company analysis: iphone nicole webb. nature of apple: established 1976 by steve jobs, steve...
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NATURE OF APPLE:
• Established 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne as Apple Computer
• Publicly –Traded Company • Largest Shareholder:
The Vanguard Group, Inc.
• Designs and Sells:• Consumer electronics and
Computer Software• Mac Computers, IPod,
IPhone, IPad, IOS Software
• Sells Products Worldwide through:• Retail stores• Online stores• Third-party cellular
network carriers (AT&T, Sprint, Verizon)
Mission Statement:“ Design the best personal computers in the world"“Lead the digital music revolution" “Reinvent the mobile phone“ “Define the future of mobile media and computing devices"
Company Goals:• Satisfy personal consumer
demands• Improve performance and
stability
IPHONE MAKES HISTORY
• First release: June 2007 as a • Combination of an Internet-enabled
smartphone and the iPod
• Major Breakthrough in cellphone technology
• Product Innovation Introduced:• iOS mobile operating system• App Store (2008 release)• Internet Communications • Navigating Screen (Pinch and Swipe)• Built in software capabilities
• Target Segment:• Professionals, students,
corporate users, entrepreneurs ,and health care workers
• Same as all other Apple products
• Apple Stores the Apple website distribution
COMPANY STRATEGY
• Brand Loyalty• Provide superior software
• iOS operating system• Mobile applications in the App Store
• Design (Ease of Use)• Use Product Differentiation, positioning the iPhone as the versatile, convenient, and a device
for personal and professional use• Convenience of having one device for communication, but also music, pictures, and video, and
full Internet access
• Promotion• Press Releases• Presentations (producing a new product, Videos)
• Hype (Secrecy Prior to launch)
• Promotion of Apps
COST STRUCTURE:
• The 16GB model carries a bill of materials approximately worth $199, $207 when manufacturing costs area added to produce the iPhone 5 at a low cost.
• The iPhone 5 costs Apple an estimated $200 in materials.
• While the 16GB will cost $200, it also requires a two-year wireless contract.
• Buying it off-contract would require $649 for the 16GB model, $749 for 32GB, and $849 for 64GB
• Apple products are designed low cost to make maximum profit
Major Cost Drivers Hardware & Manufacturing Cost (16GB for iPhone 5)
Display + Touchscreen (Cover Glass)
$44.00
User Interface & Sensors $6.50
Battery $4.50
Camera (8 Megapixel +1.2 Megapixel)
$18.00
Wireless Section/BT/GPS $34.00
NAND Flash $10.40
SDRAM (1 Gbyte) $10.45
Processor (A6 Processor) $17.50
Dual Band Wireless $5.00
Mechanical/Electro-Mechanical
$33.00
Power Management (4G LTE $8.50
Box Contents $7.00
Total: $198.85
APPLE’S REVENUE SOURCE IPHONE
• 60% of Apple’s revenue consists of iPhone and iPad sales
• 4th Quarter: $36 billion in revenue• $8.2 billion in net profit by selling 26.9
million iPhones
• Geographic Market:• 250 carriers in over 100 countries
• Increase of unit sales
CONSUMER DEMAND• iPhone demand spikes immediately
following an iPhone release and then returns to a lower mark
• Remained higher following the iPhone 4S launch because of voice and speech comprehensiveness of Siri
• iPhone 5 had the highest consumer demand when it released but also dropped 21% in consumer demand (biggest decline since iPhone 3G release in 08’)
• Reasons for Consumer Drop:• Demand satisfied• Threat from Competitors• Expectations not fulfilled
COMPETITION:
• Samsung with the highest percentage of market shares and units sold
• Nokia units sold and market share decreased but dominated Apple’s market share and units
• Market Share for Android O.S. increase 18% knocking the iOS down 3%
• Samsung widened market lead
SWOT ANALYSIS
(S)trengths: Innovative Compatibility Ease-of-Use Brand Awareness
(W)eaknesses: Cost Structure Limited Editions (O)pportuniti
es: Partnerships Upgrades Innovation
(T)hreats: Increased
Competition
SOURCES• Rassweiler, A. (n.d.). Retrieved from http://
www.isuppli.com/Teardowns/News/pages/Many-iPhone-5-Components-Change-But-Most-Suppliers-Remain-the-Same-Teardown-Reveals.aspx
• Tamer , Y., & Moustafa, H. (n.d.). Retrieved from http://www.scribd.com/doc/21275028/Apple-iPhone-Marketing-Plan
• Rob van der Meulen. Gartner says worldwide mobile phone sales declined 1.7 percent in 2012. Retrieved from http://www.gartner.com/newsroom/id/2335616