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Introduction
Apples entry in the Mobile Phone Market
o Announcement: January 2007 o Launch: 29-June 2007
Hype about the product Consumer Behavior used to mould Marketing strategy Enormous Sales Initially Large Prices cuts to sustain sales later
Major competitors
BlackBerry HTC Microsoft mobiles Nokia Motorola
specifications
iPhone
iPhone 3G
iPhone 3G S
iPhone 4
OS
iPhone OS 1.0
iPhone OS 2.0
iPhone OS 3.0
3.5 in, 3:2 aspect ratio, 265 k colors, 480 x 320px (HGVA) Display
Processor
Assembly TFT-LCD Screen Video processor chip Touch screen overlay Bluetooth chip Chip manufacture Baseband IC WIFI Chip
Foxconn Sanyo Epson, Sharp, TMD Samsung Balda Cambridge Silicon Radio TSMC, UMC Infineon Technology Marvell
Broadcom
Micron Intel, SST National Semi, Novatek Catcher, Foxconn Tech Largan Precision Altus-Tech, Primax, Lite On Delta Electronics TXC Cyntec Cheng Uei, Entery
USA
USA USA US, TW Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan 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. 1 2 3 4 5 6 Date 29 June 2007 9 Nov 2007 9 Nov 2007 29 Nov 2007 14 Mar 2008 14 Mar 2008 Country United States Germany UK France Ireland Austria Carrier AT&T T-Mobile O2 Orange O2 T-Mobile Flag A-1-1 A-2-1 A-3-1 A-4-1 A-5-1 B-1-1
Communication
Emphasize on brand prominently Associate iPhone with iPods 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 Apples 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
Weaknesses
Sharp rise in consumer demand 56% of smart-phone buyers prefer iPhone New target market price reduction attract more customers High Potential Software upgradable; can add new features 3G Apple iPhones to captivate business demand worldwide
Opportunities
Threats
Organizational Hierarchy
Marketing
-------------------
Distribution
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- Value added - Internet driven - A strong network of - Well-know and (cheaper, faster, force wholesale well-respected brand more convenient distributors/ dealers name - Replacing than the alternatives) - Fast introduction communication tools - Market - Design and and application of segmentation - Next generation innovation expertise services experience - Targeting and 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
Comparison
Model
Apple iPhone HTC P3300 Motorola RIZR Z8 Mac OS X Windows Mobile Symbian OS
OS
81cc 105cc 77cc
Size
135g 130g 112g
Weight
Screen resolution
320x480 240x320 240x320 Soft Soft
Keyboard
2mp 2mp 2mp
Camera
Other
Accelerometer GPS
Numeric with T9
Numeric with T9 Full Qwerty Full Qwerty and Numeric with T9 Numeric with T9, Multimedia Full Qwerty
GPS
5mp 1.3mp
GPS
149cc
134g
Full Qwerty
No
Blackberry OS
105cc
134g
Full Qwerty
No
Windows Mobile
76cc
106g
320x240
Full Qwerty
1.3mp
Symbian OS
162cc
150g
240x320
2mp
Symbian OS
86cc
112g
240x320
No
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