Kourtney Colley, Rob Patterson, Katie Sue Van Valkenburg
September 17th, 2012
BUAD 300.01
Apple’s Unveiling of the iPhone 5
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Précis
Much to the excitement of the public, the details of the new iPhone 5 were
revealed last week, resulting in a wide array of reviews. While some critics, as in “Is
the iPhone Boring”, believe the phone will lack the thrills that have come to be
expected with the release of past Apple products, the handheld gadget contains a
laundry list of new technologies. The new features include face recognition to
unlock the phone, bigger screens, wireless charging and more advanced digital
payment technology. But Sanford Bernstein analyst Toni Saccanaghi, in “A Thinner,
Longer iPhone”, states the iPhone “hardware and design is not uniquely
groundbreaking”. In addition the iPhone 5 is already under fire for coming out in
response to competitors who are slowly catching up to Apple. Samsung has recently
outpaced Apple in shipments and Nokia is running a new revamped operating
system. But it is believed Apple stays on top due to better services offered
exclusively by Apple, such as iTunes and iCloud. Apple also maintains ownership of
the market by dominating the web. Peyman Nilforoush, in “Media Ecosystems Feeds
on Anything Apple”, states that online, over half of the 10 most read articles are
about Apple. Because of Apple, online-ad spending by telecom, computing and
consumer electronics will reach $7.24 billion this year, up from $6.43 billion in
2011. Overall, new Apple CEO, Tim Cook, stated that the iPhone 5 is “the biggest
thing to happen to iPhone since the iPhone”.
Relation to Management:
When faced with unveiling a new product, companies have to consider the
uncertainty in how the product will be received. In order to account for such,
companies typically utilize the four basic strategy types suggested by Raymond
Miles and Charles Snow. The approaches in strategizing for the unknown include
inheriting the traits of the following: defenders, prospectors, analyzers or reactors.
Apple has actually demonstrated, to some extent, each of these strategies in
revealing the iPhone 5. ‘Defenders’ are organizations that are good at selling a
specific type of product. Apple has consistently sold upgrades of products they have
offered for years such as the iPod, the Mac Books and of course, the iPhone. At the
same time, Apple has demonstrated ‘prospector’ behavior by developing new
products such as the iTouch for those who don’t need a new phone but like the easy,
portable access to Internet as well as the convenient iPad. Adding these two
products has widened the customer base for Apple tremendously. For example
while business partners may not need a new iPod every month, they do use an iPad
to assist with meetings and organization of the company. ‘Analyzers’ watch how
other organizations create and change their products and then after seeing what
works best the company then changes their product in response. Apple is less of an
‘analyzer’, instead there are many ‘analyzers’ of the Apple organization. Products
like the Nook Tablet by Barnes and Noble and the Kindle Fire by Amazon are
products that were created after Apple came out with the iPad in order to keep their
competitive advantage. And lastly, ‘reactors’ wait until they are forced by
environmental pressures to change the product. Although Apple has yet to change
their iPhone drastically, competition could force the company to make more
dramatic decisions in the future. The competitors have come up with many
technological advances that the iPhone has not added into their upcoming iPhone 5.
If Apple does not create the amount of profits they have expected to they will most
likely start adding those advances.
Potential Impact:
As Apple’s progresses with the public release of the new iPhone 5,
management students can observe how organizations are able to effectively
produce a product that will not only encompass ideas inspired by competitors but
also stay ahead of the game with advanced technology. Also Apple’s decisions with
future products can demonstrate different systems of management and show what
works best in order to maintain dominance in the market. In addition, with the loss
of founder and CEO Steve Jobs, Apple is forced to operate under new direction. With
the changes in administration at Apple, students can observe how companies either
strive, or struggle, in new situations with different leadership.