Mags(Apple I Phone)

8/3/2019 Mags(Apple I Phone)

1/30

Your Life in yourpocket


2/30

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 Marketingstrategy

Enormous Sales Initially

Large Prices cuts to sustain sales later


3/30

Mobile phone MarketIn 2007 iPhone

was launched


4/30

Major competitors

BlackBerry

HTC Microsoft mobilesNokia

Motorola


5/30

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

Display

3.5 in, 3:2 aspect ratio, 265 k colors, 480 x 320px(HGVA)

960 x 640px,800:1 contrastratio

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

8 & 16 GB/128MB DRAM

8GB/ 256MBDRAM

16 & 32GB/512MB DRAM

Processor

620 MHz Samsung 32-bit RISC

ARM

833 MHz 1.2 GHz


6/30

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

iPhone Primary Contractors


7/30


8/30

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


9/30

The Marketing & Product Concept

Assumes that consumers will buy the productthat offers them the highest quality, the bestperformance, and the most features

Product delivers the desired satisfactions betterthan the competition

Marketing objectives:

oProfits through customersatisfaction


10/30

Why not Cheap Priceearlier

Rationaleo Production Capacity of 150,000 a month

o Production was constrained and Demand would exceed supply

o Cheap price could have increased demand many times and consumerswould have been disappointed and left to never come back.

o Apple would have got bad name for misjudging the demand (PR Fiasco)


11/30

Price Reduction after 2Months..

By holiday season the manufacturers were readywith to meet Apples Demand.

With Production increased 3 times productioncapacity Apple decided to cut the cost of iPhoneto $399 ie by 33%.

Also iPod Touch was to be launched with similarfeatures so company did not want to face anyambiguity about the pricing of the product. And

give consumers full freedom to choose iPhone oriPod Touch.

T M k


12/30

Target Market


13/30


14/30

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


15/30

Communication

Emphasize on brand prominently

Associate iPhone withiPods groundbreakinglineage

Massive TV campaign in June

Newspapers

Social Networking sites

Apple sites


16/30

Marketing Mix June: Major market rollout at AT&T and

Apple stores

August: Availability will expand to massvendors

November: New Ad campaign for holidays

Early 2008: Build buzz for next generationiPhone

2009: Major technical upgrades, e.g. 3Dability

2010: Goal of at least 50% market share


17/30

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


18/30

What happened

In September 2007, barely 10 weeks after the launch ofiPhone, Apple announced a steep price cut for theproduct.

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

The early adopters who had waited in queues to buythe product at a much greater price were discontentedand annoyed and they therefore took a legal actionagainst Apple and AT&T for the price cut.

This issue had a negative effect on Apples share prices.


19/30

SWOT Analysis First mover advantage

Ownership of technological patents

Apple is one of the most established brand

Customers loyalty

Cultural, fashion identity

Strengths

Dependence on third party provider:

AT&T, Content Provider, Application provider

Less appeal to corporate customers

Technological complication

Gorilla arm

Weaknesses


20/30

Sharp rise in consumer demand

56% of smart-phone buyers prefer iPhone

New target market

price reduction attract

more customers

High Potential Softwareupgradable; canadd new features

3G Apple iPhones to captivate businessdemand worldwide

Opportunities

New powerful entrantGoogle

Many similar or substitute products

Intense competition with major rivals

Increasing bargaining power of buyers

Threats

O E O E E Y U E


21/30

CORE COMPETENCY --- USER

EXPERIENCE


22/30

Organizational Hierarchy


23/30

Key Success factors

Consumer-oriented Factors

Technology

-------------------

- Internet drivenforce

- Replacingcommunication tools

- Next generationexperience

Marketing

-------------------

- Well-know andwell-respected brand

name

- Marketsegmentation

- Targeting andPricing effectiveness

Skill andCapability

-------------------

- Value added(cheaper, faster,more convenient

than the alternatives)

- Design andinnovation expertise

Distribution

--------------------

- A strong network ofwholesale

distributors/ dealers

- Fast introductionand application of

services


24/30

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


25/30


26/30


27/30

OS used in smart phones in 2005


28/30

OS used in smart phones in 2010

C i


29/30

ComparisonModel OS Size Weight Screen resolution Keyboard Camera Other

Apple iPhone Mac OS X 81cc 135g 320x480 Soft 2mp AccelerometerHTC P3300 Windows Mobile 105cc 130g 240x320 Soft 2mp GPSMotorola RIZR Z8 Symbian OS 77cc 112g 240x320 Numeric with T9 2mp

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

Nokia E61i Symbian OS 114cc 150g 320x240 Full Qwerty 2mpNokia E90

Communicator Symbian OS 150cc 210g 800x352 & 240x320Full Qwerty and

Numeric with T9 3.2mp GPS

Nokia N95 Symbian OS 110cc 120g 240x320 Numeric with T9,Multimedia 5mp GPS

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

BlackJack Windows Mobile 76cc 106g 320x240 Full Qwerty 1.3mp

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

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


30/30

Thank you

Documents

Mags(Apple I Phone)