Case Presentation

“Apple iPhone in India”

Muhammad Ammar Ashraf

Muhammad Hasan
Muhammad Idrees
Raja Imran Arshad
Hassan Adil
AGENDA:
•
• Introduction to iPhone
•
• Emerging Markets and their Assessment
•
• Telecom Industry In India
•
• Apple Launch in India
•
• Issues and Recommendations



INTRODUCTION TO IPHONE
CELLULAR PHONE INDUSTRY
• Very fast technology development
• Emergence of Smart phones
•
Worldwide Handset Market Share (2007)


 Nokia 38.98%
 Samsung 14.39%
 Motorola 14.2%
 Sony Ericsson 9.24%
 LG 7.19%

LAUNCH OF IPHONE
• Apple iPhone is a revolutionary and magical product that
is literally five years ahead of any other mobile phone
- Steve Jobs
•
•
•
• Cutting-edge technology. Much superior in terms of
touch aspect and software support
•
IPHONE
• Combination of a Smartphone and a multimedia device
•
• First Mover: New hardware-software interface based on
a large multi-touch display
•
• 3 in 1 Benefit – Phone, Internet, iPod
•
• Patented keyboard technology, called ‘multi-touch'
 IPHONE
• Far superior in terms of integration of hardware and
software
•
• First device to support visual voicemails
•
• Best invention of the year 2007
•
• Trendsetter
•
IPHONE 3G
• Twice as fast at half the price.
• Automatically switching between different networks such
as Wi-Fi, 3G and EDGE
• Supports Microsoft Exchange ActiveSync
• iPhone SDK
•
IPHONE 3GS


•
• “S” stands for speed
• Improvement in many features over its previous models
A WHOLE NEW WORLD TO
COME…
• A report by HMS Wireless: “Everyday one million new
customers are added to the mobile phone markets”
•
• 85% of them are only from the middle classes in the
emerging economies
•
• Apple has to face stiff challenges in emerging economies
•
MNCS’ ENTERING THE
EMERGING MARKETS
CRITICAL DILEMMAS
 Think & Plan whether They should enter the new and
emerging markets
•
 Which markets should they enter
•
 What should be their entry strategy
•
 How to form and nurture the relationship with local
partners
ASSESSMENT & PLANNING OF
ENTRY STRATEGY
John T Horn, a consultant at McKinsey Washington
 explains, “ what makes market entrants successful:
(they are the) factors such as timing, sales relative to the
competition and the ability to leverage complementary
assets.”


 EXHIBIT (V)


A thoughtful analysis and understanding of these four key



areas have helped MNCs to foray into new markets

EXHIBIT (V)
THE PATHS TO NEW MARKETS


•
PREDICTORS OF SUCCESSFUL
MARKET ENTRY
•
• Size of entry relative to minimum efficient scale
•
• Relatedness of the market entered
•
• Complementary assets
•
• Order of entry
•
• Industry life cycle stage
•
• Degree of technological innovation

TELECOM INDUSTRY IN
INDIA
TECHNOLOGICAL
DEVELOPMENTS

Fixed line GSM CDMA VoIP Broadband 3G/WiMax

Techn
ology

1947 1992 2001 2002 2003 2007

INDIA’S MOBILE SUBSCRIBER
GROWTH

Note: Data is in millions

GROWTH RATE OF WIRELESS
SUBSCRIBER BASE
MARKET SHARE IN JUNE 2008
APPLE’S MARKET ENTRY
STRATEGY
ENTRY STRATEGY

-- Successful Business Models & Product attributes???

-- Were Marketers, Superior Marketers???

-- Distribution System?

-- New Capabilities……..
- Joint Ventures
- Licensing
- Contractual approach
ENTRY STRATEGY
Apple’s Market Strategy For India :

Apple tied up with two Indian companies to introduce

iPhone

-- Bharati AirTel.
-- Vodafone.

This venture was made to understand Indian market

better and to gain benefit of the experience of Indian
telecom business that these companies already have
ENTRY STRATEGY
Manoj kholi (CEO AirTel):
“… We are delighted to bring new innovative iPhone to
India as we have always stood for innovation & customer
delight ...“

Tim Cook (Apple’s COO):

“… We are thrilled to work with Bharati AirTelcompany,

India’s leading Integrated Telecom company to bring
iPhone to millions of Indian mobile users…”
ENTRY STRATEGY
Harish Bijoor (CEO Harish Bijoor Consultants & Business Strategy
Analyst):

“…Apple is all set to enter Indian Market with it’s iPhone

which will be offered by two players Vodafone & AirTel.
What's the impact of such a move…”
Important facts:
-- Number Portability still not available.
-- Grey channel Issue
-- Who will be the real beneficiary, iPhone TSP’s or iPhone
alone??
IPHONE LAUNCH: ASSUMPTIONS
& STRATEGY
-- Being a blockbuster in US, Apple assumed iPhone to rock
the Indian market

-- Its launch date and price was never announced, leading to

speculations

-- No high intensity promotional campaign by Apple

-- Depended on word of mouth campaign ignoring 3 P’s

-- Apple as a company did not appeared in media, instead

media relied statements from Vodafone & AirTel
IPHONE LAUNCH: ASSUMPTIONS
& STRATEGY

-- Finally 22nd June, 2008 iPhone 3G was launched skipping 2.5G

ignoring the infrastructure constraints

-- Price being INR 31,000 for 8GB & INR 36,100 much greater than
$199 (INR 1,000) almost four times than in US

-- No subsidies were given by Vodafone or AirTel

On above of all that, iPhone was launched at midnight of

22st June, 2008
 REASONS &
RECOMMENDATIONS
REASONS FOR FAILURE
• Lock in Contract was not preferred
• Lack of expertise in selling handsets
• Non-availability of 3G in India
• Limited Accessibility
• Weak association with Indian consumer
• Minimum spending on VAS
• Lack of Promotion & Advertising
• Pricing Communication
• Low price of iPhone in Grey Market
•
RECOMMENDATIONS
• Market Potential should be fully capitalized
• Understanding Customers needs & value requirements
• Positioning with local values and norms (consumer
insights)
• Win Customer Confidence
• Implementation of IMC
• Effective Distribution System
• Influence government policies about Grey Market and
use of transmission codes
•

Thank You!!