Apple ilounge - IED Barcelona - 09


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The aim is to create a simple, attractive and user friendly way to distribute entertainment, news or educational content.

The Apple iLounge will provide people in metropolitan cities a legal way to listen, share, and purchase digital media such as: music, movies, TV-shows, games, applications, e-books, or audio-books.

Our long term goal is to successfully combine the experience of a record store or a cafe with the accessibility of online distribution for digital media.

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Apple ilounge - IED Barcelona - 09

  1. 1. Apple iLounge
  2. 2. Apple iLounge Challenge. “Our goal is to successfully combine the experience of a record store or a cafe with the accessibility of online distribution for digital media.” - iLounge developer.
  3. 3. Apple iLounge Situation.
  4. 4. Apple iLounge The Situation. Apple. Today, Apple Macintosh is one of the worlds largest computer manufacturers, currently claiming about 10 % of the computer users world wide. Apple are known to innovate in style, design and functionality, the brand have a unique “cool” non-comparable in the electronics world. The company is also spearheading the digital audio and video revolution with its portable music players and iTunes online music store. In recent years the ipod, iphone and the itouch have revolutionized their respective markets. Apple also own software like iTunes, and Apple TV. 2008 Apple overtook the 2nd place on the U.S.A’s top list over music retailing, only beaten by Wal-Mart. In January 2009 iTunes store passed 6 billion songs sold world wide, which accounts for almost 70% of the total online music sales. The online library has more than 10 million songs (New songs are uploaded daily) and over 1 million podcasts. Apple has also bought distribution rights of companies like NBC, Disney, and Pixar for more than 2,500 movies and 30,000 TV-episodes.
  5. 5. Apple iLounge The Situation. Changes in Consumption. Sweden 2008: Download iTunes = 6 billion sold. revenue higher than CD retail. 5 billion a year illegally. Record stores closing down. Sweden: 20 million downloads / year.
  6. 6. Apple iLounge The Situation. Stockholm. 25% of Swedes live in Stockholm. 35% of the Swedish GDP. 90% of 16 - 35 have computer access. 15% of those are Mac owners. 80% between 16 - 35 own a Mp3 device. (1.5 million sold annually in Sweden)
  7. 7. Apple iLounge The Situation. S.W.O.T Strengths Top-of-mind in the Mp3 player market. + 10 million song catalog.
  8. 8. Apple iLounge The Situation. S.W.O.T Weaknesses Low profit margins. Limited experience in service.
  9. 9. Apple iLounge The Situation. S.W.O.T Opportunities Opening a new market niche. Fluctuating market.
  10. 10. Apple iLounge The Situation. S.W.O.T Threats Failure to find a partner. Low margin = low profitability.
  11. 11. Apple iLounge The Situation. Competitive Rivalry. Supplier bargain power. Threat of new entrants. Medium. Medium - High. Both sides are quite Easy to enter. Many equally dependent on retailers already have each other. the locations. Threat of substitution. Rivalry. Buyer bargain power. Low. High. Once a owner of Mp3 The illegal downloading player the CD is gone. is 10 times greater than the legal.
  12. 12. Apple iLounge Competitors. Legal Illegal Some of the most popular alternatives except Bit torrent (peer-to-peer) downloads is one of the iTunes are: largest threats to the digital entertainment industry., Pirate Bay, Torrentz, Demoniod, and WhatCd., Beatport. Pirate Bay is the biggest one and offers a complete Nokia and Sony Ericsson are also establishing portfolio of movies, series, music, games, e-books, online music services educational software, and computer software. Playnow (Sony Ericsson) have already more Pirate Bay have at least 2.2 million individual IP than 1 million titles available addresses from Sweden downloading every week. Nokia are showing similar numbers. Limewire, Kazaa, and Bearshare also share digital content illegally but not in the same scale as the bit torrent sites.
  13. 13. Apple iLounge Segmentation.
  14. 14. Apple iLounge Segmentation. Primary target. 50% of Mac users pay for music, but only 16% of the PC Liberal political and social views Environmentally aware, buy organic or ecological products and are ready to pay more for it Considers themselves intellectually curious Above average vain and spend more than average on clothes Mid - high income Creative professional or student Live, study or work in the city centre Owns a Mac or Apple product (25.000 - 35.000 Mac users, and approx. 100.000 ipod owners)
  15. 15. Apple iLounge Segmentation. Secondary target. Shop, live or study/work within walking distance of location Owner of a flash based Mp3 player, or Mp3 capable phone, (Minimum 200.000 in Stockholm city) Between 20 - 35 Download music, movies Tv-series or any entertainment on a regular basis, both legally and illegally Conscious about environmental issues and aspire to act “Green” and buy organic foods Medium or high income
  16. 16. Apple iLounge Marketing Strategy.
  17. 17. Apple iLounge Product strategy. The iLounge. Core product: The iTunes library of music, movies, TV-shows, games, applications, e-books, or audio-books. The library is currently 10 million songs, 1 million podcasts. It’s also full of more than 2,500 movies and 30,000 TV- episodes, all in high quality. All of this directly transferable with high performance wifi, bluetooth, or dock station technology to any laptop, Mp3- player, Mp3-phone or other gadget. The iLounge’s database compatible with the existing iTunes account. Buy a quick-pass, sit down and listen, then you pay for the songs you want to transfer to your Mp3-player. Complementary product: A fine selection of beverages, snacks, and sandwiches produced locally from top quality organic products.
  18. 18. Apple iLounge Price strategy. The library. The music will be available at one of three price points: 69 cents, 99 cents and $1.29, with most albums priced at $9.99. Movies are priced between 4.99$ - 9.99$ for renting over a period of 30 days. Buying movies range from 9.99$ - 14.99$. TV-shows will range from 99 cents - 1.99$. Educational material, e-books, audio-books, applications and games will all be priced at the level set by the publisher iTunes Members-only discount plans will be available. Customer loyalty programs and bonus systems
  19. 19. Apple iLounge Placement strategy. Södermalm The iLounge needs approx. 250 - 400 m2 to fulfill the concept. Focus will of course also lie in creating something innovative and new for the customer. The Södermalm district in Stockholm gaining a lot of recognition as a Stockholm “Soho”, it’s full of conceptual stores, great restaurants, and culture. Götgatan, the main street in Södermalm, is particularly know for it’s relaxed atmosphere, trendy shops and hip bars. Outside of the 2 busiest streets, (Drottning gatan & Biblioteks gatan) this is the busiest one. The whole length of the street is closed for cars and full of life all day and night.
  20. 20. Apple iLounge Promotion strategy. Think local. Frank PR agency ( are hired to buy editorial space in lifestyle magazines. etc. Acne Advertising ( will launch the ad campaign in lifestyle magazines, fashion media, and on billboards in the Stockholm centre. The advertising will run two months, starting one month prior to the opening and ending one month after the opening. Acne are also responsible for organizing a pre-opening of the iLounge for V.I.P’s in Stockholm. We will “leek” this trivial information to all the major Apple forums, and bloggers. This will inform the most hardcore Apple fans
  21. 21. Apple iLounge Price strategy. Apple iLounge Conclusions.
  22. 22. Apple iLounge Evaluation measures. Are we successful? Are we able t change our target’s habit, to move people away from illegal downloading and back to a “store”? Popularity amongst the product groups, are we selling mostly audio or is e-books, video and applications popular? Amount of new customer registrations to iTunes through iLounge. Is the iLounge a good extension of the iTunes store? Increased Apple brand notoriety. Can we notice any increase in popularity of Apple’s hardware products? Media coverage regarding the iLounge, is the press and general public positive about the iLounge and the brand?