My father, long retired, ran his own business for as many decades as I can remember. His view of competition was simple. “If they’re spending money somewhere else, that’s competition for me.” I understand the sentiment.
Does a grocery store compete for dollars with a drug store or gasoline station with a mini-mart? Yes. Does an airline compete with the auto industry? In a way– transportation— yes. If everyone is out to get your hard earned dollar, then wherever else a dollar goes– direct competitor or just anywhere else, it’s a competitor, right? Who are Apple’s competitors?
Allow me to point out the obvious flaw in my father’s reasoning. There are direct competitors to a company’s products, and there are indirect competitors. For example, is the free and open source Tizen OS on a cheap Samsung smartphone sold only in India, a direct competitor to Apple’s iPhone? Under my father’s definition, yes. But if Apple doesn’t bother to target that segment of customer, it becomes indirect competition.
: one that competes: such as
a : rival (a fierce competitor on the soccer field)
b : one selling or buying goods or services in the same market as another (offering lower prices than our competitors)
See the distinction? Direct is competition. Indirect is, well, less competition at worst, and not at all in the obvious circumstances.
Who make up Apple’s competition? It depends on what the category is. Google? Microsoft? Samsung? Dell and HP? Lenovo and Motorola? Amazon and Huawei? Sure, let’s go with those as both direct and somewhat indirect competition for Apple, but note that such competition does not exist in every product category where Apple competes.
Google, for example, sells the Pixel smartphone, a direct competitor to the iPhone. Ditto for Samsung’s Galaxy class phones. Motorola and Huawei, too, but neither competes directly with Apple’s premium location in the smartphone segment. Dell and HP represent direct competition to the Mac. Amazon sells tablets. So does Apple, hence somewhat direct competition, but Apple targets the premium end and the enterprise space, while Amazon’s tablets are the cheapest of the cheap.
Does Profit Matter?
Now, let’s compare how Apple competes among the technology giants in the profit category where money talks. In each business segment– PCs, smartphones, tablets, smartwatches, media and tech services, Apple owns the largest percentage of revenue or profits from each category. Not only does Apple sell more iPhones than Samsung sells smartphones, but Apple takes most of the profits, too. The same holds true for smartphones, personal computers, smartwatches, and almost everywhere else where Apple competes with a product or service. Apple makes more money on App Store sales, and more on music and media sales (the latter would just about be a Fortune 100 company on its own merit).
Apple competes on marketshare by selling products that other companies sell, but the company competes even more on revenue and profits– far more valuable metrics than mere marketshare– and that means Apple owns the competition.
Yes, Apple has many direct competitors, and most of them are the obvious players (though they change as the industry’s change), but the company has far less competition when it comes to revenue and profits; especially the latter.