And according to consumer and market needs and some feedbacks, we determined the feature of the product, which has been developed and designed to meet the needs of each segment we are targeting. In addition, we implemented the pricing strategies we are going to use. Finally, a control plan designed to keep our whole plan in control and in continuous update. 2) Situational Analysis: 1) Macroenvironment Economical Situation? Economic factors will affect the purchasing power of potential customers and the products cost of capital.
Some examples of the economy: Economical growth worldwide is in a big recession, which needs careful study. Potentiality of the market is decreasing but it is higher than any others in the Telecom sector. Legal and Governmental Situation Taxation and communication laws are something that governments put and Apple should ? study this as region by region to anticipate profitability and pricing strategy and to have the standards of the mobile communication laws for frequency ranges and available network with 3G or 4G coverage. Technological Situation
• Level of technology in the world is increasing. Internet level of awareness and usage for individuals are increasing worldwide • Due to the huge competition of the big brand in smart phones, new technologies in the smart phones are increasing. • Future plans for technological linkage between cities, ? universities, colleges, hospitals and other institutes are ? increasing and have to be connected to smart phones. • Level of usage of the e-technology (online stores, books, social networks etc. ) are high and trendy. Ecological Situation
Apple-iPhone impact on the environment is also important. Environmental considerations are an integral part of Apple’s business practices. From the earliest stages of iPhone design through manufacturing, use and recycling, Apple take care to keep their activities and their product “iPhone” environmentally sound. Sociocultural Situation? Social factors include the demographic and cultural aspects of the external macro environment. Its involved customer needs and the size of possible markets. • Population growth leading to expansion of the sector needs for cell phones.
• People depend more and more on mobile communication everywhere due to the big growth of social networks and chatting applications. • There is educational growth in the world huge demanding on smart phones useful application. 2) Market and Competitors Smartphones Market analysis and iPhone competitors Why Apple is focusing on the market of its smartphone “iPhone”? Today more than 1. 3 billion mobile phone handsets are being sold annually, and in 2010 smartphones made up almost 20% of that total (Gartner, 2010; Ahonen, 2010).
Sales of smartphones are increasing almost 100% per year, and total global sales volume is expected to surpass that of PCs by 2012 (Gartner, 2010). Given the rate at which smartphone are penetrating the market and component prices are declining by 2015 there will be, at least, 2 billion smart mobile devices in use globally. (Kenney, 2011). Smartphone sales will be driven by two main factors, BI Intelligence says: Replacement of nearly 5 billion “dumb phones” with smartphones (smartphones currently make up only 10% of handsets worldwide) Price declines.
The average price of a smartphone will drop from about $315 last year to $200 over the next several years This will obviously have a huge impact on the mobile Internet economy, which is already exploding from the growth of smartphone penetration in the past few years. Some other highlights from the report: Smartphone unit sales will grow at nearly a 30% compound annual growth rate over the next five years Smartphones will represent about two-thirds of all mobile phone purchases by 2016, Smartphones will be a $320 billion market by 2016.
Competition Situation At the time Apple recognized the need for a handheld mobile device the market players were a few and mainly business users. This explains the strong market share RIM had. Palm on its hand also was also somewhat popular but having limitations in terms of usability and software, deprived the brand from gaining significant position. Most of the devices present at the market later were more featured towards personal organizing, emailing and computing, rather than web browsing or customized application usage.
$600 iPhone $500 $499 $400 Blackberry Treo $300 $299 $299 Blackjack $200 $199 $100 $. Apple has clearly taken the marketing challenging strategy attacking the market leaders Blackberry and Palm. Apple Inc. has always a customer-centered orientation spotting the growing market for smart phones, identifying an unrealized need for customization through phone applications and nonetheless usability. Nowadays, there are 19260 cell phone companies in the world, but there are more than 15 big companies competing at the world level market.
Apple iPhone 5S main competitors are Sony Z1, Motorola Razor, HTC One and Samsung S4, and all of them using Android or Windows firmware but Apple uses their own firmware “Apple IOS” for iPhone. And here is a figure showing the growth of the market of each of the firmware. For Market growth rate I used the table above and derive the table below: Smartphone brands 2012 sales* 2011sales Market growth rate Apple 148. 4 93. 1 %59 Samsung 177. 4 95. 2 %86 Research in motion (Blackberry) 41. 4 52. 8 -%21. 5 HTC 39. 2 44. 6 -%12. 1 ZTE 26. 7 14. 9 %79. 19 * In millions
Figure : BCG Matrix for iPhone and its Competitors Consumer Situation There? are? many? different? aspects? of? Apple? that? puts? it? at? the? top? of? people’s? minds? when? thinking? of? purchasing? a? new? phone. Not? only? does? Apple? have? high brand? recognition,? but? they? also? hold? a? high? relative? advantage? over? their? competition. Some? of? Apple’s? recognizable? traits? are? their? logo? and? the? “simplicity”? of? Apple? products.? Apple? is? also known? for? their? high? prices? in? comparison? to? the? competition. Many? would? think? that? this?
would? place? Apple? below? the? competition,? but? they? have? 89%? brandloyalty? with? current? customers,? keeping? them? coming? back? no? matter? what? the price is.? Apple? is? also? specifically? known? for? their? music? download? media,? iTunes.? This? allowsfor? easy? downloads,? organization,? and? storage? of? music.? At the beginning and till now, Apple? and? there? iPhones? market? more? specifically? to? their? previous? customers. Most? of? their? market? is? targeted? toward? previous? and? existing customers. 4) iPhone Performance Historical Situation
Apple as a company has not stopped growing and gaining since the day they released its smart phone “iPhone” in 2007. Specially, since iPhone has not stopped technologically advancing since the first iPhone released. There have been 7 iPhones released since the first 2G iPhone 499$ 4GB 599 8GB. With every year a new iPhone replacing the previous iPhone maintaining the same contract price and the popularity of it and the share in the smart phones market are increasing. The second 3G was released one year later in June 2008 299$ 16GB iPhone 3GS 2009 199$ 16GB
iPhone 4G 2010 199$ 16GB iPhone 4GS 2011 199$ 16GB iPhone 5 2012 199$ 16GB iPhone 5s 2013 199$ 16GB & iPhone 5c 99$ 16GB 3) SWOT analysis: It is required to indicate strength and weaknesses of smartphone section. In our opinion weaknesses are more important Internal factors: Strengths: Huge availability of downloadable application (People like to personalize their smartphone) Simple, easy-to-use design and concise product range attract customers Lots of combined functions in the same device Firmware OS updates available Strong brand loyalty predicts return customers.
It costs far less to keep an existing customer than to attract a new one. Product integrations (all their products connect/work with each other) Processor speed and special processor for graphics. Quality of the material iPhone is made of. Weaknesses: High price. Having higher costs than competitors is a major weakness. Battery life. There is only one store for application “app store” and most good applications are payable. But android for example have alot of online stores for application and most of them are for free. Problems with stock are a weakness for iPhone 5 as they need to keep up with demand.
Limited product line is a major weakness. iPhone 5 is also easily scratched One product release per year Defects of new products iPhone IOS market share is only 19. 4 whereas Android have the biggest share of the market of 68%. External factors Opportunities: iPhone biggest opportunity comes from its own, loyal fan base. High demand of iPhone 5. Strong growth of smartphones market. Growth of tablet and smartphone markets. Increasing demand for cloud based services Threats: Apple iPhone and its IOS is targeted by competitors like Samsung with Android.
Global economic situation is likely to reduce demand for iPhone5 . Extra competition with low price smart devices and new competitors entering the market could unsteady iPhone and be a threat. Rapid technological change because only one product release per year is not enough. 2013 tax increases. Dependence of the third party supplier. 4) OBEJCITVS Increasing market share by: Achieving a growth of 10% per year for the next year. Increase iPhone market share by 30% by 2014. Increase the sales for students by 20% at the end of the year.
And we can measure this by having a free package of applications when a customer presents a student ID. Gain 15% percent of competitors Android-customers to use iPhone. And we can measure this by having a free application, which transfers all of your personal information from your old Android smartphone to your new iPhone. 5) Strategy (segmentation, targeting and positioning) Apple targets all kind of people who wants new technology. They research about people’s needs and wants. The iPhone targets consumers who need to store information and communicate or people who want entertainment on the go.
Apples target segments consist of professionals, students, corporate users, entrepreneurs, and health care workers. And the following table presents how apple responds to each need of a consumer for each segment. *Detailed Features of the device shown in “Action program” section. Target Segment Consumer Need Feature Corresponding to the need Professional users Stay in touch and record information wherever and whenever. Organizing contacts and access everywhere to the calendar and schedule details. Phone, Email, Instant messaging and applications from OS X Mac to take notes and keep them in one cloud, iCloud.
Wireless access to calendar and address book to easily check appointments and contact from iPhone to any Apple device. Students All in one device to carry for different purposes, educational usage, Stylish Phone, iPod, 8mpixels Camera, HD video player, 4G internet access and Browser, instant messaging, iCloud and iBooks. Apple brand as fashion statement, Corporate users Input access to critical data Applications from Mac OS X notes and record keeping in one virtual cloud, iCloud. Compatible with a lot of software and firmware. Medical users Update, access and exchange medical records
Wireless access to calendar and address book to reduce paperwork and increase productivity. USA Market, Apple should focus more on the Western countries. For the time being, iPhone is only released in places, which have the coverage of one of the wireless network provider, the AT&T Cingular Wireless. iPhone only supports this wireless network and due to this, Alaska, Colorado, the Dakotas, Idaho, Iowa, Kansas, Maine, Minnesota, Montana, Nebraska, Nevada, New Hampshire, upstate New York and many more are the places which are not served by AT&T Cingular Wireless will not have iPhones in their market.
Under the positioning elements, Apple had position the iPhone as the flexible, convenient and value added device for professional use. Apple itself is already a strong brand in the market where all their products are focused on new technologies. This means that Apple would not have to focus so much on the brand itself but should focus more on how to promote iPhone by focusing on the convenience of having one device for communication, but also entertainment and also Internet access. 6) Action Program Product:
iPhone combines a mobile phone, an iPod, and an Internet communications device in a single handheld product. Based on the Company’s Multi-Touch user interface, iPhone features desktop-class email, web browsing, searching, and maps and is compatible with both Mac and Windows-based computers. iPhone automatically syncs content from users’ iTunes libraries, as well as contacts, bookmarks, and email accounts. iPhone allows customers to access the iTunes Store to download audio and video files, as well as a variety of other digital content and applications.
Apple launched iPhone 5S, its latest version of iPhone. In addition to the Company’s own iPhone accessories, third-party iPhone compatible accessories are available through the Company’s online and retail stores and from third parties. iPhone 5S new features corresponding to consumers’ needs and feedbacks: Meeting the needs of customers with online 24/7 services and special apple care warranty for new customers. Gaining an advantage over competitors by improving the capability and the compatibility of Apple IOS with Windows or Android based devices.
The challenge will be winning back previous iPhone owners who’ve moved on to Android devices. Having a free application, which transfers all of your personal information from your old Android smartphone to your new iPhone. Apple provides its own operating system software and applications. I OS is the Apple mobile operating system. Apple released the latest version, I OS 7 in September 2013. And Apple App Store, which is currently, has 400 million accounts with registered credit cards provide more than 650,000 software applications for customers.
Improving the online “App Store” and have multiple distributers and offering free educational application for customers with student ID. With Apple iCloud, Access your content on all your devices. Share photos with your favorite people. Or track down a missing iPhone, iPad, iPod touch, or Mac. Whether you have one Apple device or five, iCloud takes care of everything. And you barely have to do a thing. Price: Mix of different pricing strategies will be used: Market-penetration pricing according to our objectives to attract the largest number of customers and have a bigger market share.
In addition, the existence of a lot of competitors and having different prices and products. Product line pricing or Segmented Pricing as Product form pricing, according to the memory size of the iPhone. Psychological pricing as in 199$, 299$, 399$ Prices: 16GB ? $199 32GB ? $299 64GB ? $399 Apple intended to release a cheaper version of iPhone 5, which is the iPhone 5c. We think it would be clever strategies to attract customers who do not want spend that much for their smartphone and also want to experience Apple world. iPhone 5C could be a moderate price phone with apple magic features!
In an industry of low profit margins and cost cutting, Apple takes a different approach to the design of its products. While competitors are doing everything they can to keep costs down, Apple does what it can to make its product different. 7) Controls In order to keep our plan effective to reach our goals and objectives, we are going to have a monthly meeting with Apple, exchanging information so we can maintain or develop our strategies to keep up with the market. In addition, we can evaluate this plan monthly to help us to take future decisions and using different strategies.