If Apple has to retain one, either ipad or iphone which one would you recommend

and why?
If Apple has to retain one, either ipad or iphone which one would you
recommend and why?
As consumers, we buy millions of products every year. And just like us, these products have a
life cycle.
Product Life Cycle Stages
arious stages of product life cycle!!
"he product life cycle has # very clearly defined stages!.
Introduction Stage $ "his stage of the cycle could be the most e%pensive for a company
launching a new product. "he si&e of the market for the product is small, which means sales are
low, although they will be increasing..
Growth Stage $ "he growth stage is characteri&ed by a strong growth in sales and profits, and
because the company can start to benefit from economies of scale in production, the profit
margins, as well as the overall amount of profit, will increase.
Maturity Stage $ 'uring the maturity stage, the product is established and the aim for the
manufacturer is now to maintain the market share they have built up.
Decline Stage $ (ventually, the market for a product will start to shrink. "his shrinkage could be
due to the market becoming saturated or because the consumers are switching to a different
type of product. )hile this decline may be inevitable, it may still be possible for companies to
make some profit by switching to less!e%pensive production methods and cheaper markets.
Lets see where apple products iphone and ipad stands in their product life cycle.we will do
some data analysis for both the products.
*
+elow chart shows the ,uarterly iphone unit sale from *--. to *-/0
IPHO!
1"2 34 "I#S *-//1/ *-,005,---
*--.1/ *.-,--- 1* /.,-.0,---
1* /,//6,--- 10 0.,-##,---
10 *,0/7,--- 1# 07,-##,---
1# /,.-0,--- *-/*1/ *8,-*5,---
*--51/ ./.,--- 1* *8,6/-,---
1* 8,56*,--- 10 #.,.56,---.--
10 # ,080,--- 1# 0.,#0-,---
1# 0,.60,--- *-/01/ 0/,*#/,---
*--61/ 7,*-5,--- 1* 00,.6.,---
1* .,#--,--- 10 7/,-*7,---
10 5,.--,--- 1# #0,./6,---
1# 5,.7-,---
*-/-1/ 6,#--,---
1* /#,/-*,---
10 /8,*07,---
1# /5,87-,---

0
I PHO! Product Performance
"he following table presents iPhone net sales and unit sales information for *-/0, *-/* and
*-// 9net sales in
millions and units in thousands:;
$%&' (hange $%&$ (hange $%&&
*-/0 Change *-/* change *-//
net sales <6/,*.6 /8= <.5,8*6 ./= <#7,665
percentage of total net
sales 70= 7-= #*=
unit sales /7-*7. *-= /*7-#8 .0= .**60
"he growth in iPhone net sales and unit sales during *-/0 resulted from increased demand for
iPhone in all of the Company>s operating segments primarily due to the launch of iPhone 7
beginning in September *-/* and strong ongoing demand for iPhone # and #s. All of the
Company>s operating segments e%perienced increases in net sales and unit sales of iPhone
during *-/0 compared to *-/*."he year!over!year growth in iPhone net sales and unit sales
during *-/* reflects strong demand for iPhone in all of the Company>s operating segments,
e%cept for the 2est of Asia Pacific segment. ?f we draw a product life cycle curve of iPhone 9not
a curve of a particular model of iPhone:, it will look different from the curve above. iPhone>s
forecasting behaves in a different manner than most electronic devices. @enerally, people are
slow to adopt the new technology or product, which is depicted by the stretched introduction and
growth phase. 4nce technology has been tried and tested, the mass adoption occurs. 4n the
contrary, with iPhone, the initial hype is such that their majority of sales happen during initial /!*
years, and then immediately dry up. "his whole distortion can be attributed to the huge fan
following of Apple, who are not only loyal, but also want to e%perience the new product before
others. Also, Apple constantly innovate the product and launch a totally revised version of the
product 9iPhone 7 is the last e%ample:, that greatly increase the product life cycle of the Apple
iPhone..
+y seeing the data of unit sold we can say that apple ? phone has just entered in the maturity
phase and it will take few more years to complete the maturity phase and after that it will start
declining.
Lets have a look on the other smart phone suppliers)competitors
*
? phone competitors in the above chart,As we discussed they have formed two categories
hori&ontal and vertical .Aanufacturers like samsung,htc,motorolla and lg electronics they fiollow
vertical approach where they license their own 4S and built their hardware which will give them
the freedom of cost effectiveness and lesser lead time.?3 *-/* ? Phone greatest threat came
from A3'24?' an open and free platform developed by @oogle. Samsung 4wns 3early "he
(ntire Smartphone bill of materials on the other hand, Apple relies on third parties.
+orldwide Smartphone A,erage Selling Price -ASP. /y 0egion and 123ear (AG0 -figures
in 4"SD.
0egion
$%&'
Smartphone
ASP5
$%&6
Smartphone
ASP5
1 3ear (AG0
AsiaBPacific <*8* <*/7 !5.6=
(urope <#/6 <*76 !6.-=
3orth America <70/ <78. *./=
Latin America <*55 <*#8 !7..=
Aiddle (ast and Africa <005 <*0- !..0=
#otal 4''6 4$71 268'9
7
8
"hough its hardly a surprise that the average selling price of AppleCs iPhones is higher than that
of Android smart phones. As what is surprising though, is the fact that the price gap between
i4S and Android devices is actually widening. ?n *-/0 the price gap was <0.#, up from just
<*8/ in *-/-. 'espite AppleCs introduction of the 9only slightly: cheaper iPhone 7C, the average
iPhone selling price was more than twice as high as the average price of an Android
Smartphone."his cost can be e%plained in * ways
#H! SO:#+A0! SID! "he costing between the App 'evelopers of both the mobile 4S,
Android and i4S is not the same . "his is due to the fact that "he D developers cost D for
creating an app for Apple 9 i4s : and Android is higher in Apple>s i4S as Apple pays more to
the developers , hence the price point charged to consumers is high
#H! HA0D+A0! SID!; )hile the cost of manufacturing for both the e,uipment should not
be much of a difference given the volumes both Apple and @oogle enjoy. Eowever the
difference comes down to the +rand Perception and the Coolness Factor which Apple enjoy.
Apple have positioned themselves more on the consumer side 9 crowd.. led by loyal and core
Aactinosh users who were early adopters and had history on its side to boast of
Android however has no Eistory to boast off,ncluding Samsung, (ricsson, Golo, Aicroma%, L@ ,
Lenevo and Aotorola :. "hatCs why, despite and in spite of declining in market share Apple still
takes the lionCs share of profits in the smartphone industry.
Let us compare the manufacturing cost and the profit margin.if the materials cost roughly </55,
and <60 is spent on manufacturing its smartphone, 9a cost that includes the labor costs,
transportation, storage and warranty e%penses: we reach a total of about <*5/ to manufacture
an iPhone that retails at <8#6.this is the retail price which includes the other overhead e%penses
also. if we go thru the data we will find that apple profit margin is very high which is 07 to ##=.
As in the above chart we can see the price difference between apple phone and android smart
phone and by *-/. the smrtphone price will go down further by . to /-=.so for apple it is very
important to work on the reducing the overhead or reduce the profit margin to hold good market
share in the smartphone business. Smart phone demand is going to increase by 8-= by *-/.
and e%pected price would be <*7# to <*87.
S+O# AA<3SIS :O0 APP<! IPHO!
Strength2
a. Leading innovator in mobile design and technology.
b.strong financial performance 9##= profit margin: Hno debt.
c.customer loyality.
.
d.brand reputation and retail stores.
+ea=ness
a. Eigh price
b. incompatibility with different os
c. decreasing market share
d. patent infringements
e. long term gross margin decline
opportunity
a.scope of new customers in india,china,bra&il and other countries
b.digital marketing viasmartphone
c.increasing demand for cloud based services.
d.creating patent through ac,uisitions.
#hreat
a.rapid technological changes
b.*-/0 ta% increase
c.raising paylevel for fo%conn workers
d.breached ?P rights
e.price pressure from other smart phones specially Samsung
f.android os growth and strong dollar.
>
IPAD
?#0
:0OM
$%&% "I#S
9
(HAG!
& 0,*.-,---
$ #,/55,--- *5
' .,00/,--- .7
* #,86#,--- !08
1 6,*#8,--- 6.
7 //,/*0,--- *-
6 /7,#0#,--- 06
> //,.65,--- !*#
@ /.,-#*,--- ##
&% /#,-08,--- !/5
&& **,58-,--- 80
&$ /6,#..,--- !/7
&' /#,8/.,--- !*7
&* /#,-.6,--- !#
&1 *8,-07,--- 57
&7 /8,07-,--- !0.
?Pad and iPad miniI are the Company>s line of multi!purpose tablets based on Apple>s i4S
Aulti!"ouch 6
operating system. iPad has an integrated photo and video camera and photo library app.
P0OD"(# P!0:O0MA(!2
*-/0 change *-/* change *-//
net sales <0/,06- 0= <0-,6#7 ./= </6,8/5
percentage of total net
sales /6= *-= /5=
unit sales ./-*00 **= 750/- 5-= 0*06#
?f we put the sales volume on product life cycle graph we will find that ipad has already achieved
the maturity stage now it will maintain the same stage for * to 0 years and then it will start
declining.
"ablets powered by Google>s Android outsold AppleCs iPad, bringing AppleCs multi!year run to
an end. @oogleCs operating system powered nearly 8*= of the tablets sold last year, while
AppleCs iPad accounted for just 08=.?n time, itCs likely that AppleCs share of the tablet market will
decline further, as @oogleCs hardware partners, including Samsung continue to offer a wide
variety of alternatives at multiple price points. cheaper, smaller Android tablets have become
particularly popular, accounting for much of AndroidCs recent growth. Last year, emerging!
market tablet demand grew by /#7=, while developed markets saw growth of only 0/=,
according to @artner.
AppleCs tablet business declined /8= on a year!over!year basis. "his isnCt just a one!off
instance, but a troubling trend. the iPad has fallen short of e%pectations in nearly every ,uarter
for the last year. Lets analy&e few reasons for this fall.
<onger replacement cycles
)hile smartphones are typically replaced on a biennial basis, tablets are kept for a longer
period of time.A maturing tablet market poses a challenge to manufacturers, as consumers see
little reason to upgrade from their e%isting devices.
Consumer ?ntelligence 2esearch Partners, in a survey of some *,--- consumers, noted that
iPads tend to be used in ways much more comparable to devices with longer replacement
cycles 9PCs, "s: rather than shorter ones 9smartphones:. iPad owners take their time
replacing a lost or broken unit, and are much more likely to hand their iPad down to a friend or
family member.
?n short, while Apple can rely on its loyal customers to buy a new iPhone every two years or so,
the same canCt be said for iPad buyers.
o carrier support
"hat regular, two!year replacement cycle is largely the byproduct of a wireless industry willing to
subsidi&e the cost of a new handset every two years. )hen a wireless contract e%pires, iPhone
owners upgrade to a new model !! and Apple gets another sale. iPads, in contrast, are
overwhelmingly separate from the carrier comple%. Sure, you can buy one of AppleCs tablets
/-
through a major carrier, but very people few do. Last year, analyst Craig Aoffett estimated
that5-= of tablets sold in the J.S. do not sport wireless chips and only 7= are actually
connected to wireless networks at any given time. Analyst Chetan Sharma came to a similar
conclusion in *-/*, noting that only /-= of J.S. tablets relied on wireless networks.
A wea=ening ta/let mar=et
one trend affecting both Apple and its Android!powered competitors is a tablet market that,
overall, is showing signs of weakness. ?f thatCs the case, it will a sharp drop from last year, when
the tablet market grew by more than 7-=.
"he growing popularity of smartphones with larger screens may be having some effect on tablet
demand, particularly in emerging markets. Last year, ?'C reported that phablets outsold both
tablets and PCs in most Asian markets during the second ,uarter. "hese phones boast screen
si&es between five and seven inches.
#he iPad company
'uring its first two years on the market, the iPad e%perienced rapid growth, selling faster than
any of the products that had preceded it. Some projected that, one day, Apple would become
the KiPad companyK !! its tablet business looked on track to eventually overtake the iPhone.
At this point, that notion looks to be thoroughly shattered. +arring drastic changes to its tablet
strategy, AppleCs tablet business should continue to disappoint.
IPAD selling price and profit margin!ipad net sales per unit is <8*5 but its manufacturing
cost, material cost and retail distribution cost all together is only<*57
9<*7,</57,<.7respectively:.but as per financial report it shows a profit margin of *7=.still it is a
very high profit margin and it is not very competitive.
Swot analysis
Strength2
+rand perception
(ase of use and ,uality
?nnovation and improvement
+ea=ness2
Eigh price Price
3o carrier support
opportunity2
introduction of new product
threat2
Strong competition
'ecreasing mar=et share
Completion stage of maturity cycle
//
#op :i,e #a/let Aendors, Shipments, and Mar=et Share,
Second ?uarter $%&' -Shipments in millions.
Aendor
$?&' "nit
Shipments
$?&' Mar=et
Share
$?&$ "nit
Shipments
$?&$ Mar=et
Share
3ear2o,er2
3ear Growth
/. Apple /#.8 0*.#= /..- 8-.0= !/#./=
*. Samsung 5./ /5.-= *./ ..8= *...-=
0. ASJS *.- #.7= -.6 0.0= /*-.0=
#. Lenovo /.7 0.0= -.# /.0= 0/0.6=
7. Acer /.# 0./= -.# /.#= *#..6=
4thers /..7 05.5= ..# *8.*= /08.8=
#otal *18& &%%8%9 $>8' &%%8%9 1@879
&$
+orldwide #a/let Mar=et Share /y Screen SiBe Cand, $%&& 2 $%&6
Apple I phone and ipad sales)re,enue comparison
Screen SiBe $%&& $%&' $%&6
D >E *.= 77= 7.=
>E F &&E .0= #0= 0.=
&&EG -= *= 8=
#otal /--= /--= /--=
conclusion
)ith the above data we can say there is growth in the overall tablet market by *-/8 the market
will grow by /-*= and demand in the apple tablet will increase by.-= but at the same time we
have to see the other tablets price in the market which will be lesser than apple and to meet the
customer re,uirement apple has to reduce the price further. ?n *-/0 we can see that ? phone ,ty
is *.0 times more than the ipad with higher profit margin. ?n *-/8 the ? phone sale is still /.5
times higher than ipad with /7= more profit margin.we can say that ? phone is more revenue
generator with higher profir margin.
+y seeing the product life cycle of both the product we can say that iphone is in just start of the
maturity phase and ipad is at the end maturity phase.?t is advisable to continue with iphone and
we can slowly stop the ipad as it is giving lesser profit margin.
)e can coclude that from the revenue generation and profit point of view apple>s ?phone is a
better product than ?pad and we can pahase out ipad production in ne%t coming years9* to 0
years:
no of words2$16'
&'
$%&' in million in million 4 million approH

worlwide sold
units apple Ity
9 of total
Ity
current unit
price4
total
sales 4
sales
ratio grossmargin
? phone 6/5 /8- /. 87/ /-#-/5 *.0 ##=
? pad /67 ./ 08 8*5 ##806 *7=
$%&7 in million in million 4 million

worlwide units
to sell apple Ity
9 of total
Ity unit price4
total
sales 4
sales
ratio
gross
margin
? phone /7/8 *56.778 /6./ 770.07 /8-**8 /.5 0-=
? pad 086.*75 /86.87* #7.6 700.5 6-78- /7=
If Apple has to retain one, either ipad or iphone which one would you recommend
and why?
Method of analysis2
&8 product life cycle
$8 i phone sales analysis
'8 i phone performance
*8 i phone mar=et share and price
18 swot analysis
78 i pad unit sales analysis
68 i pad product performance
>8 ipad technology and competitors
@8 ipad swot analysis
&%8 worlwide mar=et share
&&8 sales re,enue comparison for iphone and ipad
&$8 (onclusion
&