The iPhone Case Write Up
Feb. 24, 2013
Apple Inc. one of the greatest contributors in IT industry, had many innovations that other companies and products followed for many years without breakthrough. For instances, graphic user interface, “mouse” device for control, large capacity digital mp3 player, online digital music shop, and smartphone with multi-touch screen which use finger for control. It literally changed the world. However, the growth of Apple Inc. almost went into a dead end during the 90s, until Steve Jobs was back. Company’s segmentation, targeting and positioning (STP) and pricing strategy are important issues that partially responsible for its fall and ...view middle of the document...
After late 90s, Steve Jobs had made strategic changes on Apple. It started to target individual costumers and non-professions. Apple introduced more user friendly operating system, the Mac OS X; adopted Intel processes; hired Jonathan Ive to design Apple’s products; lowered price for Macintosh; introduced diverse products to target different market segments.
The iPhone and Apple’s market targeting strategy
The iPhone is Apple’s only smartphone series. Not like other smartphone producers, Apple only introduce new version of iPhone annually, without any other smartphone product. Although, only six generations of iPhone ever been produced since 2007, its global sale has been accumulated to total of 319 million units, and account for 25% of global smartphone market. Apple’s product strategy is pretty interesting. Not like other brands, Apple rarely introduce new products, most of time, they are only been replaced with newer version. And Apple’s products rarely have overlap with each other. It’s like Apple is keep looking for new market segments; when they find it, they will introduce a product to target that segment with one product that clearly more attractive than similar product produced by other brand. For instance, after Steve Jobs back to Apple, Apple introduced iMac at 1998, the all in one rather low-end desktop that is colorful, cut, and easy to move, it was meanly to target education market. The iMac series is still updating, and can be seen in lots of schools. The iBook was introduced at 1999, which is a laptop that has been renamed as Macbook, was promoted as “an iMac to go”. It was also colorful, and low end. It was targeting student market. Power Mac, later as known as Mac Pro, was trying to fill high-end professional designer market. Macbook Pro, targeting high performance laptop market. Macbook air, targeting business ultrabook market. Mac mini, targeting new mac experiencers. The iPod classic, targeting high capacity digital mp3 market. The iPod shuffle, targeting sports mp3 player market. There’re more examples, but they all share a same characteristic, all Apple’s products are differentiable and costumers won’t be confused that which product they should choose. One product per segment is a risky strategy; its success is highly depended on user experiences, fortunately, it is what Apple really focused on.
The iPhone segmentation and price strategy
The iPhone was initially targeting high-end smartphone market. It was sold exclusively at AT&T with contract price of $599. This price was way higher than most people could afford. Then, just two months later, when iPhone became well known and been defined as high-end, the price drop to $399. With small sacrifice of getting early users’ complains, plus CEO’s official apology and reasonable rebate, which will never be actually paid (credits that can only been used in apple store). Apple literally promoted its iPhone as high-end product with affordable price.
As we can see for...