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An Industry Analysis Of Smart Phone Industry

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1. Perform an industry analysis of the smart-phone industry. Do you believe Apple was effective in neutralizing the threats and capitalizing on the opportunities posed by the forces in the smart-phone industry? If yes, explain how. If not, explain why not. The industry analysis of the smart phone industry could be performed using Porter’s five forces framework. This framework involves describing the bargaining power of buyers, bargaining power of suppliers, threat of new entrants, threat of substitutes and rivalry among existing firms in the industry as well as explaining the impact of these forces on industry’s profitability. Following is a description of these five forces in case of smart phone industry, explanation of how these forces are likely to affect industry profitability and an analysis of how Apple strategically neutralized the threats and capitalized on the opportunities posed by these forces. Firstly, consider the bargaining power of suppliers. The suppliers in the smart phone industry had strong bargaining power because they were specialist, i.e. providing exclusive supplies and services and also few in number as is stated in the case; “The supplier who captured most of the value in the smart phones was Qualcomm, which largely controlled CDMA (3G) and LTE (4G)-the two most important protocols for wireless service. Except in China, Qualcomm earned between 3.5% and 5% royalties on almost every CDMA and LTE phone sold in the world. The CPU structure was also
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