Iphone

Ð'ÐŽÐ'§Depending on whom you ask, the iPhone is either the greatest electronic device to grace the planet or an overpriced, over hyped status gadget sold to rubes with more credit than sense,Ð'ÐŽÐ'Ё says Arik Hesseldahl of Business Week Online. Whether or not one sees AppleÐ'ÐŽÐ'¦s iPhone as flawless or a flop, it is a device that demands our attention not only for its unprecedented features but from a marketing stand point as well. Whether it is seen as a success or a failure, it is undeniable that Apple has forever changed the wireless industry.

The iPhone

What were once obscure rumors has now become the Apple iPhone. The iPhone was born out of the U.S.Ð'ÐŽÐ'¦s love for Apple and their iPod along with a passion for new and exciting technologies. Building on their cult following, Apple began to promote their new iPhone, giving little details on how to buy one and what services would be allowed. For other companies, not providing enough information for new products might be a death wish, however, Apple understood that their following was so great, that limited teasers of their new iPhone would only generate more buzz and eventually more sales. This strategy paid off for Apple. David Yoffie, professor at Harvard Business School, said that Apple generated the equivalent of four hundred million dollars in free publicity.

It isnÐ'ÐŽÐ'¦t that Apple was the first to integrate a MP3 player into a cell phone; rather they were able to build on their reputation of outstanding, quality electronics, coupled with better technology, to create a product that was sure to please. Cell phone manufacturers had already been innovating, combining some of the technologies that we find useful such as cameras and music players into cell phones. These phones, however, were limited by very small internal memory, with memory cards available. Apple, on the other hand, saw the opportunity to use the same ideas that made their iPod great. They utilized internal flash memory in four and eight gigabyte options. They offered the consumer what no other cell phone had before, a device that stores photos, video and music inside the phone with no need for external memory and with superior visual quality.

Marketing Strategy

The strategy used for AppleÐ'ÐŽÐ'¦s iPhone consisted of much hype and anticipation, a strategy not new to the company. Using the iPod as a barometer, Beth Synder Bulik of Advertising Age, says that the iPhone followed Ð'ÐŽÐ'§a tried-and-true marketing path.Ð'ÐŽÐ'Ё AppleÐ'ÐŽÐ'¦s model consisted of Ð'ÐŽÐ'§heavy spending upfront for awareness; a decrease in reach and frequency to give consumers a chance to buy and experiment; and gradual adjustments to marketing volume as warranted by the sales curve.Ð'ÐŽÐ'Ё

Marketers commonly aim to create Ð'ÐŽÐ'§buzzÐ'ÐŽÐ'Ё for a new item, but what is so fascinating is AppleÐ'ÐŽÐ'¦s ability to maintain that Ð'ÐŽÐ'§buzzÐ'ÐŽÐ'Ё over time. Apple did continue to release Ð'ÐŽÐ'§tidbitsÐ'ÐŽÐ'Ё of information about the iPhone and its features prior to release to keep anticipation high. John Palumbo, founder of BigHeads Network, New York, a marketing innovation firm, cites AppleÐ'ÐŽÐ'¦s secret of success to utilizing grassroots and mass-access channels such as YouTube to entice product interest. Through such efforts, Apple has created what Palumbo calls Ð'ÐŽÐ'§the best advertising scenario possible.Ð'ÐŽÐ'Ё He continues, Ð'ÐŽÐ'§The public is, in effect, doing your marketing for you. And could there be a better story than that.Ð'ÐŽÐ'Ё

Marketing Program Variables

To better understand AppleÐ'ÐŽÐ'¦s marketing strategy we observed the four marketing program variables: product, price, promotion, and placement. We have already discussed a number of the iPhone features and the product itself. Overall, AppleÐ'ÐŽÐ'¦s product seems to meet or exceed most consumersÐ'ÐŽÐ'¦ desires of functionality and style. The creation of an ever-evolving market gave Apple the opportunity to launch its product to a receptive, target group. When we examine the price of a product such as the iPhone, it is important to consider not only the price of the device, but additional charges and fees associated. At $499 for a 4GB and $599 for an 8GB model, many found the iPhoneÐ'ÐŽÐ'¦s price tag high. According to eWeek analysts, one redeeming price factor of the iPhone is that service plans are Ð'ÐŽÐ'§not prohibitively priced.Ð'ÐŽÐ'Ё Ranging from $59.99/month for 450 minutes and $310/month for 6,000 minute family plans, service plan prices are competitive for the types of features included.

Promotion of the iPhone can be summed up in one, previously addressed idea: hype. Using various methods, Apple succeeded in promoting the iPhone as noted by the continuous interest of consumers in their product. Placement of the iPhone was unique to its overall success in that it was only available at limited locations. The iPhone could only be purchased at Ð'ÐŽÐ'§Apple stores or corporate-owned AT&T stores,Ð'ÐŽÐ'Ё reports Carolyn Johnson of the Boston Globe. Many consumers were surprised that there was no guarantee their local Cingular/AT&T, which could be independently owned and operated, would carry the product.

Initial Expectations

After iPhone was released in June 2007 with price and policy adjustments, Apple successfully increased their sales in the United States. However, they underwent some difficult times when the iPhone was released. In the beginning, initial sales were below market expectations. According to IMS Research, a leading provider to the electronics industry, Apple reported the launch numbers for the first two days of sales at 270,000 units. AppleÐ'ÐŽÐ'¦s wireless network provider, AT&T, reported activation of Ð'ÐŽÐ'§146,000 iPhones over the last two days of its fiscal second quarter,Ð'ÐŽÐ'Ё according to Market Watch. Some industry analysts projected first-weekend iPhone sales to be as high as 700,000 units. AT&TÐ'ÐŽÐ'¦s actual sales were so disappointing that it sent AppleÐ'ÐŽÐ'¦s shares down more than 6%. Initial sales also disappointed most of AppleÐ'ÐŽÐ'¦s investors since they were so fewer than touted expectations.

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