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As with all Apple marketing, the iPhone’s marketing strategy is very clear, simple, and clever. With the Apple icon plain and simple, Apple focuses on the pure innovative style of its products without all the “fluff”. The iPhone was launched by Apple in June 2007. The innovative style of the iPhone was hyped for months before the initial release and has remained the best of the best when it comes to mobile phones over the years. Before the official launch of the iPhone, Apple aired four television commercials promoting the new cell phone.

The first of the commercials portrays the new iPhone as the next step up from the popular iPod. The iPod was all the rage up until this point, and the iPhone was supposed to be the next generation iPod, oh, and it’s a phone too! The ad showcases all the enhanced features available on the iPod and more, and the point is “There’s never been an iPod that can do this.”

“So let’s say you’re watching Pirates of the Caribbean”
The finger clicks on the video and shows a widescreen movie.
“Hmm, did someone say calamari?”
The finger clicks to return to the menu, select the Maps application to search for ‘Seafood’.
“The closest thing would be…”
The map shows all the seafood locations and highlights the location closest to you.
“Oh!”

The finger clicks on the location of the seafood, and the phone number of the restaurant is displayed. iPhone dial.

The first four iPhone commercials touted the convenience, innovation, and usefulness of a single product with the functionality of not just a phone or music device, but a product that can, among other things, listen to music, watch video, , view photos , conduct conference calls, check email, browse the Internet, and view maps.

Not only does Apple use television for its marketing strategy, it makes use of its website to post videos, it also put out a handful of press releases that could have been published in one document. Apple often uses this tactic to build excitement and leave the consumer wanting more.

With Apple’s brief press releases giving the audience little to talk about, “Apple tapped into a law of social physics: News, like nature, abhors a vacuum. In the absence of real information, those who care about a product will pick up any buzz. Apple may publicly disavow rumors of websites seeking snippets of the company’s plans, but secretly its marketing department must be thrilled. It would cost a lot to buy that kind of advertising on the Web.” (Silverman, 2007)

The official iPhone website does more than just provide product information. The website offers the best tips and tricks for using an iPhone, as well as a heavy focus on apps. Almost the entire iPhone page displays images of apps, provides the “App of the Week”, the website also contains sections titled “Apps for Everything” and the “Top Apps”. Apple’s website is a great marketing tool for current iPhone users and consumers who are interested in purchasing the iPhone. Promoting the apps will create a stronger revenue stream for Apple. As customers see top rated apps, they are more likely to download the app, rather than searching through 25,000+ apps to find one that may be of some value to the consumer.

Successful young men were the target audience Apple had originally focused on. Apple hoped that with this target audience, and the fact that 48% of this audience did not already own an Apple iPod, it would allow them to reach their forecast of 10 million sales by the end of 2008.

A month before the launch of the iPhone, Solutions Research Group profiled a representative sample of people who were familiar with the phone. The prospective buyers forecast for launch day ranked most customers of T-Mobile, AT&T’s sole competitor for GSM-based products, at 15%. The second largest group expected to buy the new iPhone was AT&T’s existing customer base, at 12%. The Solutions Research Group also found that 72% of men, versus 28% of women, were more likely to research the phone at its $499 starting price. (Malley, 2007)

The current obvious target audiences for Apple’s iPhone include 20-35 year olds, wealthy teenagers, “jet-setters” and “mobile” employees who work outside the office.

Apple is known for its simplistic yet catchy commercials. In recent TV commercials for Apple’s iPhone, “There’s an app for that” is the new tagline that puts a heavy emphasis on the apps available on the App Store. The apps are found in “every category, from games to business, education and entertainment, finance, health and fitness, productivity and social networking. These apps have been designed to take advantage of iPhone features such as Multi-Touch, the accelerometer, wireless and GPS” (Apple, 2009). Apple currently claims to have over 25,000 apps available and counting.

The focus on the variation of the offered applications greatly opens up the target audience. There is essentially an app for everyone. As some of the iPhone commercials advertise, you can find the snow conditions on the mountain, keep track of the calories in your lunch, find exactly where you parked your car. You can find a taxi in a strange city, find your share of the bill for a table of 5, or learn how to fix a wobbly bookshelf. You can read a restaurant review, read an MRI, or just read a regular old book. These are just some of the features that Apple has promoted through television commercials. iPhone apps provide all the features one can imagine.

When the iPhone was initially released, it was priced at $599. Still, millions upon thousands of people rushed out to buy the new phone, shelling out more than a third of what they would have if they had waited 3 more months. 3 months after the initial launch, Apple reduced the price of the iPhone to $399. This angered loyal Apple customers and consumers who bought the new phone a few months earlier. A year later, Apple reduced the price of the iPhone again to $199, 66% less than the original price.

In July 2007, Apple’s iPhone was a hit. I think Apple’s decision to launch the phone at $599 was slightly based on greed. However, their product was the most innovative on the market, giving Apple the freedom to price the iPhone however they wanted. Many believed that Apple had reduced the price after discovering that iPhone sales were lower than expected. However, Apple claims that the price cut was made “to stimulate holiday sales and predicted that Apple would meet its stated goal of selling its 1 millionth iPhone by the end of September.” (Dalrymple, 2007)

As with the product life cycle of any cell phone or Apple product, including the Apple iPod, prices are often dramatically reduced months after initial launch. Technological products always compete against “the latest and greatest” while maintaining a relevant price in the market. Had Apple not lowered the price of the iPhone, the customer base would have shrunk rapidly as many consumers are unwilling to spend $599 on a cell phone, no matter how many useful features the phone may have.

As the iPhone continues to be the number one smartphone, the product continues to grow, increasing in size capabilities, increasing the number of apps available, and providing new features that are released through new iterations of the phone, continue to deliver greater value. to the iPhone as long as the price remains relevant.

At this point in the product life cycle, Apple continues to release improved iterations of the iPhone. Since most iPhone users are not willing to buy a newer version of iPhone due to price, the target audience for new generation phones is new iPhone customers. With Apple’s installed base continuing to grow, they have found a way to earn recurring revenue from their existing customers through sales of their app downloads. As more and more people buy the iPhone, Apple’s audience for new customers continues to shrink. Fortunately for Apple, they’ve built in another source of revenue that continues throughout the life of the product.

References

(2009). AppleiPhone. Retrieved April 26, 2009, from Apple

Dalrymple, J (2007, September 11). Lessons learned from iPhone price cuts. PCWorld, Retrieved April 26, 2009, from http://www.pcworld.com/article/137046/lessons_learned_from_the_iphone_price_cuts.html

Silverman, D (2007, Jul 10). Apple’s silence helped the iPhone hype. Chron.com: Computing, Retrieved April 26, 2009, from http://www.chron.com/disp/story.mpl/front/4954824.html

Malley, A (June 6, 2007). Apple and AT&T Neophytes to Define iPhone Audience: Report. AppleInsider, retrieved April 26, 2009 from the AppleInsider website

Mukherjee, A (2007, Feb 28). iPhone under attack. Business Today, Retrieved April 26, 2009, from the Business Today website

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