APPLE

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MARKETING P

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F EL I C

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MARKET SUMMARYMarket: past, present, & future Apple first introduced the iPod in 2001

First model cost $399 for a 5gb model It an exclusive Apple product sold by the company

itself, or authorized resellers Brand was able to move from an approximate 30%

market share in 2002, to holding a solid 75% from 2005 and on This success can be attributed to

Commitment to high quality user experience Understanding consumer need (iTunes, video

capability, health monitoring) Pricing strategies (by 2007, Apple had iPods

ranging from $79 to $399

Steve Jobs, former CEO of Apple, unveils the Original iPod

Source: http://stratechery.com/2010/apple-innovators-dilemma/

PRODUCT DEFINITION

“With iPod, Apple has invented a whole new category of digital music player that lets you put your entire music collection in your pocket and listen to it wherever you go,” said Steve Jobs, Apple’s

CEO. “With iPod, listening to music will never be the same again.”

(23 October 2001, http://www.apple.com/pr/library/2001/10/23Apple-Presents-iPod.html)

Since being introduced in 2001, the iPod has gone on to develop into the iPod mini, iPod shuffle, iPod video, iPod touch and also a major component in the development of the iPhone and iPad

iPod offers compact size, a large internal storage and quality

It offers on-the-go playability, music downloads from anywhere with wifi or 3G and new “trendy” feature such as health monitors

The iPod Touch offers music playability, along with a number of other applications and web compatibility.

TARGET MARKETDemographics

Males and Females

Ages 8 – 65 Very user friendly, however may present challenges for

those not familiar with computers in uploading songs Applies to such a large age demographic as general music

listening is not limited by age

International / Multiple Languages Multiple language settings

First World Countries Requires extra money to purchase, not a necessity of life

Psychological

Trendy, Technology Seekers Apple is a leader in technological innovation and will be

the choice of customers looking to be the first owners of a new product

Brand Loyalists There are many customers who stay loyal to Apple

products alone

http://fortune.com/2009/07/23/where-in-the-world-are-those-18-6-million-ipod-touches/

COMPETITIONThe competitive landscape for an iPod Touch 4th gen

Samsung Galaxy Player 3.6 Advantages: Similar screen-to-body ratio, larger camera

megapixels, micro SD port, FM radio Disadvantages: No video calling, small overall body

Microsoft Zune Advantages: same touch capabilities, apps available Disadvantages: Connectivity issues, poor company readiness

Motorola Moto G Advantages: Front facing camera, high resolution, large

battery Disadvantages: no SD slot, lacks the “trendiness” of iPod,

heavy

http://www.phonearena.com/phones/compare/Samsung-Galaxy-Player-3.6,Apple-iPod-touch-4th-generation,Motorola-Moto-G/phones/7054,5384,8208

http://www.pcmag.com/article2/0,2817,2394088,00.asp

POSITIONING

ADVERTISINGStrategy & execution Along with introducing a revolutionary product, Apple also set themselves

apart from the competition by introducing captivating, eye-catching and trendy advertisements

The iPod was introduced prior to the social media age, at a period when traditional mediums still outnumbered that of new media In 2004, Apple spent $287 million on advertising, but sold $4.5 billion

worth of iPods in the same year In recent years, new media advertising has begun to takeover with the

advent of platforms such as YouTube, Facebook, Twitter and web forums Taking advantage of the social atmosphere and connecting to the user,

Apple has managed to keep advertising costs lower than it competitors Also note, Apple does have fewer items to advertise, but this also

lends itself to a greater market focus

http://news.cnet.com/2100-1047_3-5978598.html

ADVERTISING EXPENSES COMPARED

http://www.cultofmac.com/252918/apples-advertising-budget-is-tiny-compared-to-microsoft-samsungs/

FINANCIAL FORECASTKnown Data (Apple Financial Reports) Forecasted Data

2010 2011 2012 2013 2014 2015 2016 2017 2018

in millions ($)

Revenue 65,225 108,249 156,508 170,910 216,552 247,882 277,904 316,390 347,066Expenses 7,299 10,028 13,421 15,305 18,366 21,005 23,477 26,327 28,882

Profit 57,926 98,221 143,087 155,605 198,186 226,878 254,427 290,063 318,184

Note: As Apple does not specify expense details for each product line, I used calculations for all expenses and revenues for all Apple products.

This suits the iPod product as newly established products such as iPhones and iPads have integrated the iPod capabilities within their own functions.

According to financial forecasts, by the end of the 2018 fiscal year, Apple is expected to see $318,184,000,000 in overall

profit.

Operating expenses are expected to stay relatively low.

http://investor.apple.com/financials.cfm

FINANCIAL FORECAST

2010 2011 2012 20130

20,00040,00060,00080,000

100,000120,000140,000160,000180,000

Known Data with Forecasted Trendline

RevenueExpensesProfitLinear (Profit)

in m

illions (

$)

2010

2011

2012

2013

2014

2015

2016

2017

2018

0

100,000

200,000

300,000

400,000

Known Data and Forecasted Calculations

RevenueExpensesProfit

Known Data Forecasted Data

in m

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DISTRIBUTION

Distribution strategy

Channels of distribution Online

Apple’s own website is a one-stop-shop for genuine and authorized Apple products

They offer specialty services not offered elsewhere such as personal engravings

In-Store The number of Apple Stores has been

growing in the past years Offer’s an in-person experience with Apple

experts Third Party Retailers

Authorized sellers such as Best Buy and Wal-Mart account for a large portion of iPod sales

Offers convenience of a big box store with store and Apple warranty guarantees

Number of Apple stores worldwide

http://www.statista.com/statistics/273480/number-of-apple-stores-worldwide-since-2005/

THE IMPACT OF THE IPOD

Revolutionized the Portable Music Device Industry User friendly, larger storage space, increased accessibility

Influenced New Model Designs Moved from the rotating wheel to touch screen, influencing other

designs from competitorsAdapted to the progress from CDs to digital, downloadable songs

iTunes is an industry leader in music downloads and it the connective program for uploading music to the iPod

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