The document explores the psychology behind the success of the iPhone, despite its high price and limited features, highlighting factors such as technological evolution, aesthetic appeal, and marketing strategies. It discusses early lukewarm reviews, sales data, and the cultural significance of the device, noting how it may manage to maintain consumer loyalty and anticipated future developments. Key psychological marketing principles are also outlined to explain Apple's approach to consumer engagement and brand identity.

1. The PsychologyThe Psychology
behind the iPhonebehind the iPhone
How does an over-pricedHow does an over-priced
product with limited functionsproduct with limited functions
become so successful, andbecome so successful, and
have a devoted fan-base?have a devoted fan-base?

2. Technological Development – Ages of ManTechnological Development – Ages of Man
StoneStone
IronIron
CopperCopper
BronzeBronze
SteelSteel
SteamSteam
GasGas
ElectricityElectricity
SiliconSilicon
AnalogueAnalogue
DigitalDigital
CommunicationCommunication
Post DigitalPost Digital
NanoNano

3. Everyone’s a CriticEveryone’s a Critic

4. Technological DevelopmentTechnological Development
Speed of product innovationSpeed of product innovation
Almost unstoppableAlmost unstoppable
UnsustainableUnsustainable
Reflect pace of modern life?Reflect pace of modern life?
Determines pace of modern life?Determines pace of modern life?
Future ShockFuture Shock

5. Context of Technological DevelopmentContext of Technological Development
Do Gadgets make us “frantic” ?Do Gadgets make us “frantic” ?
The sexiest words are . . . .The sexiest words are . . . .
uuPPGGrraaDDee
ccooNNnneeCCtteeDD

6. Context of Technological DevelopmentContext of Technological Development
Steve Jobs announced Jan 2007 that Apple would sell aSteve Jobs announced Jan 2007 that Apple would sell a
product called iPhone in the yearproduct called iPhone in the year
Born on . . .Born on . . .
iPhoneiPhone June 9June 9thth
20072007
iPhone 3GiPhone 3G July 11July 11thth
20082008
iPhone 3GSiPhone 3GS June 19June 19thth
20092009
iPhone 4iPhone 4 June 20June 20thth
20102010

7. Newton’s FailingsNewton’s Failings
Replaced disastrous Apple NewtonReplaced disastrous Apple Newton
Stylus basedStylus based
Handwriting recognition dodgyHandwriting recognition dodgy
Learn “new” alphabetLearn “new” alphabet

8. LatecomerLatecomer
Slow to enter marketSlow to enter market
Policy of wait and see . . .Policy of wait and see . . .

9. iPhone ReviewsiPhone Reviews
Luke warmLuke warm
Mixed at bestMixed at best
Good but could do betterGood but could do better
Still popular with Early AdoptersStill popular with Early Adopters

10. UK Gadget Sales in 2008UK Gadget Sales in 2008
24,000,000 new phones bought24,000,000 new phones bought
6,000,000 digital cameras6,000,000 digital cameras
13,000,000 PCs13,000,000 PCs
8,000,000 flat screen TVs8,000,000 flat screen TVs
7,000,000 MP3 Players7,000,000 MP3 Players
Consumer electronic sales up 3% on 2007Consumer electronic sales up 3% on 2007

11. The First 2.5 Years in the Life of the iPhoneThe First 2.5 Years in the Life of the iPhone

12. The First 2.5 Years in the Life of the iPhoneThe First 2.5 Years in the Life of the iPhone

13. iPhone Worldwide SalesiPhone Worldwide Sales
Units sold worldwide (Millions)Units sold worldwide (Millions)

14. iPhone MindMapiPhone MindMap

17. 1. Functionality1. Functionality
CameraCamera
2MegPixel (3G)2MegPixel (3G)
No video, zoom or flashNo video, zoom or flash (3G)(3G)
iPodiPod
Limited song libraryLimited song library
EmailEmail
Difficulty with integrated systemsDifficulty with integrated systems
Direct ManipulationDirect Manipulation BrowserBrowser
Pinch, Wipe, ZoomPinch, Wipe, Zoom No FlashNo Flash
Copy & PasteCopy & Paste No JavaNo Java
SearchingSearching
Spotlight searchSpotlight search
Mixed bagMixed bag
improvedimproved
satisfyingsatisfying
could be bettercould be better

18. Reasons for using an iPhoneReasons for using an iPhone

19. Three Clicks from AnywhereThree Clicks from Anywhere
The real success story of iPod functioning . . .The real success story of iPod functioning . . .
. . . Absent from the iPhone. . . Absent from the iPhone

20. BudsBuds
The other real success story of iPod functioning . . .The other real success story of iPod functioning . . .
Technically poorTechnically poor
Aesthetically greatAesthetically great
. . . Present with the iPhone. . . Present with the iPhone

21. 2. Aesthetic2. Aesthetic
LayoutLayout
ClutteredCluttered
LimitedLimited
No personalisationNo personalisation
Look n FeelLook n Feel
““iPhone black”iPhone black”
Fixed FontFixed Font
CurvedCurved
SolidSolid
HeavyHeavy
PackagePackage
White wiresWhite wires
Consistent with iPod familyConsistent with iPod family
GoodGood
consistentconsistent
simple interfacesimple interface
makes digital feel analoguesmakes digital feel analogues

22. PackagingPackaging
BoxBox
SimpleSimple
CleanClean
HonestHonest
Culturally neutralCulturally neutral
GoodGood
consistentconsistent
simplesimple
promises contentpromises content

23. 3. Campaign3. Campaign
GlobalGlobal
ConsistentConsistent
CreativeCreative
““Apple White”Apple White”
LogoLogo
YoungYoung
Rides on the back of successful Apple workRides on the back of successful Apple work
Investing in a stable successful companyInvesting in a stable successful company
Buying into AppleBuying into Apple
FaultlessFaultless
sophisticatedsophisticated
anti-marketinganti-marketing
antithesis of Microsoftantithesis of Microsoft

24. Content of iPhone AdvertsContent of iPhone Adverts

25. Steve and Bill’s Excellent Adventures . . .Steve and Bill’s Excellent Adventures . . .

26. Riding on the back of successful Apple campaignsRiding on the back of successful Apple campaigns

27. UK iPhone Advert Banned!UK iPhone Advert Banned!
ASA banned UK iPhone advertASA banned UK iPhone advert
Misleading speed of web connectionsMisleading speed of web connections
““You never know which part of the internet you'll need ...You never know which part of the internet you'll need ...
which is why all the parts of the internet are on the iPhone"which is why all the parts of the internet are on the iPhone"

28. 4. Exclusivity4. Exclusivity
Single network onlySingle network only
Combined with trusted providerCombined with trusted provider
LoyaltyLoyalty
StabilityStability
CunningCunning
exclusive for 2 yearsexclusive for 2 years
end exclusivityend exclusivity
reduced price of new modelsreduced price of new models

29. 5. Applications5. Applications
Content is the futureContent is the future
On-demandOn-demand
External developersExternal developers
ExcellentExcellent
individualityindividuality
tailor madetailor made
regenerationregeneration

30. Marketing AppsMarketing Apps
Ads for Apps more than iPhone itselfAds for Apps more than iPhone itself

31. How People use their iPhoneHow People use their iPhone

32. Locations where People use their iPhoneLocations where People use their iPhone

33. Demographic of iPhone UsersDemographic of iPhone Users

34. Cultural SignificanceCultural Significance

35. Variety of AppsVariety of Apps

36. Variety of AppsVariety of Apps

37. MockeryMockery
Personification of successPersonification of success
Cultural significance achievedCultural significance achieved
Flattery of iconic statusFlattery of iconic status
Still untarnishedStill untarnished
roastingroasting
envyenvy
McDonaldizationMcDonaldization

38. Overdone & OverusedOverdone & Overused
Cool versus Functionality paradoxCool versus Functionality paradox
2 markets – iPhone & Blackberry - will converge2 markets – iPhone & Blackberry - will converge
Dilution of user-baseDilution of user-base
Product loses identityProduct loses identity
Users look elsewhereUsers look elsewhere

39. iPhone Product FutureiPhone Product Future

40. iPhone Product FutureiPhone Product Future
Unquestionable loyalty (for now)Unquestionable loyalty (for now)
Network exclusivity deal ends in late 2009Network exclusivity deal ends in late 2009
Creative imagination of usersCreative imagination of users
200 plus patents in iPhone tech200 plus patents in iPhone tech
Pervasive monitoringPervasive monitoring
Embedded useEmbedded use
Touchscreen tablet Mac coming soonTouchscreen tablet Mac coming soon

41. 10 Psychological Rules for Marketing an Apple10 Psychological Rules for Marketing an Apple
1. CEO must own the marketing function: no delegation
2. Marketing department must start small and flat and stay small and flat
3. Face-to-face with customers: direct interaction.
4. Use market research cautiously: prefer grassroots techniques
5. Hire only passionate missionaries
6. Love and respect customers as individuals, not as numbers
7. Create a community of consumers unified by certain brands
8. Rethink the marketing mix: e.g. short, targeted ad campaigns
9. Celebrate common sense and compete via different marketing ideas
10. Be true to the brand: brand integrity & quality

42. ConclusionsConclusions
A product launched to luke-warm reviewsA product launched to luke-warm reviews
A product lacking in many key featuresA product lacking in many key features
Despite this . . . the future still looks brightDespite this . . . the future still looks bright
But can only go one way from here. . . industry expert dissatisfactionBut can only go one way from here. . . industry expert dissatisfaction
Still has wow factorStill has wow factor
The right sort of usersThe right sort of users
Cool perception of usesCool perception of uses
Healthy apps developmentHealthy apps development
Neat marketingNeat marketing
Not MicrosoftNot Microsoft
Analogue feelAnalogue feel
Avoided ethical hiccups – manufacturing & exploding batteriesAvoided ethical hiccups – manufacturing & exploding batteries
Graduated product roll outGraduated product roll out

43. ConclusionsConclusions
1. The iPhone is pretty
2. It's touchy-feely
3. It will make other phones better
4. It's not a phone, it's a platform
5. It is but the ghost of iPhones yet to come

44. Weakest Links? - - iTunes & Battery LifeWeakest Links? - - iTunes & Battery Life
Poor interface. Poor Design. Syncing. Slow. CorporatePoor interface. Poor Design. Syncing. Slow. Corporate

45. Further ReadingFurther Reading
Apple Insider. 2007. Apple’s iPhone the No. 4 U.S. handset during third quarter.
October 19. http://www.appleinsider.com (accessed February 9, 2008).
Burrows, P. 2008. Feb. 12. Inside the iPhone Gray Market. BusineesWeek.
Carew, S. 2008. Apple says has sold 4 million iPhones. Reuters.
Eisenmann, T., Parker, G., Van Alstyne, M. 2006. Strategies for two-sided markets.
Harvard Business Review; 92-101.
Grossman, L. 2007. I take the iPhone Home. Time.
Olson, P., Laurent, L. 2007. iPhones Land in London. Forbes.com. (accessed
November 9, 2008).
Wingfield N., Guth RA. 2005. Why Shortages of Hot Gifts Endure as a Christmas
Ritual. The Wall Street Journal. December 2, B1.