Iphone 5.2 Metrics: A Case Study

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Apple iPhone is a premium market player. With that said, it has tried introducing iPhone 5c for a relatively price sensitive market before, a strategy that backfired Apple and iPhone 5c turned out to be a disappointment for Apple. In order to target the Hispanic millennial market, Apple should not reduce their price. They should keep their price range around where it is today as that also gives people the impression of iPhone’s premium appeal. Apple’s iPhone is not trying to be a mass-market player, but in fact trying to capture the growing base of Hispanic millennial consumers.
With the above in mind, since the Hispanic millennials rely heavily on mobile data and text/picture/video messaging, Apple iPhone should work with their service provider
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So with the numbers in the sections above, this would come out to be about 39% of 25 million Hispanic millennials, which would be about 9.75 million people.
Currently the US market share of Apple iPhone is 47.7% (December 2014) and our goal in 3 years would be to have the same market share captured in the Hispanic millennial market as well which would be about 4.65 million people in today’s terms.
Assuming Apple with its target marketing using specialized Hispanic marketing strategy firms is able to capture ⅓ of this market which would be about 1.53 million people. Assuming the average price of an iPhone at about $800 (average of $650 and $950 above), in the first year Apple expects to generate revenues of about $1.22 billion. According to an article, Apple earns a margin of about 69% on an iPhone, which then brings the margin in Year 1 to about $844.6 million.
Similarly in Year 2, Apple iPhone should be able to capture ⅔ of the Hispanic millennial market share, which would bring the number of such consumers to be about 3.1 million people. With the same assumption of iPhone price of $800, Apple expects to generate revenues of about $2.48 billion. Again using the 69% margin number from the article, the margin in Year 2 is projected to be about $1.71

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