Apple PESTEL Analysis

PESTEL is a strategic analytical tool and the acronym stands for political, economic, social, technological, environmental and legal factors. Apple PESTEL analysis involves the analysis of potential impact of these factors on the bottom line and long-term growth prospects.


Political Factors in Apple PESTEL Analysis

The extent to which Apple is able to achieve its primary objective of profit maximization depends on a wide range of political factors. These include government stability, level of bureaucracy, corruption, freedom of press, home market lobbying groups etc. Additionally, activities of trade unions can be mentioned as important political factors for Apple.


Dispute with US Federal Bureau of Investigations

The most recent and significant case that illustrates the potential impact of a political factor relates to Apple’s battle with US Federal Bureau of Investigations (FBI). Specifically, the company has disputed with FBI over whether it should be forced to hack an iPhone used by one of the San Bernardino terrorists. The matter turned into a major political debate dividing the public into two camps – those who support the company and those who oppose it regarding this particular issue.[1]

Moreover, recently members of US Congress demanded Apple to remove controversial Saudi Arabia government Absher app. The app has attracted criticism “due to its nature of curtailing the rights of women to travel and move freely in and out of Saudi Arabia”[2] The pressure from Congress members to get the app removed from Apple App Store is a stark illustration of potential impact of political factors on the business.


Political Lobbying

The amount of political lobbying by the company represents an important element of Apple PESTEL analysis. As it is illustrated in Figure 5 below, the company has been consistently increasing its annual political lobbying budget during the past several years to reach USD 6,62 million in 2017. Apple’s lobbying efforts are directed at the development of legislations that are favourable for the business on long-term perspective.

Apple PESTEL Analysis

Annual lobbying by Apple Inc.[3]

Apart from the direct business interests of the company, Apple’s lobbying activities also pursue greater causes for the benefit of the humanity and the environment in general. To illustrate this point, it can be mentioned that in June 2017, Apple urged the White House to remain in the Paris climate agreement, to retain American leadership, and to take meaningful action on climate change. [4]


Impact of global political factors

Apple had to deal with the impacts of political factors in international scale as well. A call by Dmitry Gorotsov, a Member of Parliament in Russia to stop lawmakers in the country “using iPhones and iPads to protect them from eavesdropping by foreign special services”[5] can be referred to as an example where politics interferes with business. Another lawmaker in Russia famous for his harsh approach towards gay propaganda has publicly suggested Apple CEO Tim Cook to be banned from visiting the country due to the latter’s public acknowledgement of his homosexuality on October 30, 2014[6]. These cases can be interpreted as a clear illustration of potential impact of a political factor on Apple sales in Russia. It is important to clarify that both cases mentioned above relate to political factors that are associated with Apple in a direct manner.


Economic Factors in Apple PESTEL Analysis

There is a wide range of economic factors that affect Apple directly, as well as, indirectly.  These include overall macroeconomic climate in the market, inflation rate and interest rate, as well as, foreign currency exchange rates. Moreover, the world’s largest IT company by revenue is affected by the cost of labour and changes in disposable incomes of consumers.


Currency exchange rate

Apple generates about 63% cent of its total sales from international markets[7] and as such its revenues are negatively affected by the current tendency of strengthening USD. Apple’s CEO Tim Cook adopted a currency hedging program in 2014 aimed at easing the negative effects of strengthening USD. Hedging practices can only compensate exchange rate losses to a certain extent and the foreign exchange risk for the company is not going away any time soon.


Interest rates

Changes in interest rates can affect Apple revenues to a significant extent. Based on investment positions as of September 29, 2018 and September 30, 2017, a hypothetical 100 basis point increase in interest rates across all maturities would result in a USD4.9 billion and USD6.0 billion incremental decline in the fair market value of the portfolio, respectively.[8]


Cost of Labour

Apple has based its manufacturing units in China due to cost-efficiency of resources in general and cheaper human resources in particular. However, average hourly wages in China reached USD3,60 in 2016, an increase of 64% since 2011.[9] Rising costs of labour is a significant economic factor that has direct implications on the profitability of the business.


Tax rates

Taxation rates can be mentioned as an additional economic factor that affects Apple. Tax reforms were proposed by President Trump to make US companies more competitive in the global market. It has been noted that the “plan to lower the statutory corporate rate to from 35% to 20% would substantially lift Apple’s already gargantuan profits”.[10]


Inflation rate

The company is also affected by increasing rate of inflation in the US due to its large amount of cash reserves.  Interestingly, one of many Apple’s investors, hedge fund billionaire David Einhorn has attempted to sue the company to force payment of dividends of USD137 billion[11] so that negative impact of inflation could be addressed.


Apple Inc Report contains a full version of Apple PESTEL analysis. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on Apple. Moreover, the report contains analyses of Apple business strategy, leadership, organizational structure and organizational culture. The report also comprises discussions of Apple marketing strategy, ecosystem and addresses issues of corporate social responsibility.


[1] Tibken, S. (2017) “Apple vs. FBI one year later: Still stuck in limbo” CNET, Available at:

[2] Owen, M. (2019) “Members of congress demand Apple take down Saudi Absher app” Apple Insider, Available at:

[3] Open Secrets (2019) Available at:

[4] Environmental Responsibility Report (2018) Apple Inc.

[5] Russia Today (2014) Available at:

[6] The Independent (2014) Available at:

[7] Annual Report (2018) Apple Inc.

[8] Annual Report (2018) Apple Inc.

[9] Yan, S. (2017) “’Made in China’ isn’t so cheap anymore, and that could spell headache for Beijing” CNBC, Available at:

[10] Tully, S. (2017) “How Tax Reform Could Make Apple a $1 Trillion Company” Fortune, Available at:

[11]Neate, R. (2013) “David Einhorn Suing Apple Over Shareholder Cash” The Guardian, Available at: