Apple PESTEL Analysis

By John Dudovskiy
July 7, 2023

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


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 external political factors for Apple.


Tax Payments

The payment of taxes is a noteworthy political factor affecting Apple. The multinational technology company uses complex legal means to keep its tax payments as low as possible globally, especially in the US and Ireland. In the US, the tech giant holds the majority of its cash offshore so that it can avoid paying corporate income taxes in the US.[1] Any changes in government taxation policies may affect the bottom line for the iPhone maker.

In Europe, European Commission concluded that Apple should have paid the Irish state at least €14 billion (USD 16.2 billion) in corporate tax for 2004-2014. However, in 2020 the General Court of the European Union ruled that European Commission was wrong, a decision that was welcomed by the Irish government.[2] Changes in taxation policies in general and the stance of governments and government agencies towards the iPhone maker in particular are external political factors that have implications for the business.


Dispute with US Federal Bureau of Investigations

The most 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.[3]  At the end FBI used Azimuth, a hacking firm based in Australia to unlock the iPhone to achieve their objective.[4] The incident cemented Apple’s reputation as a company that prioritizes customer privacy even over the requirements of law enforcement agency.

Moreover, some 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”[5] The pressure from Congress members to get the app removed from App Store is another stark illustration of potential impact of political factors for Apple.


Political Lobbying

Political lobbying is a bid to influence politicians and external political environment with positive implications for the iPhone maker. As illustrated in Figure 1 below, the amount the tech titan spends on political lobbying has been mainly increasing for more than two decades to reach the peak USD 9,4 million in 2022. It is an increase of 44% compared to the previous year. Specific policies the company attempts to influence include antitrust bills, online privacy, taxes, semiconductor policy, content moderation, climate change, immigration and LGBTQ issues including the Respect for Marriage Act.

Apple PESTEL Analysis

Figure 1 Annual lobbying by Apple Inc.[6]

Nevertheless, the iPhone maker’s lobbying spending is less compared to other tech giants. For example Microsoft, Google and Facebook-owner Meta spend USD 9,8 million, USD 10,9 million and USD 19,2 million on lobbying respectively. The biggest spender here is Amazon with the lobboing budget for 2022 reaching USD 19,7 million.[7]


Impact of global political issues

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”[8] 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[9].

Trade war between USA and China can be mentioned as another global political factor that affects revenues and long-term growth prospects of the iPhone maker. 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 more than 57% cent of its total sales from international markets outside of United States[10]. Accordingly, company 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.

The tech giant hedges portions of its forecasted foreign currency exposure associated with revenue and inventory purchases, typically for up to 12 months.[11] It has to be noted that 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  24, 2022 and September  25, 2021, a hypothetical 100 basis point increase in interest rates across all maturities would result in a $4.0 billion and $4.1 billion incremental decline in the fair market value of the portfolio, respectively[12]


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, the cost of labour is increasingly rising in developing countries in general and in China in particular. As illustrated in Figure 2 below, manufacturing labour cost in China reached USD 6,5 per hour in 2020 and this trend is forecasted to continue.

Rising costs of labour is a significant economic factor that has direct implications on the profitability of the business. Specifically, rising cost of labour erodes the profit margin of the world’s largest IT company by revenue.

Apple PESTEL Analysis

Figure 2 Changes in cost of labour in China, Mexico and Vietnam[13]

Inflation rate

The company is also affected by increasing rate of inflation in the US due to its large amount of cash reserves.  Interestingly, in the past one of many Apple’s investors, hedge fund billionaire David Einhorn has attempted to sue the company to force payment of dividends of USD 137 billion[14] 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.

Apple Inc. Report

[1] Hoxie, J. (2018) “Commentary: Apple Avoided $40 Billion in Taxes. Now It Wants a Gold Star?” Fortune, Available at:

[2] Sullivan, A. (2020) “Apple tax ruling for Ireland shines light on global tax avoidance” DW, Available at

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

[4] Nakashima, E. & Albergotti, R. (2021) “The FBI wanted to unlock the San Bernardino shooter’s iPhone. It turned to a little-known Australian firm” The Washington Post, Available at:

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

[6] Open Secrets (2020) Available at:

[7] Feiner,  L. (2023) “Apple ramped up lobbying spending in 2022, outpacing tech peers” CNBC, Available at:

[8] Russia Today (2014) Available at:

[9] The Independent (2014) Available at:

[10] Annual Report (2022) Apple Inc.

[11] Annual Report (2022) Apple Inc.

[12] Annual Report (2022) Apple Inc.

[13] Source: Statista (2021)

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

Category: PEST Analyses