Apple Iphone Q and A

Case Questions: Apple IPhone

1. How did the customers of personal computers change between the late 1970s, the mid 1980s and the 1990s?

Late 1970s: technologists, computer enthusiasts

Mid 1980s: pioneers, visionaries

1990s: pragmatists, relationship-oriented

2. Is the IPhone an smartphone, cell phone or WiFi platform?

The iPhone is a device that can be used as a cell phone, an iPod and a WiFi platform. Most observers considered the IPhone as a smartphone because it supported many functions such as email, web browsing and iPod.

Also, rather than using the traditional physical buttons, the interface of the iPhone is drawn on the screen depending on the functions being used. The interface also included an innovation of multi-touch.

Moreover, there is an accelerometer inside the iPhone so its screen would adjust orientation if turned on its side.

3. Apple announced a 10 million unit sales goal. IF achieved, what would be its market share? What is its current Market Share?

If Apple achieved the 10 million units sales goal, its market share would be 1% in 2008. Its current market share is 15.3% at Q1, 2016.

4. For what kind of customer is the iPhone positioned?

Apple iPhone is a high quality product and it was the only touchscreen smartphone on the market in 2007. With the price of $599 for a 8GB iPhone, we can see that the iPhone positioned for innovators and early adopters of customers.

5. Why did Apple publish its Market share goal? Does it make sense?

Apple published its market share goal because they want to gain awareness of the market and the customers. They set a sales goal of 10 million sales and gained the attention of the media and customers by advertising this objective. Also they used the pull strategy, start by advertising directed to consumers.

6. What effect did the price reduction have on the unit sales of the iPhone at the end of September?

Before the end of the 4th quarter, the sales of iPhone were slowing down. Analysts estimated that only 9,000 iPhones were being sold per day. After the price reduction of the 8GB version from $599 to $399, there were 1,119,000 units sold at Q4 2007 (Table 1). Compare to Q3 2007, there were only 270,000 units sold. The price reduction causes the sales to increase for more than 400%.

7. How many more iPhones needed to be sold to make up for the reduced margin?