Advances in Economics, Business and Management Research, volume 652

Proceedings of the 2022 7th International Conference on Social Sciences and

Economic Development (ICSSED 2022)

Strategy Analysis of the COVID-19's Influence on

Apple
Yifan Zhao1, †, *, Zhekai Zhang2, †
1
Shattuck-St. Mary's School, 1000 Shumway Ave. Faribault, MN 55021, America
2
Mount Douglas Secondary School, Victoria, V8N 2M5, Canada
*
Corresponding author. Email: [email protected]
†
These authors contributed equally

ABSTRACT
Apple is one of the world's largest technology companies, which specializes in developing, manufacturing and selling
personal computers, servers, peripherals, computer software, online services and personal digital auxiliary devices.
Since January 2020, the COVID-19 outbreak has been spreading around the world, which had a huge impact on Apple's
operation. The device sales and production has been affected in countries, including China, Italy, South Korea, and
United States. According to the spread of the epidemic, many areas have also begun to shut down and most shops have
been forced to close. At the same time, the shrinking sales volume has also had an essential impact on Apple's production.
This study conducts the PEST analysis of Apple, and evaluates the effect of COVID-19 on this company. According to
the actual situation, this paper analyzes Apple's strategy and puts forward some reference suggestions.

Keywords: COVID-19, Apple, PEST, Strategy

1. INTRODUCTION recover, the company is expected to overcome its

pandemic-related challenges and continue to benefit from
An American worldwide corporation specializing in increased reliance on technology. Experts say the main
the design, development, manufacture, and marketing of reason is that older models were not optimized for
portable electronic devices, mobile phones, computers, videoconferencing tools, such as Zoom, key for team
laptops, media devices, and software, Apple Inc. is meetings, and small classes. One of the biggest
located in Cupertino, California. The Company's beneficiaries of the pandemic's tech trends are laptops, as
headquarters is located in Cupertino, California and is working is becoming increasingly flexible. As the
controlled by an administrative team and panel of Company with the highest market value globally,
directors. The Apple company designs and manufactures surviving this crisis and completing further growth is
a wide range of products, such as iPhone, iPad, Macs, very worth studying.
Apple Watch, iTunes, and iPod. In addition, Apple Apple is without a doubt one of the most successful
promotes a culture of creativity and innovation by corporations in the world. In general, the approaches
encouraging its engineers and designers to come up with presented in this study are easily adaptable to real-time
groundbreaking ideas that ultimately made it a world image processing [1]. The user interface of an interactive
leader in computing. The primary goal of Apple is not to computer system is how it communicates with its users.
make a profit but to make exceptional products. The user interface design incorporates every part of the
The global spread of Covid-19 is affecting the system that is visible to the user. There was a period when
economic environment and business model across the all computer users were computer professionals, and
world. To cope with the challenges, Apple must change interfaces comprised jumper wires on patch boards,
its strategies to adapt to the changes. Apple proved one punched cards created offsite, and batch printing.
of the biggest winners in the first year of the pandemic Keyboards, mouse, and graphical displays are the most
despite store closures, supply-chain disruptions, and popular types of interface devices used by non-specialists.
strained finances for many customers as it posted a record As more people use computers, the user interface
fiscal year and saw its stock nearly double. As Apple's becomes an increasingly important component of the
U.S. stores are open again and the job market starts to software of a system. Computer power is increasing,

Copyright © 2022 The Authors. Published by Atlantis Press International B.V.

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Advances in Economics, Business and Management Research, volume 652

which makes the user interface more of a bottleneck loudness of the device after assessing the amount of
when it comes to solving problems by applying surrounding sound. This allows the device to adapt to its
computer-based systems [2]. Rekimoto introduced a new acoustic surroundings and lowers the potential of audio
sensor architecture for making interactive surfaces output disturbance by dynamically altering the volume
sensitive to human hand and finger gestures. It uses setting [7].
capacitive sensing and mesh-shaped antenna to
An acoustic port, such as a speaker port, a
determine the distance between the hand and the cover.
microphone, and an earpiece and receiver port, can be
This sensor recognizes multiple hand shapes and
found on a portable handheld test fixture. Once put on the
positions.
test fixture, the port on the media device is linked to an
Unlike camera-based gesture recognition systems, acoustic aperture associated with a speaker, microphone,
this approach is not affected by illumination or occlusion or earpiece/receiver, as applicable. A test tool, such as a
issues since all sensor components are embedded into the sound pressure level, S.P.L., meter, must have an output
surface. This article provides a description of the sensor or input sound port that may be linked to the test fixture's
architecture as well as two experimental systems that acoustic port [8]. The flexible circuit is followed by
show its use: a table-size system and a tablet-size system. extending and electrically connecting the voice coil
As a result of this design, various interaction approaches loudspeaker voice coil to the bottom side of the sound
that would not be conceivable without it are outlined [3]. emitting surface [9].
So that the display may be greatly expanded, the
As previously indicated, past studies attracted a
multifunctional portable device should include as few
tremendous lot of research interest. This article looks at
physical buttons, keys, or switches as feasible. It
how apples fared throughout the pandemic. The second
comprises audio and video inputs in addition to a
portion contains a PEST analysis, the third section
multipurpose portable device with a range of input
discusses the outbreak's impact on Apple, the fourth
methods such as touch-sensitive screens, touch-sensitive
section discusses Apple's coping strategies, and the fifth
housings, display actuators, audio inputs, and so on. The
section provides a summary.
gadget also includes a user-configurable GUI. This
enables the device to execute a wide range of functions
[4]. It is possible to verify a user for a certain position
2. PEST ANALYSIS
using an electronic device equipped with a display and a PEST Analysis (political, economic, social, and
fingerprint sensor. When a certain device function is technological) is a management technique that allows a
locked, the device shows a graphical element on the company to examine important external elements that
display, the visual element showing the initial direction impact its operations in order to become more
of finger movement that permits unlocking of that competitive in the market.
specific device function. It detects a user input that
comprises a finger movement in the first direction over Apple Inc. is a global firm recognized for the design
the fingerprint sensor and evaluates whether the input of iPhones, MacBook, and iPods, among other things.
matches unlock requirements in part based on fingerprint They are also well-known for its systematic connectivity.
information detected by the fingerprint sensor during the Their devices have an unbelievable connection. It is one
input. of the seasons in which they have the potential to be one
of the top corporations in the world.
When a user input matches the unlock conditions, the
gadget activates the corresponding function. By
2.1. Political Factors
concluding that the information does not fulfill the
unlock requirements, the gadget keeps the particular A trade war between the United States and China is
position locked [5]. This invention pertains to an possible. Factors such as government-level trade
earphone that includes a body section and an acoustic restrictions and tariffs, as well as insufficient political
output aperture that allows sound to be output into a relations, may have an impact on the Company's
user's ear from a driver located inside that body portion. performance in China. However, the United States of
The device's body is outfitted with an acoustic tuning America's political relations with other countries are
element. An acoustic tuning member specifies a driver's stable. They have negative consequences for the
back volume chamber and contains an acoustic output company and may have an impact on its performance
port for producing sound to emanate from the driver's because a significant portion of its income is earned
back volume chamber, therefore improving the outside of the United States of America. It may also have
earphone's acoustic performance [6]. Audio output can be an impact on the Company's reputation and business
modified depending on the output of a sound sensor operations in China. Apple struggled to keep political
system in one embodiment of the present invention. factors under control. The majority of its product sales
During operation, the system makes use of an outstanding come from countries other than the United States.
sensor to determine the ambient sound level in the
vicinity of the device. The mechanism adjusts the

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Advances in Economics, Business and Management Research, volume 652

Nonetheless, in Apple's situation, significant political external factors. The mobile cloud is a recent trend that
external variables such as enhanced free trade rules and includes various Internet-based companies and software
balanced politics in developed countries provide chances. behemoths such as Microsoft, Facebook, and Google.
Apple's extra-liberal trade practices enable it to deliver Apple is at the top of the market because it invests heavily
the bulk of its products to various markets throughout the in research and development. Additionally, the Company
world. Because Apple can foresee only small political can capitalize on this opportunity by offering cloud-
difficulties influencing its company, political stability friendly gadgets and apps. Furthermore, the
provides opportunity in a number of industrialized technological amalgamation of devices is a critical trend.
countries. Apple may enhance its performance by Apple can capitalize on this opportunity by continuing to
capitalizing on political possibilities in its macro- offer products that can be seamlessly connected. The app
environment, according to this component of the PEST market is expanding, and Apple needs to expand its App
analysis model. Store. According to this component of the PEST analysis
methodology, Apple is well positioned to capitalize on
2.2. Economic Factors such critical possibilities in its business environment's
technology aspect.
The majority of economic factors influence Apple's
ability to generate opportunities. The most important External political variables generate more
external factors for Apple are rapid growth in developing possibilities than threats. The bulk of the recognized
countries and balanced economies in developed countries. economic conditions provide opportunity. They allow the
Furthermore, due to the economic stability of most company to expand its operations in the future, but some
developed countries, Apple can expand its business and of the identified negative elements may have an influence
make more money. It is critical for developing countries on Apple's sales in China. The social elements indicated
to expand or grow quickly. Inflation, recession, and as being far more beneficial to the company than the
currency fluctuations could all have an impact on Apple. other variables. P.C.P.C. sales appear to have
The inflation rate has risen, and the unemployment rate skyrocketed during the epidemic, owing to mass
has risen. As a result, consumers spend less money, purchases by businesses and schools that must now
primarily on 'luxury goods.' Despite this, Apple's revenue connect to workers and pupils remotely, as well as
is unaffected by the economic downturn, despite the fact consumers who had delayed an update for years.
that the majority of the company's products are high-end.
Apple made it possible by creating products that were 3. THE IMPACT OF COVID-19
distinct from those of its competitors, which increased
demand for Apple's products. 3.1. Sales
COVID-19 has had an impact on retail outlets, and
2.3. Social Factors
iPhone sales in China are down this year. Previously
Nowadays, technology plays an important role in our afflicted by the domestic pandemic, Apple has finished
social lives, and Apple is known as the technological its offline retail outlets for several days in a row, while
ruler due to its quality and design. Furthermore, the music mobile phone sales have plunged. According to data from
industry has had a significant social impact and has the domestic mobile phone market provided in February
expanded its market to cyberspace. Apple has created the by the China Academy of communications and
world's largest virtual media store for digital music, communications, the domestic mobile phone market
known as iTunes. Apple Incorporated benefits from the shipped 6.341 million units in February, a 54.7 percent
modern social lifestyle. The effects of social factors are reduction year on year. In January and February, 26.7
central to Apple's business. Apple's main social factors million units were supplied, a 42.1 percent decrease year
include improved mobile access and social media. These on year. It's worth mentioning that Android phones sent
elements present opportunities for Apple. The growing roughly 5.84 million messages in February, while
popularity of mobile access provides an opportunity for iPhones sent about 490000. This indicates that phone
Apple to continue providing convenient mobile devices. shipments in February declined by 770000 (62%) year on
The iPhone, iPad, and Apple Watch have already begun year and 1.82 million (78%) month on month. The
to capitalize on this opportunity. Furthermore, as the use closing of shops had a tremendous impact on Apple. This
of social media grows, so will the demand for Apple time, eliminating all retail outlets outside of Greater
products. This aspect of Apple's business environment China will result in a substantial drop in Apple's mobile
offers the company more opportunities than the phone sales since retail stores are critical to Apple's
others.2.4 Technological Factors business model.

External technological factors are influencing Apple's Marketing and promotion of items at a physical retail
ability to generate opportunities. Mobile cloud trend, 6G, business fosters a relationship between the staff and the
and improving app market are the critical technical customer. Product sales are directly affected by
employee-customer engagement and communication.

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Because Apple values interactions between staff and chain provided tremendous ease to workers who worked
customers, it will improve formal language training for from home. Prior to the virus, 33% of users stated they
on-site technical support professionals to stress the were "inseparable" from Apple and its services. This
significance of details. There are guidelines and proportion increased to 40% last year and will reach 48%
regulations for the usage of preload images and music on by 2021. Similarly, the share of "close users" has risen
each prototype. It is dedicated to provide the best possible from 41% before the new crown to 51% in 2020 and 52%
experience for its clients. Because of this exceptional user this year. Prior to the pandemic breakout, around 22% of
experience, some individuals will visit Apple retail customers were prepared to pay a 20% premium for
outlets to purchase products. Apple retail locations stand Apple products, growing from 21% last year to 29% in
out among numerous retail outlets by offering consumers 2021. As can be seen, the pandemic has increased
with a more ultimate experience through high-quality customer reliance on Apple.
customer service and the quest of perfection. Apple will
suffer enormous commercial losses as a result of the 4. STRATEGIES IN COVID-19
pandemic forcing the closure of physical retail shops.
The global proliferation of COVID-19 is altering the
3.2. Supply Chain global economic climate and business model. To meet the
difficulties, Apple's methods must evolve to keep up with
A novel profit model has been adopted by Apple, the times.
which differs from the traditional manufacturing industry
According to experts, the main reason is that previous
of controlling product costs. Apple's combined marketing
models were unsuitable for videoconferencing
strategy of "hardware + iTunes software + content" is a
applications like Zoom, which are essential for team
novel profit model. Rather than selling products, apple
meetings and small classrooms. Laptops have benefited
sells an integrated "solution" that meets people's
the most from the pandemic's technological
demands in life, work and entertainment. Based on this
advancements, since employment is becoming more
unique closed ecosystem design, Apple has the
flexible.
confidence to adopt the skimming pricing method, which
means that the products have high pricing and high gross
profit. Although the unit charges for music, application
4.1. Diversification of Products
software and other services are low, they are "profit Apple's choice to expand its services division paid off
without cost", 63.7%. The traditional product value chain during the pandemic, yielding the highest-ever revenue
suggests that Apple has built its primary competitiveness and assisting the company in defending itself against
on the two ends of the "Smiling Curve" with the greatest downturn in certain of its areas.
value: research and development and marketing,
capturing the most significant profit space, while Apple Apple should continue to develop a wide range of
has primarily outsourced assembly and manufacturing in consumer electronic gadgets, such as smart phones
low-value areas. Since 1998, the cook has implemented (iPhone), tablets (iPad), PCs (MAC), smart watches
drastic reforms in Apple's manufacturing and supply (Apple Watch), and TV boxes (Apple TV). The iPhone
chain, putting pressure on its vast inventory. He closed accounts for the vast bulk of Apple's total income.
all factories and will manufacture outsourcing products Furthermore, Apple provides its clients with a variety of
worldwide. He also shut down many warehouses and services such as Apple Music, iCloud, Apple Care, and
domestic distribution centres at the same time and Apple Pay. Apple's devices use software and
arranged supply chains near the factories of Apple's semiconductors created in-house, and the company is
outsourcing manufacturer partners. The result has been a well renowned for its combination of hardware, software,
dramatic reduction in Apple's inventory and fixed asset and services. Apple's goods are sold online, in company-
investment, allowing Apple to become a standard "light owned shops, and through third-party merchants.
company" that focuses on marketing and R & D. A large
proportion of Apple's suppliers come from China. 4.2. Building Subscription Income
Perhaps because the Chinese government's reasonable
supervision of the epidemic has recovered faster than Apple's move to expand into a subscription-based
other countries, it has no significant impact on product company, as anticipated some years ago, has aided.
sales. Apple's previous product-driven income generating
approach depended significantly on developing
3.3. Consumers extremely popular electronic goods, leaving the company
vulnerable if economies fell or customer enthusiasm
According to M.B.L.M., 50 percent of the 3000 decreased.
U.S.U.S. customers assessed during the epidemic utilized Apple currently provides an Apple Card-based
Apple's products and services more than normal. During payment plan for iPhones and has stated that it is
the pandemic, Apple's good system product ecological "working on offering this for other items as well." Even

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Advances in Economics, Business and Management Research, volume 652

during a crisis, subscription income is more predictable. this point. It used the time to look at disadvantages to
This might help Apple maintain a consistent income. them and turned it into an advantage. Also, Apple are
developing in all the areas in the PEST. Some companies
4.3. Focusing on Telework only form the technology part and forget about the other
three. Youth entrepreneurs should learn about how they
Working remotely has increased productivity among react to the pandemic. Also, this case taught a lesson
certain of the Company's workers while significantly about how to adapt to the environment. In the future,
cutting management expenditures. People are becoming youth entrepreneurs should act like Apple and manage
more acclimated to working and learning from home, and the poverty smartly with the environmental changes and
this trend is likely to continue. The message must be that, time.
rather than perceiving remote working as a temporary
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pandemic and their PEST situations. They were smart at

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