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Mobile phone MarketIn 2007 iPhone was launched

Major competitors BlackBerry HTC Microsoft mobiles Nokia Motorola

Your Life in your pocket

specifications

iPhone

iPhone 3G

iPhone 3G S

iPhone 4

OS

iPhone OS 1.0

iPhone OS 2.0

iPhone OS 3.0

iPhone OS 4 960 x 640px, 800:1 contrast ratio

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

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

8 & 16 GB/ 128MB DRAM

8GB/ 256MB DRAM833 MHz

16 & 32GB/ 512MB DRAM1.2 GHz

Processor

620 MHz Samsung 32-bit RISC ARM

iPhone Primary ContractorsSoftware and design Apple USA

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

Taiwan Japan Korea Germany UK Taiwan Germany USA

Touch screen control chipCMOS chip NOR Flash ICs Display Driver chip Case, Mechanical parts Camera lens Camera module Battery Charger Timing Crystal Passive components Connector and cables

BroadcomMicron Intel, SST National Semi, Novatek Catcher, Foxconn Tech Largan Precision Altus-Tech, Primax, Lite On Delta Electronics TXC Cyntec Cheng Uei, Entery

USAUSA 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

CarriersNo. 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 PenetrationPricing 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

Dependence on third party provider: AT&T, Content Provider, Application provider

Weaknesses

Less appeal to corporate customers Technological complication Gorilla arm

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

New powerful entrant Google

Threats

Many similar or substitute products Intense competition with major rivals Increasing bargaining power of buyers

CORE COMPETENCY --- USER EXPERIENCE

Organizational Hierarchy

Key Success factorsConsumer-oriented FactorsTechnology-------------------

Marketing-------------------

Skill and Capability-------------------

Distribution--------------------

- 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

OS used in smart phones in 2005

OS used in smart phones in 2010

ComparisonModelApple iPhone HTC P3300 Motorola RIZR Z8 Mac OS X Windows Mobile Symbian OS

OS81cc 105cc 77cc

Size135g 130g 112g

Weight

Screen resolution320x480 240x320 240x320 Soft Soft

Keyboard2mp 2mp 2mp

Camera

OtherAccelerometer GPS

Numeric with T9

Nokia 5500 Sport Nokia E61i Nokia E90 Communicator

Symbian OS Symbian OS Symbian OS

87cc 114cc 150cc

103g 150g 210g

208x208 320x240 800x352 & 240x320

Numeric with T9 Full Qwerty Full Qwerty and Numeric with T9 Numeric with T9, Multimedia Full Qwerty

2mp 2mp 3.2mp

Accelerometer, heart rate features

GPS

Nokia N95 Palm Treo 700p RIM BlackBerry Pearl

Symbian OS Palm OS 5 Blackberry OS

110cc 151cc 77cc

120g 180g 90g

240x320 320x320 240x260

5mp 1.3mp

GPS

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, Numeric with T9, Soft

2mp

Sony Ericsson W950i

Symbian OS

86cc

112g

240x320

Numeric with T9, Soft

No