Case Study: Why did iPhone not succeed in the Japanese Market?

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This is a case study that investigates the reason why Apple's iPhone has not been successful in the Japanese market compared to other markets. Using international marketing theories, we have analysed various factors such as the market, culture, utilisation of FSA, and standardisation.

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  • Well this sure as hell doesn`t apply now. I live here in JP and iphones are EVERYWHERE - things just take longer to market and implement - nothing to do with the product itself
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  • excellent presentation - I managed in Japan for Hewlett Packard for 3 years and can understand completely some of the points raised. Please, Please, Please may I have the slides for some work I am preparing. comemorning@yahoo.com - honto ni domo arigatou gozaimashita
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  • hi there,

    i am preparing a presentation about iphone marketing and sales strategies all around the world, and since now whatever i had was about how successful it was, but your presentation was quit awesome on a failure in their strategies. now i'm asking you to do me a favor and send me your presentation if it is possible for you, so i can use some of your slides in mine?! this is my email: stony_gal@yahoo.com

    that would be so kind of you to send me your presentation and let me using few slides of it!

    thank you in advance
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  • Hi ,Your presentation data is certainly nice. Supb .Keet it up .
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  • Apple was formed in 1977 by Steve Wozniak and Steve Jobs. They were the first computer company to sell a fully assembled personal computer (PC). They had tremendous success from this product, but this was short lived as many other computer companies rushed to the market. The market was quickly dominated by IBM. The first Apple Macintosh was released in 1983 and although this had some success, internal turmoil saw Steve Jobs ousted from Apple. The company went through a series of highs and lows as it tried to define itself in the market. By 1996 the Apple’s board had had enough with the poor performance and lack of market credibility. Steve Jobs company NeXT was purchased and shortly thereafter he was made CEO of Apple. Jobs has been instrumental in turning the company around. The release of the i-mac, i-pod and the i-phone which has had great success except for one country.
  • Apple computers first entered the Japanese markets through small domestic firms but they had no license from Apple. Apple was a “XXXXXXXX Importer”. Apple decided to use Toray as its sole distributor in Japan in 1980, which subsequently stopped all the smaller firms from importing. However Toray was a textile merchant and it had little contacts in the computing industry. Sales were less than stellar.Apple dropped Toray and then used ESD labs, a computer research firm, as its distributor but soon found that the prices for its products were being charged doubled that of the US.Apple persisted with other distributors and approached the likes of Pioneer, Mitsubishi and Canon to distribute its products.Apple shortly thereafter opened its own subsidiary, the only country subsidiary in Apple’s company. Apple Japan would look after the marketing and support whilst keeping its distributors to keep on distributing. An integrated distribution approach.Apple Japan still struggled with average sales. It soon identified the problem; it was selling an English product to the Japanese with American executives running the subsidiary. A Japanese CEO was put in place and he quickly installed native Japanese to the management team.Apple also realised that it needed to develop Japanese specific products and software. It created the first keyboard to type roman and Japanese kanji characters.Apple Japan has only had moderate success with graphic artists and designers being the majority of buyers. Apple’s greatest success has come from the iPod and iTunes where sales have been quite high for the company. It was hoped that this success would be translated with the introduction of the iPhone.Play Video
  • For those who are unaware here are the iPhone feaures;MP3 player2MG pixel camera (no camera flash, no video recorder)Touch screen techHigh resolution screen3G internet & e-mailiPhone Apps GPSBluetoothWifiI will now pass on to Remi who will talk about the JP mobile market
  • Developed independently from the rest of the worldJapanese handsets come standard with high functionalitiesStrong partnership between the carrier and the manufacturers. 
  • Mobile as a fashion item Compatibility with friends' mobile phone is important, because Japanese consumers seeks \"oneness\" with particular peer groups. Importance of feeling togetherness among peers
  •  Strong domestic players, with mobile phones developed specifically to meet JP consumers’ needsWeak product competitive advantage where high-tech mobiles are a norm.Disadvantage in relationship with mobile carriers vs Domestic manufacturers. They could only make a deal with Softbank, the #3 player
  • Little match with the Japanese mobile culture. Lack of compatibility with other JP mobilesResearch shows that Japanese people tend to perceive US products inferior compared to Japanese products.
  • Apple may have core competency, possess dominant position in the market, so that it prevents competitions from entering,,, in the global market Apple has that power, however not in JP, US and JP has different mrk structure as JP market developed independent from other markets, and more than 80% is dominated with JP mobile manufacturers.
  • Loss of distribution advantage because of the partnership with SoftbankLoss of mktg advantage because of weak brand power/ Parent company did the negotiation, no utilisation of managerial expertise.
  • Case Study: Why did iPhone not succeed in the Japanese Market?

    1. 1. Case Study: Analysis of Apple iPhone in the Japanese Market Proposal Authors: Mari-Otani Consultants Remi Otani Henri Mariasson 25th May 2009
    2. 2. AGENDA Apple Computer Incorporated History iPhone entry to Japan Mobile Market in Japan (JP) Case Questions & Discussions
    3. 3. Apple US o1977: Founded by Steve Wozniak & Steve Jobs oDeveloped one of the first Personal Computer (PC) oSuffered serious setbacks o1983: The First Apple Macintosh released/ Steve Jobs ousted o1990's: Went through series of highs and lows o1996: Steve Jobs returns to Apple oReleased the i-Mac, i-Pod and i-Phone with great success
    4. 4. Apple Japan oSmall Japanese firms originally imported Apple with no license oEntered the JP market in 1980 through Toray, a textile merchant, not very successful o Another try: ESD labs but the price of the computer doubled oFor better distribution of computers: Used high profile companies, Pioneer, Mitsubishi and Canon. oApple develops its own subsidiary - Apple Japan oRelease of Japan specific products, ex. JP Kanji characters
    5. 5. iPhone JP market release in July 2008 Seek for partnership with a Mobile Phone Carrier Begins negotiation with DoCoMo, #1 carrier with 58 million subscribers. Move to negotiations with Softbank, #3 carrier with only 11 million subscribers Apple Japan not involved in the negotiation process 5
    6. 6. iPhone Features oMP3 player o2MG pixel camera oTouch screen tech oHigh resolution screen o3G internet & e-mail oiPhone Apps oGPS oBluetooth oWifi 6
    7. 7. Japanese Market: More than 80% is occupied by JP local brands Sharp, 17.2 Others Nokia Panasonic, 14.9 LG Sharp Panasonic Samsung Toshiba Mitsubishi Fujitsu Samsung LG Nokia Others Fujitsu , 12.5 Toshiba, 14.5 Mitsubishi, 14.2 Euromonitor International, data of 2007
    8. 8. Japanese Mobile Market Strong partnership Developed 3G, Smart between the carrier independently from phones with high and the the rest of the world functionality manufacturers.
    9. 9. Japanese Mobiles
    10. 10. Japanese Mobile Culture Use of Emoticons for rich and humane Mobile as a fashion item communication Importance ofRich and togetherness among feeling warm communication with Emoticons and Photos peers Importance of feeling togetherness among peers; Compatibility
    11. 11. What factors in the Japanese Market prevented iPhone from succeeding? Consumer Needs High Product Functionality
    12. 12. What factors in the Japanese Culture prevented iPhone from succeeding?
    13. 13. Why didn't standardisation work in the Japanese market? Core Competency Market Power Competitive Structure
    14. 14. Why didn't Apple’s FSA (Firm Specific Advantage) overcome some of the problems faced? Strong Scale economies advantage Minimal production advantage Low distribution advantage Low marketing advantage No utilisation of managerial expertise
    15. 15. What could have Apple done differently to release the iPhone? Japan Overview; The Competitive Power: High The Supplier Power: Very High The Customer Power: Neutral Should have taken the Japanese market & culture into consideration from the start of iPhone development Better utilisation of FSA -Knowledge of Apple Japan - More Product Adaptation

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