Evaluation of the iPhone as a New Product
The iPhone was launched by Apple on June 29, 2007 after much speculation by the market. The product is an internet connected with a multi-touch screen. It also has a 2 mega pixel camera and a media player which is an equivalent to the company’s most successful ‘ipod’ music player. The iPhone was introduced in America initially and soon received the award of 2007 Phone of the Year by Times Magazine. The dimensions of the iPhone are: 11. 6mm thick, 2. 4-inches wide, and 4. 5-inches tall. It has a QWERTY virtual keypad for text messages; you can listen to music and go through audio books, watch movies and conference call among other things.
The phone allows you to view WebPages in their normal HTML format as it supports a rich HTML email client as well as the Safari Browser. The phone also has a built in Wi-Fi system. The phone also has built in sensors which detect how the person is holding the phone and adjust the screen accordingly. The storage space available in different models is from 4 GB to 8 GB. The battery has a life of 5 hours for talk time and up to 16 hours for audio playback. (Mobile Whack) The competitive advantage the phone had over other phones been that when launched it was one of its kind, a multi touch screen and it had an ipod.
Other features that the iPhone had were almost equivalent to those of a laptop. The customers were benefiting out of this deal because they could surf the web, listen to music, watch movies and call from the same phone. Consumers were basically getting three things in one which was very attractive. The iPhone was initially priced at $600 for the 8 GB version. Even with such a high price, Apple sold around a million phones in the first two months. After sometime they realized that they could produce more and sell more so they brought down the price to $200. With an AT&T (formerly known as Cingular) connection the iPhone costs around $350.
(Carl Howe) The pricing strategy of iPhone was initially to skim the market by catering to high end clients and to price their phone above the competitors and the market but once they realized that they could make more profit and with the holiday season coming up they decided to bring down the price. Apple was still making a profit after the decrease in price and iPhones were selling more than ever. The price was suitable for a phone which was one of its kinds and in my opinion it was smart for Apple to bring the price down because there were many similar phones coming out in the market which were competing against the phone.
When the iPhone was launched it was only available at AT&T stores, Apple stores and Apple on-line stores. The iPhone was equivalent to a PDA however due to this distribution strategy, the sales were being limited. The phone on the other hand was a big hit and everybody wanted to buy it. Apple could have generated more sales had their widened their distribution networks especially in the European countries. (Tom Yager) Analysts have said that the iPhone had the best ever launch. There was a lot of hype about the phone since the time that the announcement was made.
The company had not spent a very high amount on its marketing strategy; it was low key but very effective. People were anxious to see what the company will come out with. The promotional strategy for the iPhone was announced by Bear Stearns analyst Andy Neff. (ICMR) Customers were queuing up even before the stores had opened on the day of the launch. The strategy that worked was that people would look cool carrying this phone. That is one of the reasons that there were so many people waiting outside the stores and the reason behind the sale of around 500,000 to 1 million phones in the first two days.
The initiation of the phone was in 2003 and iPhone has lived up to its expectations. The promotional strategy was a success; it had the required effect on people and created an image for the phone. The advertisements were simple but yet very clear and minimalist. This enticed the customers and helped in increasing the sales figure as it gave the brand a very sophisticated look. The iPhone is in its maturity stage of the product lifecycle because the sales are increasing at a very rapid pace and Apple has also taken out a new version of the product, Apple iPhone 3G.
The phone has been in the market for some time now and people are aware of it around the world, it has created a brand name for itself. Such newer versions will help in expanding lifecycle of the product. Nobody refers to it as just a phone; it is always referred to as the iPhone.
Howe, C. The Gutsy Strategy Behind Apple’s iPhone Price Cut, Seeking Alpha. <http://seekingalpha. com/article/47881-the-gutsy-strategy-behind-apple-s-iPhone-price-cut> (2007) ICMR India. Launching iPhone: Apple’s Entry into the Mobile Phone Market, <http://www.
icmrindia. org/casestudies/catalogue/Marketing/Launching%20iPhone-Marketing%20Case1. htm> Mobile Whack, Apple iPhone, <http://www. mobilewhack. com/handset/apple_iPhone. html> (2008) Tom Yager, iPhone distribution set: Apple Store, Apple on-line Store and AT&T Store. Now, what’s an AT&T Store? Weblog. <http://weblog. infoworld. com/enterprisemac/archives/2007/06/iPhone_distribu. html> (2007) Vertygo Team. Apple Marketing Strategy. <http://www. vertygoteam. com/apple_marketing_strategy. php>