Free Research Paper on Apple and iPhone:
Apple’s Entry into the mobile Phone Market
It is often said that Apple has changed the world of manufacturing consumer electronics and software products forever. As all of us know, the company’s best-known hardware products that include: the Macintosh line of personal computers, the iPod line of portable media players, and the iPhone line of superbly designed mobile phones that my paper will talk precisely about.
To begin with I would like to provide very brief information about the Apple Company. The company was established in Cupertino, California on April 1, 1976 and incorporated on January 3, 1977. Originally the company was called “Apple Computer, Inc.” because for the first thirty years it had mainly specialized in producing hardware. Though on January 9, 2007, the word “Computer” was deleted from the company’s name in order to reflect to the continuing expansion into the consumer electronics market. According to data of fiscal year ending September 29, 2007, currently Apple has about 28,000 employees all over the globe and has worldwide annual sales of US$24 billion (Apple FAQs).
It is obvious that Apple has managed to establish a very special relationship with customers. There are different reasons for it, some consider it is because of Apple’s successful distinctive marketing, some say it is due to its philosophy of comprehensive aesthetic design. The result of this relationship is that first of all, the customers are devoted to the company and its brand, particularly in the United States. Secondly, all of Apple product are awaited with great impatience and create stock-jobbing (Fisher).
The long anticipated iPhone that is a convergence of an Internet-enabled smartphone and iPod was revealed at the Macworld Conference & Expo in January 2007. For the sake of the paper it is useful to mention the functions of iPhone that are as follows: it combines a 2.5G quad band GSM and EDGE cellular phone with features found in hand held devices, it is running scaled-down versions of Apple’s Mac OS X, with various Mac OS X (Safari and Mail) and web-based applications. The iPhone has a 89 mm touch screen display, 4 or 8 GB of memory, Bluetooth, and Wi-Fi. The iPhone first became available on June 29, 2007 and already on July 11, 2008 the new approved version came out.
1. What, according to you, was the reason for such a huge amount of buzz being generated around the launch of iPhone? Discuss the advantages and disadvantages of the strategies adopted by Apple in launching iPhone.
It is common that the products Apple Company launches are great success. What is also common is that the products are not simply launched and advertised, but they generate a massive buzz around them. As I have mentioned in the introduction, Apple has long ago created a very closely-knit relationship with the loyal customers, who tend to create a buzz waiting for the launching of the new product (Fisher). Though, obviously, the buzz around new iPhone was generated because of the companies marketing activities. Lower I would like to describe some of the successful launching tools the company used.
To begin with, right when the news about future creation of iPhone came out to the public, it was clear for everyone that the product would be an innovation. In fact, Apple company has proved to come up with only innovation products, thus each time an ad about a new product made, the public is already expecting in awe its release date. What had also helped to create the buzz is that there are constant trade records of Apple in the media, thus people take notice of the company and its products and know the product will be groundbreaking.
The next step to create the buzz around the iPhone was the advertisement created by Apple’s longtime agency, TBWA/Chiat/Day. This ad was introduced for the first time on the Academy Awards telecast. It was a 30-second smorgasbord of TV and movie clips, featuring actors from Lucille Ball and Dustin Hoffman to the animated Betty Rubble from The Flintstones saying hello into a phone. This advertisement was not long and the iPhone itself did not appear it that much, however, the ad had the anticipated effect.
One may remember that after introduction, the iPhone had been expected by the public for weeks. In my opinion, that was also one of the Apple’s strategies because for a long time people did not know how the iPhone would look like and, of course, were charmed when the design was unveiled. Such state of things, without a shadow of doubt, has created a buzz around the new product. As well as it made those who will be able to afford it feel as the members of some secret society who soon will be the owners of a very special phone that not everyone can afford to buy.
On the day when the iPhones appeared in the stores people rushed to test and then buy the products. The witnesses say that the lines next to the electronic stores was very long as well as there were people who arrived to the store the night before in order to be the first ones to obtain the buzzing iPhone. The launching strategy adopted by Apple here was not only creating the buzz around the product and make people expect it impatiently, but also showing them that there is a scarcity of this new product and only the deft ones will be able to purchase it.
Next I would like to speak about the pricing strategy that Apple undertook when launching iPhones. We all know that Apple had initially priced the 8-GB iPhone at $600. This was done not to milk early adopters, but to purposely limit demand. While production expanded at its Asian factories, Apple wanted to limit buyers to the rather few who were happy to pay $600 for the phone. Nevertheless, Apple went on to sell a million iPhones in the first two months. Such state of things was the clear indication that the device was accepted. At that moment, as it became clear there was enough factory capacity to produce millions of iPhones, and Apple started to think about dropping the price in the United States. The next step Apple took in iPhone launching to launch it in Europe, showing that it was confident and was able satisfy demand in multiple countries.
Above the launching strategies used by Apple to create the buzz around the new iPhone were presented. Lower I would like to provide some criticism of the strategies used by Apple. To begin with, Apple has created hype around its new product indeed, however, it is a question whether the iPhone will be able to keep up with the competition on the mobile phone market. What is also rather disappointing is that Apple chose to partner with AT&T to market the iPhone that is, certainly, limiting the market only to the people who are subscribers to this network and those who are willing to change to it.
Some other disadvantages of Apple’s strategy are that the price is rather high and unjustified. At first Apple was willing to sell only a limited about of phone, thus the price was expected to be high, though today when the iPhones are generally bought the price (even though it is lowered)seems to be simply unreasonable. Moreover, according to marketing experts it is inappropriate to use one brand name for a range of phones the way Apple does. They point out that the mobile phone market is very divorced, and traditionally companies tried to differentiate the names of mobile phones in their product lines.
2. Prepare a note on what should be Apple’s strategy for iPhone in Europe and Asia (except Japan), considering that Europe is a relatively mature market for mobile phones and Asia is largely an emerging market.
In the previous question I have pointed out the strengths and weaknesses of the marketing strategies Apple had applied for iPhone. It was clear that the strengths outweigh the weaknesses. However, it can not be denied that the entry of Apple to the mobile phone market will not be easy. This is because the market of mobile phones is mostly mature, and saturated. Lower I would like to suggest some marketing strategies that Apple should take on in Europe that is a mature market and Asia that is rather an emerging market.
In my opinion in order to market iPhones in Europe successfully, Apple should forget everything it knows about the American consumers and concentrate and what it knows and what it has to learn about the European ones. To begin with, the Europeans expect much more from their cellular phones than their American counterparts. It is clear that technology wise Apple cannot be compared to its competitors, thus it is important, in my opinion, to make sure that the Europeans are more than aware about other features, expect for technology, the phone has got to offer. Thus, I consider that, much money should be invested in advertising, emphasizing the design and such features of iPhone as convenient web-surfing and music downloading device.
Apple is well known in Europe, however, it does not have the loyal costumer base the way it does in the United States. Moreover, it has got a very strong competition on the European market, for example such companies as Nokia and Sony Ericsson that are deep-rooted in Europe. In fact, Nokia and Sony Ericsson enjoy dominant market share and offer their own multimedia music phones. Furthermore, even if the price of the iPhone is reduced it will still come out as an upper end of the scale. European consumers also could turn up their noses at a phone that, despite its groundbreaking user interface, offers lesser specifications and slower data speeds than some of its rivals (Scott).
From my point of view, in order to market the iPhone successfully Apple should make it possible for all the mobile providers to work with them. Many Europeans, who might consider purchasing an iPhone would restrain from that not- willing to break their mobile phone contract or to change the number. Thus, it is very important that in the frame work of its marketing activities Apple signs contracts for cooperation not only with T-Mobile and Orange, but also companies.
I believe that when approaching Europe Apple should take up a marketing strategy consisting on two stages. In the first sate the company should satisfy the demand of its small loyal audience that loves Apple’s design aesthetic with ads showing off those capabilities. Thus it would be fine to keep the price high at this stage, insuring that iPhone becomes something that not everyone can afford and many can only dream about. Though, in order to really revolutionize the stabilized and mature market of Europe Apple will have to target the broad public. Thus, in the second stage the prices for iPhones should be reduced and it has to be emphasized that the iPhone is a music player, a pocket-size Internet access device, and a phone with email, and not a device only businessmen would use.
It is very important that Apple does not overlook the European markets. Consequently, with a successful marketing strategy better communication and distribution, Apple could make 300% more revenues in Europe in the next couple of years.
When it comes to Asia, Apple will find it even harder to market the iPhones successfully. This is because even though Asian markets, except of Japan, are mostly emerging, the customers there are rather demanding (Markoff). One of the main difficulties in Asia, as it was in Europe, will be the price. An iPhone is a without a doubt gadget, expensive, especially considering that a typical annual salary in Asian countries ranges from $12,000-$24,000. Consequently, I would suggest that Apple lowers the price for its Asian consumers as well as engages in partnerships with Asian mobile connection providers in order to work out affordable deals for the consumers (Apple to Launch iPhone in Four Asian Regions).
It is important in my opinion, that Apple unlocks its iPhones and the Asian costumers would not have to charge extra for unlocking the phone. Additionally, Apple should make sure that the operator partners it chooses to work with have the experience of aggressively selling handsets and would actively promote the iPhones on their local markets. This is important because when in comes to Asian market it is not enough to simply sell the phones in stores, but branch out to the numerous retail phone outlets.
Next, from my point of view, Apple should make sure that the iPhones are promoted in Asia as the “lifestyle” product. One thing to be considered, Asian people today are very fashion-oriented, thus Apple should be popularized to the point when an individual would not imagine not purchasing one because everyone in his/her surrounding would already have it. Apple’s iPhone should be on everyone’s wish list, thus Apple need needs local marketing experts, that know the preferences of the people in the region, to promote their new product in the Asian countries.
In this research paper I have presented the strategies that Apple used to launch its innovative iPhone as well as I have suggested possible strategies for marketing iPhone in Europe and Asia. I consider that since Apple is highly respected in both Europe Asia, the sales of iPhone will reach expected profits and soon iPhone will be enjoyed equally all other the world.
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