iPhone1

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iPhone1

  1. 1. iPhone Blue Ocean Strategy INDE 599 11-3-09
  2. 2. Overview <ul><li>Industry Pre-Launch </li></ul><ul><li>5 Forces Analysis </li></ul><ul><li>4 Actions Framework </li></ul><ul><li>Strategy Canvas </li></ul><ul><li>6 Paths </li></ul><ul><li>Risk Assessment </li></ul><ul><li>Post Launch Success </li></ul>
  3. 3. History of Industry <ul><li>2002-2003 2 </li></ul><ul><ul><li>Very successful iPod sales </li></ul></ul><ul><ul><li>No desire from Apple to create a PDA </li></ul></ul><ul><ul><li>Steve Jobs believes that cell phones will eventually carry the PDA information </li></ul></ul><ul><ul><li>Americans carried cell phones, Blackberries, & MP3 players </li></ul></ul><ul><li>2007 </li></ul><ul><ul><li>Cell providers marketing to kids & teens </li></ul></ul><ul><ul><li>Boost in consumers wanting smart-phones 3 </li></ul></ul><ul><ul><li>Motorola losing 2% of market share 1 month after iPhone launch 3 </li></ul></ul><ul><ul><li>Google reveals cell phone software 4 </li></ul></ul>
  4. 4. Apple SWOT Analysis <ul><li>Threat </li></ul><ul><li>Success of rival music stores </li></ul><ul><li>Data networks sluggish </li></ul><ul><li>Success of Palm Treo </li></ul><ul><li>Wireless carriers that dictated hardware devices </li></ul><ul><li>Highly competitiveness IT industry </li></ul><ul><li>Opportunity </li></ul><ul><li>3G phones gaining popularity </li></ul><ul><li>Wi-Fi phones coming soon </li></ul><ul><li>Price of storage plummeting </li></ul><ul><li>Fast & efficient cell phone processors </li></ul><ul><li>Weakness </li></ul><ul><li>Existing “convergence device”-Palm Treo </li></ul><ul><li>Need to create a new OS for the phone </li></ul><ul><li>Accused of having a niche market </li></ul><ul><li>Fault screens & batteries in early iPods </li></ul><ul><li>Strength </li></ul><ul><li>iPod 16% company revenue </li></ul><ul><li>Favorable perception of brand </li></ul><ul><li>Ability to capture & retain customers </li></ul><ul><li>Launch of iTunes for music </li></ul>
  5. 5. 5-forces Analysis on Cell Phone Industry <ul><li>Threat of new entrants? </li></ul><ul><ul><li>Apple would be the new entrant </li></ul></ul><ul><ul><li>Google, Microsoft could choose to produce cell phones, eventually. </li></ul></ul><ul><ul><li>Other cell phone companies may re-design their products to compete, later </li></ul></ul><ul><li>Bargaining power of buyers? </li></ul><ul><ul><li>Minimal—Other devices, Palm Treo, Blackberry do not integrate all technologies efficiently </li></ul></ul><ul><li>Threat of substitutes? </li></ul><ul><ul><li>Minimal. Palm Treo is only other existing convergence device. </li></ul></ul><ul><ul><li>Blackberry does not have all of the same functionality, such as MP3s </li></ul></ul><ul><li>Bargaining power of suppliers? </li></ul><ul><ul><li>Minimal. Suppliers will want to get involved with new project, beneficial to their sales. </li></ul></ul><ul><li>Rivalry? </li></ul><ul><ul><li>Medium. iPhone can revolutionize the cell industry. </li></ul></ul><ul><ul><li>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) </li></ul></ul>
  6. 6. 4 Actions Framework <ul><li>Raise </li></ul><ul><li>User interface & improve navigation </li></ul><ul><li>Hold more music </li></ul><ul><li>Applications-games, money management, news, etc. </li></ul><ul><li>Wireless internet on phone </li></ul><ul><li>Create </li></ul><ul><li>Device to download music directly </li></ul><ul><li>Hold more songs </li></ul><ul><li>Simple user interface, no user manual required </li></ul><ul><li>Sleek design </li></ul><ul><li>Eliminate </li></ul><ul><li>Difficulty in text messaging-use keyboard instead </li></ul><ul><li>Reduce </li></ul><ul><li>Carrying separate devices: phone, MP3, PDA </li></ul><ul><li>Requirement to always hook up to PC </li></ul><ul><li>Difficult user interface-make touch screen </li></ul>
  7. 7. Strategy Canvas Relative Scale 2-Highest Rating 0-Lowest Rating
  8. 8. Areas to Change the Rules “6 Paths” Framework <ul><li>Alternative Industries </li></ul><ul><ul><li>Incorporate smart-phone technology </li></ul></ul><ul><ul><ul><li>iPod-MP3, email, applications </li></ul></ul></ul><ul><li>Strategic Groups within Industries </li></ul><ul><ul><li>Trade up from typical cell for smart phone technology </li></ul></ul><ul><ul><li>Improved user interface from Blackberry </li></ul></ul><ul><li>Chain of buyers </li></ul><ul><ul><li>Increase iTunes users </li></ul></ul><ul><ul><li>Market to AT&T only </li></ul></ul><ul><li>Complementary Offerings </li></ul><ul><ul><li>Incorporate iPod and & iPod touch capabilities </li></ul></ul><ul><li>Differentiation </li></ul><ul><ul><li>Touch features, compared to Blackberry </li></ul></ul><ul><ul><li>Integrated applications </li></ul></ul><ul><ul><li>“ Cool factor” </li></ul></ul><ul><li>Look across Time </li></ul><ul><ul><li>Revolutionary user interface </li></ul></ul><ul><ul><ul><li>Touch screen, keyboard, directly connect to App Store, linkage to Mac/PC </li></ul></ul></ul>
  9. 9. Risks Assessment <ul><li>First time Apple makes a cell phone </li></ul><ul><li>Aligning to a single cell carrier </li></ul><ul><li>Ability to successfully integrate software </li></ul><ul><li>Problems with battery life </li></ul><ul><li>Impacts to iPod sales </li></ul><ul><li>High price of product </li></ul><ul><li>Data networks sluggish </li></ul>1 2 3 4 5 6 7
  10. 10. Product Impact Post-Launch <ul><li>Product Impacts 1 </li></ul><ul><ul><li>Cell phone carriers realize that phones can win customers & bring in revenue </li></ul></ul><ul><ul><ul><li>Upset the carrier-manufacturer balance of power </li></ul></ul></ul><ul><ul><li>Opportunities for application developers </li></ul></ul><ul><li>Sales </li></ul><ul><ul><li>March 2009 6 </li></ul></ul><ul><ul><ul><li>17 million iPhones sold </li></ul></ul></ul><ul><ul><ul><li>25,000 applications sold on App Store </li></ul></ul></ul><ul><ul><ul><li>800 million total downloads from App Store </li></ul></ul></ul><ul><ul><li>October 2009-Apple Profit increases 47% 5 </li></ul></ul><ul><ul><ul><li>Apple sold 7.1 million iPhones in single quarter </li></ul></ul></ul>
  11. 11. References <ul><li>The Untold Story: How the iPhone Blew up the wireless industry: http://www.wired.com/gadgets/wireless/magazine/16-02/ff_iphone?currentPage=2 </li></ul><ul><li>Steve Jobs: No Tablet, No PDA, No Cell Phone, Lots Of iPods: http://www.macobserver.com/article/2003/06/05.9.shtml </li></ul><ul><li>Mobile Phone Industry Already changing due to iPhone: http://arstechnica.com/apple/news/2007/08/report-mobile-phone-industry-already-changing-due-to-iphone.ars </li></ul><ul><li>Google Unveils Cell phone software & alliance: http://news.cnet.com/google-unveils-cell-phone-software-and-alliance/ </li></ul><ul><li>Apple Profit Surges on iPhone Sales: http://online.wsj.com/article/SB10001424052748704500604574483631612633824.html </li></ul><ul><li>iPhone Sales hit 17 Million: http://www.pcworld.com/businesscenter/article/161725/iphone_sales_hit_17_million.html </li></ul>

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