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Iphone

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The Iphone Functions As A Camera Phone Marketing
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Apple Inc designs, manufactures, and markets personal computers, mobile communication devices, and portable digital music and video players and sells a variety of related software, services, peripherals, and networking solutions. Apple’s products and services include the Mac line of desktop and portable computers, iPhone, the iPod line of portable digital music and video players, Apple TV,
Xserve, a portfolio of consumer and professional software applications, the Mac OS X operating system, third-party digital content and applications through the iTunes Store, and a variety of accessory, service and support offerings.
The iPhone functions as a camera phone (also including text messaging and visual voicemail), a portable media player (equivalent to a video iPod), and an Internet client (with e-mail, web browsing, and Wi-Fi connectivity) — using the phone's multi-touch screen to provide a virtual keyboard in lieu of a physical keyboard. The first-generation phone was quad-band GSM with EDGE; the second generation phone added UMTS with 3.6 Mbps HSDPA; the third generation adds support for 7.2 Mbps
HSDPA downloading but remains limited to 384 Kbps uploading as Apple had not implemented the
HSPA protocol (Wikipedia, 2009)
Apple has managed to create a Macintosh computer with mobile phone capabilities, bundled within an
Internet enabled PDA and an iPod body, which is the iPhone. The Apple iPhone is an elegantly designed information communicator forged from steel and silicon that runs pioneering software under
Apple’s OS X in a Unix Kernel.
There are some characteristics that make iPhone highly differentiate from its competitors (such as RIM
Blackberry products, Nokia’s products, Sony’s products, HTC’s products and so forth):
The iPhone has an innovative multi-touch screen display that that is patented and unmatched by any other mobile products today. It is radically different from those of other phones or PDAs that recognizes multi finger gestures, just as the human hand normally behaves. The Mac OS X application imbedded into the iPhone assures users will easily recognize what they can do
The iPhone has only a single "Home" hardware button below the display brings up the main menu, compared to many in other phones. The touch screen furnishes the remainder of the user interface.
The iPhone features an internal rechargeable battery. Like an iPod but unlike most other cell phones, the battery is not user-replaceable. The iPhone can be charged when connected to a computer for syncing across the included USB to dock connector cable that make iPhone differentiate from other cell phones. The iPhone run an it owns operating system known as iPhone OS which is based on a variant of the same Darwin operating system core that is found in Mac OS X, while other cell phones (except
BlackBerry) use the same OS such as Symbian, Window Mobile, Androi,
The iPhone allows audio conferencing, call holding, call merging, caller ID, and integration with other cellular network features and iPhone functions
The iPhone allows users to purchase and download songs, applications from the iTunes Store directly to their iPhone which is iPhone's biggest differentiating feature
The iPhone supports gapless playback. Like the fifth generation iPods introduced in 2005, the iPhone

can play digital video, allowing users to watch TV shows and movies in widescreen. Double-tapping switches between widescreen and fullscreen video playback.
While competitors distribute products through many carriers, distributors, Apple only distribute iPhone through only one carrier in each country that Apple operates. Another distribution channels are its own store called Apple Store and its website. In doing so, Apple can provide better service to customers.
The price of iPhone is quite higher than its competitive products because it outperforms any other PDA or smart phone on the market and the convenience of having multiple features combined into onedevice increases its overall value.
Figure 2-1: The strategy clock: competitive strategy option
By applying the strategy clock (see figure 2-1) to the case of Apple, it is clear that the competitive strategy Apple pursuing is differentiation strategy. iPhone’s marketing strategy is to differentiate the iPhone from other PDA’s on the market. The iPhone targets consumers who need to store information and communicate or people who want entertainment on the go. One of Apple’s primary customer targets is the middle-upper income professional that need one portable device to coordinate their busy schedules and communicate with colleagues, friends and family. The secondary consumer targets are high school, college and graduate students who need one portable multifunction device. Mainly this market will be replacing their iPod and cell phone with the iPhone.

2.2 Product and market development
Apple announced the iPhone on January 9, 2007, after months of rumors and speculation. The
(retroactively labelled) original iPhone was introduced in the United States on June 29, 2007 before being marketed in Europe in November, 2007. The iPhone 3G supports faster 3G data speeds and assisted GPS were released on July 11, 2008. The iPhone 3GS was announced on June 8, 2009, and has improved performance, a camera with higher resolution and video capability, and voice control. It was released in the U.S., Canada and six European countries on June 19, 2009, in Australia and
Japan on June 26, and saw international release in July and August, 2009 (Wikipedia, 2009). After two year since its debut, the iPhone is available in 88 different countries throughout the world and around
21.17 million iPhone were sold. These moves evidently demonstrated that Apple pursues both product development and market development strategies to expand its market

3.0 Evaluation and comment on Strengths and Weakness of Apple’s iPhone Strategy
3.1. Evaluation of Apple’s iPhone strategies
In order to evaluate properly Apple’s iPhone strategies, which are product differentiation, product development and market development, we will look at its performance from debut to date

Map of iPhone availability worldwide
Based on above figure, we can conclude that Apple’s iPhone strategies were very successful while there were over 21.17 million iPhone sold in only 2 years and the iPhone is available in 88 different countries throughout the world, representing an addressable market of 760 million users.
Now, the writer will indicate some strengths and weakness of Apple’s iPhone differentiation strategy

Strengths
Position the iPhone as the versatile, convenient, value-added device for personal and professional use.
This is align with current Apple’s positioning, brand image

Build a strong brand awareness and gain customer loyalty
Enhance competitive advantage then make its competitors difficult to imitate. Hence, Apple has created an imitation barrier that competitors cannot easily cross
Increase the perceived value of the offering to the customer either more effectively or at lower cost than do competitors
Concentrate resources to compete more effective in intensive mobile phone market
Limit itself to some potential segment and become a niche player in the upper and premium end of the smartphone market so it can better meet the needs of customer
Can command premium for its products based on the quality, features and services.
Increased costs can be passed on to the buyers
Buyers loyalty can also serve as an entry barrier-new firms must develop their own distinctive competence to differentiate their products in some way in order to compete successfully
Research does suggest that a differentiation strategy is more likely to generate higher profits than is a low cost strategy because differentiation creates a better entry barrier

Weakness
Lack of diversification that make the company vulnerable
The targeted market may become saturated in the future and makes the company not sustainable in the long run.
In the glooming global economy, customers may switch to other products that are cheaper due to the decrease in their income. The recession also shrink the niche market for premium price smartphone
If the company lower product price to adapt to the recession and to compete in all segment, it would undermine and erode the company's premium brand image as well as the company's culture and internal activities

4.0 Writing a Report to Apple’s Board of Director
To: The Apple’s Broad of Director
From: Chu Minh Khai
Date: 15 January 2010-01-15
Some comment and recommendations on Apple’s iPhone differentiation strategy
Not since the introduction of the original Apple Macintosh has a product introduction been met with so much anticipation. The Apple iPhone is an elegantly designed information communicator forged from steel and silicon that runs pioneering software under Apple’s OS X in a Unix Kernel. The iPhone combines smart phone capabilities with a simple to use graphical interface projected on a large ‘multitouch’ display. Apple has managed to create a Macintosh computer with mobile phone capabilities, bundled within an Internet enabled PDA and an iPod body.
In order to compete effectively and efficiently in the intensive smartphone market, Apple has chosen differentiation strategy, which aligns with Apple’s market positioning, brand image and culture. By pursuing this strategy, Apple can differentiate iPhone from other PDA’s on the market; hence Apple positioned the iPhone as the versatile, convenient, value-added device for personal and professional

use. Differentiation strategy gave Apple many advantages such as charging premium price in customer, enhancing brand awareness, retaining customer loyalty, building high entry barrier for competitors and so forth. Besides that, this strategy has some weaknesses that will weaken the company development in the future. The first weakness is that it makes Apple lack diversification of its portfolio of products that could make the company vulnerable in long term. The second one is that the targeted market (namely smartphone) may become saturated in the future or there may be many competitors enter the market to compete with Apple and makes the company not sustainable in the long run. The third weakness is that the slowdown in global economy will affect the company. The final weakness is that this strategy does not provide flexibility for Apple in order to respond effectively to competitors. In order to enhance the strengths of this strategy and overcome the weakness, Apple can use Ansoff matrix. The first move is to diversify Apple’s iPhone while Apple will still concentrate on differentiating its products from customer like Apple has done with the iPod line-up (the iPod line-up includes a number of products such as iPod Shuffle, iPod Nano, iPod Classic, iPod Touch). Following this strategy, Apple may create iPhone Nano, iPhone Biz, iPhone Classic...etc in which each product will target in different segments. The second strategy is market development, in which Apple may reduce price to attract customers from other segment as the price of Apple is now considering too high compared to its competitors’ products. Currently, Apple only distributes iPhone through only one carrier in each country that limits the expansion of iPhone. In the future, Apple can distribute iPhone through more carriers, which will help Apple capture more market share as customer will have more choice, which in turn will help Apple diversify its market. The third strategy is product development, in which
Apple will innovate iPhone to serve its current market. For example, Apple can create iPhone compatible with CDMA network, 4G network. These strategies will help Apple overcome the weaknesses of differentiation strategy and enhance the strengths without changing strategy to other strategy such as low price or hybrid strategy.

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