Mobile phone Market

In 2007 iPhone
was launched
Major competitors

 BlackBerry
 HTC Microsoft mobiles
 Nokia
 Motorola
Your Life in your
pocket
specifications

iPhone iPhone 3G iPhone 3G S iPhone 4

OS iPhone OS 1.0 iPhone OS 2.0 iPhone OS 3.0 iPhone OS 4

3.5 in, 3:2 aspect ratio, 265 k colors, 480 x 320px 960 x 640px,
(HGVA) 800:1 contrast
Display ratio

Storage/memory 4,8 & 16 GB/ 8 & 16 GB/ 8GB/ 256MB 16 & 32GB/
128MB DRAM 128MB DRAM DRAM 512MB DRAM

620 MHz Samsung 32-bit RISC 833 MHz 1.2 GHz

Processor ARM
 iPhone Primary Contractors 

Software and design Apple USA

Assembly Foxconn Taiwan

TFT-LCD Screen Sanyo Epson, Sharp, TMD Japan

Video processor chip Samsung Korea

Touch screen overlay Balda Germany

Bluetooth chip Cambridge Silicon Radio UK

Chip manufacture TSMC, UMC Taiwan

Baseband IC Infineon Technology Germany
WIFI Chip  Marvell USA

Touch screen control chip Broadcom USA

CMOS chip Micron USA

NOR Flash ICs Intel, SST USA
Display Driver chip National Semi, Novatek US, TW
Case, Mechanical parts Catcher, Foxconn Tech Taiwan
Camera lens Largan Precision Taiwan

Camera module Altus-Tech, Primax, Lite On Taiwan

Battery Charger Delta Electronics Taiwan

Timing Crystal TXC Taiwan
Passive components Cyntec Taiwan
Connector and cables Cheng Uei, Entery Taiwan
 Technology

• The Touch screen

• The sensors
• The Internet
• Mac OS X
 Objectives
• I year objectives
- aiming for 2%market share of US & UK
- unit sales volume 4,45000

• II year objectives
- achieve 10% market share
- unit sales volume 12,45000
Target Market
 Distribution
• AT&T and major cellular providers like Verizon
• Apple online & Apple stores
• Major third party online retailers like Amazon.com
• All major electronics retailers
- wall mart
- Best Buy
- Circuit city

• Distributors in INDIA
- Bharti Airtel
- Vodafone
 Carriers
No. Date Country Carrier Flag

1 29 June 2007 United States AT&T A-1-1

2 9 Nov 2007 Germany T-Mobile A-2-1

3 9 Nov 2007 UK O2 A-3-1

4 29 Nov 2007 France Orange A-4-1

5 14 Mar 2008 Ireland O2 A-5-1

6 14 Mar 2008 Austria T-Mobile B-1-1

 Communication
• Emphasize on brand prominently
• Associate iPhone with iPod’s groundbreaking lineage
• Massive TV campaign in June
• Newspapers
• Social Networking sites
• Apple sites
 Marketing Mix
• June: Major market rollout at AT&T and Apple stores
• August: Availability will expand to mass vendors
• November: New Ad campaign for holidays
• Early 2008: Build buzz for next generation iPhone
• 2009: Major technical upgrades, e.g. 3D ability
• 2010: Goal of at least 50% market share
 Market Penetration
Pricing strategy

Market skimming

- Release new product at high premium

- Skim the greatest possible margin
- Once sales volume begins to decrease at the
original price
- Incrementally lower the price to increase sales
- Repeat this until stable price with acceptable
margin is determined
 What happened
 In September’ 2007, barely 10 weeks after the launch of iPhone,
Apple announced a steep price cut for the product.

 The 4GB version was made inoperable while the 8GB version was
available at US $ 399 and a 16 GB version was to be introduced at US
$ 499.

 The early adopters who had waited in queues to buy the product at a
much greater price were discontented and annoyed and they therefore
took a legal action against Apple and AT&T for the price cut.

 This issue had a negative effect on Apple’s share prices.

 SWOT Analysis
• First mover advantage 

• Ownership of technological patents

Strengths • Apple is one of the most established brand

• Customers loyalty

• Cultural, fashion identity

• Dependence on third party provider: 

• AT&T, Content Provider, Application provider

Weaknesses • Less appeal to corporate customers 

• Technological complication

• Gorilla arm
 • Sharp rise in consumer demand
• 56% of smart-phone buyers prefer iPhone

• New target market –

• price reduction attract
Opportunities • more customers

• High Potential Software –upgradable; can add new

features

• 3G Apple iPhones to captivate business demand

worldwide

• New powerful entrant – Google

• Many similar or substitute products

Threats • Intense competition with major rivals

• Increasing bargaining power of buyers

CORE COMPETENCY --- USER
EXPERIENCE
Organizational Hierarchy
 Key Success factors
Consumer-oriented Factors

Technology Marketing Skill and Distribution

Capability
------------------- ------------------- ------------------- --------------------
- Internet driven - Well-know and - Value added - A strong network of
force well-respected brand (cheaper, faster, wholesale
- Replacing name more convenient distributors/ dealers
communication tools - Market than the alternatives) - Fast introduction
- Next generation segmentation - Design and and application of
experience - Targeting and innovation expertise services
Pricing effectiveness
 Financials
• First year sales revenue : $ 2.5 billion avg.
• Wholesale price $500 per unit, Variable cost $250
• Total volume: 10 million
• $50 million fixed cost
• Break even at 200,000 units

• After Break even Apple will make profit of $1.25

billion minus $50 million fixed cost
OS used in smart phones in 2005
OS used in smart phones in 2010
 Comparison
Model OS Size Weight Screen resolution Keyboard Camera Other

Apple iPhone Mac OS X 81cc 135g 320x480 Soft 2mp Accelerometer

HTC P3300 Windows Mobile 105cc 130g 240x320 Soft 2mp GPS

Motorola RIZR Z8 Symbian OS 77cc 112g 240x320 Numeric with T9 2mp

Accelerometer, heart
Nokia 5500 Sport Symbian OS 87cc 103g 208x208 Numeric with T9 2mp
rate features

Nokia E61i Symbian OS 114cc 150g 320x240 Full Qwerty 2mp

Nokia E90 Full Qwerty and

Symbian OS 150cc 210g 800x352 & 240x320 3.2mp GPS
Communicator Numeric with T9

Numeric with T9,

Nokia N95 Symbian OS 110cc 120g 240x320 5mp GPS
Multimedia

Palm Treo 700p Palm OS 5 151cc 180g 320x320 Full Qwerty 1.3mp

RIM BlackBerry Pearl Blackberry OS 77cc 90g 240x260 Numeric with SureType 1.3mp

RIM BlackBerry 8700c Blackberry OS 149cc 134g Full Qwerty No

RIM BlackBerry 8800 Blackberry OS 105cc 134g Full Qwerty No

Samsung SGH-i607
Windows Mobile 76cc 106g 320x240 Full Qwerty 1.3mp
BlackJack

Full Qwerty, Numeric

Sony Ericsson P990 Symbian OS 162cc 150g 240x320 2mp
with T9, Soft

Sony Ericsson W950i Symbian OS 86cc 112g 240x320 Numeric with T9, Soft No