Apple inc., 2008 Case Study Help
Opportunities
A fixed premium will be charged from AT&T for service contract on each iPhone sold, in the contract of carrier distribution agreement. A new retail channel, best bounty had opened to sell iPhones in 1000 stores (Dyson, 2004). Partnership with YouTube and google enabled the new iPhone to easily access mapping, searching along with direct music downloading from iTunes and Wi-Fi Music store.
Threats
User interface technology had made manipulation easier by providing easy tapping, dragging and pinching.
It could be seen from above analysis that both of thestrategies had different approach towards the product’s sales’ assumption. Different strategies were adopted because of some specific reasons:
- One million of iPhone units out of total 3.7 million units had fallen the victim of “gray market”, where consumers tried to purchase illegal iPhone from unauthorized sellers and used unsanctioned mobile networks for the purchased iPhones.
- Apple had made an agreement to reduce the illegal iPhone sales by restricting its sales up to only in five European countries and in the United States, at the end of June 2008.
- Apple did not use a fastest growing network 3G for wireless solutions because of its negative impact over its battery life and preferred to use 2.25G Edge network.
- Initial Pricing strategy was too high.
- Fixed premium will be received.
- It was launched in 22 markets.
- Making partnership with google and YouTube enabled the new iPhone to have an easy access to mapping, searching along with direct music downloading from iTunes and Wi-Fi Music store.
- In the appendix 2 and 3, a detailed compression analysis has been performed with the help of vertical and horizontal analysis in order to examine the impact of both the different strategies for the year 2007 and 2008.
- It could be seen that from new strategy, sales had incarsed by only 2%, along with a 3% in gross profit margin.(Tesch, 2013).
- It could be seen that the market value of the company had decreased by 15%, along with 1% decrease in its stock price.
Conclusion
After analyzing the entire situation with the help of qualitative as well as quantitative analysis, it is concluded that for the year 2008, Mac sales were representing a 43% margin in the total revenue of Apple. Apple reinvented the phone and introduced a new device, which shared smartphone’s qualities as well as internet facilities. In this iPhone, many features were introduced, such as: e-mail capability, text messaging, web access, address book, calendar, 2-mega pixel camera and other PDA functions. Apple had reinvented the phone and had come up with a totally new offer for its iPhone, with an inclusion of an entirely different pricing strategy in 2008. It could be seen that from the new strategy, sales had increased by only 2%, along with a 3% increase in gross profit margin. The company made partnership with Google and YouTube, which enabled the new iPhone to have an easy access to mapping, searching along with direct music downloading from iTunes and Wi-Fi Music store..............................
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