Iphone Marketing Plan

1.0 Executive Summary:

The Past – Steve Jobs, Steve Wozniak and Ronald Wayne established Apple on April
1, 1976 in order to sell the Apple 1 Computer Kit that was hand built by Steve
Wozniak. The Apple 1 was sold as a motherboard (with CPU, RAM and basic textual
video chips) – less than what is considered a personal computer today. Apple was
responsible for creating the desktop publishing market due to their innovative
programmes, PageMaker and LaserWriter. Between 1983 and 1996 Apple
experimented with a number of failed consumer target products including digital
cameras, portable CD players, speakers, video consoles and TV appliances. Market
share and stock prices decreased. In 2001, Apple introduced the iPod portable digital
audio player. The product was phenomenally successful – over 100 million units
were sold within 6 years.

The Present – January 2007, Steve Jobs, the CEO and Co-Founder of Apple,
announces that Apple Computer Incorporated would now be known as Apple Inc. He
also reveals the long anticipated iPhone, a combination of an Internet-enabled
smartphone and the iPod. In June 2008, he announces that the iPhone 3G would be
released in July 2008, this newer version added support for 3G Networking and
assisted GPS navigation, among other things.

The Future – Apple plans on focusing on satisfying personal consumer demands

rather than merely fulfilling a demographic requirement as well as, improving
performance and stability rather than introducing new features when releasing new
versions of any product.

2.1 Situational Analysis:

2.1.1 Political Situation:

• Taxation is something that governments put and Apple should be study

this as country by country case to anticipate profitability, and pricing
strategy.

• Importing laws in the world with GATT are in favor of trading.

• Countries are very variable in stability of, so we should study each

country case by case.

2.1.2 Economical Situation

 • Economical growth worldwide is in a big recession which need careful
manipulation

• Potentiality of the market is decreasing but it is higher than any others

in the Telecom sector.

2.1.3 Socio-Cultural Situation:

• Population growth leading to expansion of the sector needs for cell

phones.
• People depend more an more on mobile communication everywhere.
• There is educational growth in the world.
• Culture’s perception of the technological devices is positive worldwide.
• Literacy & illiteracy level is not affecting using cell phones but affecting
high technological cell phones, this fact needs to be considered.
• Acceptance of imported products in some countries are less if there is
local provider
• There are different social views that may affect product should be
considered (e.g.: Boycotting American products in the Islamic world)

2.1.4 Technological Situation

• Level of technology in the world is increasing.

• Internet level of awareness & usage for individuals & industrial aspect
are increasing worldwide
• Fixed phone lines capacity and development attempts.
• New technologies in the cell phones are increasing.
• Future plans for technological linkage between cities, universities,
colleges, hospitals and other institutes are increasing and can be
connected to cell phones
• Levels of usage of the E- Technology (online bidding, billing, complaints,
blogging etc) are high and trendy.

2.1.5 Competition Situation

• There are 19260 cell phone producer in the world, but there are more
than 15 big companies competing at the world level Market (e.g: Nokia,
Motorola, Alcatel, HTC, Blackberry, etc)

2.1.6 Environmental Situation

• The global concern of the Global Warming issue & other pollution
effects concerning the packaging material and radiation of the cell
phones
• The demand of the international environmental approvals is a must (if
there is any) 
 2.1.7 Sales Situation

• Cell phones industries are one of the most profitable industries

everywhere and the Market is increasing

2.2 Product review:

2.2.1 Description:
The iPhone is a line of Internet and multimedia-enabled smart
phones designed and marketed by Apple Inc. The first iPhone was
unveiled by Apple CEO Steve Jobs on January 9, 2007, and was
released on June 29, 2007.
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.

2.2.2 Current 4Ps:

Product:

• Full year warranty along with an optional three-year Apple Care

warranty
• Same taste as all other Apple products.
• Special edition version to be launched (including the iPhone
Beatles edition celebrating their 40th anniversary)
• Launching a cheaper version in 2008 with less
advanced features along with a more
advanced version for professional use.
• Adding the following features to the iphone
(large disk storage capacity, lower weight,
thinner device, long battery life, 4G wireless,
GPS and improved camera).

Price:

• Set the base model at a cheap price of $199.

 • A more advanced model for $299.
• Special limited edition Beatles iPhone for special prices.
• Generally lower our prices to ensure we establish market
dominance in as short of time as possible.

Place:

• Massive rollout Online, Showrooms and in all cell phone

providers

• Massive rollout worldwide at all reputable major retailers

• All Apple Stores the Apple website will dedicate themselves to

the iPhone

• Eye catching displays will be found at all physical

stores featuring the iPhone to make the product
stand out from the pack

• Apple Stores will have the iPhone on display a full

month before its worldwide release

Promotion:

• Integrate Apple message of revolutionary communications and

audio/visual experience together in all media advertisements

• Differentiate the iPhone against others is the touch screen

functionality

• Emphasize Apple brand prominently and associate the

iPhone with the iPod’s groundbreaking lineage

• Original but tasteful advertisements at the same time

• A massive TV campaign is planned before launching the iPhone

featuring a soon to be legendary ad to be the talk of the country

• Advertising will be appearing on a regular basis to

maintain general public awareness

2.2.3 Product life cycle-PLC:

According to Boston's consulting group matrix (BCG) iphone is a

star product and in its maturity stage.

Relative market share: IPhone 28% /RIM blackberry 41% = .68

Market growth rate: 48%

 2.2.4 Current Segmentation, targeting, differentiation, & positioning:

Targeting

Differentiate the iPhone from other PDA’s on the market.

Primary customer targets is the middle-upper income professional to

coordinate their busy schedules and communicate with colleagues, friends
and family.

Secondary consumer targets are high school, college and graduate students
who need one portable multifunction device.

Primary business target is to partner with :

large cell phone service providers, AT&T, Verizon, Sprint and Cellular
One

large enterprise software firms where information is critical to the end

user.

Secondary business target is mid-to mid-size corporations that want to

help managers and employees stay in communication or access critical
data on the go.

Market segment will consist of companies with $10-$50 million in annual

sales.

Positioning:

• Using product differentiation, positioning the iPhone as the versatile,

convenient, value-added device for personal and professional use.

• Focus on the convenience of having one device for communication, but

also music, pictures, and video, and full Internet access.

• The iPhone will be promoted as both professional and hip.

2.3 SWOT Analysis:

Strengths

Innovative – The iPhone has an innovative touch screen. It also has many functions of
other mobile products all in one device

Compatibility –The phone will work with iTunes and with other Mac/Apple products
and OS software tools which means limitless potential for upgradeability.
 Ease-of-Use – The all-new touch screen interface recognizes multi finger gestures, just
as the human hand normally behaves.

Brand awareness – Apple is well known for cool essential gadgets like the iPods along
great technological innovations like the original Macintosh.

Price – iPhone would be sold at a reasonable price for its value.

Quality – Scratch resistant screen – durable and light metallic finish - software suite
resistance to computer viruses.

Opportunities

Increasing demand and expansion to a new target segment – As technology advances

and smart phones get cheaper Apple will attract consumers and get iPod users to
upgrade to iPhones.

Upgradeable – iPhone software allows new exciting features to be brought in which

take advantage of the touch screen ability. Future versions will also be hardware
upgradeable.

Partnerships – Apple can collaborate with many powerful global mobile phone
companies to flood the market with iPhones, which reduces costs in marketing and
increases revenue through long-term agreement deals.

Weaknesses

Image – The Apple brand is not targeted towards business people and does not have a
reputation as being compatible with the corporate world.

Price – Apple does not yet offer lower priced models for more cost conscious
consumers.

User Interface – Touch screen interfaces suffer from the problem of “gorilla arm”
(holding your arm out in front of you to use a touchscreen or light pen for a long time).

Threats:

Increased competition – Smart phones are easier to make now more than ever. More
companies may enter the market, and competitors or even Apple contractors can
maneuver around patents to create similar devices.

Downward pricing pressure – The iPhone is marketed as a high-end phone, but phone
 prices are almost certainly going to fall when other companies undercut the price of
iPhones.

Difficulty expanding into Asian market – There is less hype and interest in Asia since
smart phones are better known and already widely used.

Competition (Palm) - Palm has the longest history in PDA market and has experience-
developing software for mobile devices. It is also a well-known brand for
businesspeople. Existing software is well established and compatible with many
products for this market. The market is familiar with Palm products; significant
switching costs are involved in going to an iPhone. Palm can add many similar
capabilities to their products that match the iPhone and expand to a wider market
through lower cost and higher-power products.

2.4 Porter's 5 forces:

1) EXISTING RIVALRY

The number of competing firms within the mobile phone industry is increasing,
while a few firms make up the majority of the market share. Provided by CNET
is a list of suppliers that operate within the same industry as Apple’s iPhone, and
a count of their product offerings.

Direct competition includes all mobile phones that can be subcategorized as a

basic, smart, camera, mp3, or videophone. The industries large selection of
mobile phone manufacturers creates a strong threat of rivalry. The iPhone has
made its debut as a smart phone targeting the higher-income demographic, but
this does not eliminate the fact that all subcategories of cell phones contribute to
the strengthening threat of rivalry.

2) THREAT OF NEW ENTRANTS

 Ultimately the iPhone is going to face the most competition from imitators who
can sell a similar or comparable device at a lower price. Most of these threats
are going to come from established players in the cell phone industry (such as
LG and Samsung) rather than companies trying to enter the cell phone market
anew. This is not to say, however, that new entrants may not be around the
corner. Software companies such as Google and Microsoft may pose a credible
threat at entering the cell phone market and trying to carve a niche out for
themselves. It has been rumored that Google has a team actively investigating
such a move and Microsoft currently has a lot of experience creating software
specifically for mobile devices. It remains to be seen, however, if either
company will take the initiative to enter into the cell phone device market
directly rather than content themselves with creating licensing software for cell
phones.

3) BARGAINING POWER OF SUPPLIERS

Fortunately for Apple the iPhone is more than the sum of its parts. Arguably,
the parts themselves are not that interesting as they are readily available from a
number of sources and alternatives exist for most of the parts. What gives the
iPhone its appeal is really the software that brings all these parts together and
allows the user to interact with the phone in a compelling way. And Apple, of
course, developed and owns the software. Further, given the barriers to entry
outlined above, Apple has little to worry about forward integration from its
suppliers. So, in this sense, Apple is not beholden to the whims of powerful
suppliers.

4) BARGAINING POWER OF CUSTOMERS

The buyers of the iPhone are somewhat more powerful, however. Broadly
speaking the consumers as a group can be considered the principle purchasers
of the iPhone, a claim that gains more credence given the fact that no large
resellers will be selling the phone. And consumers tend to be susceptible to
price sensitivity and alternative choices. Given the relatively high price of the
iPhone it remains to be seen whether consumers will pay a premium for Apple
cachet and technological convergence when their needs may be equally met by
cheaper alternatives.

5) THREAT FROM SUBSTITUTES

The iPhone’s top priority is to provide its customers with a complete solution in
the mobile phone industry with added features and benefits. Quoting Steve Jobs
“the original iPhone, it combines three products in one — a revolutionary phone, a
widescreen iPod, and a breakthrough Internet device with rich HTML email and a
desktop-class web browser” (Steve Jobs, 2008).

So I think that Iphone does not have a strong substitutes threat the need to the
Iphone, Examples of substitute industries include landlines, pagers, walkie talkies,
computers, fax machines, and snail mail.

If the mobile phone industry cannot meet the needs of its customers at a
reasonable price, then substitute products play a key threat. Landlines are
evolving to be more of a direct competitor to the mobile phone industry, but they
still provide its services at a different vantage point. Landlines are non-wireless
receivers that are offered at a much lower cost than mobile phones. Computers
(notebook and desktop) offer numerous options in the communication sector,
which include electronic mail, live chat, and communication software.
Collectively, fax, snail mail, pagers, and walkie talkies make up a small portion of
the market share, but still pose a threat for unsatisfied customers in the wireless
industry.