Industry Analysis

Gadgets – The Smartphone AgeI love them!Nielson estimates 64% of the US

population now owns a smartphone and 80% of the recent phone purchase has been a smartphone

iPhone◦Global market share◦Talk about its competitors◦What can Apple do to increase

market share?

iPhone’s Global Market shareWhat is the iPhone’s global

market share?◦14%

What is Android’s?◦80% as of 2013◦Up from 53% in Q1 2011 (iOS was

28%)

iPhone’s Global Market ShareHas the iPhone sales dropped?

The Competition vs iPhoneTwo different product

philosophiesiOS – closed, controlled, optimal

experience that Apple wants you to have

Android – Open, Unrestricted – 3rd party developers are free to improve the experience as they see fit

The Competition - AndroidAndroid Manufacturers are free to

release new products as a market tester

eg. Bigger phones, water-resistant phones, phones with IR blasters

iPhonesPremium device, boasts intuitive

designOne device per year (except for

5C)Older devices serve as the Entry

level devices when new one comes out

Emerging Markets & EuropeApple has fallen significantly in

market shares in emerging markets

People in India with GDP per Capita of $1,400 cannot afford a phone that is priced $700.

Europe market share fell to 20% where Android sored to 69%

Apple’s answeriPhone 5C“Unapologetically plastic” – Jony

Ive◦Cheaper to manufacture◦More competitive price point

$549 still too much for unsubsidized emerging market (5C not doing so well)

Possible solutionMay be too risky to change

philosophyPremium phone for less price

◦Partially subsidized (or loss leader) strategy

Google Nexus 4• Premium spec• $299

unlocked• $29 on

contract• Price

subsidized by Google

Possible solutionNew segmentation9 Million (possibly 5.5 million)

iPhone 5S and 5C sold on first 3 days◦Proved that there is still a big market

for a smaller one-handed premium device

30 Million Galaxy Note 2 sold◦Develop a new bigger device with

the same premium design

ConclusionGlobal market share may have

fallen significantly but revenue still up

Samsung, Sony, HTC and LG creating new markets for themselves

Adapt to new market demandsNo matter who wins, we win!