Apple Inc., a rebirth, a paradigm shift from a computer manufacturer to consumer devices has given Apple a resurgence in the marketplace. Defining the path forward, specifically for the launch of the new iPhone consumer device, we need to understand the forces that will impact the strategy moving forward, then define the strategy that will give the company sustained earnings in the future. To begin, we need to understand Apple Inc.’s product lines and where they are in the Industry Life Cycle (see Exhibit 1). For Macintosh computers, from 2001 to 2004 we have seen a flat line in unit sales, for 2005 there is an increase in unit sales, but we suspect this is due to network effects brought on by a surge in sales for Apple iPod music device (see
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The iPod product line, is in the “Growth’ stage of the Industry Life Cycle. Sales of the iPod have nearly doubled three years straight. The iPhone, being introduced recently, is in the “Embryonic” stage. Just as the Macintosh computer product line has seen a renewed increase in total product sales, we suspect the iPhone will see favorable increases in unit sales due to the innovation consumers have seen in Apple’s product …show more content…
Apple is producing the devices with materials from supplieers that aren’t producing for Apple’s competitors. With Apple’s innovation they are leading the way into new markets with new devices with rapid succession. In reviewing sales of iPod devices between 2003 and 2005 (see Exhibit 2), suppliers aren’t gaining the economies of scale before Apple is launching new devices. Consumer’s bargaining power is low. Apple has created tremendous demand by combining both the music device, and the digital download marketplace. With the introduction of the iPhone, consumer’s bargaining power will continue to decline. The threat of having an alternative device that is a music player, a phone, a organizer, and mobile is very low. Each additional feature that the iPhone provides is one less opportunity to substitute another device. Computers have many of the features, but aren’t mobile. A PDA is a great device for oranizing schedules and activities, but doesn’t provide the ability to make a phone call. An MP3 music device allows you to listen to music, but doesn’t give you tools to oganizer schedules. The iPhone is
The iPod product line, is in the “Growth’ stage of the Industry Life Cycle. Sales of the iPod have nearly doubled three years straight. The iPhone, being introduced recently, is in the “Embryonic” stage. Just as the Macintosh computer product line has seen a renewed increase in total product sales, we suspect the iPhone will see favorable increases in unit sales due to the innovation consumers have seen in Apple’s product …show more content…
Apple is producing the devices with materials from supplieers that aren’t producing for Apple’s competitors. With Apple’s innovation they are leading the way into new markets with new devices with rapid succession. In reviewing sales of iPod devices between 2003 and 2005 (see Exhibit 2), suppliers aren’t gaining the economies of scale before Apple is launching new devices. Consumer’s bargaining power is low. Apple has created tremendous demand by combining both the music device, and the digital download marketplace. With the introduction of the iPhone, consumer’s bargaining power will continue to decline. The threat of having an alternative device that is a music player, a phone, a organizer, and mobile is very low. Each additional feature that the iPhone provides is one less opportunity to substitute another device. Computers have many of the features, but aren’t mobile. A PDA is a great device for oranizing schedules and activities, but doesn’t provide the ability to make a phone call. An MP3 music device allows you to listen to music, but doesn’t give you tools to oganizer schedules. The iPhone is