Apple iPhone Marketing Plan

•Executive Summery
•Situational Analysis
•SWOT Analysis
•Marketing Objectives
•Marketing Strategy
•Implementation
•Budget
•Control

Executive Summery
The Past – Steve Jobs, Steve Wozniak and Ronald Wayne established Apple
on April 1, 1976 in order to sell the Apple 1 Computer Kit that was hand
built by Steve Wozniak. The Apple 1 was sold as a motherboard (with CPU,
RAM and basic textual video chips) – less than what is considered a personal
computer today. Apple was responsible for creating the desktop publishing
market due to their innovative programmes, PageMaker and LaserWriter.
Between 1983 and 1996 Apple experimented with a number of failed
consumer target products including digital cameras, portable CD players,
speakers, video consoles and TV appliances. Market share and stock prices
decreased. In 2001, Apple introduced the iPod portable digital audio player.
The product was phenomenally successful – over 100 million units were sold
within 6 years

Executive Summery
The Present – January 2007, Steve Jobs, the CEO and Co-Founder of Apple,
announces that Apple Computer Incorporated would now be known as Apple
Inc. He also reveals the long anticipatediPho ne, a combination of an
Internet-enabled smartphone and the iPod. In June 2008, he announces that
the iPhone 3G would be released in July 2008, this newer version added
support for 3G Networking and assisted GPS navigation, among other things.
The Future – Apple plans on focusing on satisfying personal consumer
demands rather than merely fulfilling a demographic requirement as well as,
improving performance and stability rather than introducing new features
when releasing new versions of any product.

Executive Summery
The iPhone targets consumers who need to store information and
communicate or people who want entertainment on the go. Apples target
segments consist of professionals, students, corporate users, entrepreneurs,
and health care workers. Currently, the market for high-end phones like the
Apple iPhone is small. Few people want Internet, video, and PDA features in
one device because of the high price. The smart phone market is still relatively
small compared with general phone market. The market will rapidly increase in
coming years due to lower prices and greater power.

Situational Analysis
Political Situation
•Taxation is something that governments put and Apple should be
study this as country by country case to anticipate profitability, and
pricing strategy.
•Importing laws in the world with GATT are in favor of trading.
•Countries are very variable in stability of, so we should study each
country case by case.
Economical Situation
•Economical growth world wide is in a big recession which need
careful manipulation
•Potentiality of the market is decreasing but it is higher than any
others in the Telecom sector.

Situational Analysis
Socio-Cultural Situation
•Population growth leading to expansion of the sector needs for cell
phones.
•People depend more an more on mobile communication
everywhere.
•There is educational growth in the world.
•Culture’s perception of the technological devices is positive
worldwide.
•Literacy & illiteracy level is not affecting using cell phones but
affecting high technological cell phones, this fact needs to be
considered.
• Acceptance of imported products in some countries are less if
there is local provider
•There are different social views that may affect product should be
considered (e.g.: Boycotting American products in the Islamic
world

Situational Analysis
Technological Situation
•Level of technology in the world is increasing.
•Internet level of awareness & usage for individuals & industrial
aspect are increasing worldwide
•Fixed phone lines capacity and development attempts.
•New technologies in the cell phones are increasing.
•Future plans for technological linkage between cities, universities,
colleges, hospitals and other institutes are increasing and can be
connected to cell phones
•Level of usage of the E- Technology (online bidding, billing,

Situational Analysis

Competition Situation
•There are 19260 cell phone producer in the world, but there are
more than 15 big companies competing at the world level Market

complaints, blogging etc) are high and trendy

Situational Analysis
Environmental Situation
•The global concern of the Global Warming issue & other pollution
effects concerning the packaging material and radiation of the cell
phones
•The demand of the international environmental approvals is a must
(if there is any)
Sales Situation
Cell phones industries are one of the most
profitable industries everywhere and the
Market is increasing

S/O Analysis
Strengths
Innovative – The iPhone has an innovative touch screen. It also has
many functions of other mobile products all in one device
Compatibility –The phone will work with iTunes and with other
Mac/Apple products and OS software tools which means limitless
potential for upgradeability.
Ease-of-Use – The all-new touch screen interface recognizes multi
finger gestures, just as the human hand normally behaves

S/O Analysis
Strengths
Brand awareness – Apple is well known for cool essential
gadgets like the iPods along great technological innovations like the
original Macintosh

S/O Analysis
Strengths
Price – iPhone would be sold at a reasonable price for its
value.
Quality – Scratch resistant screen – durable and light
metallic finish - software suite resistance to computer
viruses

S/O Analysis
Opportunities
Increasing demand and expansion to a new target segment–
As technology advances and smart phones get cheaper Apple will
attract consumers and get iPod users to upgrade to iPhones.
Upgradeable – iPhone software allows new exciting features to be
brought in which take advantage of the touch screen ability. Future
versions will also be hardware upgradeable.

S/O Analysis
Opportunities
Partnerships – Apple can collaborate with many powerful global
mobile phone companies to flood the market with iPhones, which
reduces costs in marketing and increases revenue through long-term
agreement deals

W/T Analysis
Weaknesses
Image – The Apple brand is not targeted towards business people and
does not have a reputation as being compatible with the corporate
world.
Price – Apple does not yet offer lower priced models for more cost
conscious consumers.
 User Interface – Touch screen interfaces suffer from the problem of
“gorilla arm”*

W/T Analysis
Threats
Increased competition – Smart phones are easier to make now more
than ever. More companies may enter the market, and competitors or even Apple
contractors can maneuver around patents to create similar devices.
Downward pricing pressure – The iPhone is marketed as a high-
end phone, but phone prices are almost certainly going to fall when
other companies undercut the price of iPhones.
Difficulty expanding into Asian market – There is less hype and
interest in Asia since smart phones are better known and already widely
used.

W/T Analysis
Threats
Competition (Palm) - Palm has the longest history in PDA market
and has experience-developing software for mobile devices. It is also a
well-known brand for businesspeople. Existing software is well
established and compatible with many products for this market. The
market is familiar with Palm products; significant switching costs are
involved in going to an iPhone. Palm can add many similar capabilities
to their products that match the iPhone and expand to a wider market
through lower cost and higher-power products

Marketing Objectives
•Set an aggressive buy achievable objective for the first and
second years of market:
1. First-year Objectives - We are aiming for a 2 percent
share of the U.S and U.K. PDA/Phone market through
unit sales volume of 445,000.
2. Second-year Objectives - are to achieve a 10 percent
share based on sales.
•Extend on the Apple brand name and link to the established
meaningful positioning.
•Extend on Apples image of innovation, quality, and value.
•Measure the awareness and response in order to make
adjustments to the marketing campaigns as necessary.

Marketing Objectives
Target Market
•Differentiate the iPhone from other PDA’s on the market.
•Primary customer targets is the middle-upper income professional
to coordinate their busy schedules and communicate with
colleagues, friends and family.
•Secondary consumer targets are high school, college and graduate
students who need one portable multifunction device.
•Primary business target is to partner with :
•large cell phone service providers, AT&T, Verizon,

Sprint and Cellular One

•large enterprise software firms where information is
critical to the end user.
Marketing Objectives
Target Market (cont.)
•Secondary business target is mid-to mid-size corporations that
want to help managers and employees stay in communication or
access critical data on the go.
•Market segment will consist of companies with $10-$50 million in
annual sales.
Positioning
•Using product differentiation, positioning the iPhone as the versatile,
convenient, value-added device for personal and professional use.
•Focus on the convenience of having one device for communication,
but also music, pictures, and video, and full Internet access.
•The iPhone will be promoted as both professional and hip

Marketing Mix Strategy

Product
•Full year warranty along with an optional three-year Apple Care
warranty
•Same taste as all other Apple products
•Special edition version to be launched (including the iPhone Beatles
edition celebrating their 40th anniversary)
•Launching a cheaper version in 2008 with less
advanced features along with a more
advanced version for professional use
•Adding the following features to the iphone
(large disk storage capacity, lower weight,
thinner device, long battery life, 4G wireless,
GPS and improved camera)

Marketing Mix Strategy

Price

•Set the base model at a cheap price of $349

•A more advanced model for $399

•Special limited edition Beatles iPhone for special prices

•Generally lower our prices to ensure we establish market dominance

in as short of time as possible

Marketing Mix Strategy

Place
•Massive rollout worldwide at all reputable major retailers
•Massive rollout Online, Showrooms and in all cell phone providers
•All Apple Stores the Apple website will dedicate themselves to the
iPhone
•Eye catching displays will be found at all physical
stores featuring the iPhone to make the product
stand out from the pack
•Apple Stores will have the iPhone on display a full
month before its worldwide release

Marketing Mix Strategy

Promotion
•Integrate Apple message of revolutionary communications and
audio/visual experience together in all media advertisements
•Differentiate the iPhone against others is the touch screen
functionality
•Emphasize Apple brand prominently and associate the
iPhone with the iPod’s groundbreaking lineage
•Original but tasteful advertisements at the same time
•A massive TV campaign is planned before launching the iPhone
featuring a soon to be legendary ad to be the talk of the country
•Advertising will be appearing on a regular basis to
maintain general public awareness

Marketing Research
•Four age groups will be targeted: 15-20 years, 20-25 years, 25-45

years, and 45 years and up

•High School and College aged people will demonstrate social uses

•The 25-45 years group will be used to determine business application

and social/personal use
•The 45 years and above will give us a plan to market to more senior
well-refined group

Marketing Research
•This research will be done through surveys (via email campaign
through portals such as, iTunes and other on-line application
developed for the iPhone) and interviews (in Apple stores) with the
same age groups listed before
•To bring the iPhone to the front of the business world it is important
to research different ways to grow the 15-25 year old group into
business uses of the product
•Brand awareness will be an important tool in taking the Apple brand
from "social cool" to "business cool".

Marketing Research
•We will ask for feedback on iPhone features, and implement those
changes most important to the end user in the next generation iPhone
•We will allow users themselves to design their own ideal iPhone on-
line and use any useful ideas to further refine future iPhone models
•We will continuously scour the Apple fan websites to understand
what the Mac faithful are saying, as they are our best customers

Implementation
Compensation system
•workers $5 incentive pay for every non reject phone they produce
•$10 per phone six sigma quality program
•each worker $5000 each year for best practice training
use control measures to closely monitor
quality and customer service satisfaction
consumers can contact the main headquarters
about any possible technical problems– by using
Apple Customer Service Bar and a customer service phone number
stored in the phone book

Implementation
In case of slow sales
•Offer iPhone to customers who have purchased other Apple products
$10 per phone six sigma quality program, which will lead to:
•demonstrate the product for consumers, it will promote synergy
and lure buyers.
•develop deep relationships with two very different segments:
those who have it and those who aspire

Budget
•Our break-even analysis assumes wholesale revenue of $500 per unit
variable cost of $250 per unit and est. fixed cost of $50 million. Based
on these assumptions the break-even calculation is $50 million
divided by $500 minus $250 equals 200,000 units sold.
•Break-even calculations indicate that Apple will become profitable after the sales volume
exceeds 200k. After the first year Apple will make a profit of 1.25 billion minus 50 million in
fixed costs.
•Recommended price is $350. The markup is 40 percent.
•It is predicted that sales volume will increase at least 60 percent from
this change; this will decrease the impact of fixed costs and improve
opportunities to increase our production scale, which will further
improve profits in the long run

Control
To plan our strategy we will meet monthly with the board of Apple,
present our information, and make a proposal for continued marketing
efforts. Before each meeting our team will meet in private, with each
person presenting their own proposal based on the information they
have learned. After the initial proposals, we will vote on the best one
or come to a compromise. The final proposal sent before Apple is the
result of that meeting.

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