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Apple Inc. and Their Success Story on Diversification

I agree with the main idea in the discussion response that Apple Inc. is one of the firms in the telecommunication industry that tell their success story on diversification. The Company’s vision of developing personal computers that would change how people create and share information lives on decades after it was founded. As judiciously stated in the response, Apple’s diversification journey began with personal computers but has since grown to become the world’s leader in offering telecommunication services (Yarow, 2018).

Although new product lines now propel the tech giant to greater success, Apple’s new personal computers and smartphones continue to boost revenue growth, thereby giving the Company a competitive advantage in the global market.

Also, Apple’s service segment has been reporting growth since the last quarter of 2018. The Company has diversified its product lines in recent years with the introduction of the iPad, Apple Watch, and iPhone. These products reflect a related diversification strategy used by Apple to stay ahead of the competition.

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Nevertheless, Apple’s services segment is increasingly becoming a lucrative cash machine as the Company seeks to monetize its products through services. I find a business article by Schomer (2018) so relevant to the diversification strategies of Apple that it supports the need to continue expanding the service segment. There is no doubt that diversification is creating substantial value in terms of high revenue streams and effective risk management.

Apple’s service lines such as Apple Play, iCloud, Apple Music, and App Store propagate a bearish view of the Company’s service segment as it recorded an estimated $ 10 billion in service revenues last year.

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The move from products alone to products and services adds value to Apple since apps in the service segment can serve over one billion devices (Schomer, 2018). Today, Apple uses a concentric diversification strategy as it raises additional revenue through user subscription fees for the services. Therefore, I concur with the view that any potential competitor of Apple can succeed only if they remain innovative in their products and monetize services for the products.

References

Schomer, A. (2018, August 2). Product Diversification – Learn About the Strategies of Diversification. Retrieved April 1, 2019, from

Yarow, J. (2018, August 31). Apple proved that it is no longer just an iPhone company. Retrieved April 1, 2019, from

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Apple Inc. and Their Success Story on Diversification. (2019, Nov 24). Retrieved from http://studymoose.com/apple-inc-and-their-success-story-on-diversification-essay

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