2020 marks the 13th anniversary since the release of the first iPhone model. The iPhone is a smartphone that is designed and marketed by the Apple Company. Unlike other smartphones, the phone has its operating system software known as the IOS. The phone uses both cellular networks and Wi-Fi and has various applications such as a camera, email, search engine, and a phone application. The first iPhone was released in 2007, and since then, iPhones have been released in all major markets globally. Before 2007, Apple was considered to be a computer firm, but with the return of Steve Jobs as the CEO of the corporation, numerous changes took place in the company. The company launched multiple products in a bid to boost its competitiveness, and one of them was a smartphone device. The first corporation to offer the iPhone with only their cell carrier was AT&T mobile communications. The primary factor of the phone was its ability to use the internet, and it changed the way persons live their lives in the contemporary technological world. Presently, the iPhone allows people to have everything they need in their daily activities in just one device that can be held in hand. For instance, there is a calendar, alarms, photos, music, maps, GPS, social media platforms, and news applications and alarms. Finally, the iPhone is presently in its growth stage of the product life cycle since the company continues to innovate and develop new products daily as it is to increases its market growth.
Product evaluation
The smartphone industry is one of the most competitive and innovative sectors globally. In this case, the Swot analysis is used to evaluate the product. Swot analysis is vital as it helps determine the market position of the product. The primary strength of the iPhone is that it is a global and valuable brand that is well recognized. Therefore, this gives the iPhone a competitive advantage over other smartphones in the market. Additionally, the product has sustained consumer loyalty, which keeps on growing. iPhone is one of Apple’s best-selling products because the consumer loyalty that exists doesn’t allow these consumers to use android smartphones. Further, Apple Company is recognized worldwide as one of the leading innovators when it comes to smartphones. The technology firm has, over the years, innovated and come up with new applications and features to make their mobile phones more attractive to consumers. Also, the company Apple has a robust financial performance, and this makes it easy for the firm to access financial resources that enable it to make the best smartphones. Currently, the firm is one of the few firms that have been valued at over one trillion dollars hence making it one of the most valuable firms globally. Likewise, Apple has a strong distribution network across the globe, and this makes it easy for consumers to purchase their mobile phones on the internet, get a chance to experience the phone in a retailer shop, and buy the product that he or she wants. The last strength is that Apple Company has a strong marketing and advertising team that makes the iPhone appear to be appealing and classy. The portrayal of the iPhone has led to people saving up money to buy products and, more importantly, helped increase the consumer markets.
The major weakness of the iPhone is its high prices when compared to other smartphones like Huawei. The high prices are justifiable because of the high-quality products, and it has reduced the market for iPhone since not everyone has the disposable income to buy the phone. Furthermore, the iPhone is only compatible with other iPhone products and operating systems, and this means that an iPhone user has to have a charger meant for the iPhone and MacBook as their laptop. However, android phones can be used with any device since they are compatible with any device. Similarly, a different type of iPhone is produced seasonally, which is after one year, and this leads to bottlenecks in productivity. There are also bottlenecks in cash flow hence causing strain on the company’s facilities and employees. Finally, there is a lack of diversification in both the client base and product line. The company continues to rely on the same iPhone consumers and the same kind of model of the iPhone. Thus, with increased competition from companies like Huawei, the complacency of Apple Company can cause the firm to lose its competitive advantage.
There also exist different opportunities for the Apple product, and one of them is the overwhelming demand for both past and current iPhone models. Early, when a new model is released, the sales surpass that of the previous model, and that is why Apple company put iPhone has one of its biggest revenue generators. Also, it is only American that is a significant market for iPhone products. Overseas countries either have their phone brands or are not aware of the advantages of having an iPhone. Therefore, Apple needs to expand to these regions and one of the potential markets for the iPhone in India. Also, since Apple Company is a leader in the smartphone industry and its launches of smartphones get a lot of media attention, free advertisement is an opportunity for the company to market the iPhone to the world market. Likewise, Apple Company can develop its insurance firm so that its consumers can ensure their highly-priced smartphones.
Consumers would like to protect the iPhone at all costs because of its price, and there is an opportunity for Apple Company to establish itself in the insurance sector.
The primary threat that Apple faces is that there are many emerging and existing smartphone makers that can make better products than Apple. For instance, Samsung is one of the leading manufacturers of smartphones, and currently, it is competing for the American smartphone market with Apple Company. Also, the operating system that iPhone uses is not the standard system used by smartphones globally. Therefore, it is challenging for consumers to access repairs when needed. Thus, the company faces a threat from other mobile phone makers like Huawei that have better-operating systems and ultimately easy for everyday use. The last danger is that the reputation of Apple company relies a lot on its ability to innovate, and there is a risk of the company losing its smartphone market share if it fails to innovate.
Competitor evaluation
The competition is the smartphone sector is substantial both at the national and global levels due to the advancement in technology and the existence of man options for consumers. Apple Company has avoided the price-based competition by staying away from the low end, where the price is the primary differentiators. Also, the company has never put iPhones on sale. Some of the most significant competitors of the iPhone are Samsung, Huawei, Google phones, and Microsoft smartphones. Also, the tool used to analyze the competition in the smartphone industry is Porter’s fives force.
The first force is competitive rivalry, and it high and intense. For instance, Apple used to enjoy the domination of the United States market. However, with the entry of Samsung and Huawei, competition has increased, and it is threatening to reduce the market share of the iPhone. Currently, the competitive rivalry is based on innovativeness since smartphones are highly perishable products and depreciate rapidly in the market. Therefore, companies need to innovate quickly and sell their products quickly. A majority of companies have followed in the footsteps of Apple Company, and they are producing new, improved products yearly. Therefore, brand identity and brand strategy I important since it enables a company to have a competitive advantage over other smartphone makers. The next force is the threat of new entrants, which is low since most consumers are loyal to their phone brands. Also, it is expensive and difficult for emerging firms to make a name for themselves in the smartphone sector since the existing players already have significant market share and the resources to maintain the market shares. Additionally, the new entrants lack economies of scale and the experience needed to navigate the market.
Furthermore, the threat of substitutes is medium. iPhone features are similar to other phones, and there are only a few features that distinguish these phones. Therefore, a consumer can at least find a phone that can act as a substitute to the iPhone. Also, some firms are developing products similar to the iPhone at a lower price, and that is why Apple company has sued some firms because of copyright issues. However, the performances of the phones are very low when compared to the iPhone, and some of the consumers are skeptical about using these phones. Apple consumers prefer to pay more and get a high-quality product than paying less and getting a product that will not last long. There is similarly the power of buyers, which is medium. The primary two buyers of the iPhone are individuals and business organizations. These buyers have been unable to influence the price of the iPhone and its accessories. However, they help determine the design of the iPhone and some of the features that are put on the phone. Further, since numerous rivalry firms in the market manufacture products that are more affordable, buyers can easily switch to other smartphones. Also, with the availability of the internet and well-advanced technologies, it has become easy for buyers to compare prices and performances of smartphones and make an informed decision.
The last force is the power of suppliers, which is medium. Two suppliers are the hardware and software suppliers. There is competition from other smartphone manufacturers, especially for hardware suppliers who supply the hardware parts. However, since there are many suppliers, Apple Company can easily find another supplier. Likewise, the suppliers do not have the power to influence decision-making when it comes to the design of the iPhone. However, they contribute to the determination of its price. Finally, presently, the iPhone still has a competitive advantage, but it needs to be more innovative to maintain this advantage.
Target market
The audience for the iPhone product is increasing daily across the world. For some people, the iPhone is their way of life since it incorporates everything they require daily such as the clock, bible, and calculator. The target audience comprises of persons between ages 18 to 35. The iPhone users usually look for features such as applications the need, the capability to use multi-media, the technology that is user friendly and protects the environment, and sensitive touch. iPhone is considered to be a premium brand that is often associated with premium income earners. It is a brand that everyone might want, but not everyone can afford it. The target market for Apple is generated by looking at the trends that exist in the market. For instance, more men than women purchase Apple products. The target markets for the iPhone are young persons who have a significant amount of income. Some of these persons are college and university students who use an iPhone to record notes quickly. iPhone has an application that keeps the notes organized, and it is also light to carry to school. Further, the iPhone is known for its quality and durability, and for these students, it is a worthy investment. Further, a good number of business persons love Apple devices and, in particular, the iPhone, since its high quality is useful for enhancing efficiency and reducing operational costs. The iPhone helps in finishing work efficiently and communicating with clients. The iPhone can also send documents in an easy and organized manner. The above target markets are already the existing ones, and advertising helps to maintain these markets and expand their share
However, there are also several target markets that Apple wants to reach to increase its sales and ultimately, its revenues:
Target market 1: individuals earning more than 200,000 dollars as a household. Research has shown that there is at least one iPhone in a household with such an income level. These households have disposable income that will be able to purchase at least two iPhones.
Target market 2: businesses that have extensive customers’ networks and hospital organizations that deal with a lot of patients. Examples of these organizations are referral hospitals, banks, and audit firms. An example is at the request of a healthcare organization, Apple Company will be able to have a medical health application whereby all the information about a patient will be stored. Therefore, all patient needs while visiting the doctor is his or her phone.
Target market 3: parents are one of the target consumers that are usually overlooked since they are considered to be more concerned about providing their children with iPhone devices and not buying it for themselves. However, they are target consumers because they can use the iPhone as an educational tool. Parenting is complicated, but the iPhone has several applications that are specifically created for parents to make parenting easy. For example, currently, parents are using mobile phone applications to help their children learn the necessary skills and complement the learning that they get in school.
Target market 4: just like the college students, the middle-aged consumers are an essential target market since it is during this phase that persons have a significant amount of income. These persons have already figured out what to do with their lives, have jobs, and don’t have many responsibilities. Also, these consumers are concerned about people’s opinions in society and the need to look stylish; hence brands are vital to them. An iPhone is one of the well-known expensive brands globally, and that is why research done among the middle-aged consumers determined that many of them love the iPhone as a product.
Advertising goals
The primary marketing objective of the iPhone products is to establish the sum of financial resources and any other resources that has been spent on specific advertising campaigns. Another aim was to determine the content and presentation of the advertisement and the most appropriate media that will make sure the target consumers get the message in the ad. The third objective is to establish the number of times of displaying the advert or campaign and a specific geographical area that the advert needs to focus on. The last aim is to help determine the best ways of assessing the impacts of advertising efforts.
Advertising recommendations
The first recommendation is for the advertising program of iPhones to be coordinated with other product mix elements of the company. Promotion is only one aspect of the product mix, and the other three aspects are product, place, and price. The coordination of these elements helps to avoid numerous problems, such as not communicating effectively to the target audience since they don’t understand the unique features that the product has. For instance, it is known widely that the iPhone is of high quality, but adverts need to offer more than that. High quality and other factors such as a full year warranty and an extended three year Apple care warranty are wanted to meet the satisfaction of consumer value. They persuade the customer to choose the product. Furthermore, customers are aware that the iPhone is of high quality, and the advertisement needs to justify these prices. Likewise, the customers need to be sure that their products will reach them conveniently and that they would struggle or incur a lot of costs getting it.
The second recommendation is for the advertisement managers to be aware of the significance of developing objectives and key performance indicators while planning for an advertisement campaign. Usually, there is a lot of confusion about the purposes that are appropriate for advertising and those that are appropriate for marketing in general. Further, there is a common myth, and setting objectives for advertisement is a waste of time and financial resources since the sector is very dynamic. However, Apple Company needs to know who it is advertising its iPhone and the target sales that it will realize from the advertisement. Further, it is essential to have marketing objectives since it ensures effective decision-making, guarantee effective communication, and help measure and evaluate the advertising efforts. Measurability is one of the significant features of a good objective since they outline the criteria for determining how well the advertising is working.
Budget
When compared to the advertising budgets of other Apple company products, the budget for the iPhone is low. The company achieves this b having other businesses advertise the iPhone for them. For instance, because iPhone is arguably the best-selling smartphone every year, other mobile firms like AT&T and Verizon do the advertising for Apple so that they can boost their sales by associating themselves with the iPhone. Therefore, Apple makes its adverts very simple, and their adverts are primarily aimed at demonstrating to the consumer that the iPhone is easy to use and is available to be used by persons of all ages.
In this case, the break-even analysis hypothesizes that the wholesale revenue of 1000 dollars per unit variable cost of 500 dollars per unit and est. Fixed cost 100 million dollars. Thus, based on these assumptions, the break-even calculations are 100 million dollars divided by 1000 dollars minus 500. The answer is 200, 000units are sold. These break-even calculations show that Apple Company will become more profitable if the sales of iPhones exceed 200,000 sales after the first years, to get profits made, one has to subtract the earnings from the revenue gained from the sale of iPhones. With advertisements, it is predicted that the sale of iPhones will increase by 50%. It is because the company will have an opportunity to sell more products hence enhancing the profits gotten from iPhone sales in the long run.
Conclusion
iPhone has have reached a significant level of success because of its practical business strategy and, more importantly, the advertising strategies. However, there are still some challenges and issues because of the difficulties experienced in advertising. Therefore, for the iPhone to continue enjoying its competitive advantage, it needs to have more effective adverting strategies that will grow its brand. Without a doubt, high-quality products meet and even exceed the customers’ expectations but to maintain existing consumers and appeal to potential customers, the iPhone has to step up its advertising efforts.