Michael Porter's five forces (threat of new entrants, rivalry among existing firms, threat of substitutes, bargaining power of buyers, and bargaining power of suppliers) offer a good structure for analyzing Apple Computer's current position in the computer industry. This analysis can also provide insight into the company's long-term critical success factors.
Although Apple is generally associated with computer hardware (as typified by its Macintosh product line), the company participates in a wide range of computer products, including hardware, software and peripherals for the Apple market. This gives the company some resilience in that its breadth of offerings can help insulate it from downturns in any one area, but the fact that all of its products are dependent on the Apple hardware platform (with the exception of its limited joint venture with IBM) reduces the benefit which might otherwise be achieved.
This also makes Apple vulnerable to new entrants, particularly on the software front. Companies both large and small (including Microsoft) can write applications which can run on the Apple platform and which can take away market share from Apple's own product offerings.
There is also intense rivalry among existing firms, a fact which has not been lost on Apple (its CEO sees one of its primary objectives as the reduction of the perception of computers as commodities). Although Apple has joined forces with IBM, it has not done so with the many IBM clone manufacturers, such as Dell and Gateway, all of whom are capable of bringing significant price pressure to Apple's market.
The threat of substitutes is a very real one for Apple in that the company's hardware must now compete with the lower priced IBM-compatible personal computers. Where Apple once had a significant advantage in compatibility of hardware and software and ease of use, the Windows operating system and the attractiveness of the prices of IBM-based machines...