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Rise of IPhone


Rise of IPhone 4 & Fall of IPhone 3

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  • pg 1
									Basic Management & Marketing                    By Waseem Akram

                             Rise of IPhone 4


                         Fall of IPhone 3GS


 No.    Topics                                          Page No.
  1     Introduction                                       2
  2     Executive Summery                                  2
  3     History Of IPhone                                  3
  4     Apple's Branding Strategy                          4
  5     The IPhone Halo Effect                             5
  6     Strategic Overview                                 6
  7     IPhone 4 VS IPhone 3GS                             7
  8     Apple Market Summary                               9

KLIUC                                                      Page 1
Basic Management & Marketing                                          By Waseem Akram


Apple is an American multinational corporation that designs and markets consumer
electronics, computer software, and personal computers. The company's best-known
hardware products include the Macintosh line of computers, the iPod, the iPhone and the
iPad. Apple software includes the Mac OS X operating system; the iTunes media browser;
the iLife suite of multimedia and creativity software; the iWork suite of productivity
software; Aperture, a professional photography package; Final Cut Studio, a suite of
professional audio and film industry software products; Logic Studio, a suite of music
production tools; and iOS, a mobile operating system. As of August 2010, the company
operates 301 retail stores in ten countries, and an online store where hardware and software
products are sold. As of May 2010, Apple is one of the largest companies in the world and
the most valuable technology company in the world, having surpassed Microsoft.

The iPhone is a line of Internet and multimedia-enabled smartphones designed and marketed
by Apple Inc. The first iPhone was introduced on January 9, 2007. There are four generations
of iPhone models, and they were accompanied by four major releases of iOS (formerly
iPhone OS). The original iPhone was a GSM phone which established design precedents like
screen size and button placement that have persisted through all models. The iPhone 3G
added 3G cellular network capabilities and A-GPS location. The iPhone 3GS added a
compass, faster processor, and higher resolution camera, including video. The iPhone 4 has
two cameras for Face Time video calling and a higher-resolution display. It was released on
June 24, 2010. On January 11, 2011, Apple and Verizon together launched a CDMA2000
compatible iPhone 4 specifically for the Verizon network in the US, due for release on
February 10, 2011.


The Past – Steve Jobs, Steve Wozniak and Ronald Wayne established Apple on April 1, 1976
in order to sell the Apple 1 Computer Kit that was hand built by Steve Wozniak. The Apple 1
was sold as a motherboard (with CPU, RAM and basic textual video chips) – less than what
is considered a personal computer today. Apple was responsible for creating the desktop
publishing market due to their innovative programs, PageMaker and LaserWriter. Between
1983 and 1996 Apple experimented with a number of failed consumer target products
including digital cameras, portable CD players, speakers, video consoles and TV appliances.
Market share and stock prices decreased. In 2001, Apple introduced the iPod portable digital

KLIUC                                                                                Page 2
Basic Management & Marketing                                           By Waseem Akram

audio player. The product was phenomenally successful – over 100 million units were sold
within 6 years.


Development of the iPhone began with Apple CEO Steve Jobs' direction that Apple engineers
investigate touchscreens. Apple created the device during a secretive and unprecedented
collaboration with AT&T Mobility Cingular Wireless at the time at an estimated
development cost of US$150 million over thirty months. Apple rejected the "design by
committee" approach that had yielded the Motorola ROKR E1, a largely unsuccessful
collaboration with Motorola. Instead, Cingular gave Apple the liberty to develop the iPhone's
hardware and software in-house.

Jobs unveiled the iPhone to the public on January 9, 2007 at Macworld 2007. Apple was
required to file for operating permits with the FCC, but since such filings are made available
to the public, the announcement came months before the iPhone had received approval. The
iPhone went on sale in the United States on June 29, 2007, at 6:00 pm local time, while
hundreds of customers lined up outside the stores nationwide. The original iPhone was made
available in the UK, France, and Germany in November 2007, and Ireland and Austria in the
spring of 2008.

On July 11, 2008, Apple released the iPhone 3G in twenty-two countries, including the
original six. Apple released the iPhone 3G in upwards of eighty countries and territories.
Apple announced the iPhone 3GS on June 8, 2009, along with plans to release it later in June,
July, and August, starting with the U.S., Canada and major European countries on June 19.
Many would-be users objected to the iPhone's cost, and 40% of users have household
incomes over US$100,000. In an attempt to gain a wider market, Apple retained the 8 GB
iPhone 3G at a lower price point. When Apple introduced the iPhone 4, the 3GS became the
less expensive model. Apple reduced the price several times since the iPhone's release in
2007, at which time an 8 GB iPhone sold for $599. An iPhone 3GS with the same capacity
now costs $99. However, these numbers are misleading, since all iPhone units sold through
AT&T require a two-year contract (costing several hundred dollars), and a SIM lock.

KLIUC                                                                                  Page 3
Basic Management & Marketing                                             By Waseem Akram


IPhone 4, previously rumored to be named iPhone 4G or iPhone HD, is the thinnest
smartphone offering from Apple, and has included a bunch of most advanced features and
hardware specifications. As compared to its predecessor iPhone 3G S, the processor of new
iPhone 4 is powered by Apple A4 which is replaces 600MHz Cortex-A8 architecture and
runs on newest iOS 4 operating systems. The new iPhone 4 is also featured with 3-5-inch
high-resolution display with 960 x 640 pixels, comes with additional secondary VGA camera,
supports Face Time video calling and provides longer battery life

Apple Inc. uses the Apple brand to compete across several highly competitive markets,
including the personal computer industry with its Macintosh line of computers and related
software, the consumer electronics industry with products such as the iPod, digital music
distribution through its iTunes Music Store, and more recently in the smart phone market
with the Apple iPhone.

Apple's product strategy is to create innovative products and services aligned with a "digital
hub" strategy, whereby Apple Macintosh computer products function as the digital hub for
digital devices, including the Apple iPod, personal digital assistants, cellular phones, digital
video and still cameras, and other electronic devices.

Apple has a branding strategy that focuses on the emotions. The Apple brand personality is
about lifestyle; imagination; liberty regained; innovation; passion; hopes, dreams and
aspirations; and power-to-the-people through technology. The Apple brand personality is also
about simplicity and the removal of complexity from people's lives; people-driven product
design; and about being a really humanistic company with a heartfelt connection with its

KLIUC                                                                                    Page 4
Basic Management & Marketing                                          By Waseem Akram


Though Apple's iPhone and iTunes music business is profitable in its own right, Apple's
venture into these product areas was based on a strategy of using the music business to help
boost the appeal of Apple's computing business.

Apple is using iPod, iTunes, and now iPhone to reinforce and re-invigorate the Apple brand
personality. At the same time, these product initiatives are growing a highly relevant,
appealing brand image in the minds of consumer segments that Apple has not previously

In a so-called iPod halo effect, Apple hoped that the popularity of iPod and iTunes among
these new groups of customers would cause these segments to be interested in Apple's
computer products. This does seem to have happened. Since the take-off of the iPod there has
been a dramatic rise in Apple's computer sales and market share.

A couple of years ago, Apple's aspirations for the iPod halo effect was was highlighted most
strongly when it used the slogan "from the creators of iPod" in its promotion of iMac G5
computers. In this instance, the Apple brand came full-circle - having been built into a
branding system that originates in the personal computer market, then leveraged into the
consumer electronics market, and then back into the consumer personal computer market.

KLIUC                                                                                Page 5
Basic Management & Marketing                                          By Waseem Akram


The primary goals of the Sales Introduction Plan are to reach our sales objectives and arrest
Apple momentum within each targeted market, and by doing so establish Macintosh as the
personal computer industry's 3rd standard.

This will be accomplished by:

   1. Using three special events to personally introduce Macintosh to Apple Field Sales
        (National Sales Meeting), Dealer Introductory Event (dealers), Shareholders Meeting
        (public). These meetings will: position Macintosh in the marketplace, establish
        Apple's strong commitment to Macintosh, and communicate to Apple's Field Sales
        and outside Sales organizations the importance of Macintosh's success and the
        necessity of their support.
   2. Communicating and implementing a consistent Strategy which focuses on the retail
        channel plus the University Consortium and Education Rep's channels. The VAR and
        National Account channels will receive secondary emphasis. To reinforce our
        commitment to our channels, we will have product available for demonstration and
        customer ship at launch for all channels.

KLIUC                                                                                 Page 6
Basic Management & Marketing                                            By Waseem Akram

   3. Providing simple yet innovative training, selling tools, support, and motivational
        incentives to the various sales organizations to insure the easy acceptance and
        successful selling of Macintosh in their respective markets
   4. The continued cooperation of and input from Sales Development, Sales Operations,
        Training Development, DSSD, and Marketing Communications will be critical to the
        smooth execution of our Sales Introduction Plan.
   5. A complete timeline of the major milestones for the Sales Introduction is presented on
        the next page. Greater detail of the specific events, programs, and materials which
        make up the Sales Introduction Plan are contained in the pages which follow.


There are many differences between the new iPhone and the old iPhone. Below you will find
reviews and pricing of the iPhone 4 and the iPhone 3GS to help you decide if the new iPhone
is worth purchasing or upgrading. While not a free cell phone, the iPhone 3GS will continue
to be sold at a discounted price with iOS 4 operating system but now only 8 GB of memory.

There are many upgraded features for the iPhone 4 when compared to the previous model.
One of the new features is a much slimmer width of 0.37 inches. This is 24% thinner than the
iPhone 3GS. Another upgrade is for the battery, talk time is increased by 40% on the iPhone
4. Finally the addition of the gyroscope technology allows for six axis motion sensing, this is
in combination with the accelerometer.10

The gyroscope In addition to the accelerometer that was featured in the iPhone 3GS, has now
upgraded the iPhone 4 to six axis motion sensing software. This gyroscope adds another three
axis gryo that controls pitch, roll, and yaw, also a rotation about gravity. This is a default
feature on every iPhone 4 and requires no extra cost or applications.

KLIUC                                                                                   Page 7
Basic Management & Marketing                                            By Waseem Akram

Specs                       iPhone 3GS                                  iPhone 4
Operating     iPhone OS 3 (Upgrade to iOS 4)         iOS 4

Size (inches) 4.5 x 2.4 x 0.48                       4.5 x 2.3 x 0.37

Weight        4.76 ounces                            4.8 ounces

Processor     600-MHz ARM Cortex A8                  Apple A4 processor
Display       3.5 inches (480 x 320 pixels, 163 ppi) 3.5 inches (960 x 640 pixels, 326 ppi)

Camera        3-MP                                   5-MP with LED flash, VGA front camera

              VGA @ 30fps                            720p @ 30fps

Wi-Fi         802.11b/g                              802.11n

              Accelerometer, proximity sensor,       3-axis gyro, Accelerometer, proximity,
              ambient light                          ambient light

Internal      8GB                                    16GB, 32GB

Talk /        up to 5 hours (3G)/12.5 days           7 hours (3G)/12.5 days

Internet Use
             5 hours/9 hours                         6 hours/10 hours

            Up to 10 hours/30 hours                  Up to 10 hours/40 hours

KLIUC                                                                                Page 8
Basic Management & Marketing                                            By Waseem Akram


The iPhone targets consumers who need to store information and communicate or people
who want entertainment on the go. Apples target segments consist of professionals, students,
corporate users, entrepreneurs, and health care workers. Currently, the market for high-end
phones like the Apple iPhone is small. Few people want Internet, video, and PDA features in
one device because of the high price. The smart phone market is still relatively small
compared with general phone market. The market will rapidly increase in coming years due
to lower prices and greater power.

KLIUC                                                                                    Page 9

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