Is Apple a Monopoly or Oligopoly?

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Apple is undoubtedly one of the most prestigious companies in the world, but behind the great success they have had, hard work is hidden by its founders Steve Jobs and Steve Wozniak, since they were people with few resources and with a dream that which over time they could get little by little. The key to the ascent of this company was due to the union of qualities of its founders, Jobs was a visionary in the business world and Wozniak was a genius of engineering, his union was a crucial complement to his success.

According to Apple vice president of designs Jonathan Ive, Apple’s goal is not to make money, its goal is to offer good services. Creating fantastic products, which consumers would like very much, they knew that they would get two crucial factors at the same time, popularity for the quality of their products and acceptance of consumers, factors that would lead this company to obtain profits anyway. Therefore, this company has managed to position itself among the highest positions.

In order to answer the question of whether Apple is a monopoly or an oligopoly, we need to determine characteristics, that a firm must have in order to enter to the monopoly category or the oligopoly structure. So, if we are talking about monopoly, the characteristics should be as follows: it must be a single firm in the market and that controls it; differentiation in its products which is key, not entry to other firms; a firm that belong to this category has the advantage of being able to raise or lower prices at its will. The characteristics that a firm must have in order to belong to the oligopoly structure are: interdependence; belong to a small number of firms that control the market; difficulty of entry to other firms that don’t belong to this structure; identical or similar products in comparison with the companies that belong to said structure.

Depending on the market structure, a company can be differentiated from another easily since each one has different characteristics and, in turn, shows the possibilities or strategies for an optimal market positioning. Market structures help to know the number of agents in the market, both buyers and sellers, its relative bargaining power in terms of the ability to set prices, the uniqueness of its products and its ease, it helps to know its specific type of demand such as perfectly elastic or other.

In the market structure of monopoly, the company can make it easy to obtain benefits since it has the control of the market, which makes it easy to raise its prices, whenever it wants. It can produce less quantity of products whenever it wants. It has barriers to entry to create strategies in the market and prevent the entry of other competitors. Basically, this market structure has many benefits.

If the companies that belong to the market structure of oligopoly want, they can make agreements between them and that way they can create strategies. Also, they can raise the prices of the products at the same time, and in this way produce more benefits to them, since they are a small group of companies that control the market.

So, getting back to the main question, we can say, that Apple belongs to the monopoly market structure. It has advantages over market competition since can control sufficiently so that it does not harm it. As Apple is a company that is very well positioned and manage a good level of competition in relation to other companies. Does not suit Apple the entry of more companies to the market that do not benefit it and instead increase competition by risking its established company to have less demand in their products, this is why barriers to entry are created, which refer to the difficulties and obstacles, that a firm encounters, when it comes to accessing a market. Barriers to entry are important because they help to measure the level of competition and profitability and this helps established enterprises to develop strategies to defend themselves against the appearance of new competitors in the market. According to Fortune 500, Apple is positioned as the number 3 company worldwide in terms of profit, showing profits around 59.531 million dollars. Demonstrating that it is one of the most prestigious companies in the world and showing how it has been maintained over the years.

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