COMPANY ANALYSIS: IPHONE
Nicole Webb
NATURE OF APPLE:
• Established 1976 by
Steve Jobs, Steve
Wozniak, and Ronald
Wayne as Apple
Computer
Mission Statement:
“ Design the best personal computers in the
world"
“Lead the digital music revolution"
“Reinvent the mobile phone“
“Define the future of mobile media and
computing devices"
• Designs and Sells:
• Consumer electronics
and Computer Software
• Mac Computers, IPod,
IPhone, IPad, IOS Software
• Publicly –Traded
Company
• Largest Shareholder:
The Vanguard Group,
Inc.
• Sells Products Worldwide
through:
Company Goals:
• Satisfy personal consumer
demands
• Improve performance and
stability
• Retail stores
• Online stores
• Third-party cellular
network carriers (AT&T,
Sprint, Verizon)
IPHONE MAKES HISTORY
• First release: June 2007 as a
• Combination of an Internet-enabled
smartphone and the iPod
• Major Breakthrough in cellphone
technology
• Product Innovation Introduced:
•
•
•
•
•
iOS mobile operating system
App Store (2008 release)
Internet Communications
Navigating Screen (Pinch and Swipe)
Built in software capabilities
• Target Segment:
• Professionals, students,
corporate users,
entrepreneurs ,and
health care workers
• Same as all other Apple
products
• Apple Stores the Apple
website distribution
COMPANY STRATEGY
• Brand Loyalty
• Provide superior software
• iOS operating system
• Mobile applications in the App Store
• Design (Ease of Use)
• Use Product Differentiation, positioning the iPhone as the versatile, convenient, and a device for
personal and professional use
• Convenience of having one device for communication, but also music, pictures, and video,
and full Internet access
• Promotion
• Press Releases
• Presentations (producing a new product, Videos)
• Hype (Secrecy Prior to launch)
• Promotion of Apps
COST STRUCTURE:
• The 16GB model carries a bill
of materials approximately
worth $199, $207 when
manufacturing costs area
added to produce the iPhone 5
at a low cost.
• The iPhone 5 costs Apple an
estimated $200 in materials.
• While the 16GB will cost
$200, it also requires a twoyear wireless contract.
• Buying it off-contract would
require $649 for the 16GB
model, $749 for 32GB, and
$849 for 64GB
• Apple products are designed
low cost to make maximum
profit
Major Cost Drivers
Hardware &
Manufacturing Cost
(16GB for iPhone 5)
Display + Touchscreen (Cover
Glass)
$44.00
User Interface & Sensors
$6.50
Battery
$4.50
Camera (8 Megapixel +1.2
Megapixel)
$18.00
Wireless Section/BT/GPS
$34.00
NAND Flash
$10.40
SDRAM (1 Gbyte)
$10.45
Processor (A6 Processor)
$17.50
Dual Band Wireless
$5.00
Mechanical/ElectroMechanical
$33.00
Power Management (4G LTE
$8.50
Box Contents
$7.00
Total:
$198.85
APPLE’S REVENUE SOURCE
IPHONE
• 60% of Apple’s revenue consists of iPhone
and iPad sales
• 4th Quarter: $36 billion in revenue
• $8.2 billion in net profit by selling 26.9
million iPhones
• Geographic Market:
• 250 carriers in over 100 countries
• Increase of unit sales
CONSUMER DEMAND
• iPhone demand spikes immediately
following an iPhone release and
then returns to a lower mark
• Remained higher following the
iPhone 4S launch because of voice
and speech comprehensiveness of
Siri
• iPhone 5 had the highest consumer
demand when it released but also
dropped 21% in consumer demand
(biggest decline since iPhone 3G
release in 08’)
• Reasons for Consumer Drop:
• Demand satisfied
• Threat from Competitors
• Expectations not fulfilled
COMPETITION:
• Samsung with the highest percentage
of market shares and units sold
• Nokia units sold and market share
decreased but dominated Apple’s
market share and units
• Market Share for Android O.S.
increase 18% knocking the iOS
down 3%
• Samsung widened market lead
SWOT ANALYSIS
(S)trengths:




Innovative
Compatibility
Ease-of-Use
Brand Awareness
(W)eaknesses:
 Cost Structure
 Limited Editions
(O)pportunities:
 Partnerships
 Upgrades
 Innovation
(T)hreats:
 Increased
Competition
SOURCES
• Rassweiler, A. (n.d.). Retrieved from
http://www.isuppli.com/Teardowns/News/pages/Many-iPhone-5-ComponentsChange-But-Most-Suppliers-Remain-the-Same-Teardown-Reveals.aspx
• Tamer , Y., & Moustafa, H. (n.d.). Retrieved from
http://www.scribd.com/doc/21275028/Apple-iPhone-Marketing-Plan
• Rob van der Meulen. Gartner says worldwide mobile phone sales declined 1.7
percent in 2012. Retrieved from http://www.gartner.com/newsroom/id/2335616