THE iPhone: A PRODUCT OF THE APPLE COMPANY
Apple, Inc. is one of the very successful companies in the world and very few people around the globe would deny the fact the Apple is one among many other companies that grew tremendously in the short period. The company specializes itself in designing, developing and selling the consumer electronics, software, and it also sells the digital content through its retail chain store called as Apple Store. The consumer electronics includes the products like Mac personal computers, the tablet computer called as iPad, smartphone device as iPhone, and media player with high portability as iPod, Apple TV digital media player, and the Apple smart watch. On the software segment, Apple produces operating system for its computer systems with the name of OS X and iOS for smartphone and iPad. It also has web browser named as safari, iTunes media player, iWork, iLife, and other productivity and creativity suites. Apples also run the online stores in the name of Mac App Store, iOS App Store, and iTunes store together with its cloud storage facility called as iCloud. The company has been able to diversify its products so well that it has been able to capture the market of consumer electronics very well. With a very interesting history, Apple has been successful in selling its products, from iPhones to MacBook.
Company background
On 1st April 1976, Steve Wozniak, Steve Jobs, and Ronal Wayne founded Apple Computer, Inc. and incorporated on 3 January 1977 to develop as well as sell the personal computers. It was renamed as Apple, Inc. on January 9, 2007, so that it could reflect that fact that the company is more focused on consumer electronics (Richardson and Terrell, 2008).
Apple, Inc. stands as one of the largest IT company in terms of revenue and total assets while it stands as the second largest manufacturer of the mobile phone in the world. Towards the end of 2014, the company’s total value crossed US$700 billion making it as the largest company in the world in terms of market capitalization that is publicly traded (Higgins, Ciolli, and Bost, 2014). As of July 2015, more than 115,000 peoples are employed in the company as permanent full-time employees (Bloomberg.com, 2015). The company has also extended its chain of the retail store to seventeen countries while the number of retail stores has crossed the milestone of 475 as of March 2016. The iTunes store operated by Apple, Inc. is the largest music retailer in the world. As per the statistics of March 2016, more than one billion of Apple’s products are actively being used around the globe.
In the year 2015, the total worldwide revenue of the company was $233 billion, which is about 1.25% of the national GDP of the United States of America (Apple, Inc., 2015). The customers’ brand loyalty towards the company’s product is measured to be at the highest level. As per the report of “InterBrand Best Global Brands Report 2015”, the company enjoys the highest brand value of $170.3 billion (Ember, 2015).
It was only after 2007; the Apple, Inc. got a ladder to climb higher in the market when CEO Steve Jobs announced that the company would be focusing on consumer electronics rather than its long-time business of computers. Jobs also announced the introduction of Apple TV and iPhone for the first time in the same event, which raised the value of the company’s share to $97.80, all time highest value (Starkman, 2015).
The company kept on introducing new features and versions of its product on consumer electronics segment that led to the success of the company. The company’s success can be credited to the success of its iPhone, iPad products, iPod Touch. These products introduced innovations in the mobile phone segments, personal computers, and portable music players respectively. It was Apple, Inc. that introduced these smart devices in the market for the customers that forced other companies like Samsung to develop smart devices.
With the progressive success of these products, the company has been focused on introducing innovative features in its product and making it reachable to many people. To make the product reachable and affordable to many people, it introduced a variant of iPhone version 5c that was relatively cheaper. The success of these products motivated the company to introduce Apple store to sell applications, iTunes to sell music, iCloud to provide cloud storage and several other features that generate the significant amount of revenue for the company.
OBJECTIVES
Apple, being one of the top global companies, needs to drive constantly its activities based on its mission, vision, and objectives. To stay competitive in the market, the company has focused more on its strategic objectives. The company is driven by the strategic objectives that are intended to achievement. The iPhone was the result such strategic objective of achieving the higher market share.
One of the major objectives of Apple, Inc. is to develop the innovative and leading edge products continuously. The company has focused on being a trendsetter in the entire market where the products of the company are introduced with many exciting new features. It is also focused on innovating and dictating the drive for the future technology. The company has the objective of covering all the implementation cost from the sales within the six months of implementing the project (Burnette, 2015).
Another objective of Apple Company is related to the place of distribution. While its chain store is only extended to 17 countries, the company has a strong commitment to expanding the stores globally because these stores are the main source of company sales. Apart from making sales through its own store, the company has the objective of making its product reachable through other stores as well. So, the company is planning to use other existing retail channels to make its product available to the customers. The company is driven with the entering and maintaining its market in the premium segment while increasing the profits. Apart from this, one of the major objectives of the company is to create the hype for its upcoming products so that the huge sales can be made in the short time of product introduction. This is the reason why the company spreads rumors about its new product launch through different sources long before the product is introduced in the market (Burnette, 2015).
PRODUCT AND BRAND PORTFOLIO
In the preliminary days, Apple, Inc. focused more on the personal computers. The company entered the global market with small desktops and personal computers like Macintosh computers. Until 2007, the company was focused more on computers, during 2007; the company focused more on consumer electronics. The majority of the people believe that Apple, Inc. is a very creative technology companies that the world has ever witnessed. Apple desires to achieve a revolution when it comes to designing, developing and distributing its line of products.
The company has the wide range of product portfolio. It sells both the hardware as well as software in consumer electronics segment. One of the major products of the company is its iPhone in the mobile phone segment. The company is equally concerned with the development of iPad with the latest feature that serves as a portable table computer. With the introduction of iPods, the company brought the revolution in the portable music and media player market. The iMac and MacBook are still considered to be the best computer systems in the market. Apart from this, the company holds the market of retail music through iTunes store and third party application through Appstore. The company also develops its iOS and OS X, system software, for its devices. Apart from that, the top product of Apple includes Apple Digital TV Media Player, iCloud, iBook and several other essential software. One of the main products recently developed is Apple Watch, a smartwatch that comes with many essential features that work together with the smart devices.
PRICING STRATEGIES
It is a true fact that the company faces stiff competition from Samsung and other consumer electronics manufacturer. But, the company never prices its products in such a way that it distorts the company's values, mission, and image. The products developed by the company are targeted to the premium segment and has the premium features. So, the company never develops the products at a low price. According to Tim Cook, ”We never had an objective to sell a low-cost phone. Our primary objective is to sell a great phone and provide a great experience, and we figured out a way to do it at a lower cost (Nielson, 2014).” This statement proves that the company is focused on pricing its products at a premium level. This strategy was implemented since Steve Jobs took over the company in 2007. Rather than offering many product lines and long product length, the company focused on offering a small number of products on the premium or high-end segments. The price is determined in such a way that the maximum profits are earned rather than achieving the bigger share.
DISTRIBUTION STRATEGIES
The company has its unique distribution strategy to create the sales. The company creates the hype and anticipation of its new product long before it is introduced in the market. This facilitates the sales of the products from its stores. The majority of the sales are made from the Apple stores. It will not be wrong if we say that the Apple stores are the most successful stores generating sales for Apple, Inc.
At first, the Apple, Inc. had their in-house distribution channel i.e. they sold their products through their stores and tried to maximize the sales. But, with the increasing competition and to address the requirement to expand sales, the company is adding other distribution channels. A Huge portion of the sales of the company is also generated from its online store. The online stores are accessible through 36 countries, and both hardware and software are sold through the online store. The company also has retailers all across the globe to sell their product. The company has tied up with telecom service providers like AT&T to sell their products in the bundle. Apart from this, the company has started selling its product through Best Buy Stores, Wal-Mart Stores, and few other stores to expand their sales (Shetty, 2010). This shows that the company has been using multiple distribution channels to generate sales. The company has been using some degree of differentiation in the product distribution. For example, the company is distributing its software products like iTunes through the product of other companies. For example, iTunes are sold in the pre-loaded form in HP laptop. This kind of differentiation in the channel has helped the company to increase the market coverage while reducing the distribution cost.
PROMOTIONAL MIX
Apple implements the unique type of promotional strategy where the company puts the highest emphasis on quality and the premium image of the product. The company pays maximum attention to the technology and the product features. In the case of Apple, the company advertises its product through newspapers and TV advertising, sales promotions, and the Internet. The company makes the maximum use of its website to promote its product. Apart from that, the company makes the good use of tech websites to promote the product; the periodic review of the product in an anonymous form is also an important strategy of the company to promote its product (Kotler, 2005). The company employs several staffs in its Apple Store where these people promote personal selling by providing the customized product related specific information to the visitors of the store and motivate them to buy the product. In addition to this, the company’s promotional strategy includes the sales promotion. The company offers refurbished products and old models at a discounted price. The company announces several coupons and rebates while purchasing new and old models of products. The company carefully uses the public relation to creating the positive image of the company. The company knowingly leaks the information and the features about its new models of iPhone, discloses information about Apple events, and provides exclusive interviews regarding the product to enhance the public anticipation and image of the product.
SPECULATION AS TO FUTURE DEVELOPMENT
With the growth of Samsung and several other companies like Huawei, Gionee, and other Indian brands in the smartphone segment, the company has a hard time in increasing its sales of iPhones. In the year 2016, the company has been experiencing the continuous decrease in its sales. So, we can say that the company is facing tough competition from its competitor.
So, we can conclude that Apple is one of the very successful companies with long history of success. The company has its own premium market segment, and the company serves its customers with the wide portfolio of products. The company has unique marketing mix strategy that is making the company, a top-notch company, in the competitive market.
References
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