Apple Inc. has a contour of planned and marketed phone series known as iPhone. The ever first
mobile phone from Apple.co (iPhone) was launched on 29th June 2007.
Apple Inc. has a contour of planned and marketed phone series known as iPhone. The ever first
mobile phone from Apple.co (iPhone) was launched on 29th June 2007.
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target are served? What needs are covered?
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market? Why?
• Is the brand showing/communicating its competitive advantage to consumers? How?
• In your opinion, what are the key aspects that made the launch a success?
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products or services. In this case, do you think that entry barriers for new competitors are
high or low? Why? Analyze competitors’ reactions.
• Go further: What other marketing initiatives could be implemented?
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Running head CASE STUDY1CASE STUDY5Case StudyHult i.docxsusanschei
Running head: CASE STUDY 1
CASE STUDY 5
Case Study
Hult international business school.
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Major problems:
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· The fourth W describes the place where this case occurred. Clearly, Intel is an international label, one of the leading companies to manufacture microprocessor. However, reviewing the particular case study more thoroughly, the ARM processor is a British based company manufacturing smart phones microprocessors and chip.
· The fifth W refers to the reason why this case happened? This is probably the core of this case study, that according to Moore’s law, the size of electronics are decreasing with each passing year, meaning that with each passing year, there are new technologies that ...
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1. REPORT ON:
TABLET INDUSTRY ANALYSIS
AND
HOW APPLE FITS IN TABLET MARKET
From:
Vinod Singh
(Executive MBA, MDI Gurgaon)
2. TABLET INDUSTRY:
Tablets computers are portable computers that have touch display, circuit and battery in a single unit. The
first modern tablet was released by apple as IPAD in 2010. From there on tablet viewers have
significantly increased with the usage of tablets varying from videos, games to ebooks, TV shows.
Tablets are new TV for kids (games and shows). Interactivity, mobility are some of the things that make
the tablet market more promising. Kids targeted television shows and apps are being targeted by walt
Disney, Nickelodeon.
Newspapers are planning to expand their reach through tablets and will change the way people access
newspapers,magazines.
With the tablet industry growing, new players have come up having android OS, windows OS and
capturing most of the market share.
The industry can be analyzed using Porters five forces framework:
1) RIVALRY
High – Today in tablet market, we can see multiple players sharing the space and many
more coming up. From the charts below in this section there are many established
companies and other small companies fighting for market share. For ex. Samsung,
Apple, Micromax, Karbonn, Dell, Lenovo, HP etc.
3. Very low switching cost. Android tablets are more or less the same by any manufacturer
and even Apple & Android interfaces are same.
Customer loyalty for the tablets is not specific to one type. There is no specific
differentiation in products.
Exit barriers are not high in tablet industry. Most of the components are standard in a
tablet (processors,touch panels, battery) and there is no high cost associated.
2) THREAT OF NEWENTRANTS
Fairly easy for new companies to enter market, as we can see in current scenario where
Samsung, dell, Lenovo and many more small players exist.
There is no specialist knowledge needed for entering the tablet segment.
Many Chinese companies who are into smartphone/PC industry can easily enter into
tablet market and there are in fact white box android tablets coming up.
(Article in www.tabletpcreview.com – may-2012 : White Box Tablet Market TakesShape
While Android Tablet PricesPlummet.)
4. Table 1. Worldwide White-Box Smarpthone and Tablet Sales to End-Users, 2012-
2014 (Millions ofUnits)
Devices 2012 2013 2014
Smartphones 105 300 450
Tablets 35 64 74
Source: Gartner (September 2014)
3) SUBSTITUTES
Ultra-mobile pc’s are coming which are hampering growth of tablet industry. Gartner
expects ultramobile premium sales to more than double over the next two years, from 39
million units in 2014, to 62 million in 2015, and 85 million in 2016.
PC tablets are another substitute which can be used both as tablet and traditional PC’s.
Also phablets are coming which are giving a strong competition as they can do both
works of calling functionality as well as tablet usages and is more portable than tablets.
Phablet sales are cannibalising tablet sales globally. By 2019, there will be three times
as many phablets shipped as tablets.
5. 4) COMPLEMENTS
TV shows, be it the kid shows, or live news channel, live sports channel, all are now
viewed on tablet rather than PCs. Tablets give mobility and personalized experience.
Games which can be played on PC are easily finding space on large tablet screens. As per
the Gartner research, Tablets generated the smallest share of games revenue in 2012 –
just 3.2 percent – they’ll be the fourth biggest player overall by 2016, with an 11.6
percent slice of the cake.
Education Industry is looking at making apps for tablet as most of the people will now be
reading courses on smartphone or tablet.
5) BARGAINING POWER OF BUYERS
High : Buyers have vast numbers of tablets to choose from.
It is easy to switch between Android and IOS operating systems.
6. From the data sources above, tablet industry will be growing at faster pace and the
demand will grow in the education sector,TV viewing on tablets.
6) BARGAINING POWER OF SUPPLIERS
Bargaining power of suppliers are more when we consider CPU’s. Inteland Qualcomm
Snapdragon processors take the most of market share in supplies for tablets.
Apple uses processor which is designed by apple. We can say that in apple’s case the
bargaining power of supplier is less.
While in case of other android operating tablets, bargaining power of Intel and
snapdragon are more. They can have their effects on pricing and delivery for many small
and medium players in the industry.
7. APPLE’s ipad position in the market:
IPAD is one of the largest revenue generating products after iphones for apple corporation..
After the launch of first IPAD in 2010, company has been seeing growth, but recently there has been
decline in revenues and shipments.
8. According to the IDC report published in Feb 2015, Apple iPad is unlikely to witness much improvement,
going forward. However,it would continue to see its revenue declining in terms of iPad sales through at
least 2019 and Apple’s market share in tablets is expected to fall 23% in 2019. According to the IDC
report, the worldwide tablet market hit started decelerating in 2014 with the growth rate slowing to 7.2%
from 52.5% in 2013.( By Zacks Equity ResearchApril29, 2015)
Another report says “Annual sales of tablets grew on average by 49% between 2011 and 2014, but this
growth will slow considerably to a 3% CAGR between 2014 and 2020 ( source ReportsNReports.com –
May 2015)”.
Competitors analysis:
1) Future Objectives:
Apple is coming up with frequent new tablet series that are faster and thinner but there
sales are going lower year after year when many android platform players entered the
market.
Samsung & Other companies who are using android are coming in lower segment and are
perfect substitutes for ipad.
Samsung is coming up with phablets which are eating up tablet market. Samsung has
realized that phablets will be the new future as after the success of note series they are
constantly coming up with new bigger variants.
Apple will have to work on the bigger series of tablets (around 10 inches) which they are
planning and which will differentiate the phone and tablet. Tablets are used mainly
because of the speed,accessibility & mobility. Apple have to think on providing more
functionalities to their new tablets which are lacking. With the coming of 4g networks,
apple will need to give calling feature which is already been given by very small players
also.
2) Current Strategy:
Ipad is coming with more faster and thinner variants which are targeted for upper
segment of price. After 2 years in 2012 Apple came up with ipad mini variants. Mini
variants came up when apple realized that the 7 inches tablets from other companies are
picking up the market.
Apple strategy has always been to target the upper segment, and the tablet sale in US also
shows that. But the same strategy is not picking up in other markets
Looking at the trends published in 2013
9. Apple watch is the recent product that Apple launched and are projecting the same sales
as the iphone & ipad got on their openings. Apple’s more focus is on making new
developments on watch front and to add new features, integrating new features to it.
3) Assumptions:
Future will be extremely volatile with smartphones getting bigger and PCs getting smaller
and lighter. There is an uncertainty on how the tablet industry will prove its usefulness.
Samsung is one of the big players after Apple who are constantly working on design and
form factors of tablet. While, Apple has been always relying on the loyal customer base. And
analysts say that the loyal customer base for tablet is just because people take time to switch
and eventually the sales will fall.
US market is the only market where ipad tablet has been able to retain customers and its like
a fashion thing that will be faded off when the same functionalities will be there in lower
price tablets.
4) Capabilities:
Apple have a strong customer base and have always been known for innovation. The
customer always rely on Apple’s products which has always given apple confidence to
push the products.
Apple has always been a pioneer in innovation and there simplicity and usability is what
make them unique.
10. 5) Response (What Apple should do ?)
Apple’s main competitor in every segment is Google’s Open Source Android operating system.
With the pace through which android market is growing, Apple has a big reason to worry about.
Android is expected to account for 62.4 percent of global tablet shipments in 2017, thus taking
over as the market leader.
Android’s ability to be used in devices at different price points was key to its success,as in the
smartphone market.
Apple innovation is the key factor in every product, but it has not been seen in tablet market. The variants
that come are different in size and becomes more thinner, faster. There is nothing that differentiates it
substantially from other tablet vendors.
Apple’s ipad was one of the big players in education market in US, but that also was eaten up by the
introduction of Google Chromebook. As per the article by Jaikumar vijayan in eWeek-jan-2014 “The $4.2
billion U.S. education segment is an important market for technology vendors. It has remained a hot spot
for sales even as other market segments have witnessed lackluster sales over the past year or so.
In 2013, for instance, the sale of client devices, like Chromebooks and iPads, to the education sector grew
by 14.4 percent from the previous year even as the overall PC market reported a 3.4 percent decline in
sales, according to IDC.“
Phablets entering the market are making 7 inch tablets obsolete. There is a need for bigger size tablets that
can easily get differentiated from phablets.
11. Education sector, TV viewing, Kids games and videos are the key factors that define how the people use
tablets.
Some of the strategies that can boost growth of ipad market.
Calling facility is one of the major functions missing in ipad which other competitors give.
To tackle the competitors pricing strategy, Apple should plan for cost cutting strategies which
will be an enough incentive for user to grab an ipad. Apple did this cost cutting strategies
with older smartphone series,which boosted sale of their older models.
Apple is coming with watches and technologies in fields of IOT ( Internet of things).
Integrating these with ipad will be an advantage over others.
Although, if we look at the forecast data for the sales of overall tablet market, it doesn’t seems promising.
The other products that are coming up are replacing the tablet. Tablet can’t be a substitute for PC’s or
smartphones and therefore are not preferred over NoteBook PCs,Phablets, Ultramobile PCs.
It will be difficult for users to justify the usage of tablets in future.
Technology presumes there’s just one right way to do things and
there never is.
–Robert M. Pirsig
TOTALNO. OF WORDS: 1807