Industry Pre-Launch
5 Forces Analysis
4 Actions Framework
Strategy Canvas
6 Paths
Risk Assessment
Post Launch Success

•
2
– Very successful iPod sales
– No desire from Apple to create a PDA
– Steve Jobs believes that cell phones will eventually carry the PDA information
– Americans carried cell phones, Blackberries, & MP3 players
•
– Cell providers marketing to kids & teens
– Boost in consumers wanting smart-phones 3
– Motorola losing 2% of market share 1 month after iPhone launch 3
– Google reveals cell phone software 4

Strength
• iPod 16% company revenue
• Favorable perception of brand
• Ability to capture & retain customers
• Launch of iTunes for music
Weakness
• Existing “convergence device”-Palm
Treo
• Need to create a new OS for the phone
• Accused of having a niche market
• Fault screens & batteries in early iPods
Opportunity
• 3G phones gaining popularity
• Wi-Fi phones coming soon
• Price of storage plummeting
• Fast & efficient cell phone processors
Threat
• Success of rival music stores
• Data networks sluggish
• Success of Palm Treo
• Wireless carriers that dictated hardware devices
• Highly competitiveness IT industry

• Threat of new entrants?
– Apple would be the new entrant
– Google, Microsoft could choose to produce cell phones, eventually.
– Other cell phone companies may re-design their products to compete, later
• Bargaining power of buyers?
– Minimal—Other devices, Palm Treo, Blackberry do not integrate all technologies efficiently
• Threat of substitutes?
– Minimal. Palm Treo is only other existing convergence device.
– Blackberry does not have all of the same functionality, such as MP3s
• Bargaining power of suppliers?
– Minimal. Suppliers will want to get involved with new project, beneficial to their sales.
• Rivalry?
– Medium. iPhone can revolutionize the cell industry.
– Immediately, there will be little competition, but there will be competition from all cell phone producers once it is released. (Motorola, LG, Sanyo, Palm, Blackberry, etc)

• Carrying separate devices: phone, MP3,
PDA
• Requirement to always hook up to PC
• Difficult user interface-make touch screen
• Device to download music directly
• Hold more songs
• Simple user interface, no user manual required
• Sleek design
• Difficulty in text messaging-use keyboard instead
• User interface & improve navigation
• Hold more music
• Applications-games, money management, news, etc.
• Wireless internet on phone

Relative Scale
2-Highest Rating
0-Lowest Rating
Strategy Canvas: Cell Devices
2.5
2
1.5
1
0.5
0
C ost
Im ag e
U se r I nt er fa ce tio ns
A pp lica
In te gr at ed
C ap ab ili tie s
Feature
C el l C ar rie r
In no va tio n
C ust om er
S er vi ce iPhone
Blackberry
Other Cell

1.
Alternative Industries
• Incorporate smart-phone technology
• iPod-MP3, email, applications
2.
Strategic Groups within Industries
• Trade up from typical cell for smart phone technology
• Improved user interface from Blackberry
3.
Chain of buyers
• Increase iTunes users
• Market to AT&T only
4.
Complementary Offerings
• Incorporate iPod and & iPod touch capabilities
5.
Differentiation
• Touch features, compared to Blackberry
• Integrated applications
• “Cool factor”
6.
Look across Time
• Revolutionary user interface
• Touch screen, keyboard, directly connect to App Store, linkage to Mac/PC

First time Apple makes a cell phone
Aligning to a single cell carrier
Ability to successfully integrate software
Problems with battery life
Impacts to iPod sales
High price of product
Data networks sluggish Likelihood
5
4
3
4
1
2 2 7
1
6
5
3
1 2 3 4 5
Consequence
Lo w
Medium
High

•
1
– Cell phone carriers realize that phones can win customers & bring in revenue
• Upset the carrier-manufacturer balance of power
– Opportunities for application developers
•
– March 2009 6
• 17 million iPhones sold
• 25,000 applications sold on App Store
• 800 million total downloads from App Store
– October 2009-Apple Profit increases 47% 5
• Apple sold 7.1 million iPhones in single quarter

1.
The Untold Story: How the iPhone Blew up the wireless industry: http://www.wired.com/gadgets/wireless/magazine/16-
02/ff_iphone?currentPage=2
2.
Steve Jobs: No Tablet, No PDA, No Cell Phone, Lots Of iPods: http://www.macobserver.com/article/2003/06/05.9.shtml
3.
Mobile Phone Industry Already changing due to iPhone: http://arstechnica.com/apple/news/2007/08/report-mobile-phoneindustry-already-changing-due-to-iphone.ars
4.
Google Unveils Cell phone software & alliance: http://news.cnet.com/google-unveils-cell-phone-software-andalliance/
5.
Apple Profit Surges on iPhone Sales: http://online.wsj.com/article/SB1000142405274870450060457448
3631612633824.html
6.
iPhone Sales hit 17 Million: http://www.pcworld.com/businesscenter/article/161725/iphone_s ales_hit_17_million.html