Apple Co. Rivalry

1. For rivalry within the industry, the market share of Apple was about 3% of the total PC market. The reason for this was that other PC manufacturers were building generic computers at various low prices while Apple would only build high quality products at premium prices. This gave Apple a low market share and high rivalry with other companies. For Suppliers, the suppliers of hardware were many so while the suppliers for microprocessors and OS’s were few like Intel and Microsoft. The first set was available at competitive prices while the second set was not as widely available. For Buyers, there were many people and organizations that would buy Microsoft PCs due to lower prices so they had more power to choose while buyers for high quality of Apple were few. In threats of new entrants, due to the ease of Micorsoft’s model in the 80s many new entrants could enter the market easily with a competitive machine. In threat of substitutes, there weren’t many in the 80s but by 2005 there were many different players in the PC market so there were all kinds of machines to choose from.

4. The key problem for Apple in the PC market was the high price of its products while Microsoft machines were lower priced. Since Apple machines could only use the Apple OS, while Microsoft was compatible with all other machines, Apple’s market share was low. This caused Apple’s adoption rate to slow down and then more software would be developed for Microsoft due to its high market share. This in turn would give manufacturers and the buyer incentive to increase Microsoft market share due to more software available for it. This cycle would continue in Microsoft’s favor. The high price would also inhibit the common user as well as businesses to purchase an Apple machine due to its lack of software and extra cost for the budget conscious.