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R u n n i n g H e a d : i P h o n e 5 s p M a r k e t P l a n P a g e | 1

Marketing Plan iPhone 5sp the Solar Powered Phone

LaMarcus BaileyKyle GeorgeSuzi Tullis

California State University, Monterey Bay

Bus 306-90

May 4, 2014

i P h o n e 5 s p M a r k e t P l a n P a g e | 2

Contents

Executive Summary

Situation Analysis

Market Summary

Market Analysis

Demographics

Geographics

Psychographics

The Market

Market Needs

Market Trends

Market Growth

SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

Competition

Product Offering

Keys to Success

Critical Issue

Marketing Strategy

Value Proposition

Mission


Marketing Objectives

Financial Objectives

Target Markets

Demographics

Positioning

Strategies

Marketing Mix

Marketing Research

Financials

Break-even Analysis

Sales Forecast

Expense Forecast

Controls

Implementation

Marketing Organization

Contingency Plan

References


List of Tables and Figures


Executive Summary

Suzi needs to do (Can’t do until the rest of the paper is written)

Marketing Analysis

Situation Analysis

On June 17, 1946 the first mobile phone call was made. In the 68 years since that time there has been an exponential amount of growth and a growing dependence on cell phones. The growing dependence on cell phones has made battery life an extremely important aspect of design. The iPhone 5sp will have an integrated solar powered battery. This will enable users to forget about the conventional methods of cell phone charging and constantly have a fully charged cell phone.

Market Summary

There are currently a multitude of solar chargers on the market. These charges range in price from $20-$150 and offer a variety of features including, light weight design, durability, and varying levels of performance. None of the current solar chargers on the market are integrated in a cell phone.

Customers want a charged cell phone and convenience. There are many alternative (non-solar) cell phone chargers available currently. One such option is the mophie juice pack. The mophie Juice pack ranges in price from $79 to $118. It encases the iPhone and protects it from bumping around; it also carries a backup rechargeable battery. Another alternative charger is the bootcase hybrid power case. This case costs $99 and has mixed consumer reviews. Both of these examples are expense and require the consumer to carry around an extra piece of equipment. The convenience offered by an integrated solar battery charger would appeal to consumers who are willing to spend a little extra money for a constantly charged battery.

Label, Title, Brief Explanation, Citation


Need to insert a graph incorporating the raw data from LaMarcus’s research

Target Market

Demographics

Outdoor enthusiasts are likely to be interested in the iPhone 5s due to its use of the sun as its power source. Outdoor enthusiast spend $646 billion dollars annually in the United States, in California alone this group spends $85.4 billion dollars annually (Outdoor Recreation Economy). The average age of a cell phone user is 13 years old; this creates a huge market of young consumers. Young adults have an average annual spending power equaling $183 billion (Vivion, 2014) Young adults who enjoy outdoor activities, and have an annual income of more than $50,000, are the main target audience for the iPhone 5sp.

Geographics

Studies show that 20% of the world’s population does not have access to electricity (The World Bank). The people without access to electricity live in developing countries with the highest concentration being in Africa and India. While most of these individuals that do not have access to electricity are not concerned with cell phones, a cell phone with an integrated solar battery would still be useful in these regions. This is why the initial target market for the iPhone 5sp will be travelers, outdoor enthusiast and athletes. Imagine how useful an integrated solar battery charger would be to a National Geographic photographer spending months in the safari. There will be a large demand for the iPhone 5sp because of the large portion of the world still living off the grid.

Psychographics

Initially the iPhone 5sp will target members of the upper middle class. The iPhone 5sp is going to have a starting price of $649 and will therefore not be obtainable by members of every social class. The iPhone 5sp is aimed at individuals who spend a good amount of time outdoors and/or away from conventional power sources. The iPhone 5sp will appeal most to outdoor enthusiasts, athletes and travelers. The specific athletes that the iPhone 5sp is going to target are bicyclists, backpackers, and hikers. Travelers are often concerned with carrying around the least amount possible. With restrictions on weight and size of baggage, travelers do not want to have extra pieces of equipment in their bags.

The Market

Market Needs


The smart phone market is in need of a solution that can keep up with the active and busy lifestyle of today’s consumers. Smart Phones are becoming the default mode of access to information, services, data collection and internet browsing. One of the biggest challenges cell phone users face today is how to keep their cell phone charged while constantly on the go. There is a direct correlation to the amount of features built into a cell phone and the phones battery life. This is an ongoing concern for cell phone companies, there is a need in the marketplace for a solar powered smart phone.

A survey was conducted to assess the potential success of the iPhone 5sp. Of the people surveyed, 59% currently own an iPhone. Of those surveyed, 90% said that they would be interested in purchasing a smart phone with an integrated solar charger. The oldest person involved in this survey was 65 years old, the youngest was 18. The Average age of those surveyed was 22. From this survey and other research it can be concluded that young adults who already use Apple products are likely to be interested in buying the iPhone 5sp. (LaMarcus Bailey, Survey, March 2014)

The average smart phone user uses their phone for a variety of everyday tasks. In many cases the smart phone is replacing the necessity of a desktop or laptop computer. A smart phone allows its user to connect to the internet and creates an element of convenience in everyday tasks. Studies of market trends among smart phone users show that there are key needs and wants that are not being met.

Apple has created a new product – one that fulfills previously ignored aspects of the user experience. This iPhone 5sp is thoughtful, intelligent, and efficient by design. One of the biggest priorities in this new design was to remove the necessity of using excess cables. This new and improved iPhone will have a mini solar panel built into its screen and will have a backup battery. The phone will be completely powered by the solar panel and will never have a low battery life. The backup battery will come in useful when the phone does not have solar energy for charging.

Market Trends

The first 40 years cell phones were around saw very slow progression. The first mobile phone call was placed on June 17, 1946. It wasn’t until 1973, 27 years later, that a call was placed from the first mobile phone not connected to a car. Ten years later, in 1983, the Federal Communications Commission (FCC) approved the mobile phone for commercial use. In 1999 Nokia introduced the internet onto cell phones; this is the time when rapid improvements in cell phone technology started to take place.

Today’s consumers are accustomed to fast, easy to use technology. To meet the demands of consumers cell phone companies have made a point of constantly introducing new aspects into the cell phone design. With today’s cell phone technologies it is effortless to connect to the internet, use GPS, or communicate using one’s smart phone. The industry has also been


progressing in reference to speed. Increasing the performance of the smart phone is a must in order to keep up with the high demand of performance. This includes increasing bandwidth, applications, software, and more efficient operating systems. All of these enchantments require more power consumption furthermore establishing the need for solar power which is on the go. (Yarrow, 2012) As cell phones get more advanced it becomes harder to keep them charged, an integrated solar charger would eliminate this problem.


Market Growth

The potential for growth with the solar powered cell phone battery is nearly limitless. No such product currently exists and consumers are growing more interested in solar power. “The demand for solar energy has grown by 30% per annum over the past 15 years. The strong push for renewable energy in 2009, photovoltaic (PV) installations grew by 20%. Revenues in 2009 for the PV industry also increased, reaching $38.5 billion” (Gandhi, 2013)


The market for solar powered technology is currently booming and is a very attractive market to enter into.

The global solar industry has grown 849% over the past eight years, from an installed capacity of 877 MW in 2000 to 8,325 MW at the end of 2007. That breaks down to a compounded annual growth rate (CAGR) of 37.9% for the same period (Hodge, 2008).

With the expansion of the solar industry and increased investment, “PV solar energy has made great strides in the last five years as solar technology has become more efficient and costs of production have decreased” (DOE, 2008). In her article “U.S. Solar Market” Ucilia Wang states that the solar equipment market grew nearly 76% in 2012. (Wang, 2014) The solar market has been experiencing a vast amount of growth. This growth is opening the doors to new technologies, such as the integrated solar battery charger available in the iPhone 5sp.

SWOT Analysis

STRENGHTS WEAKNESSES

Never ending battery life

Less Cables = More Convenience

Reliability of iPhone, Strong

Brand Name

Longer battery life = More

Productivity

Requires Frequent Exposure to

Sunlight

Cell Phone Covers May Block

Solar Panel

Cost

Possibly Not Appealing in All

Locations Geographically

Opportunities THREATS

Increase Apple’s Market Share of

Cell Phones

Change in Market Trends

May not Charge as Fast as


Convert Users

First to Introduce New

Technology

High Revenues in Sunny

Locations

Conventional Methods

Competition Quickly Releasing

Similar Products

Not Applicable in Locations

Lacking Adequate Sunlight

Competition

There are currently a variety of alternative charges on the market. None of these are integrated into a cell phone and none are known for being overly efficient or convenient. Some of the most popular solar battery chargers include the Concept Green Solar (CGS) 1250, CGS 3500, and the JOOS Orange.

The CGS 1250 runs at about $20 per unit, the battery capacity is only 1250 mAH and cannot fully charge a battery. It is lightweight, small and relatively durable. Some reviewers found the CGS1250 to be a good product for the price paid, while others found it to be a heap of junk.

The CGS3500 runs at about $50 per unit, it is small, lightweight, and relatively durable. The battery capacity of the CGS3500 is 3500 mAH. Consumers really like this product but find the charging process to take too long.

The JOOS Orange solar charger has a price tag of $150 per unit with a battery capacity of 5400 mAH. The JOOS Orange can survive a wide range of temperature conditions and is water proof. It takes 12 hours to get a full charge, but one hour of sunlight results in two hours of talk time. The JOOS Orange is built for those on the go, who spend long spans of time away from traditional power sources. The JOOS may be heavy and bulky but it can withstand a multitude of situations making these attributes well worth it. The JOOS orange does not have to be directly angled toward the sun in order to receive a charge and can even charge on a cloudy day. Reviews are relatively positive for the JOOS Orange, with weight being the biggest complaint among consumers.

It is essential to look not only at alternative chargers but also other cell phone producers in order to get a clear picture of who the completion for the iPhone 5sp is.



Figure …. Provides a graphical look at the cell phone market for quarter three of 2013 (CNET, 2013). The iOS operating system has the second largest market share with 12.9%. Android has the largest market share with 81.0%. The biggest competitors that the iPhone 5sp faces are the Samsung Galaxy S5, the Lenovo Vibe Z, and the LG-G Flex.

We need to include place and price in these strageties. See the note she put on our graded first draft.

Samsung’s Strategy

Although Samsung put top of the line adapters and drivers into the Galaxy S5, they are taking the

quality of life approach to market their new phone. In the Official introduction video for the

Galaxy S5, Samsung opens up with the quote, “Innovation is not just about technology, It’s

about how it improves every-day life”. Samsung has realized that the average phone consumer

does not know enough about high performance processors, video rendering cards, and Memory,

but is more concerned with the simple things like a camera that can “capture meaningful

moments instantly” and being able to “stay fit and more active” (Samsung Mobile 2014).

Samsung is also aware that there is still a part of their consumers that is interested in their phones

for the cutting edge technology they put inside of it. With a 2.5GHz quad-core processor, 2GB of


RAM, and a battery that can last for hours on end, the Samsung has created a machine that is

more powerful than the average computer of 5 years ago. These specs keep phone and tech

enthusiasts coming back for the newest Galaxy product (Samsung 2014).

Lenovo’s Strategy

Lenovo’s model for the vibe is “for those who do”. Lenovo is focusing on the social aspect of a

cellphone, with the ad trying to appeal to a younger, more active audience. Lenovo touts qualities

such as the Vibe Z’s dual high resolution cameras and 4G speed because they know that the

active youth want to capture their unforgettable moments, and share them as fast as possible. The

Vibe Z is also no slouch in the technical department. It features a 2.2GHz quad-core processor,

2GB of ram and I high resolution 5.5” screen (Lenovo 2014).

LG Electronics’ Strategy

LG Electronics focuses on the innovation, sleekness, and durability of its G Flex model. LG uses

clever slogans such as “shape your experience” due to the G Flex’s unique curved shape. This

shape is not only for looks, it also adds high durability to the phone. In one commercial for the G

Flex, LG continues to add more and more weight on the phone only to prove that it can

withstand high pressure and will always return back to its original form. Even with its unique

shape, the G Flex still has high quality technology to power itself. It uses a 2.26 quad-core

processor, 2GB of ram, and 1080p full HD camera (LG Electronics 2014).

Product Offering



This image is a breakdown of our product, the iPhone 5sp. The iPhone 5sp features solar power

technology, full 1080p HD display, fingerprint recognition, HD front facing camera, 30pin Apple

USB, and an HD eight mega pixel camera.

The iPhone 5sp has a layer below the surface of the phone, surrounding the screen, of solar

panels. These solar panels are directly connected to the phone’s battery station and, when in

light, will continuously feed the battery energy. This can be done while the phone is in use, or

while the phone is off. While the phone is in use, the phone will experience a much longer

battery life on a full charge. While the current model iPhone 5s can only hold a charge in use for

around 10 hours, the iPhone 5sp can maintain use for over 25 hours in sunlight. While the solar

panels cannot provide enough power to charge the phone above its current state while it is in use,

it is able to feed enough energy to the phone to increase energy efficiency above 100%. While

the phone is on standby or off, the phone is put into charge mode. This mode will charge the

battery of the phone, although a full charge may take up to six hours (Apple, 2014).

The phone features technology that makes the solar panels available to receive sunlight without

the negative effects to the sleek look of the phone. This is done with a patented one way mirror

type technology. This technology allows the solar energy to be received by the panels, but does

not allow the user to be distracted by the solar panels surrounding the screen.

The phone is available for coverage from Apple care. Apple care will fix or replace damaged

solar panels and any problems the phone may be having with the battery.

Keys to Success

The key to the iPhone 5sp’s success will be:

Apple market share growth

Lifestyle changes

Competitor incompetence

Apple market share growth would greatly accelerate the progress of the iPhone 5sp. As we have

shown in the competition portion of this report, Apple is a far second, behind Samsung, in the

cellular market. If Apple were to gain some ground and increase the percentage of people using

iPhone, this would create more publicity for our product. Apple users have very high customer


loyalty, meaning their next phone will most likely be an Apple product. If more people have

iPhones, they will most likely upgrade to the newest model, which will be the iPhone 5sp.

Lifestyle changes would also accelerate the progress of the iPhone 5sp. The iPhone 5sp is useful

for people of all walks of life, but will be especially useful for very active users. Active users

refers to people who like to maintain an active lifestyle by doing activities such as hiking,

running, biking, rock climbing, hunting, bird watching, etc. These people will have more

incentive to purchase a phone that can last longer/charge in the sun, where they will be for most

of their time. If we see an increase in these types of lifestyles, we may also see an increase in the

amount of phones demanded.

Competitor incompetence refers to our biggest competitor, Samsung, not being able to live up to

expectations on their Galaxy S5. If Samsung’s “next big thing” is a flop, they will lose some of

their hold on the cellular market share. If Apple can take advantage of those dissatisfied

customers and convert them to iPhone users, they are most likely to purchase the newest iPhone

model series which includes the iPhone 5sp.

Critical Issue

Critical issues for the iPhone 5sp will be:

Hardware Specs

Cost

Durability

Hardware Specs are on growing in importance when it comes to what customers are looking for

when shopping for a phone. Apple is notorious for being skimpy with the amount of hardware

they put in their products. An Apple laptop with $300 worth of hardware can cost a consumer

well over $1000. In order to keep up with other cellphone manufactures, who supply their

phones with quad core processors and large amounts of RAM, Apple must follow suit and

upgrade the hardware specifications.

Cost will be an issue for the iPhone 5sp. iPhones are not cheap and solar panels are not cheap.

The iPhone 5sp is a combination of both and will therefore not be cheap. Not only will it be

expensive to purchase, but also to manufacture. It is essential to find an achievable cost of goods


in order for Apple to continue making a profit. If the price of the iPhone 5sp is substantially

higher than that of the iPhone 5s it could potentially scare off customers.

Durability will be crucial to the iPhone 5sp. Cellphones are used to seeing all types of abuse,

from being sat on to being dropped on concrete, but the iPhone 5sp will have an extra thing to

worry about with the solar panels. If one drop can shatter a screen, one drop can also shatter solar

panels. Apple must make the phone durable enough to withstand the impact of a fall or else

consumer perception will fall. If people think the main selling point of the iPhone 5sp will break

too easily, they will not purchase it.

Marketing Strategy

Value Proposition

The iPhone 5sp disconnects the cell phone from the power outlet, opening up a world of freedom

for the user. The iPhone 5sp is an iPhone with an integrated solar panel to charge the battery. The

iPhone 5sp is always there for you when you need it, out of site but constantly working. Our

customers are athletic and always on the go, they expect convenient, dependable technology. The

integrated solar panel cell phone battery allows the user to stop worrying about the cell phone.

Bringing life to your phone to equip you with the tools you need to thrive.

Mission

We excel at offering cutting edge technology. Through innovation and open channels of

communication we are able to provide the customer with the products they are asking for. We

are in business so we can have a positive impact on the lives of those we provide products to. By

offering style, functionality, and new technologies we prove to ourselves, and to our customers

that we are the best of class.

Marketing Objectives

The purpose of the iPhone 5sp is to allow users the freedom associated with a constantly charged

cell phone battery. Through a survey of 51 respondents it was found that 90% would be

interested in purchasing a cell phone with an integrated solar panel cell phone charger. It is


expected that once this battery is proved to be successful in maintaining a full charge, it will be

desired by all cell phone users.

Financial Objectives

When looking at the production costs of making an iPhone 5sp, we must first look at the

production costs of making an iPhone 5s. On a strictly hardware and manufacturing level, the

iPhone 5s costs approximately $199 to produce (Wall St. Cheat Sheet 2013). This price may vary

due to components being outdated or discontinued, but for the purposes of this report we will

assume the production price of $199. Apple sold the iPhone 5s for $649 at launch, bringing in a

crude profit of $450 (this does not include software, licensing, royalties or any other

expenditures).

The iPhone 5sp will have a similar price. Although the solar panels will add an additional $5 to

$20 to produce, depending on the type of panels and the cost of integration, it will be possible to

keep costs down using similar methods as the iPhone 5c. This means the iPhone 5sp will have to

sacrifice luxuries such as the more powerful processor and the fingerprint scanner. These lost

features will not affect the iPhone 5sp because its purpose is battery life not computing power,

which usually comes at the expense of battery life. By dropping such luxuries, the iPhone 5c has

kept its manufacturing costs down to $173 (Cnet, 2013). It will be possible to achieve

manufacturing costs less than that of the iPhone 5s using the iPhone 5c specs. The additional cost

of the solar panels will result in a manufacturing cost of $193 per phone. This will bring in a

crude profit of $456.

For opening weekend it is estimated that the iPhone 5 sales figures will be surpassed. The iPhone

5 sold 5 million units during its launch weekend. The iPhone 5s and the iPhone 5c sold 9 million

combined units during their launch weekend. The iPhone 5c and iPhone 5s were released in a

dual launch; those sales figures are not obtainable for a single launch of the iPhone 5sp. Selling 5

million units will bring in approximately $3.24 billion in revenue and $2.28 billion in crude

profits.

Target Markets


In the market analysis portion of this report the target market was touched on briefly in terms of

demographics, geographics, and psychographics.

Demographics

The target market has been chosen based on who the iPhone 5sp will benefit the most. Single,

active, young adults are the primary target market. Single people will be more compelled to

spend a significant amount of money on advanced technology because they do not have anyone

else to worry about financially supporting. Young adults are tend to be more active and will

therefore be spending more time away from home. This will result in the iPhone 5sp having a

perceived value that may not be present in other demographics.

Geographics

The iPhone 5sp will be marketed in the United States initially, with potential for an immediate

launch in Europe and Asia. These three regions have the highest purchasing power (Country

Comparison, 2014) and are likely to see the highest sales.

Psychographics

Suzi needs to do

Outdoor Enthusiasts

The iPhone 5sp can be used for a wide variety of things including, as a GPS, as a camera, and as

a music player. All of these applications can be useful during long periods spent outdoors.

Unfortunately they also all drain battery life failry quickly. The iPhone 5sp will appeal to

outdoor enthusiasts for this reason.

Positioning

The cell phone industries major product attributes are:

User Friendly

Computing Power

Simplicity

Cost


Other iPhone models and competitors have already positioned themselves to fit these attributes.

The iPhone is positioned as a user friendly phone. It boasts its simple, yet effective, user

interface (UI), ease to use camera, and huge variety of apps.

The Samsung Galaxy series has positioned itself as a power packed mobile phone. The Galaxy

series is always a leader in top-of-the-line processors, detailed cameras, and display.

Simplicity is a position which usually belongs to the elderly or the technologically impaired. The

most successful mobile phone manufactures have abandoned this position in order to put more

resources into manufacturing modern phones, however, some companies embrace this position

and continue to build simple phones with buttons and hardly any UI. The Jitterbug is a cell phone

that has very large buttons and only has the ability to send and receive calls.

The iPhone 5sp will create a new niche in the market positioning toward battery life and

convenience. Currently people do not take battery life much into their decision of buying a new

phone; this does not mean it is a trait they do not want. As has been shown through research,

battery life is a problem the majority of cell phone users have and something they want a

solution for. One of the reasons it is not something cell phone users take into consideration when

purchasing a new phone, is because it is an issue cell phone manufactures have not addressed

yet. It is a problem that up until this point has been left for third party accessories to address. By

combining the phone and a battery life solution, it is possible to offer a phone with a long lasting

battery and the convenience associated with it.

Strategies

Kyle needs to do

Marketing Mix:

Pricing

Pricing the newly innovative Apple iPhone involved deep consideration of certain key factors,

including identifying the target market, tracking how much competitors are charging, and

understanding the relationship between quality and price. The price for the iPhone 5sp was

decided based off of competitors pricing of similar products and previous set prices from Apples


latest products. The recently launched iPhone 5 had an initial selling price of $649 when

launched on January 25, 2013. Apple sold roughly 5,150,000 iPhone 5s within the first two

months on the market. A majority of these sales, 83%, came from loyal Apple fans who

previously owned the iPhone 4. The iPhone 5sp will be priced at $649, to stay on track with

previously successful prices. A price skimming and premium pricing strategy will be

implemented. This pricing strategy will give Apple the flexibility to lower the price of the iPhone

5sp to meet the demands of the market and their response to the initial set price.

Distribution

Apple products are currently available through multiple channels, such as the Apple store,

distributors, and online retailers. The most successful channel for iPhone sales are through

distributors such as AT&T and Verizon. Through these distributors people have the ability to

link their cell phone plan with the iPhone. The iPhone 5sp will be available in all the places

people already have access to Apple products, this will add convenience and familiarity. The

iPhone 5sp will initially be launched in the United States, and will later be launched in the other

two geographic segments that Apple operates within. With time the iPhone 5sp will be sold at an

international level through all reputable retailers.

Market Communications

Advertising, public relations, sales promotions, and personal selling will be the major

communications tools utilized.

Advertising

The goal of the iPhone 5sp campaign is to integrate Apples current message of “revolutionary

communications and audio/visual experience” with solar technology. This is in quotations marks,

should it have a sourche Is it a direct quote? Why is it in quotes? The iPhone 5sp will

differentiate itself from its competitors through its solar technology. A.T.V campaing (What is

this? What does A.T.V stand for? It needs to be explained) Advertisements will appear heavily

on television with the intention of making people aware of the new technology and its benefits.

The innovative distinctions found on the iPhone 5sp, such as the reduced need for recharging the

battery, will be emphasized in all advertisement techniques used.


Public Relations

Public relations will be established through sponsorships with popular sports players and/or

public stars who will endorse the iPhone 5sp. This sponsorship will reflect positively on Apple

and the new technology by making it visible at sporting events and on public media. Building

good relationships with those sponsored will give Apple favorable publicity and build an

attractive corporate image.

Personal Selling

The associates that work in Apple stores are very knowledgeable and tech savvy. These

representatives are trained thoroughly in both product information and customer service. When

the iPhone 5sp is released, all staff will be trained to effectively help customers with any

questions or problems associated with the iPhone 5sp.

Marketing Research

Primary research was conducted through surveys intended to foresee potential interest and

success of the iPhone 5sp. The results showed that the target market would have interest in a cell

phone with an integrated solar charged battery. It also showed that people would be willing to

pay more for a technology that would add convenience and make it easier to keep up with busy

lifestyles. Secondary research was done through various internet sites that allowed multiple

statistics and Apple facts to be used when necessary. There was much discussion and research

done to figure out who the biggest competitors to Apple are, and the most effective way to

launch a new product. The primary and secondary research was utilized to better understand the

target market, how to effectively place the iPhone 5sp, an adequate price, and where to place

emphasis on selling.

Financials

Break-even Analysis

Suzi needs to do

Sales Forecast


Below are charts showing the iPhone 5sp’s projected sales. The past few generations of the

iPhone have been released in September, the last month of the third quarter (Q3). This release

time is so that sales do not dwindle from a lack of relevancy during the holiday season.

Year Q1 Q2 Q3 Q4 Yearly Totals2014 N/A N/A 30,000 26,500 56,5002015 50,0002016 24,000

Year Q1 Q2 Q3 Q4 Yearly Totals2014 N/A N/A 19,470,000,000.00$ 17,198,500,000.00$ 36,668,500,000.00$ 2015 32,450,000,000.00$ 2016 15,576,000,000.00$

Unit Sales

Revenues

Q3 of 2014 yields high sales even though the phone will be released at the end of the quarter.

This is due to the fact that iPhones have extremely successful launch dates. Many units will be

sold during the first weekend because Apple has a very loyal fan base and is known to build up

hype around the release of a new product. Q4 of 2014 will see relatively high revenues due to the

holiday season and the newness of the phone.

The first two quarters of 2015 will see sales similar to those of 2014. Apple releases a new model

of cell phone almost every year, this will result in a decrease in sales for the iPhone 5sp in the

second two quarters of 2015 as customers anticipate a new release. 2014 will see higher revenues

than 2015 even though the iPhone 5sp was only available for four months during 2014.

Expense Forecast

LaMarcus needs to do

Controls

Four key segments of business will be analyzed in order to measure the success of the iPhone

5sp. These are:

Financial: revenue and profitability


Marketing: sales velocity and market share

Product Level: time, quality of product, and budget to sales

Customers: satisfaction, awareness, image

The selling price of the iPhone 5sp will be constantly measured and evaluated. The revenues and

profits received off of these sales will then be derived and recorded. These records will be

evaluated on a monthly and annual basis. Prosperous returns are anticipated due to successful

product launches of the iPhone4 and 5; which sold roughly 5 million units within the first two

months at a stable market price. The market price of $649 is expressed within the reputable

Apple name and is ultimately what consumers will pay for an Apple product.

The number of units sold will be measured on a weekly, monthly, and annual basis.

Customer surveys will additionally help Apple monitor the progress and success of the iPhone

5sp. These surveys will provide detailed information about how the consumers perceive the

product. These perceptions may reflect: pricing, quality assurance, known issues with the

product. The questions will be relative to the four drivers stated above and will be focused

questions in regard to the short and long term goals established.

Implementation

Kyle needs to do

Marketing Organization

LaMarcus needs to do

Contingency Planning

As previously mentioned in the critical issues section of this report, the difficulties the iPhone

5sp is facing are: hardware specs, cost, and durability. There is not a phone on the market that

can withstand every major impact, the iPhone is no exception to this. The addition of a solar

panel will ultimately make the phone more susceptible to damage upon impact. The solar panel

will be located on the front of the phone, allowing the use of protective casings. The worst case

scenario would be that the solar panel breaks easily upon impact. This would give the iPhone 5sp

a bad reputation and could ultimately tarnish Apples brand image. This situation would be


handled by addressing the issue immediately and supplying the customers with free repairs and a

better protective case. Going forward it would be necessary to reconstruct the protective bearing

around the solar panel and provide better support.

The cost of an iPhone and solar technology are not cheap, combining the two will result in an

extremely expensive cell phone to manufacture. The survey indicated that people are willing to

pay more in order to have the convenience a solar charged phone would offer. It is likely,

however, that there is a ceiling to how much people are willing to pay for such a convenience. It

would be extremely unfortunate to realize that the money spent on manpower, time, and

materials would not see a return on investment (ROI). In this situation it would be wise to partner

with a successful solar panel company in order to keep costs down. This could include an

agreement where Apple provides the company with cell phones, and the phone then supplies

Apple with solar panels. The logo of the solar company would then be engraved on the back of

all iPhone 5sp’s to provide the solar company with additional advertisement.

Apple is notorious for supplying minimal product at maximum prices. Apple is able to do this

because they have been able to differentiate themselves and offer products unlike those offered

by the competitors. Apple products do not require anti-virus protection, yet do not get viruses.

Apple products are more durable than those of competitors in terms of everyday wear and tear.

Apple products are also made to very high standards and have a very loyal fan base. If a

competitor were able to discover how Apple produces their products to the standards they do it

could prove very detrimental. This would take away Apples competitive advantage and require

them to strategize the business plan. In order to stay one step ahead of the competitor Apple must

find an innovative genius that could keep the company on the path that Steve Jobs laid out.

References

Country Comparison :: GDP (purchasing power parity). (n.d.). Retrieved May 1, 2014, from

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html

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