What differentiated iTunes from its competitors

1. Elisabeth Präauer Julia Berktold Paul Alkire
Eleni Miltiadous Soo Jin Lee Hyunwoo Jo
Jeong Dahye

2. APPLE INC.
• Multinational IT corporation.
• World’s second largest information technology
company.
• World’s third largest mobile phone maker.
• Become the most valuable brand worldwide.(2013)

3. APPLE INC.
• Products
• Software applications
• Sells digital content and applications

4. APPLE’S HISTORY
• 1977: “Apple” founded.
• 1984: “Apple Macintosh” came on.
• 1985: Steve Jobs left Apple and built “NeXT”
• 1996: Steve Jobs came back to Apple.
• 2001: “iPod” came on.
• 2003: Implemented the “iTunes Store”
• 2007: Launched the “iPhone”
• 2010: Launched the ‘iPad”
• 2013: The most valuable brand worldwide.

5. APPLE’S MARKETING STRATEGIES
• Empathy
• Truly understand customer needs
• Focus
• Eliminate unimportant opportunities
• Impute
• “We may have the best product, the highest quality, the
most useful software; if we present them in a creative,
professional manner, we will impute the desired qualities.”
(Mike Markkula, investor/advisor)

6. ONLINE MUSIC STORES BEFORE ITUNES
• IUMA (Internet Underground Music Archive)
• Ritmoteca.com
• Napster
• Sony Music Entertainment Service

7. WHY ALL OTHERS FAILED
• IUMA not mainstream enough
• Ritmoteca.com failed because of Napster
• Napster illegal
• Sony because customers only rented the files

8. APPLE BEFORE ITUNES
• Before iMac Apples target market was for higher
paying customers.
• The iMac’s ease of use is how Apple got noticed
by the rest of the market
• Then came the iPod which changed portable
music players

9. ITUNES
• iTunes was implemented in 2001
• iTunes store was implemented in 2003

10. COMING UP WITH STRATEGIC INNOVATION
• Strategic collaborations
• Contracts with 4 major music companies
• Turning a previously illegal activity into legal
• Satisfying people who want to purchase just one song and
not the whole disc
• Compatibility
• iMac, Windows computers
• iPod, iPad, iPhone

11. COMING UP WITH STRATEGIC INNOVATION
• Unique pricing strategy
• Simplicity, user friendly design
• Portability
• Cloud services, synchronization
• Automatic creation of playlist
based on one single track

12. MARKET AFTER THE STRATEGIC
INNOVATION
• Main competitors
• Microsoft’s Zune
• AmazonMP3
• Google’s forecast music service
• Use of mobile as music player as well
• Need for 1 device

13. MARKET AFTER THE STRATEGIC
INNOVATION
• 2008 – 2010
• iTunes’ market share almost the same
• AmazonMP3’s increased from 4% to 11.6%.
Online music sales market share (Kafka, 2010)
Rank Retailer Jan-Mar 08 Jan-Mar 09 Jan-Mar 10
1 iTunes 68.9% 68.9% 69.9%
2 AmazonMP3 4% 7.9% 11.6%
3 Zune Marketplace 1.7% 2.3% 2%
4 Walmart Music Downloads 1.8% 1.5% 1.6%
5 Napster 1.4% 1% 1.5%
6 Rhapsody 3.2% 4% 1.3%

14. CONCLUSION
• Apple’s designs
• Advanced technology
• Easy to use
• Convenience
• Reasonable price
→ Satisfied customer’s needs

16. REFERENCES
• Apple Inc. "Apple Annual Report 2013." Annual Report, Financials,
Washington D.C., 2013, 1-25.
• www.apple.com/pr/library/2003/04/28Apple-Launches-the-iTunes-Music-
Store.html
• www.worldofapple.com/archives/2006/04/01/happy-30th-birthday-1996-
2006/
• http://www.slideshare.net/romansterly/apple-innovations-steve-jobs-
quotes-mac-iphone-ipod-ipad-itunes
• http://www.insead.edu/blueoceanstrategyinstitute/home/documents/Disru
ptive_Product_Innovation_Strategy.pdf
• http://www.forbes.com/sites/christinemoorman/2012/07/10/why-apple-is-
a-great-marketer/
• Kafka P. (2010) Maybe Apple should pay attention to Amazon after all.
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