Apples Smart Phone - iPhone - Case Study Example

Apple’s Smart Phone - iPhone Product Category Smart phone is the of the product category that has been picked to undertake the marketing analysis. The emergence of smart phones came into lime light when Apple introduced its iPhones in 2007. Till now iPhones are still considered as the pioneers in the smart phones industry and every other smart phone is compared with Apple’s iPhone in terms of its features. Smart phones are basically those mobile phone devices which have touch screen features, sleek in shape, provide high quality internet based facilities, fully fledged business solutions to corporate users and last but not the least, the support to play HD quality videos. The current major manufacturers of smart phones other than Apple are, HTC, Samsung, Research-In-Motion (RIM) and Nokia. 2) Improvement of an Existing Product This particular marketing study is based on the idea to improve the existing marketing tactics for Apple’s smart phone which is iPhone. The following discussion highlights the market segmentation of smart phone industry and its respective constituents followed by the recent statistics for market research. Concise marketing mix, pricing, promotion, target market and branding strategies for smart phones in general and iPhone in particular are later discussed in this report. 3) Market Segmentation It is practically not possible to exactly determine the amount of the total market size of smart phone industry mainly due to the fact that some of the companies do not publicly announce their shipments, sales and store revenue figures. However, some guesses can be made in this regard by the amount of available information. The total store revenue earned from smart phones manufactures in 2009 amounted to $n828 million whereas it increased more than double and reached to $2.1 billion which is undoubtedly a phenomenal growth. Currently in US, every one of two persons owns a smart phone and this rate, is expected to increase more in the coming years. 4) Market Research and Competitive Analysis As far as the market research is concerned for the smart phone industry, different researches have been conducted to analyze the existing market share of this industry by Nielsen, Gartner, IDC and comScore. More or less similar results were obtained which are tabulated as follows: Smart Phone Manufacturer Market Share Operating System Samsung 29.1% Android Apple 24.2% iOS Nokia 8.2% Symbian, Windows Mobile OS HTC 4.8% Windows Mobile OS RIM 6.7% BlackBerry OS Others 27% Various OS From the above table, the relative market shares of smart phone industry can be observed such that the biggest among all Samsung with 29.1% market share and Apple with 24.2%. However, interesting other small manufacturers have shown a decent cumulative market share of around 27% which is a quite a big chunk in the overall industry. Conversely, Nokia, HTC and RIM are found to have loosened their grip in the smart phone industry with total market share of hardly 21%. So, it can be analyzed that major competitors in the smart phone industry are Samsung and Apple or in other words, iOS and Android. 5) Marketing Mix: Develop a SWOT analysis Strengths The smart phones of Apple possess number of strengths due to which it can be distinguished from its competitor’s products. iPhones are equipped with multi-touch screen which is a patented technology. Apple’s smart phones have great confrontation against computer bugs and virus. Moreover, these smart phones offer variety of applications as well as facilities like ITunes and Apple store. iPhones are very sleek and are available in cool designs. The facility of taking advantage of countless functions from just one device can be taken from these phones. Apple’s iPhones have gained hefty popularity and substantial market share in the past few years. They possess strong market image and customer loyalty. Finally, the most dominating strength is the fact that company has been the leading firm which offers such quality of phone in the arena of smart phones. Weaknesses Despite of having number of weaknesses, Apple’s iPhones do not possess 3G device and therefore they aren’t able to work in the countries which are technologically advanced such as Korea and Japan. The product is geared towards elite class of customers and therefore does not offer lowered price smart phones. The choice of distribution of Apple is also considered as a weakness as the only choice of distribution is through AT&T. Phone assistance of AT&T is not so great. Finally, the smart phones are questioned for being used for entertainment only and are incompatible with corporate duties. Opportunities Despite of being expanded internationally, Apple’s iPhones can yet expand internationally for gaining market share and building more customers. Another opportunity is that these smart phones permit a contract of one year. Moreover, hardware and software upgrades are also expected in future period of time. Threats Number of threats, are faced due to the presence of strong competitors such as Google, Sony, Nokia etc. These smart phones encounter storm of competitors possessing more innovative and creative software. 6) Pricing: Pricing strategy for this product Till now, Apple has adopted Price Skimming strategy for its smart phones, whereby as opposed to mass marketing, initially it targeted a very narrow segment of market which possess high willingness to buy this product. In the past few years, the prices of Apple’s handset have reduced considerably, sometimes even by 50%. Therefore, if Apple cuts the prices of smart phone and introduces new range of smart phones for price sensitive customers then there are higher chances for sales to expand substantially. iPhones have profit margins of more than 30% as compared to its competitors smart phones, therefore there are a lot of opportunities for introducing innovative pricing strategies. 7) Marketing Communications The basic feature which differentiates Apple’s products with its competitors is its touch screen functionality. The communication of the features of Apple’s smart phones to the prospects has been done through advertisement. Assistance from a massive TV campaign has been taken to promote the product. Advertising will continue to appear on regular basis so as to maintain the public awareness and to communicate various messages to the targeted segments. Personnel of Apple have also been sent to inform about how the iPhones of Apple can be used with other products of Apple. 8) Target Market Primary target market of Apple’s iPhones, are the upper middle income professional who need to coordinate and communicate with their friends, families and colleagues with their busy schedules. The second group of customers is the students of colleges, high schools and graduates who prefer to possess a single portable multifunction device. The other group of target market are the mid- size corporations that prefer to assist managers and employees in order to stay in touch while on the go. 9) Branding The branding of iPhone has been conducted in a way to present the smart phone with the technology that can reduce complexity from its users. iPhone’s brand is in continuity of i-series that Apple has adopted over the years believing more on its own brand name. So for iPhones, the Apple’s own brand endorsement is itself a big factor in making this product more successful as people show their strong belief on products backed by Apple. Over next 5 to 10 years, it seems quite difficult that Apple would make any radical change in its branding strategy and the existing brand of iPhone is likely to prevail in the upcoming years. Works Cited Alex. "IPhone Marketing Plan." Apple IPhone Forums. 22 May 2007. Web. 15 July 2012. . Read More