , which is of great practical significance for the monitoring and control of C. kiangsu pest infestation in China and Southeast Asian countries.

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Introduction.

Global climate change represents one of the foremost challenges facing modern society 1 . As ectothermic organisms, insects rely entirely on external temperatures for their growth, development, and various physiological activities 2 . A Warming climate accelerates the developmental rate of insects throughout all life stages in all periods. It has been observed that the developmental period of each life stage of Acanthoscelides obtectus (Coleoptera: Bruchidae) shortens with increasing temperatures, and a positive correlation between developmental rate and temperature has been established 3 . A study investigating the impact of climatic conditions in China on the flight behaviour of S. gregaria (Orthoptera: Acrididae) found that extreme weather events, such as tropical cyclones, have created favorable conditions for the migration of S. gregaria towards the southern Tibetan border of China, thereby posing significant risks to agricultural and ecological systems 4 . Luo et al. 5 sought to examine changes in the suitable habitats of Calliptamus italicus (Orthoptera: Oedipodidae) and Gomphocerus sibiricus (Orthoptera: Acrididae) under the influence of global climate change in Xinjiang, China 5 . Climate and geographical distribution data were combined with the CLIMEX model 2 to verify that rising temperatures have expanded the suitable habitats of these two locust species, facilitating their invasion and settlement in new territories, with their distributions extending to higher latitudes and altitudes 5 . In summary, insects exhibit high sensitivity to changes in ambient temperature of their environments 2 . Consequently, elucidating the causes and mechanisms through which climate change drives the gradual expansion or contraction of suitable habitats for insects is a crucial objective in the field of ecology 2 .

Ceracris kiangsu (Orthoptera: Arcypteridae) is a polyphagous pest commonly referred to as the bamboo locust 6 . C. kiangsu has a varied diet, consumes substantial quantities of plant material, and inflicts damage over an extended period. Infestation of this pest primarily occur from late May to September each year, with the egg-laying period extending from late August to early October. The eggs overwinter in the soil 7 . C. kiangsu primarily damages moso bamboo (Gramineae: Phyllostachys) and other Gramineae plants 8 . It predominantly feeds on the leaves of the aforementioned plants, creating variously shaped notches. In severe infestations, it can completely consume the leaves, resulting in irreversible damage and causing the plants to appear fire-yellow from a distance (Fig.  1 ) 9 .

( a ) Geographic distribution records of C. kiangsu ; ( b , c ) scene of locust infestation: Yot Ou County, Phongsaly Province, Laos.

Historical records indicate that since 1368 A.D., southern China has faced infestations of C. kiangsu , resulting in significant economic losses 10 . Surveys reveal that since 2015, provinces such as Phongsaly and Luang Prabang in Laos have been inundated by C. kiangsu , which has severely impacted the growth of bamboo, Musa basjoo and other Gramineae plants 11 , 12 . In Phongsaly Province, the infestation primarily concentrated in Yot Ou, Boun Neua, and Phongsaly counties, affecting an area exceeding 40.4685 km 2 . The pest density was immeasurable, and the impact was severe. In 2018, C. kiangsu began migrating on a small scale to Jiangcheng County in Yunnan Province. By 2020, a large-scale invasion into the Chinese border commenced 13 , 14 . From 2020 to the present, Jiangcheng County in China has observed C. kiangsu migrating from the China-Laos border, resulting in varying degrees of locust infestations in areas such as Menglie Town, Niuluo River Nature Reserve, and Huangjiang Ridge. The cumulative affected area totals 80.319 km 2 , with direct economic amounting to 19.4 million yuan. The damage initially manifested as localized outbreaks and progressively spread to adjacent areas 12 .

Species Distribution Models (SDM) employ statistical or machine learning algorithms to predict the spatial probability of species presence or habitat suitability, based on occurrence records and environmental variables 15 , 16 , 17 , 18 , 19 . Previous studies have predicted and evaluated the distribution of C. kiangsu using only a single model, the Maximum Entropy model (MaxEnt). These studies primarily focused on China and overlooked the impacts of C. kiangsu in neighboring countries on the ecological environments of both local and Chinese borders 11 , 14 . The "Biomod2" package is an integrated platform in R for species distribution modeling 20 . The platform utilizes multiple modeling techniques to create ensemble models, which effectively reduce the biases inherent in individual models 20 . Biomod2 predictions are generally more accurate than those produced by MaxEnt 21 . Therefore, in this study, we expanded the study area and employed Biomod2 21 to predict the current and potential future geographic distribution, areas of overlap under climate change, and the ecological niche dynamics of C. kiangsu in China and Southeast Asia. This approach offers a theoretical foundation for enhancing our understanding and monitoring of the biological invasion of C. kiangsu , and supports early warning and integrated control measures. It is crucial for disaster prevention and risk assessment.

Materials and methods

Data source and processing, data source and processing of distribution points of c. kiangsu.

The distribution data of C. kiangsu were collected from multiple surveys including field surveys conducted in Jiangcheng County, China, and Yot Ou County, Laos; the Global Biodiversity Information Facility (GBIF, https://doi.org/10.15468/39omei ); and scholarly literature 17 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 . Using ENMtools, we eliminated duplicate samples as per Wang et al. 31 , resulting in 284 unique distribution points (Fig.  1 ) and thereby minimizing clustering effect errors during the modeling process.

Data acquisition and screening of environmental factors

Future climate scenarios encompass four Representative Concentration pathways (RCPs): SSP1-26, SSP2-45, SSP3-70, and SSP5-85. This study predominantly utilized SSP1-26 and SSP5-85, which correspond to low and high greenhouse gas emission scenarios, respectively. Regarding future climate scenarios, most studies have relied on the Coupled Model Intercomparison Project Phase 5 (CMIP5); however, the latest CMIP6 version demonstrates significantly higher climate sensitivity 32 . The CMIP6 model simulations align more closer with observational data, reducing uncertainty and permitting a more comprehensive exploration of future climatic outcomes. Different scenarios imply varied impacts of socio-economic and technological developments on radiative forcing 33 . SSP1-26 and SSP5-85 are updated scenarios corresponding to RCP2.6 and RCP8.5, which represent radiative forcing stabilization at 2.6 W/m-2 and 8.5 W/m-2 by the year 2100, respectively 32 , 33 . These scenarios are frequently employed to assess species distribution under projected future conditions.

Climate environmental factors for the present, 2050s, and 2090s were sourced from the WorldClim Version 2.0 database ( http://www.worldclim.org ), from which 19 bioclimatic variables, Bio1 to Bio19, were downloaded. These variables encompass annual mean temperature, mean diurnal range, isothermality, temperature seasonality, maximum temperature of the warmest month, minimum temperature of the coldest month, annual temperature range, mean temperature of the wettest quarter, driest quarter, warmest quarter, coldest quarter, annual precipitation, precipitation of the wettest month, driest month, precipitation seasonality, and precipitation of the wettest, driest, warmest, and coldest quarter.

To eliminate multicollinearity and validate the authenticity of environmental factors, we utilized principal components analysis (PCA) to conduct a correlation analysis of the 19 environmental variables, taking into account the survival conditions of C. kiangsu . This step is crucial because multicollinearity among environmental variables can result in model overfitting and adversely affect prediction outcomes 34 , 35 . In the principal component analysis of each indicator, the principal (PCA) of each indicator, principal components were identified based on a cumulative contribution of 80% or higher 34 , 35 . Finally, four environmental factors were selected: bio_02 (mean diurnal range of temperature), bio_05 (max temperature of the warmest month), bio_08 (mean temperature of the wettest quarter), and bio_14 (precipitation of the driest month) (Fig.  2 ).

Principal component analysis(PCA) of environmental factors.

The world administrative map was obtained from the National Earth System Science Data Center, a part of the National Science & Technology Infrastructure of China ( http://www.geodata.cn ). Finally, the resolution of all environmental variables was standardized to 2.5 arc-minutes.

Biomod2 model construction

SDMs are widely employed to predict potential distributions across various scales, from global species diversity patterns and regional landscape-scale invasive species spread to local population distribution simulations 36 , 37 . Commonly applied SDM algorithms include Generalized Linear Models (GLM), Maximum Entropy Model (MaxEnt), Artificial Neural Networks (ANN), Random Forests (RF), among others. 21 , 52 , 53 . These models frequently link species distributions to climate data to elucidate variations in distributions and the critical environmental variables that determine species distribution patterns 38 . However, due to the multitude of species distribution models, their differing perspectives, and their respective strengths and weaknesses, achieving accurate predictions with a single model in challenging 38 . Integrating the predictive outputs of various models into an ensemble model can significantly enhance predictive accuracy 20 , 52 , 53 .

The Biomod2 ensemble model integrates ten widely used SDM algorithms, including Generalized Linear Models (GLM), Generalized Additive Models (GAM), Artificial Neural Networks (ANN), Random Forests (RF), and Maximum Entropy Models 21 , 36 , 37 . When obtaining real data is challenging, SDMs use randomly generated pseudoabsence (background or implied absence) data from the study area to extract available environmental information. This method is known as the pseudoabsence allocation method 15 , 16 . Biomod2 is an integrated platform for implementing SDM. It leverages modeling and classification techniques, including statistical and machine learning algorithms, to establish relationships between species and environmental variables. This platform is employed to predict the habitat suitability of species in geographical space 20 , 38 , 39 . Compared to single models, Biomod2 results are more objective and repeatable, independent of expert experience. They integrate species niche information, yield more accurate predictions, and can incorporate and analyze a greater number of environmental variables 21 , 40 .

Therefore, this study utilized the R package "Biomod2" to predict the current and future distribution of C. kiangsu in Asia, accounting for environmental factors and shifts in geometric center points and ecological niches. The primary operational approach of Biomod2 involves involves initially using the ten models provided by the package for individual model construction. A model demonstrating superior individual performance is selected as the foundational model. Subsequently, Biomod2 is employed to integrate and process this model, yielding a composite model framework 41 . Ultimately, the optimal combination model algorithm is applied to derive the ensemble model outcomes. Specifically, for each modeling process, 75% of distribution records were randomly selected as the training dataset, and the remaining 25% were designated as the test dataset, with the division between training and testing data repeated five times. Additionally, 1000 pseudo-absence points were randomly selected, repeated three times, resulting in 240 models. After evaluating the accuracy of the models generated by the eight algorithms, those with AUC values > 0.9 and TSS values > 0.8 were selected, including ANN, Classification Tree Analysis (CTA), Flexible Discriminant Analysis (FDA), Gradient Boosting Machine (GBM), and RF 41 , 42 , 43 , 44 .

Model accuracy

Model performance was evaluated using the area under the curve (AUC) and true skill statistics (TSS) metrics 41 . Both AUC and TSS range from 0 to 1, with higher values denoting greater accuracy of the model outcomes 44 . An AUC value between 0.8 and 0.9 indicates a good model prediction; while an AUC > 0.9 suggests high model precision, accurately reflecting the potential distribution of the species 11 . TSS is recognized for maintaining the advantages of Kappa concerning occurrence rate, sensitivity, and specificity in species distribution predictions, while avoiding its unimodal dependence on occurrence rate 41 . TSS values between 0.55 and 0.7 suggest average prediction outcomes; values from 0.7 to 0.85 indicate good prediction performance; and TSS > 0.85 signifies high model precision, accurately reflecting the potential distribution of the species 41 , 42 , 43 , 44 .

Spatial patterns of C. kiangsu in the present and future

Based on the model simulation results, ASCII raster layers were generated using suitability values (S, ranging from 0 to 1) to represent the potential presence of C. kiangsu . According to the species existence probability by IPCC-CMIP5 (IPCC 2014), the suitable habitats were classified into four categories: highly suitable areas (0.7 ≤ P ≤ 1.0), moderately suitable areas (0.5 ≤ P < 0.7), less suitable areas (0.3 ≤ P < 0.5), and unsuitable areas (0.0 ≤ P < 0.3). The areas of these habitat types were subsequently calculated for each period 37 .

Migration of potential geographic distribution center and overlapping geographic distribution areas

The shifts in the potential geographic distribution center of C. kiangsu under current and future climate scenarios were determined using SDM tools. The SDM toolbox was utilized to analyze the migration of the potential geographic distribution center of C. kiangsu under various climate scenarios 31 . The "Quick Re-classify to Binary" tool was employed to convert the raster data of suitable and unsuitable areas under various climatic conditions into binary data (1 and 0). The "Centroid Changes (Lines)" tool was employed to calculate the displacement of the geometric center of the predicted distribution across different periods, detecting the overall trend in the distribution area of C. kiangsu 45 .

Ecological niche comparison

The ecological niches of C. kiangsu in its native and invaded habitats were delineated. Initially, the ecoshot package in RStudio, combined with methodologies form used in related literature 37 , was utilized to compare ecological niche changes under varying conditions between the native and invaded areas 37 . A PCAenv  analysis was conducted using bioclimatic variables associated with C. kiangsu . Subsequently, the ecospit package was used for 1000 iterations of climate ecological niche similarity testing in both directions (native ↔ invaded areas). If the observed ecological niche similarity value was significantly lower than the niche overlap value (P < 0.05), the null hypothesis of ecological niche similarity was accepted 31 . Finally, based on these results, the ecological niche differences of C. kiangsu were ascertained, including the extent of niche overlap and the range of overlap, comparing the degree of ecological niche overlap between its native and invaded areas 31 , 45 .

Model prediction accuracy

In this study, all six species distribution models demonstrated high predictive performance, with ROG and TSS values exceeding 0.65, indicating that all models exhibited good or better performance. Specifically, the GLM model had the lowest predictive performance, with a ROC value of 0.86 and a TSS value of 0.655. The ANN, FDA, CTA models demonstrated higher predictive performance, each with a ROC value of 0.96 and a TSS value of 0.85, which were superior to the GLM model, though the performance differences among these three models were relatively small. The RF and GBM models exhibited the best prediction performance, with ROC values nearing 0.99. The TSS value for the RF model was 0.94, which is significantly higher than that of the GBM model (0.91). In summary, the SDMs constructed using the six modeling algorithms in this study showed overall good prediction accuracy, though with some differences. The RF model had the best overall performance, followed by the GBM model (0.94), and the GLM model (0.85). The RF model had the best overall performance, followed by the GBM, ANN, CTA, and FDA models, with the GLM model exhibiting the lowest predictive accuracy compared to the above models. This indicates that the ensemble model is more accurate and reliable for predicting the potential distribution of C. kiangsu in China and Southeast Asian countries.

Analysis of the response curves of environmental variables

Using the Biomod2 platform, we calculated the contribution of each environmental factor to the modeling process and observed that different models utilize distinct set of factors. Furthermore, the impact of different factors on the models varies significantly. Using the optimal combination model, we investigated the environmental variables influencing the distribution of C. kiangsu (Fig.  3 ). The mean diurnal temperature range suitable for locust distribution in between 4 and 19 °C, with the optimal range being between 9 and 13 °C. C. kiangsu prefers areas with larger diurnal temperature variations, which are beneficial for its feeding, reproduction, and other life history activities. The maximum temperature of the warmest month suitable for locust distribution ranges from 15 to 40 °C, with the optimal range between 25 and 35 °C. Locusts can inhabit high-temperature areas due to their high biological tolerance, resulting in a wide distribution. The mean temperature of the wettest quarter suitable for C. kiangsu distribution ranges from 10 to 38 °C, with the optimal range being 21–23 °C. The mean temperature during the wettest quarter exhibits a narrower tolerance range compared to other environmental factors, making it a crucial determinant. Precipitation in the driest month shows a broader suitable range for C. kiangsu distribution, within 0–240 mm, with the highest suitability at 20 mm. In summary, the mean diurnal temperature range, maximum temperature of the warmest month, mean temperature of the wettest quarter, and precipitation of the driest month are critical factors influencing the distribution of C. kiangsu .

Response graph of environmental factors.

Current distribution patterns of C. kiangsu in Asia under current climatic conditions

Based on the model simulation results, under current climatic conditions, the suitable habitats for C. kiangsu in China and Southeast Asia are predominantly concentrated in the southern provinces of China, including Yunnan, Jiangxi, Jiangsu, Zhejiang, Fujian, Guangdong, and Guangxi. High suitability areas are primarily located in the border regions of Yunnan with Laos, as well as in the middle and lower reaches of the Yangtze River in Jiangxi, Hunan, Zhejiang, Anhui, and along the southern coast in Guangdong and Guangxi (Fig.  4 ). In central Anhui, northern Hubei, western Hunan, and Guangxi, less suitable areas primarily spread outward from medium to high suitability areas. Additionally, significant suitable habitats for C. kiangsu were identified in Southeast Asian countries where no prior infestation records exist. These regions include the China-Vietnam border, China-Thailand border, China-Myanmar border, central Vietnam, northern Myanmar, the Malay Peninsula, and the Indochina Peninsula. The types of suitable habitats in these regions are predominantly medium to low suitability, with a smaller proportion of highly suitable areas. In Laos, areas overrun by C. kiangsu are predominantly concentrated in the northern part of Phongsaly Province, specifically in Yot Ou County, Boun Neua County, and Phongsaly County. Field surveys in Yot Ou County, including villages such as Manla, Malitou, Songkan, Dalishu, and Huangpiao, as well as around the county town, identified 65 sites of C. kiangsu damage across 21 villages. Extensive bamboo forests in Udai Mountain near Yot Ou County were damaged, with the Yot Ou County viewing platform serving as an important migration corridor for C. kiangsu . The most severely affected area is Dalishu Township, with large contiguous bamboo forests damaged, a significant population of C. kiangsu , and close proximity to Jiangcheng County, posing a high risk of migration into the region. Next is the town of Malitou, which borders Jiangcheng County and acts as one of the corridors for C. kiangsu migrating into China. Additionally, Huangpiao Township, near the China-Laos 10–12 boundary markers adjoining Mengla County, serves as another migration corridor into China.

Geographical distribution of Ceracris kiangsu in China and Southeast Asia under current and future climatic conditions.

Prediction of suitable areas for C. kiangsu under future climatic conditions

The potential geographical distribution of C. kiangsu in China and Southeast Asia for the 2050s and 2090s under the SSP1-26 and SSP5-85 climate scenarios is illustrated in Fig.  4 . A comparison of the predicted suitable habitats for the 2050s and 2090s reveals significant differences in the response of C. kiangsu to climate change under various scenarios (Table 1 ).

Overall, the distribution pattern of suitable habitats, centered around highly suitable areas and radiating outward, remains unchanged. Under both greenhouse gas emission scenarios in the 2050s, the total area of suitable habitats slightly decreases. However, by the 2090s, a significant increase in the total area of suitable habitats is observed, with SSP5-85 exhibiting the most pronounced expansion. The overall suitability area expands by 32.96%, from 278.4806 × 104 km 2 in the 2050s to 370.2568 × 104 km 2 in the 2090s.

It is evident that under the SSP1-26 climate scenario, the response of suitable habitat area C. kiangsu to climate change is less pronounced than under the SSP5-85 scenario. Under the SSP5-85 scenario, the suitable habitat area for C. kiangsu expanded more markedly. The analysis compares the changes in the suitable habitat area for C. kiangsu under different climate scenarios across various time periods. In future periods, the suitable habitat area for C. kiangsu predominantly increases (Table 2 ). Notably, during different periods (2050s and 2090s), the changes in expansion, loss, and stability within the suitable habitat area under the SSP1-26 scenario are more drastic compared to the SSP5-85 scenario. Under the SSP1-26 scenario, the gain area from the current period to the 2090s is more than three times that from the current period to the 2050s, while under the SSP5-85 scenario, the gain area from the current period to the 2090s is approximately half of that from the current period to the 2050s. Spatially, as shown in Fig.  5 , under the SSP1-26 scenario, the most significant expansion of suitable habitat is concentrated in the southeastern part of China, including regions such as Guangxi, Guangdong, Zhejiang, Fujian. The loss areas are primarily concentrated in the southern part of China, such as northeastern Guizhou and Yunnan, while the overall trend in the Yunnan border region remains stable. Under the SSP5-85 scenario, from the current period to the 2050s, changes in the suitable habitat in southern China are more pronounced, with a larger distribution range of losses, but the gain area is greater than that in the same period under the SSP1-26. Overall, the suitable habitat for C. kiangsu changes with climate variation, and the distribution pattern of C. kiangsu under different climate scenarios across various periods consistently responds to climate change.

Spatial changes in the geographical distribution of Ceracris kiangsu under SSP1-26 and SSP5-85 Climate Scenarios in the 2050s and 2090s.

A comparative analysis of the area changes of C. kiangsu under various climate scenarios across different periods (Table 2 and Fig.  5 ) indicates that the area of suitable habitats for C. kiangsu predominantly increases in future periods. Notably, the changes in the area of highly suitable habitats under the SSP1-26 scenario, including expansion, loss, and stability, are more pronounced than under the SSP5-85 scenario. As shown in Fig.  5 , under the SSP1-26 scenario, the most significant expansion of suitable habitats is primarily concentrated in southeastern China, such as Guangxi, Guangdong, Zhejiang, Fujian. The loss areas are primarily in southern China, such as Guizhou Province and the northeastern region of Yunnan Province, with the border areas of Yunnan generally tending towards stability. Under the SSP5-85 scenario, changes in habitat loss are more pronounced, with southern suitable habitats in China showing an overall trend of loss. Overall, the suitable habitats of C. kiangsu change with climate, and the distribution patterns of C. kiangsu under various climate scenarios across different periods consistently respond to climate change.

Center points of suitable areas

This study employs the geometric center to represent the overall spatial position of potential suitable habitats for C. kiangsu under current and future climatic conditions (Fig.  6 and Table 3 ). The current geometric center of potential suitable habitats for C. kiangsu is located near the Xiaoqikong scenic area in Hechi City, Guangxi Province (107.735° E, 25.2217° N). Under the SSP1-26 climate scenario in the 2050s and 2090s, the centers of distribution for suitable habitats of C. kiangsu are predicted to be in Hechi City (108.1235° E, 25.2028° N) and Liuzhou City, Guangxi (108.798° E, 25.1289° N), respectively, with the predicted geometric centers being 39.06557 km and 107.4012 km away from the current suitable area. Under the SSP5-85 scenario, the distances between the predicted geometric centers of suitable habitats in the 2050s and 2090s and the current habitat are 455.75118 km and 125.90022 km, respectively, primarily located in Hengyang City, Hunan Province (112.484° E, 26.3884° N), and Qiannan Buyei and Miao Autonomous Prefecture, Guizhou Province (107.692° E, 25.6631° N).

Migration of the center of suitable habitats for Ceracris kiangsu under current and future climatic conditions.

However, the accuracy of the future distribution center of suitable habitats for C. kiangsu across different periods may be limited, primarily due to the inherent uncertainty in simulating future climate scenarios. Under the SSP1-26 scenario, the distribution center in the 2090s exhibits significant changes, migrating northeastward by 455.75118 km, while the center for the same period under the SSP5-85 scenario remains relatively stable compared to the current period. From another perspective, the substantial migration distance of the distribution center under the SSP1-26 scenario is attributed to significant changes in the spatial distribution of non-suitable areas under future climate models, leading to increased uncertainty in the fluctuation of the distribution center due to the fragmentation of suitable habitat distribution.

Regarding migration trends, C. kiangsu exhibits varying displacement tendencies under different climate scenarios. Under the SSP1-26 scenario, the geometric center of the suitable habitat gradually shifts northeastward over time. In contrast, under the SSP5-85 scenario, the center of the suitable habitat in the 2050s tends to move eastward, but the displacement is not significant. By the 2090s, the suitable habitat shifts eastward from the current center. C. kiangsu prefers high temperature and high humidity areas, and the locations of the suitable habitat center in each period exhibit these characteristics. The high suitability areas for C. kiangsu under future climate scenarios align with the current average annual temperature conditions in China and Southeast Asia.

The geographical distribution areas of C. kiangsu are partially determined by its fundamental ecological niche, defined as a set of environmental conditions essential for its survival. Based on the comparison of climate ecological niche spaces between native and invaded areas, Fig.  7 illustrates the ecological niche of C. kiangsu in Asia. The figure indicates that the ecological niche overlap of C. kiangsu is substantial in each period under various climate scenarios. The ecological niche of C. kiangsu in the invaded areas is broader than in the native areas but does not entirely encompass the ecological niche of the native area. Therefore, the ecological niches of C. kiangsu in its native and invaded areas are not identical but are more similar than would be expected by chance in the invasion process.

Ecological niches of Ceracris kiangsu in the 2050s and 2090s under SSP1-26 and SSP5-85 Climate Scenarios (purple indicates ecological niche overlap, green indicates unoccupied areas, and red indicates expansion. Red arrows represent the centroids of realized ecological niches of each species).

Potential distribution of C. kiangsu and its influencing factors

Wen 11 utilized the MaxEnt model to predict the current suitable habitat distribution of C. kiangsu in China, indicating that its suitable habitats are primarily in provinces such as Hunan, Jiangxi, Yunnan, and Fujian. In this study, the current high suitability areas of C. kiangsu are primarily distributed in southern provinces such as Yunnan, and the predicted future expansion of suitable areas is mainly in southeastern coastal provinces like Guangdong and Fujian. The results of this study are consistent with those of Wen et al. and align with existing reports of C. kiangsu infestations, indicating the accuracy of the model outputs 11 . This study also identified suitable habitats for C. kiangsu in countries such as Laos, Thailand, Vietnam, and the Philippines, with high suitability areas primarily concentrated in northern Phongsaly Province, Laos. However, field studies by Yang et al. 46 found that besides Phongsaly Province, provinces such as Luang Prabang, Houaphanh, Xiangkhouang, and Oudomxay in Laos also experienced severe infestations and crop damage. The limited distribution of suitable habitats to northern Phongsaly Province, with less emphasis on other provinces, is presumably due to missing species distribution data. In previous studies, only a single model, the MaxEnt model, was used to predict and evaluate the distribution of C. kiangsu in China 11 , 14 . In this study, we used the "Biomod2" package, an integrated platform for species distribution modeling in R, to analyze and evaluate the potential distribution areas of C. kiangsu in depth. Additionally, we expanded our study area and analyzed the changes in the current and future suitability zones of C. kiangsu in China and Southeast Asia, thereby filling the research gap regarding its potential distribution. This is of great significance for locust infestation prevention and monitoring.

Environmental principal component analysis revealed that mean diurnal range of temperature, maximum temperature of the warmest month, mean temperature of the wettest quarter, and precipitation of the driest month are crucial to the distribution of C. kiangsu . The biological characteristics of C. kiangsu indicate that June to August is a critical period for adult C. kiangsu , with the risk of water loss is exacerbated by insufficient precipitation 47 . C. kiangsu overwinters as eggs, and the warmer climate and milder winters create favorable climatic conditions for its safe overwintering 31 . The increase in global temperatures due to the massive emission of greenhouse gases directly impacts the development rate and population dynamics of C. kiangsu . The rise in temperature creates favorable conditions for C. kiangsu to hatch and reproduce. This, combined with persistent hot and dry weather during the summer, lays the groundwork for locust outbreaks 47 .

However, the factors influencing the distribution of C. kiangsu include not only climatic factors but also non-climatic factors. Sun confirmed that C. kiangsu often prefers to lay eggs on north-facing sunny slopes or bamboo slopes 2 . Li in their study on the causes and control measures of C. kiangsu outbreaks in China, affirmed that besides climate, soil moisture is a critical habitat factor affecting the occurrence of C. kiangsu , with lower soil moisture being more conducive to the survival of its eggs 43 . Wen et al. 11 confirmed that as a host-specific folivorous pest, the host species significantly influences the growth and development of C. kiangsu 11 . Environmental factors directly or indirectly influence the distribution of C. kiangsu . Direct effects pertain to its suitable environmental range, while indirect effects involve environmental factors influencing plant distribution, thereby affecting its feeding and other life history aspects. Wang et al. 31 indicate that under similar temperature conditions, nymphs of C. kiangsu feeding on wheat seedlings exhibit higher survival rates, shorter development times, and higher adult emergence rates compared to nymphs consuming other food sources 31 . Additionally, compared to glutinous maize and sweet maize, the nymphs of C. kiangsu exhibit a relatively slower decline in survival rates on wheat and rice at different temperatures. Moreover, human activities may also significant impact the gene flow of C. kiangsu . These activities stimulate the population to generate local diversity and influence its distribution 27 . Furthermore, the migration and spread of C. kiangsu are closely related to wind direction. Therefore, factors such as topography, slope, aspect, host plants, and wind direction are critical in influencing the distribution of C. kiangsu . In this study, only climatic factors such as temperature and precipitation were considered, without accounting for non-climatic factors. Therefore, future research should comprehensively consider the impact of these factors on the suitability of C. kiangsu . By conducting an in-depth analysis of its potential suitable habitats, the accuracy of predictions can be significantly enhanced.

Predictions from different models and ensemble modeling

In terms of the precision of model predictions, Biomod2 integrates multiple models, thus providing better predictions with fewer input distribution points 21 , which strongly aligns with the relevant conclusions of this study. The reasons are as follows: Firstly, we chose the current mainstream and recognized high-performance algorithms, which exhibit high robustness and generalization ability overall, providing a good strong model foundation for predicting biological species in this study. Secondly, the model integration algorithm provided by Biomod2 combines multiple models efficiently to improve prediction accuracy. It reduces errors by evaluating uncertainties and the importance of variables in the modeling process, and enhances accuracy by eliminating poorly performing single models in the integrated model 48 . Consequently, the overall modeling precision and the accuracy of species distribution in the study area were effectively improved.

Classical single model algorithms possess distinct advantages and disadvantages. specifically, the Maximum Entropy Model (MaxEnt) accurately reflect the response of species to environmental variables and habitat selectivity but is less precise in simulating the boundaries of species distribution 40 . However, integrating multiple high-performance single algorithms can effectively overcome the limitations of individual algorithms, thus enhancing the overall robustness of the model. Meanwhile, integrating multiple models can also lead to overfitting and partial defects in the selection of indicators to some extent 48 . Ensemble algorithms like the Generalized Additive Model (GAM) and Random Forests (RF) enhance overall prediction accuracy by increasing model complexity. However, overly complex models risk overfitting, necessitating cautious selection through methods like cross-validation 21 . Overall, compared to single algorithms, the Biomod2 ensemble model provides more precise and robust predictions. In terms of the overall accuracy and robustness of various SDM algorithms constructed in this study, significant difference exist between the accuracy of each single model and the prediction model integrated by multiple algorithms. The integrated model can greatly improve the accuracy and efficiency of prediction, and has higher accuracy and reliability.

The critical premise for a SDM to accurately predict species distribution points under various environmental conditions is to evaluate the reliability and accuracy of the prediction model, which is essential before making predictions 49 . Therefore, appropriate quantitative evaluation methods for are used to assess the accuracy and robustness of the model. It is necessary and significant to study the impact of various data and species attributes on the accuracy of the generated prediction results 50 . Hence, we selected the current mainstream and widely used important indicators that can evaluate the reliability of probabilistic prediction modeling for accuracy evaluation 51 . Specifically, this study used two common assessment metrics, AUC and TSS, to evaluate the performance of the model. The average AUC value reached 0.96, and the average TSS value was 0.8, both meeting excellent standards and demonstrating higher precision and reliability than single models like MaxEnt and GLM.

Impact of global climate change on the distribution of C. kiangsu

In recent years, global climate change and the excessive exploitation of natural resources by humans have caused ecological damage, creating favorable conditions for locust breeding and exacerbating the frequency and severity of locust plagues. According to the results of this study, from the present to the 2090s, the high suitability areas for C. kiangsu in Asia exhibit an expanding trend. In China, the high suitability areas for C. kiangsu are primarily concentrated in regions such as Yunnan, Hunan, Jiangxi, Zhejiang, and Fujian, consistent with the results of Yang et al. 14 , who predicted the suitable habitats of three locust species in China using the MaxEnt model. In other Asian countries, such as Laos, Vietnam, the Philippines, Thailand, and the southern Malay Peninsula, the high suitability areas for C. kiangsu appear to remain stable. Overall, compared to the present, the future habitat areas of C. kiangsu are expected to expand, particularly under the SSP5-85 scenario, with shows a greater increase. The centroid points of suitable habitats for C. kiangsu across different periods all exhibit a trend of moving northeast, and the ecological niche in the invaded areas also tends to expand further than in the native areas.

Role of SDMs in biological invasion and control of C. kiangsu

Based on the prediction results of local suitable areas in Southwest China and Southeast Asia, as well as the practice and relevant research of biological disaster prevention and control in China, Laos, and other countries, this study posits that the cross-border pest C. kiangsu on the China-Laos border and the outbreak of biohazards within a certain range and time are the results of multiple factors. These factors include the suitability of the natural environment, favorable climate conditions, social governance experience, and economic and social development. Specifically, in China, on one hand, due to the relatively complete monitoring network and prediction and evaluation system for various biological disasters, including C. kiangsu , China has a mature prediction ability for the outbreak of biological disasters. On the other hand, the control technology of C. kiangsu is relatively advanced, allowing for the effective reduction of pest density through active elimination. Regarding the incident of C. kiangsu entering China from the China-Laos border, this study posits that the surge in C. kiangsu numbers, leading to the large-scale invasion of the Chinese border, is due to the suitable environmental conditions for regular large-scale outbreaks of C. kiangsu and the imperfect biological disaster prevention and control system in Laos.

Conclusions

Ceracris kiangsu is highly responsive to climate change, particularly temperature, and the sharp increase in its population size is closely linked to these change. Understanding the current and future distribution of suitable areas for C. kiangsu is crucial for the surveillance, prevention, and control of locusts. According to the predictions of this study, under different climatic conditions, the current and future high suitability areas for C. kiangsu are primarily concentrated in the southern provinces of China such as Yunnan, Jiangxi, and Hunan, as well as in northern Phongsaly Province, Laos. Additionally, we found large numbers of suitable habitats for C. kiangsu in several Southeast Asian countries where locusts had not been previously recorded. In the coming period, the area of suitable habitat for C. kiangsu is expected to show an upward trend. In summary, given the unique geographical location of Yunnan Province, bordering countries like Laos, Vietnam, Thailand, and Myanmar, it is imperative for the Chinese border to enhance the construction of plant protection and epidemic prevention systems along the border. Additionally, establishing pest and disease monitoring and early warning systems in border areas, and strengthening the monitoring of the distribution dynamics of C. kiangsu in these regions are crucial. Proactively responding to the United Nations 2030 Sustainable Development Goals and establishing a multi-national disaster monitoring collaboration mechanism for data sharing will provide valuable references for strengthening control and risk monitoring in relevant countries and regions, contributing positively to ensuring the ecological safety of multiple countries (Supplementary Information S1 ).

Data availability

Data can be obtained by contacting the corresponding author.

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Acknowledgements

I would like to express my gratitude to the Jiangcheng County Forestry and Grassland Bureau for their strong support and assistance in this research.

This research was funded by the National Natural Science Foundation of China “Multi frequency SAR polarized interferometric data for forest tree height inversion" (Grant No. 42061072); Forestry Innovation Programs of Southwest Forestry University of Key Laboratory of National Forestry and Grassland Administration on Biodiversity Conservation in Southwest China(Grant No：LXXK-2023Z06 ); and Yunnan Province Agricultural Basic Research Joint Special Project “Estimation of aboveground biomass of Simao pinus forest based on multisource remote sensing data"( Grant No. 202401BD070001-117).

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College of Forestry, Southwest Forestry University, Kunming, 650224, China

Churui Li, Guangfei Luo, Cairong Yue, Lanzhong Zhang & Yunfang Duan

Jiangcheng County Forestry and Grassland Bureau, Pu’er, 665900, China

Yu Liu, Song Yang & Zemin Wang

Yunnan Academy of Forestry and Grassland, Yunnan Province, Kunming, 650201, China

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Li, C., Luo, G., Yue, C. et al. Distribution patterns and potential suitable habitat prediction of Ceracris kiangsu (Orthoptera: Arcypteridae) under climate change- a case study of China and Southeast Asia. Sci Rep 14 , 20580 (2024). https://doi.org/10.1038/s41598-024-69897-0

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Impact of a new wave mixing scheme on ocean dynamics in typhoon conditions: a case study of typhoon in-fa (2021).

1. Introduction

2. materials and methods, 2.1. experimental programs, 2.2. introduction and setup of the coupling model, 2.3. study area and datasets, 3.1. wave-simulation results, 3.2. simulated currents, 3.3. simulated sst, 3.4. the simulated results of mixed-layer temperature, 3.5. effect on surface current field, 4. conclusions, author contributions, data availability statement, acknowledgments, conflicts of interest.

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Chen, W.; Chen, J.; Shi, J.; Zhang, S.; Zhang, W.; Xia, J.; Wang, H.; Yi, Z.; Wu, Z.; Zhang, Z. Impact of a New Wave Mixing Scheme on Ocean Dynamics in Typhoon Conditions: A Case Study of Typhoon In-Fa (2021). Remote Sens. 2024 , 16 , 3298. https://doi.org/10.3390/rs16173298

Chen W, Chen J, Shi J, Zhang S, Zhang W, Xia J, Wang H, Yi Z, Wu Z, Zhang Z. Impact of a New Wave Mixing Scheme on Ocean Dynamics in Typhoon Conditions: A Case Study of Typhoon In-Fa (2021). Remote Sensing . 2024; 16(17):3298. https://doi.org/10.3390/rs16173298

Chen, Wei, Jie Chen, Jian Shi, Suyun Zhang, Wenjing Zhang, Jingmin Xia, Hanshi Wang, Zhenhui Yi, Zhiyuan Wu, and Zhicheng Zhang. 2024. "Impact of a New Wave Mixing Scheme on Ocean Dynamics in Typhoon Conditions: A Case Study of Typhoon In-Fa (2021)" Remote Sensing 16, no. 17: 3298. https://doi.org/10.3390/rs16173298

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Incorporation of mechanistic model outputs as features for data-driven models for yield prediction: a case study on wheat and chickpea

• Open access
• Published: 04 September 2024

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• Dhahi Al-Shammari   ORCID: orcid.org/0000-0001-6608-8322 1 ,
• Yang Chen 2 ,
• Niranjan S. Wimalathunge 1 ,
• Chen Wang 3 ,
• Si Yang Han 1 &
• Thomas F. A. Bishop 1  

Introduction

Context Data-driven models (DDMs) are increasingly used for crop yield prediction due to their ability to capture complex patterns and relationships. DDMs rely heavily on data inputs to provide predictions. Despite their effectiveness,  DDMs can be complemented by inputs derived from mechanistic models (MMs).

This study investigated enhancing the predictive quality of DDMs by using as features a combination of MMs outputs, specifically biomass and soil moisture, with conventional data sources like satellite imagery, weather, and soil information. Four experiments were performed with different datasets being used for prediction: Experiment 1 combined MM outputs with conventional data; Experiment 2 excluded MM outputs; Experiment 3 was the same as Experiment 1 but all conventional temporal data were omitted; Experiment 4 utilised solely MM outputs. The research encompassed ten field-years of wheat and chickpea yield data, applying the eXtreme Gradient Boosting (XGBOOST) algorithm for model fitting. Performance was evaluated using root mean square error (RMSE) and the concordance correlation coefficient (CCC).

Results and conclusions

The validation results showed that the XGBOOST model had similar predictive power for both crops in Experiments 1, 2, and 3. For chickpeas, the CCC ranged from 0.89 to 0.91 and the RMSE from 0.23 to 0.25 t ha −1 . For wheat, the CCC ranged from 0.87 to 0.92 and the RMSE from 0.29 to 0.35 t ha −1 . However, Experiment 4 significantly reduced the model's accuracy, with CCCs dropping to 0.47 for chickpeas and 0.36 for wheat, and RMSEs increasing to 0.46 and 0.65 t ha −1 , respectively. Ultimately, Experiments 1, 2, and 3 demonstrated comparable effectiveness, but Experiment 3 is recommended for achieving similar predictive quality with a simpler, more interpretable model using biomass and soil moisture alongside non-temporal conventional features.

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Data-driven models (DDMs) have emerged as powerful tools for agricultural applications, including crop yield prediction. These models utilise advanced statistical and machine learning techniques to analyse large amounts of data collected from multiple sources, such as weather stations, satellite imagery, soil sensors, and historical crop yield records. DDMs can capture the complex interactions between environmental factors and crop growth patterns by incorporating these diverse datasets, enabling accurate yield predictions. DDMs, such as Random Forest (Breiman, 2001 ) and Neural Networks (Abdi et al., 1999 ), are commonly used in these models to analyse large datasets and identify patterns that can help predict crop yields. The XGBOOST (eXtreme Gradient Boosting) is another one of these DDMs algorithms that has been shown to be successful in crop yield prediction (Al-Shammari, 2022 ; Huber et al., 2022 ; Jones et al., 2022 ; Kang et al., 2020 ). It excels at handling multicollinearity, which refers to strong correlations between features used for modelling. In agricultural datasets, features, such as remote sensing (RS), soil, and weather factors can exhibit interdependencies or collinearity. XGBOOST addresses this issue by using regularisation techniques, effectively reducing the impact of collinear of features in the final model.

Although DDMs require a minimum knowledge of the processes (Cao & Zhang, 2007 ), DDMs require representative features, which are assumed to help reveal hidden information about a specific phenomenon. One of the biggest challenges is to select features that allow a DDM to reveal hidden information or patterns to estimate the response variable more accurately.

In contrast to traditional DDMs, mechanistic models (MMs) require domain knowledge in a system to produce meaningful relationships between the inputs (features) and the outputs (response) (Fan et al., 2015 ). Unlike DDMs, MMs are governed by some processes defined by the experts who create the proper formulas to solve a specific issue. MMs can explain part of but not all processes in dynamic and complex systems, such as cropping systems. Consequently, many studies have employed DDMs to find empirical relationships rather than using mathematical formulas to describe a specific phenomenon, taking advantage of DDMs' flexibility in accepting a large number and variety of features and less of a need to understand complex mechanisms to provide predictions.

Many studies have used MMs to model processes in agricultural systems. Of relevance to this study is a processed-based model (C-Crop) that has been introduced based on simulating plant growth to predict crop yield (Donohue et al., 2018 ). The authors of C-Crop stated that this model is simple and effective for predicting wheat and canola yield. This model is based on calculating biomass from environmental variables (weather, remote sensing) to describe the processes using mathematical equations. In another study, a processed-based model for soil moisture prediction was developed by Wimalathunge and Bishop ( 2019 ). This model uses rainfall, evapotranspiration (ET), and some soil attributes, including clay, sand, and bulk density, to calculate soil moisture. The advantage of this model is that it can predict soil moisture for the whole profile, which is very important in dryland cropping systems since water availability is a yield-limiting factor in these systems. The advantage of these two models is that they can be easily constructed using readily and freely available geospatial data, capturing the within-field variability and benefiting precision agriculture operations.

Since DDMs are very flexible in dealing with various features, there is a need to select the best representative features, allowing these models to maximise the prediction quality. One way to do that is by combining MMs with DDMs to form what is known as domain-driven models (Cao & Zhang, 2007 ). Several studies have examined the advantages of combining DDMs and MMs (Džeroski & Todorovski, 2003 ; Fan et al., 2015 ; Todorovski & Džeroski, 2006 ). Fan et al. ( 2015 ) incorporated two sub-models derived from MMs and DDMs to build knowledge-and-data-driven modelling (KDDM) for tomato plant growth modelling. They found that the proposed KDDM has several advantages over the MM and the DDM approaches in predicting tomato yield.

Therefore, this study aimed to investigate the potential of incorporating MMs into DDMs for wheat and chickpeas yield prediction at the within-field scale for precision agriculture. Two outputs from MMs, namely biomass and soil moisture, are investigated in this study for use as features. The XGBOOST algorithm was selected, and four experiments are performed to explore scenarios involving different combinations of MM-based features and more general ones such as remote sensing. The results of the experiments are considered in terms of the prediction quality and the feature importance of the features in the models.

Methodology

The study area comprises a single site with 10 field-years of crop yield data near Moree, New South Wales, Australia. The total area of these fields is ~ 1 096 ha. In any season all 4 fields are sown to the same crop. Wheat yield maps were available for the four fields (Fields 1, 2, 3, and 4), whereas chickpea yield maps were unavailable for Field 2 (Fig.  1 and Table  1 ).

Map of Australia showing the location of the study area. Fields 1, 2, 3, and 4 are shown in yellow colours (Color figure online)

The area receives an average of 450 mm of rainfall annually, mostly occurring during summer. However, the area is also prone to drought and heat waves. The soils in the Moree region are predominantly heavy clays (Hunter & Earl, 1999 ), and clay loams, with some areas of sandy soils (Young & Schwenke, 2013 ). The soils are generally fertile and well-suited for crop production. Soil constraints, such as sodicity can be an issue in some areas (Filippi et al., 2018 ). The climate, topography, and soil characteristics of Moree make it a challenging yet productive agricultural region.

Yield monitor data of wheat and chickpeas was acquired from a private AgTech company and processed to remove anomalies by excluding data points outside the established range of 0.1 to 10 t ha −1 (Taylor et al., 2007 ). Subsequently, values exceeding 2.5 standard deviations from the field mean were also removed from the remaining data. Yield data was then kriged using block kriging (a spatial interpolation method) at a 10 m spatial support onto a 10 m grid. The total size of the yield dataset after interpolation was 259 318 observations.

Derived and processed features

To examine the potential of incorporating the MMs with the DDMs for wheat and chickpeas yield prediction, various sets of features were prepared from Tables  2 , 3 and shown in Fig.  2 . This study used the terms derived and processed to differentiate between the types of features. The difference between derived and processed features lies in the information extraction and refinement level applied to the raw data. Derived features refer to the conventional ones obtained from RS or other platforms that are used as is or after simple calculations. On the other hand, processed refers to the features that are the outputs of mechanistic models (MM).

Flowchart illustrating the process of creating the four datasets, models, and the evaluation processes for each experiment. Each coloured line (green, blue, black, and red) refers to a dataset and the features included in it (Color figure online)

Derived features

A set of temporal, elevation and soil-derived features were prepared as a space–time data cube (Tables  2 , 3 ). Google Earth Engine (GEE) (Gorelick et al., 2017 ) was used to obtain all the derived features (except rainfall). The time series of normalized difference vegetation index (NDVI) images (from 1st of May to 1st of September) were acquired from Sentinel-2 at 10 m resolution for each growing season and used to calculate the average of the seasonal NDVI for each pixel. The enhanced vegetation index (EVI) was used to calculate the leaf area index (LAI) for the 1st September (peak LAI) for each growing season, using an equation (Eq.  1 ) developed by (Boegh et al., 2002 ). The peak LAI was used in this study as it was reported to be highly correlated to the final yield (Cai et al., 2019 ).

The ET was derived from a dataset that provides accurate actual evapotranspiration (AET) for Australia using a model that has been developed by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) known as the CSIRO MODIS Reflectance-based Scaling EvapoTranspiration (CMRSET) model (Guerschman et al., 2022 ). The accumulated ET was calculated as the sum of ET from 1st of May to the 1st of September at 30 m resolution. Elevation is a spatially static data, which was accessed a digital elevation model (DEM) at 30 m resolution (Australia, 2015 ). Soil attributes were derived from the Soil and Landscape Grid of Australia (SLGA) at 90 m resolution (Grundy et al., 2015 ). These soil attributes were available as five layers from different soil depths (0–5 cm, 5–15 cm, 15–30 cm, 30–60 cm, and 60–100 cm) for each attribute. Then, the weighted average of each attribute was calculated to extract the attribute as the root zone average (0–100 cm). Daily rainfall grids (~ 5 km) for each growing season have been downloaded from the Australian climate database known as (SILO) (Jeffrey et al., 2001 ). The rainfall was calculated as the accumulated rainfall from the start of the growing season 1st of May to the 1st of September.

In our study, spatial resolution harmonisation involved resampling the original 30 m, 90 m, and 5 km resolution layers to 10 m to ensure consistency across all features used in the final modelling. For data layers with spatial resolutions of 30 m and 90 m, bilinear interpolation was employed to resample the data, chosen for its effectiveness in preserving continuous spatial information without introducing significant artifacts. The rainfall data, was resampled using the nearest neighbour method as the difference from the target grid size of 10 m was too far from 5 km.

Biomass (processed feature)

The C-Crop model is an MM, which was developed to simulate some of the processes in the ecosystem using mathematical equations. This model can predict biomass using the fraction of photosynthetically active radiation ( f par ), which is derived from NDVI, and a carbon mass accumulation and turn-over model (Donohue et al., 2018 ). The Donahue et al. ( 2018 ) model used the 16-day NDVI product with 250 m resolution, the Moderate Resolution Imaging Spectroradiometer (MODIS) (MOD13Q1: collection 5) (Justice et al., 1998 ). However, for this study, Landsat 8 data was used to derive the NDVI at 30 m resolution as the authors stated that this model is unrestricted to a specific source of data where the C-crop can use NDVI time series from any source (e.g., satellite) at any spatial resolution as long as the source provides 16 days or higher temporal resolution. Therefore, Landsat images at 16-day intervals were acquired to preserve the C-Crop structure unchanged. Moreover, the C-Crop model requires the NDVI time series to be prepared according to a nominal start and end of the growing season to calculate biomass. According to the crop calendar for wheat and chickpeas in the study area, wheat sowing begins in April and ends in July, while chickpeas sow in May and end in July, with the growing season for both crops ending in October to December. The nominal start and end of the growing season were determined as the 1st of May and the 1st of October, respectively. Besides the NDVI time series, C-Crop also uses the air temperature, which is a 5 km resolution and 1-day temporal resolution, which was readily available from (Jeffrey et al., 2001 ). Donohue et al. ( 2018 ) study provides more details about C-Crop. After preparing the inputs for the C-Crop model, biomass maps, which represent the seasonal biomass were generated for each field at 10 m resolution. The maximum biomass during the season was calculated from the time series and added to the space time data cube. Maximum biomass is valuable for assessing overall productivity and its impact on final yield.

Soil moisture (processed feature)

The water balance (WB) model, which has been developed by Wimalathunge and Bishop ( 2019 ), has been used to estimate the soil moisture to 100 cm depth (root zone). This WB is a multi-layer, knowledge-based model that better represents the vertical soil moisture variation. It is also an unsaturated model where water infiltrates through layers freely and continuously according to the soil properties. It requires rainfall, evapotranspiration and an estimate of the soil water bucket size. In this study the SLGA was used to represent the soil water bucket size. SLGA soil depth intervals are the WB model’s layer thickness. The corresponding clay, sand and bulk density values were used to calculate the bucket size which is represented by field capacity ( θ FC ) using a pedotransfer function (PTF) (Padarian et al., 2018 ).

For this study, the model used ET from MODIS (MOD16; Mu et al., 2011 ) which is a different source to ET used in the machine learning and shown in Tables  2 , 3 . This is because CMRSET ET provides the daily averages for each month and MODIS ET provides 8 day totals which is closer to the daily time step needed for the modelling. The MODIS ET was resampled using nearest neighbour to downscale the 8 day total to a daily total. The rainfall used was the same as presented in Tables  2 , 3 . The modelling depth was 100 cm, and the spatial resolution of the predictions was 90 m, as determined by the SLGA data. The model was run on each SLGA grid cell with the corresponding value for rainfall and ET. For example, the model uses the same ET value for each 90 m grid cell within the 500 m ET grid cell. The model was run on a daily time step from the 1st of January 2015 to the 31st of September 2023, and the output at 0–100 cm (root zone) was used as an input of the data-driven model. For this study, the sum of soil moisture from the 1st of May to the 1st of September for each growing season was calculated and used as a predictor. The hypothesis is that the soil moisture output can replace the rainfall because it provides a better representation of the available water for crops than the rainfall. Moreover, this output has a much higher resolution (~ 90 m) than the rainfall data, provided at a 5 km resolution.

Description of models

Figure  2 illustrates the main steps followed to evaluate each model with different sets of features. Four experiments were performed based on different datasets and tested individually in the XGBOOST (see next section). The base DDM model was built using all features, both derived and processed (Fig.  2 and Table  1 , Experiment 1). The biomass and soil moisture (processed) features were removed from the model (Experiment 2) to test the impact of removing these on the model's predictive power. Then, the derived temporal features were removed for Experiment 3 to test the potential of using soil moisture and biomass as features instead of their temporal inputs, e.g., rainfall, NDVI, ET. The aim was to create simpler and more interpretable models. The soil features were kept in the model even though some of these are used in the water balance model as inputs. The reason being that also relate to soil fertility which can impact on crop yield. Experiment 4 only uses features produced by the MMs (biomass and soil moisture) to test the possibility of the MMs replacing all the other derived features completely.

Wheat and chickpeas were modelled separately. The reason for this is that different crop types require specific models due to a variety of factors that are unique to each crop type. The factors include biological characteristics, environmental responses, and management practices. For each model, datasets were split randomly into 80 percent for training and 20 percent for validation. Therefore, other strategies such as leave-on-field-out (LOFO) and leave-one-season-out (LOSO) cross-validation were not employed. The models were evaluated individually using the concordance correlation coefficient (CCC), the root mean square error (RMSE) and feature importance to understand the most important features for the model.

These three metrics allow a fair evaluation of the benefits of the addition of processed features to the DDM model. The CCC is a measure that combines measures of both precision and accuracy to determine how well a pair of observations conform to a 1:1 correspondence with each other. The RMSE captures the amount of error (t ha −1 ) in the DDMs. The feature importance highlights the contribution of individual features to model prediction quality.

The XGBOOST is a highly efficient and powerful ML algorithm that has gained immense popularity (Chen & Guestrin, 2016 ). It is a decision-tree-based ensemble algorithm that applies boosting on weak learners (Fauzan & Murfi, 2018 ), such that the weak learners learn sequentially from the residual of the previous weak learner. The idea of learning from the trees sequentially can reduce the bias (Nielsen, 2016 ). L1 regularisation is used to handle the multicollinearity, as L1 adds a penalty term to the objective function during training, which helps control the complexity of the model and discourages large coefficients for correlated features.

The XGBOOST was used for all experiments. Predictions were repeated 100 times, and the mean of CCC, RMSE and feature importance were calculated. The feature importance was calculated for each experiment to evaluate the importance of derived and processed features and their contribution to the models. The feature importance in XGBOOST models is calculated based on the concept of gain, which measures the improvement in model performance resulting from splitting a particular feature. The gain is computed by considering the average loss reduction achieved by using that feature to split data across all trees in the ensemble. The higher the gain value, the more important the feature is considered. This calculation allows XGBOOST to identify features that contribute most significantly to predicting the response variable. According to Chen and Guestrin ( 2016 ), calculating feature importance in XGBOOST provides a robust measure of relevance for each feature. They explain that gain-based methods have advantages over other techniques, such as permutation-based or drop-column-importance approaches because they consider interactions between features and their contributions. Additionally, this method can handle missing values effectively without requiring imputation.

Tuning an XGBOOST model is important for maximising its predictive performance and generalisation capabilities. By fine-tuning hyperparameters, the model's predictive quality can be enhanced significantly, prevent overfitting, and improve the handling of diverse datasets. This study used a combination of grid search and internal cross-validation to tune hyperparameters for an XGBOOST model, aiming to optimise model performance by finding the best hyperparameter values for each model. For each combination of hyperparameters, each model for each experiment underwent a rigorous evaluation through fivefold cross-validation, implemented via the xgb.cv function. This function trains the model on different subsets of the data, ensuring that the evaluation is robust and not biased toward a specific portion of the data. The RMSEs were recorded for both the training and validation phases at the most effective iteration determined by early stopping (a technique used here to prevent overfitting by halting training if there is no improvement in validation error for three consecutive rounds). This systematic approach allowed for careful monitoring and adjusting the model based on its performance across the different data folds. Finally, the hyperparameter settings that yielded the lowest RMSE on the validation data were identified and selected for each model.

Exploratory data analysis

According to the coefficient of variation (CV) values (Tables 2 , 3 ), it is clear that there are notable differences in variability between wheat yield in 2017 and its features, such as biomass, SM, and LAI. Biomass, with a CV of 31.55%, shows greater variability compared to wheat yield, which has a CV of 25.30%. This suggests that biomass may better represent variability for predicting yield. In contrast, the SM showed significantly less variability (CV of 0.39%) compared to yield. This low variability might mean it is less useful for predicting yield than other features. LAI, with a CV close to that of yield (20.25%), might be better aligned as a feature, reflecting similar variability patterns without extreme fluctuations.

Furthermore, the variability of chickpea yield over the two seasons (2019 and 2022) was much higher (as reflected by the CV , where a noticeable trend can be noticed with a significant increase in yield variability from 2019 to 2022. The CV for chickpea yield in 2019 was around 99.95%, indicating considerable fluctuations in yield compared to wheat ( CV  = 25.30%). However, in 2022, this variability increased to 162.04%. This increase highlights a greater inconsistency in chickpea production, potentially due to more extreme environmental conditions or other factors affecting agricultural outputs.

When comparing the variability of other features across these two seasons, such as biomass, SM, LAI, and rainfall, distinct patterns are observed. Biomass, while still variable, shows a decrease in CV from 85.30% in 2019 to 31.89% in 2022, suggesting that the fluctuations in biomass production have become less pronounced, possibly due to more consistent growth conditions and better management practices. In contrast, SM and rainfall maintain consistently low variability across both seasons (with CVs under 1% for rainfall and around 1% for SM). LAI showed a reduction in variability, from a CV of 42.97% in 2019 to 18.72% in 2022, hinting at more consistent growth conditions between the seasons. The overall reduction in variability among these features, except for yield, raises important considerations for predictive modelling. It suggests that while environmental and growth conditions measured by SM, rainfall, and LAI have become more stable, the factors specifically affecting yield have diverged, becoming more volatile.

While many soil properties such as AWC, clay content, ECEC, PTO, and SOC are influenced by long-term processes like weathering, organic matter accumulation, and gradual shifts in mineral content and thus remain relatively stable over time, certain properties like BDW can exhibit more immediate changes. For example, BDW can be significantly impacted by soil compaction due to agricultural practices or the use of heavy machinery. These characteristics make soil a relatively static factor in short to medium term, especially when compared to more dynamic, temporal. Therefore, Tables 2 , 3 showed that the CV was much less compared to wheat and chickpeas yield.

The AWC showed little variability, with an average value of about 19% across the study area. The BDW remained relatively constant, averaging around 1.67 g/cm 3 . Clay content in the soil varied significantly between locations, ranging from 46 to 72%, with an average clay content of about 64%. The ECEC varies widely, ranging from 23.95 to 59.65 meq/100 g, indicating the soil's capacity to retain essential nutrients through cation exchange.

Figure  3 shows that the strongest positive correlation in all growing seasons was between ET and yield, and this was expected as ET reflects the amount of water used by a crop for growth and maintaining its physiological processes, and the spatial resolution of ET (30 m) is close to the yield’s resolution (10 m) as compared to other features. There was also strong positive correlation between NDVI and LAI, which is expected as the relationship between NDVI and LAI is generally positive (Smith et al., 2008 ). Similarly, there was a strong relationship between NDVI and ET and LAI and ET in all growing seasons. Yield-biomass and yield-SM correlation had very weak correlations. The yield-ET correlation was stronger in the 2017 growing season (wheat) than in the 2019 and 2022 growing seasons (chickpeas). The multicollinearity was also observed between other features, which can be an issue for the DDMs; however, using the XGBOOST with L1 regularisation can mitigate the multicollinearity.

Correlation matrix showing the Peason’s correlation between yield, processed, and derived features

The learning curves of XGBOOST are crucial in understanding the effectiveness and performance of the model, offering insight into how well XGBOOST generalises to new, unseen data. Typically, XGBOOST learning curves demonstrate rapid improvement in training performance with increasing data size, followed by a plateau as the model approaches its optimal capacity.

This study explored and reported the learning curves to examine the ability of the models to learn from the derived and the processed features (Figs.  4 and 5 ). Figure  4 shows the RMSE of training and validation sets over different iterations for the four wheat experiments (1, 2, 3, and 4). All experiments showed a similar initial high RMSE of around 2.3 t ha −1 , rapidly decreasing and stabilising around 0.32 t ha −1 , indicating effective model learning and minimal overfitting. Experiment 4 (Fig.  4 D) stands out with the fastest convergence, stabilising within 50 iterations, compared to the other datasets, which stabilise at around 200 iterations. However, the final RMSE values for Experiment 4 were higher, suggesting lower model performance on this dataset. The close alignment of training and validation RMSE values across all experiments indicates good model generalisation. However, this is not unexpected, as in each field, we have training and validation samples.

Learning curves for wheat models using XGBOOST. Panels A , B , C , and D represent models built for Experiments 1, 2, 3, and 4, respectively

Learning curves for chickpea models using XGBOOST. Panels A , B , C , and D represent models built for Experiments 1, 2, 3, and 4, respectively

The RMSE plots (Fig.  5 ) for the chickpea experiments (1, 2, 3, and 4) reveal distinct patterns in model performance and generalisation. Experiment 1 (Fig.  5 A) shows a gradual decrease in RMSE, stabilising around 0.3 t ha −1 for training and slightly higher for validation after about 2000 iterations, indicating slight overfitting. The learning curve for the model built using Experiment 2 converged quickly, with training RMSE dropping below 0.2 t ha −1 within 500 iterations, but the validation RMSE remains around 0.3 t ha −1 , suggesting significant overfitting. The model built using Experiment 3 followed a similar trend to that built using Experiment 1, with RMSE stabilising at 0.2 t ha −1 for training and above 0.3 t ha −1 for validation, showing moderate overfitting. The model built using Experiment 4 exhibited the best performance, with both training and validation RMSE stabilising around 0.48 t ha −1 within 500 iterations, indicating minimal overfitting and good generalisation. These results suggest that while the models developed in Experiments 1, 2, and 3 exhibited varying degrees of overfitting, the model that used processed data only achieved a balanced and robust fit, highlighting the need for potential regularisation and feature optimisation in the other features in the other experiments.

The results obtained from the validation set show that the predictive power of the XGBOOST for both crops was almost similar, where the CCC ranged from 0.89 to 0.91 and an RMSE ranged from 0.23 to 0.25 t ha −1 for chickpeas, and CCC ranged from 0.87 to 0.92 and an RMSE ranged from 0.29 to 0.35 t ha −1 for wheat, for Experiment 1, Experiment 2, and Experiment 3, respectively (Figs.  6 and 7 ). In the case of Experiment 4 there was a sharp degradation in the XGBOOST model's predictive power, where the CCCs declined to 0.47 and 0.36, with increased RMSEs to 0.46 and 0.65 for chickpeas and wheat, respectively.

Observed vs predicted yield of chickpeas obtained from XGBOOST model for Experiments 1, 2, 3, and 4, shown in Figures A , B , C , and D , respectively

Observed vs predicted yield of wheat obtained from XGBOOST model for Experiments 1, 2, 3, and 4, shown in Figures A , B , C , and D , respectively

Feature importance from XGBOOST was calculated (Figs.  8 and 9 ) to identify the features that have more impact on the model. In general, the temporal (processed and derived) features were more important than soil attributes for both crops, indicating that temporal features provide valuable insights into the temporal dynamics of a system and can significantly affect the outcome of predictive models. The importance of rainfall was evident for chickpeas but not for wheat, whereas the LAI was one of the most important features in Experiments 1 and 2 for both crops. The importance of biomass was not evident in Experiment 1 for both crops as the models seemed to learn from the derived features more than biomass; however, biomass importance was evident in Experiment 3 for both crops, which revealed the impact of biomass on the outcomes with the absence of other temporal features. The NDVI was at the top of the feature importance for wheat and the third most important feature for chickpeas, which is likely due to the correlation with yield (Fig.  3 ). The other soil properties were not important for both models (except ECEC and clay, which appeared to be more important for wheat in dataset 3). Soil moisture appeared to be more important than biomass in Experiment 4 for both crops, indicating the importance of soil moisture for predicting crop yield.

Feature importance obtained from XGBOOST for chickpeas. A , B , C and D correspond to Experiments 1, 2, 3, and 4, respectively

Feature importance obtained from XGBOOST for wheat. A , B , C and D correspond to Experiments 1, 2, 3, and 4, respectively

Although the model built for Experiment 4 converged better, its prediction performance was still lower than the other models. Figure  10 illustrates the difference between observed (top panel) and predicted yield of wheat for Experiment 3 (middle panel) and Experiment 4 (bottom panel). The model developed for Experiment 3 captured the within-field variability and could predict low and high yield values. However, the model that was built for Experiment 4 overpredicted yield and could not capture the within-field variability. This is likely due to the low variability in the soil moisture features.

The difference between observed (top panel) and predicted yield of wheat using Experiment 3 (middle panel) and Experiment 4 (bottom panel)

This study investigated the potential of using MMs outputs (biomass and soil moisture) as features in ML models. Four experiments (Experiments 1, 2, 3, and 4) were performed with different combinations of features and tested using the XGBOOST model in this study. The results obtained from all experiments showed the potential for using biomass and soil moisture as features in DDMs. However, several points must be considered when using MMs outputs as features in DDMs. For example, the MMs are usually restricted by expert knowledge, and the quality of the outputs from an MM depends on how these models are designed. Therefore, using these outputs in DDMs might increase/decrease in prediction quality depending on the MMs predictive quality. In this study, the XGBOOST could learn from the derived features;however, the need for a more real representation of the temporal processes or higher-resolution inputs might require using prior knowledge to model one or more inputs (Reichstein et al., 2019 ). For example, in the case of the WB model (Wimalathunge & Bishop, 2019 ), the soil moisture is represented by the root zone depth at a 90 m resolution. This can be considered an advantage for use in the DDMs as the rainfall (5 km) (Jeffrey et al., 2001 ) does not provide such representation. C-Crop also assumes that biomass can be predicted by empirically using the greenness of the vegetation cover as the response to light and temperature. Donohue et al. ( 2018 ) suggest biomass is directly related to yield through the harvest index. As shown in the results, using biomass and soil moisture along with the soil attributes and removing the other temporal features, XGBOOST could preserve the predictive power while reducing the number of features by removing the derived features. However, biomass and soil moisture could only provide reasonable predictions with soil features, which means that soil attributes play an important role in predicting crop yield. Instead, biomass and soil moisture could use multiple features because they provide a more stable and less noisy representation of the temporal features.

The feature importance plots helped us understand different features contribution towards predicting the target variable. It allowed us to gain insights into which features significantly impact the model's performance, aiding in feature selection, understanding relationships between features, and improving interpretability. According to the results in Fig.  8 A, rainfall was the most important feature for chickpeas but not for wheat. This is because chickpeas data were obtained for two seasons, and the rainfall variation in these two seasons was significantly different (Tables  2 , 3 ), which explains the impact of the rainfall on the outcomes. The LAI was also on the top of the feature importance list for both crops, and this is because LAI is a good indicator of final crop yield (Ziliani et al., 2022 ). Several studies have demonstrated the usefulness of LAI for predicting crop yield in various agricultural systems (Cao et al., 2021 ; Ma et al., 2022 ; Mokhtari et al., 2018 ; Tewes et al., 2020 ). The peak LAI contributed significantly to the model, which could be due to the high correlation with final yield that was found here (Report value) and has been reported in the past, e.g., Cai et al. ( 2019 ). The NDVI was also one of the most important features for both crops (Experiments 1 and 2). Research studies showed that NDVI can be a very important feature in DDM models of yield (Al-Shammari et al., 2021 ; Filippi et al., 2017 ; Johnson et al., 2016 ). The accumulated ET was also an important feature to the model for both crops (Figs.  8 .A and 8B and 9A and 8B). ET is a parameter that reflects the impact of various factors on crop growth and is highly correlated with crop growth and yield (Khan et al., 2019 ), and the ET obtained from the CMRSET model was a significant feature for crop yield.

Elevation did not have an impact on the outcomes of the models. Because the elevation in the study area did not vary significantly, the models (Figs.  8 and 9 A, B and C) could not identify the relationship between elevation and other features to discern its impact on the crop yield. This is because the variation will make a difference if it varies within a field. A significant change in elevation leads to variation in temperature frost incidence, and water flow, which leads to variation in yield (Dixit & Chen, 2011 ; Kelleher et al., 2001 ; Thornton et al., 2009 ). However, this was not the case in our study area, therefore, the elevation was not important to the model.

The low importance of soil properties in the XGBOOST model in all datasets was attributed to the uncertainty of these properties at the fine scale (10 m in this study). The SLGA is a valuable resource for understanding soil properties at a national scale. However, it is important to acknowledge some limitations associated with this dataset. Firstly, SLGA relies on predictive modelling techniques that use various environmental covariates to estimate soil properties. This can introduce uncertainty and potential errors in the predictions. These models depend on the availability and quality of input data, which may vary across different regions of Australia. Additionally, SLGA provides point estimates of soil properties at a spatial resolution of 90 m, which may not capture local-scale variability or fine-scale features, such as soil texture gradients within landscapes (Han et al., 2022 ; Kidd et al., 2020 ). Therefore, caution should be exercised when using SLGA for site-specific applications or detailed studies.

The learning curves (Figs.  4 and 5 ) revealed that the models would learn better from the processed data. The learning curves also showed that using data from different years would lead to overfitting the model using the derived features (Fig.  5 A–C). However, using the processed feature (Fig.  5 D) led to minimising the overfit, indicating the potential for modelling the other features (e.g., soil data). This would lead to improving the temporal extrapolation of predictions through time.

Conclusions

The potential of incorporating MMs and DDMs has been investigated. Two outputs from two mechanistic models (C-Crop and WB models) were used with the commonly used LAI, NDVI, weather and soil data. The results of this study indicated that these two outputs could be helpful to replace the other temporal features while preserving the model’s predictive power, reducing noise caused by using many temporal features in the model, predictions at higher resolution, and more interpretable models. Biomass and soil moisture cannot completely replace the soil features used in this study. This is especially important when the scale of a study is small. This study also highlighted the need for improving MMs to improve ML models that use MMs outputs as inputs, as shown in the Experiment 4 results.

Data availability

Not applicable.

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Acknowledgements

The corresponding author would like to gratefully acknowledge the financial support (CSIRO/Data61 Postgraduate Research Stipend and Supplementary Scholarship in Digital Agriculture) from the Commonwealth Scientific and Industrial Research Organisation (CSIRO). This research was also funded by the University of Sydney, and partly funded by the Cotton Research and Development Corporation (CRDC).

Open Access funding enabled and organized by CAUL and its Member Institutions. The work was supported by CSIRO/Data61.

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Dhahi Al-Shammari, Niranjan S. Wimalathunge, Si Yang Han & Thomas F. A. Bishop

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Conceptualization & methodology: Dhahi Al-Shammari, Thomas F.A. Bishop; Material preparation & data collection: Dhahi Al-Shammari, Si Yang Han, Niranjan S. Wimalathunge; Statistical analysis: Dhahi Al-Shammari; Writing—original draft preparation: Dhahi Al-Shammari, Niranjan S. Wimalathunge, Si Yang Han; Review & editing: Dhahi Al-Shammari, Thomas F.A. Bishop, Si Yang Han; Supervision: Thomas F.A. Bishop, Chen Wang.

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Al-Shammari, D., Chen, Y., Wimalathunge, N.S. et al. Incorporation of mechanistic model outputs as features for data-driven models for yield prediction: a case study on wheat and chickpea. Precision Agric (2024). https://doi.org/10.1007/s11119-024-10184-3

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DOI : https://doi.org/10.1007/s11119-024-10184-3

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