Apple Inc. in 2023

Under CEO Tim Cook, Apple became the first trillion dollar market cap company, the first two trillion dollar company, and the first three trillion dollar company. Since the COVID pandemic, Apple gained over 20% of the world smartphone market and 50% of the U.S. market, making Apple the largest seller of smartphones in 2023. Apple’s services revenues were exploding while it was actively diversifying its product line, introducing their first spatial computer called the Vision Pro in June 2023. At the same time, Apple was facing headwinds: smartphones were maturing in developed economies, revenues were dependent on premium pricing for the iPhone, services were closely tied to iPhone sales, and a new wave of regulations in the U.S., China, and Europe were casting a shadow on Apple’s future. This case explores the sources of Apple’s competitive advantages, the sustainability of the iPhone, the efficacy of Apple’s strategy as a walled garden, and the pros and cons of building a service business largely built around the iPhone.