New Product Analysis - Apples iPhone 6 - Case Study Example

New Product Analysis-iPhone 6 By Student’s Name Code +course name Professor’s name University name City, State Date New Product Analysis-Apple’s iPhone 6 Introduction Apple Inc was established in 1976 as a partnership Steve Jobs, Woszniack and Wayne (Jinjin, 2013). The company's innovative computer designs increased its popularity with time. The exit of Steve Jobs in 1985 left the company facing hard times, as sales stagnated. However, the return of Steve Jobs in the late 90's helped the company rise to the rank of one of the most profitable firms in the United States. At the end of the 2012 financial year, the company posted a 66 million dollar net profit and is ranked the sixth largest computer manufacturer (Jinjin, 2013). Apple thrives on making unique, innovative designs that are intended to suit customers' tastes. The company's spirit of thinking big is the engine behind its innovative and stylish designs. The company's products range from computer hardware and software, mobile electronic devices, electronic peripherals and information technology solutions. One of its most popular products so far has been the iPhone Smartphone model (Apple, 2014). Apple runs a smart phones line, popularly known as iPhone. The first type of the iPhones’ Smartphone model, a GSM phone, was released in 2007, while the most recent types are the iPhone 6 and 6 plus released in 2014. Every successive iPhone model is an improvement over the previous model, and the improvement is aimed at enhancing performance, usability and appearance. To develop the iPhone, Williams-Grut (2015) reported that Apple invested $150 million and even much more to develop the iPhone 6. From this investment, Apple managed to make a profit of $18 billion in 2012 and went on to amass $51.1 billion in terms of sales by 2014 (Williams-Grut, 2015). This essay will look at the new product development strategy employed by Apple in developing and marketing the iPhone 6 that led to its unmatched success, as well as the strategies' limitations. The essay will then give recommendations for future products. The New Product Development Process Companies need to keep diversifying their product portfolios as well as improving existing products in order to meet consumer tastes and increase their competitiveness. However, the introduction of new products into the market requires careful thought, research, and planning. Otherwise, the decision to introduce new products could consume one’s capital and leave them in a hopeless situation. The major processes of new product development include idea generation and evaluation, concept development, product development, testing and release (Unger & Eppinger, 2010). These processes will be discussed in relation to Apple’s iPhone. The development of Apple’s iPhone was driven by the need to gain a competitive edge over rivals, which led to the identification of an opportunity in the Smartphone market. The company faced competition from established multinationals like Samsung Electronics and Nokia which were already manufacturing smartphones. For this reason, the company has to device systems that help it remain competitive. One of the company’s strengths in the face of competition lay in its unique, innovative products, as had been the case with the successful iPod and MacBook products (Sawayda, 2010). The company wanted to continue this success by producing a Smartphone different from what other companies were building in order to appeal to smartphones’ enthusiasts. The company realized that other companies were developing smartphones that suited their abilities with little regard for consumer needs. Apple, therefore, sought to design a Smartphone that would win over consumers. Idea Generation Normally, companies develop products from ideas that are obtained through market research, from consultants, customer suggestions, and competitors’ products (Hoyer, Chandy, Matilda, Krafft, & Singh, 2010). After obtaining these ideas, companies have to select those that seem feasible while discarding the impractical ones. The iPhone concept was developed by Apple's co-founder, Steve Jobs after the launch of the iPod in 2002. At that time, the company was working on developing a computer tablet. From the initial progress in developing the tablet’s multi-touch glass display, Jobs got the idea of using the same function on a Smartphone. As described by one of Apple's engineers, Jobs' idea was not just to develop a Smartphone, but one that would win the hearts and wallets of mobile phones’ consumers. Jobs then personally brokered a product development partnership with Cingular/AT& T, a mobile network provider. Work on the tablet stalled as the company shifted focus to developing the iPhone. The iPhone project was code named Project Purple. Concept Development After selecting the most viable of ideas, companies must build on them through obtaining suggestions from experts and target market that would make substantial additions. Areas or issues that had possibly been overlooked are revisited. This also helps the company determine whether the product will have the desired impact. At this stage, the company can also look at possible ways in which the product could be launched/ marketed, the cost of production and marketing and the potential returns that a product will generate (Jerrard, Barnes, & Reid, 2008). In this case, a marketing mix that will respond to varying consumer needs in the chosen markets is drafted. Though Apple had earlier partnered with Motorola to develop a Smartphone, Apple was discontented with the latter's input. Therefore, the company decided to go solo in their new project. The company had a team of one thousand employees selected from its diverse workforce (Gladwell, 2011). The team was tasked with making Jobs’ idea a reality by designing the phone’s appearance and performance. Since the initial iPhone, the company’s employees have continually worked on ways of improving the initial design where new features are added and the design, size, and materials changed with every successive iPhone model. The iPhone 6 is, therefore, as a result of a continued process of improving the initial iPhone idea. Product Development This stage usually involves the design of a prototype which is taken through rigorous tests and analyses to detect flaws and identify areas for improvement. This step usually involves a number of revisions and at times, it becomes difficult to keep track of all the changes made to the initial idea/ design. The stage, therefore, requires proper change management where clear guidelines on whom, where and when changes can be made and how these changes should be recorded (Bhuiyan, 2011). Interviews with the members of the team tasked with the iPhone's development have revealed that the process was very challenging, stressful and was occasioned with many setbacks (Wakabayashi, 2014). The process took two years during which a number of changes were made to the prototype. The initial model had a circular dialer. This was changed to a later model made entirely of aluminum. However, the interference of aluminum with wireless signals prompted the engineers to look at the alternatives. The final model was made of plastic-capped metal. The final change to the prototype involved a change from the then popular plastic touch display to the currently used gorilla glass after Jobs realized that the plastic screen was susceptible to scratches. The iPhone 6 is an improvement of the previous models; iPhone, iPhone 3, iPhone 4 and iPhone 5 series. It has a larger screen than its predecessor, the iPhone 5 as well as two additional processors (Apple, 2014). The iPhone 6 was designed in the USA but manufactured in China and Brazil by Foxconn and Pegatron, while its parts were sourced from a number of companies around the world; for example, display screens were made by LG, cameras by SONY, and storage devices by Toshiba (Compare Camp, 2014; (Xing, 2013)). It is also possible that the development of a marketing mix and a launch strategy went hand in hand with the product’s development since its release was made immediately after completion. Testing The stage is usually characterized by the release of a product to a select group of consumers or a particular geographical region to test the product's appeal to consumers, as well as get reviews and suggestions for improvement. An analysis of the marketing mix is also done to determine its effectiveness and changes are made where necessary. Before mass release, the iPhone was tested severally by the company and reviewers like Walt Mossberg. The phone was subjected to fifteen thousand laboratory tests to test its durability. In addition, tests were carried out by hundreds of the company’s employees who received free devices to determine their performance in a real world environment (Lowensohn, 2014). Product Release The final stage of the new product development process is launching the new product in the market. This is done once the product testing gives an assurance that the product will meet the set market objectives. A number of parameters are considered during this stage in order to have the best possible impact. The mode of product launching, timing, location and market segments are some of the considerations that a company should make before releasing the product. The iPhone 6 was first launched at the Flint centre for the performing arts on September, 19, 2014 (Cadwell, 2014). The invitation criteria and guest list was kept secret until the launch. Influential personalities in the entertainment and mobile industry featured prominently a number of which played the role of keynote speakers. Events at the launch were also streamed live on social media, more so on Twitter. The launch was preceded by advertisements for pre-orders and succeeded by aggressive media advertisement. Three days after the launch, the company had sold over ten million devices and faced a supply versus demand deficit (Cadwell, 2014). According to Laugesen & Yuan (2010), Apple uses a skimming and versioning sales strategy in all its products releases, where devices are sold at high initial prices (skimming) and slightly lower prices thereafter (versioning). Conclusion and Recommendations The rise of Apple to the position of a major mobile devices manufacturer and one of the most profitable in recent times can be attributed to exceptional leadership that had a clear focus on meeting consumer expectations of quality and elegance. In addition, their increased marketing of products has increased the company’s popularity. In 2013, Apple spent over $300 million in advertisement, a figure that was only second to what Samsung spent in the same year (Sharma, 2013). This popularity and insistence on quality led to the success of the iPhone 6 which was sold out within the first week of the launch. While this is a show of the NPD process, it highlights a weakness in the company’s demand projection and it might have led to possible lost sales opportunities. The company, therefore, needs to invest more in market research so as to make better demand forecasts in the future. Reference List Apple, 2014. iPhone. 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