Apple Inc.'s iPhone: Can iPhone Maintain its Initial Momentum?


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:

Case Code : MKTG201 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

Themes

International Marketing/ Pricing/Market Skimming Strategies
Case Length : 18 Pages
Period : 2007-2008
Pub Date : 2008
Teaching Note : Not Available
Organization : Apple Inc.
Industry : Consumer Electronics
Countries : UK; Europe; USA

Abstract:

This case is about Apple Inc.'s (Apple) entry into the mobile phone market by launching the iPhone. The launch of the much hyped iPhone was hailed as the most successful launch of a brand ever by some analysts.

The case also discusses the various challenges faced by Apple shortly after its launch including the pricing controversy in the US and the challenges in marketing the iPhone in Europe.

Apple raised many eyebrows by reducing the price of its much hyped iPhone by one-third within 10 weeks of the launch.

While some analysts felt that adoption of such market skimming strategies and subsequent price cuts by companies selling technological devices was nothing new, others felt that Apple's decision to reduce the price so drastically just a few weeks after the launch was nothing short of a public relations fiasco.

In November, 2007, Apple launched the iPhone in three European markets, Germany, France, and the UK. Analysts opined that despite Apple being a late entrant in the highly competitive mobile phone market, it emerged as a successful player. However, a few analysts were of the view that it remained to be seen whether iPhone would be able to maintain its initial momentum considering that the challenges in marketing the iPhone in the European countries were stiffer. Then there was the challenge of cracking the Asian market. In August 2008, Apple launched the iPhone in India. The company planned to launch its iPhone in other Asian markets like Japan, South Korea, and China by the end of 2008.

Issues:

Understand the rationale behind Apple's entry into the intensely competitive mobile phone market.

Understand the challenges faced by Apple while entering a new market with a new product like the iPhone.

Understand the issues and challenges faced by Apple while launching the iPhone in Europe and Asia.

Analyze Apple's strategy of slashing the price of its iPhone so soon after the launch.

Understand the issues and challenges in pricing a product or service (pricing decisions, premium pricing, market skimming, etc).

Understand how pricing could affect product adoption and diffusion.

Contents:

  Page No.
Introduction 1
Background Note 2
Launching the iPhone 4
Pricing the iPhone 7
The Price Cut Chaos 8
iPhone Goes to Europe 9
Other Challenges 11
Outlook 11
Exhibits 13

Keywords:

International marketing, Pricing, Public relations, Public relations, Buzz marketing, iPhone, Apple, Samsung, Nokia, Macintosh, Sony Ericsson, Motorola

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