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Say Hello To iPhone: What made people really say Hello to

iPhone?

Overview:

Apple with a new brand…entering a new market… with highly effective
marketing effort… redefining the scopes and technologies in a mobile
device.
In the crowded and overly competitive mobile market ….. How did apple’s
marketing crew created and sustained the hype…. What made iPhone a
success-story??

The Product:
What is iPhone?
What's new in this?

iPhone combines three products — a revolutionary mobile phone, a
widescreen iPod with touch controls, and a breakthrough Internet
communications device with desktop-class email, web browsing, maps, and
searching — into one small and lightweight handheld device. iPhone also
introduces an entirely new user interface based on a large multi-touch
display and pioneering new software, letting you control everything with just
your fingers. So it ushers in an era of software power and sophistication
never before seen in a mobile device, completely redefining what you can do
on a mobile phone.

Background information:

Apple Inc,established in Cupertino, California on April 1, 1976 and
incorporated January 3, 1977, the company was called "Apple Computer,
Inc." for its first 30 years. On January 9th, 2007, Steve Jobs, renowned CEO
of Apple, announced that the company which he founded would no longer be
known as Apple Computer, Inc. Its new name would just be Apple Inc,
erasing the word“computer” from the company name[i.e. company identity]
to reflect the company's ongoing expansion into the consumer electronics
market in addition to its traditional focus on personal computers.
Apple has about 35,000 employees worldwide and had worldwide annual
sales of US$32.48 billion in its fiscal year ending September 29, 2008. For
reasons as various as its philosophy of comprehensive aesthetic design to its
distinctive advertising campaigns, Apple has established a unique reputation
in the consumer electronics industry.This includes a customer base that is
devoted to the company and its brand, particularly in the United States.
In 2008, Fortune magazine named Apple the most admired company in the
United States.

Here we give pictorial representation of landmarks of the company:
Entry into the Mobile Phone Market
The foundations for the development of the iPhone were laid in 2003 when
Jobs declared at an executive conference, "D: All Things Digital," that
the future of mobile communication and information exchange lay with
mobile phone.

Analysis of the marketing opportunity: Target Consumers: The iPhone
targets consumers who need to store information and communicate or people
who want entertainment on the go. Apples target segments consist of
professionals, students, corporate users, entrepreneurs, and health care
workers.
Currently, the market for high-end phones like the Apple iPhone is small.
Few people want Internet, video, and PDA features in one device because of
the high price. The smart phone market is still relatively small compared
with general phone market. The market will rapidly increase in coming years
due to lower prices and greater power.

Creation of the phenomenon:

When Apple wanted to redefine what a cellphone is, it didn’t phoned in yet
another clunky “smart-phone” with an Apple logo on it. For over a decade,
the incumbents in that industry were satisfied with existing form factors,
carrier relationships, revenue models and infinite small-minded product
differentiations. Unlike Nokia or Microsoft, Apple didn’t say, “There are too
many industry restrictions and technical hurdles for us to redefine this
category. It’s way too early.”

Apple didn’t leave anything to time or fate. In hardware, software and
services, it actively created a space for the iPhone to succeed. Where it was
needed, it poured in R&D , invented new things and collected hundreds of
patents; gained new expertise in radio technology; bought a company
specialized in multi-touch; converted a desktop OS into mobile one; created
new global distribution channels; negotiated a ground-breaking arrangement
with the largest carrier; and so on. In other words, instead of creating, hoping
and predicting that the iPhone would somehow become a killer product, it
made sure that all the supporting elements were in place to make sure that it
would.

While the company announced the iPhone in January, few outside Apple
have actually seen the product in action. No one has been able to see
anything more than what Apple wanted the world to see.

Advertising & hype: When Apple CEO Steve Jobs removed an iPhone from
his pocket, officially unveiling the phone/media player/Internet device at
Macworld on Jan. 9, Apple did not follow up with a barrage of advertising.
Far from it: It ran a mysterious teaser ad during the Academy Awards
telecast, six weeks later. The "Hello" spot, featured dozens of clips from
classic movies and TV—actors and actresses answering phones—and ending
with a brief look at an iPhone, the word "Hello" and the line "Coming in
June."

Subsequent ads showed close-ups shots demonstrating what people can do
on the phone.It gave the sense to the potential customer that he was actually
experiencing the product.

What was amazing on launching the i-phone was the SECRECY involved
with the product. Before the official launching of the product , not a single
Apple-store displayed anything about the product, not even one, protected by
a glass box or display. NOTHING. It was just this huge MYSTERY which
intrigued people to talk more about it.

Within the ensuing information vacuum, the media and the blogosphere
engaged in an endless stream of speculation.

One of the great things I liked about the iphone campaign was, taking the
celebrities out of advertisements (besides the debut commercial) and
concentrating on the phone. Good strategy, seems like Apple knows its
target audience does not need to see Paris Hilton half naked to buy their
merchandise.

Apple's less-is-more strategy worked brilliantly, judging by the search
activity. Search activity related to the device jumped to more than 1.1
million during the week ended Jan. 14, according to comScore. As Apple's
major advertising began in June, searches ramped up again, finally peaking
with 1.2 million for the week ended June 24.
Over the six months prior to the product’s introduction it was the subject of
14,000 articles, 311,000 blog posts and it generated 69 million hits on
Google. Think about any product, which was declared it’s launch before 6
months and lived upto this hype until it was launched.

The iPhone is an outstanding product, 5 years ahead of any competitors in
user interface and technology. It has changed the paradigm.
However, Apple did a lot of mistakes in marketing the iPhone:
Marketing mistake #1 - reducing the iPhone retail price from $599 to $399 -
a 33% rebate - after only 3 months from the product launch.
This way Apple betrayed the iPhone early adopters - and their most faithful
costumers.

Mistake #2 – now – lowering the iPhone price even down to $199 – 66%
less than the original launch price, just 12 months after.
Will the iPhone price be $10 in December 2008?

Mistake #3 - Forcing costumers in signing with AT&T as an exclusive
carrier. Result: slowing down sales of the iPhone.

Mistake #4 – Late launch in European markets. US launch: June 2007. In
Nov. 2007 the iPhone was launched in UK, Germany and France.
on July 11, 2008 – 1 full year after the first launch - the iPhone gets launched
in most of the other European countries: Italy, Spain, Switzerland, Ireland,
Denmark, Norway, Sweden, Finland, Netherlands. And in Japan and
Australia.

Mistake #5 – absurd and jammed pricing of the iPhone and carrier monthly
fees in European countries.
Result: kills big slices of potential sales of the iPhone in Europe.
And making a big favour to Nokia and Motorola.

Despite its serious marketing blunders done by Apple, the iPhone has been a
huge success. Approximately total of 17.4 million iPhones had been sold
worldwide until December 27, 2008.

The launch of iphone, which was hailed by some analysts as the most
successful launch of a brand ever. While many analysts hailed the innovative
marketing strategy followed by Apple and also considered the iPhone to be a
category-defying product, others felt that iPhone was over hyped and said
that it was never good to over hype any products. Some analysts felt that
Apple had a long way to go to realize its ambition of becoming a major
player in the mobile phone market considering that the market had some
very dominant competitors who had decades of experience behind them.
Some analysts also viewed Apple's foray into this market as a defensive
strategy necessitated by the introduction of music phones by some well-
known mobile phone companies.

Critics said that the enormous amount of hype surrounding the iPhone had
led to the initial success of the brand. The main question, however, was
whether Apple would be able to match the initial hype with performance.
Some analysts opined that the iPhone might not live up to expectations.

Conclusion

Over-hyped or not, Apple deserved kudos for coming up with a product idea
like the iPhone and also implementing it successfully. The company had
made an aggressive entry into the mobile phone market and had managed to
attract the attention of the existing competitors.

Introduction of the iPhone would prompt its competitors to come out with
better phones in the future, thus offering wider choice and better products to
customers...