APPLE CASE

Team 4
Ankit Sharma
Komal Sharma
Rahul Sharan
Vishal Chauhan

How do you assess Apples

competitive position in MP3
players?
Ipod is an mp3 player designed by Apple, was
launched in 2001
It was designed in such a manner to be very
friendly to use, large storage memory, and
attractive outlook like very sleek. It could store
1000 songs at first, when other MP3 players
offered just several hours of music. Its price was
at $399.
In 2010 more than 70 % of US MP3 market was
captured by Apples Ipod iTunes.
Within three days of launch, it was downloaded
one million copies of its software, and they paid
for that.

Analysis The sustainability of Apples

Ipod can be identified by the analysis
of porters five force model.
Threat of Entry :
1. Low Product Differentiation: That means, by
opening the iTunes music store there was no
much revenue generation by it, because out of
99 cents, 70 went to music labels, 20 cents went
to credit card processing, then also apple had to
pay for its website, with other direct and indirect
costs.
2. Apples Ipod sale for a quarter was on an
average of 113,000 units, but after iTunes Music
Store launch it went to its own exploratory sale
path of 733,000 units, which was 6.5 times of the
previous figure, and was continuously increasing.

 Cost Advantage:
1 Price : When the other players came in to existence,
the Average Selling Price of ipods were in position to
decrease. They were initially priced by $399 when Apple
launched it, but then when the comparison begun apples
ipods were higher than the price range of $50 to $100.
2 DRM - Digital Rights Management : Initially when the
ipod was launched the DRM system named Fair play was
an disadvantage for the users. Its main policy is to
prevent the iTunes from the piracy issues.
3 First Mover: Apple has changed not only the way people
listen to music, but it has transformed its parent
company Apple into an entertainment giant. The another
main advantage it had was the early mover
4 Stylish Models: Their look of the ipod was very stylish,
which could attract youth largely.

 Threat of Rivalry:
1 Moderate- Competition for iTunes: Other online music
stores took the advantage of DRM system, which apple
maintained with music labels and then they become
biggest competitors for Apples iTunes music store. They
are Amazon.com, Napster, Walmart.com.
2 Competition for Music Streams: Internet radio sites such
as Pandora and Last.fm offered free music streaming.
3 Competition from Mobile segment: The competition from
mobile phone segment is really a biggest threat for Ipods.
4 The substitutes for ipods can be a mobile phone, CD
player, MD player, radio, etc.; The easy of getting the MP3
files has been making customers leave from the other
music players. Apples iTunes music store and other online
music stores are making download easier and the access
of those files are easier to use and convert in other
formats.

Conclusion :

MP3 players from in its future

wont be strictly judged by their
technical merits, but rather than
may be on their value as a style
accessory. However iPod also
created a whole industry, which
must now be characterized as
having a broad scope, simply
because of its ubiquitous
presence. It maybe a unique
niche. It certainly will be at the
time, because they intentionally
did not go for cost leadership, as
the price has already come to a
reasonable halt.

How do you assess Apples

competitive position in smartphones?

 Apples competitive position can be

explained in analysing the Porters five
force model. In 2007, Steve Jobs,
renowned CEO of Apple, announced
new name would just be Apple, Inc.
This seemingly trivial change
represents a fundamental shift with
deep implications that were the result
of many changes Apple had engineered
over the past six or seven years;
transitioning itself from a computer
company slugging it out for a meagre
share of an increasingly competitive
hardware and software market, to a
business that promoted an entirely new
concept, the digital lifestyle.

 Analysis: The sustainability of Apples Iphone can be

identified by the analysis of porters five force model.
Threat of New Entrant 1 Product Differentiation: iPhone has add-on functions with
technology from their own PC and MP3 player. Mobiles are
now focused more on adding feature with them like
camera, calendar, watches, memory for Mp3, alarm,
internet browsers, mail facility.
2 Cost Advantage: High proprietary technology and
favourable access to raw materials. While other
competitors were having the price range of $300 to $ 400
with all those features, Apple had the advantages of price
range of around $562. 6
3 Consumers Loyalty: Its loyal customers are always
showing a positive response for Apples product. The new
customers of their ipod added a significant customer base
to Apple iphone.
4 Economies of Scale: High demand in R&D and marketing.
Todays cell phones come with a lot of add-ons like camera,
voice recorder, speakerphone, MP3 player and FM receiver.

 Memory:
They also have built in memories to record and retain
voice and pictures and facility to download them to a
computer. The price of the products varies according to
the memory capacity of the phone. 8 GB memory
capacity iphone cost around $ 199 with subsidy from AT
& T and the same model cost around $599 without
subsidy from AT & T. They have 16 GB memory capacity
also. So it always tries to be in a place where and when
the customers need increase.
Number of available Apps: When we see the exhibit no
9 we can identify that the number of available apps in
Apples store was the highest one with 1,85,000,where
android has only 30, 000 and Symbian didnt have
anything. One study indicates that the iphone users
having average of 37 apps, when compared to the
Android users having 22 apps.

 Threat of Rivalry: High

There are relatively large number of competing
firms such as Samsung, LG, Motorola, etc., but from
exhibit 8 we can come to know that Mac OS X was
in the third position in over all smart phone market
with 14.4 % of market share, when others like
Symbian and RIM having the market share of46.9%
and 19.9%. of world wide market of smart phones.
Microsoft and android gained 8.7% and 4 %in the
world market by 2010.

Conclusion :
1. Premium pricing
2. Patents over icons and some other patents, won over
samsung.
3. Hardware and software independence: means control
over hardware and software both.
4. Main challenge is from Android and low cost
smartphones.
5. Enjoys reputation and goodwill of being a highly
reliable performance products of company.
6. Made unboxing popular as its marketing strategy.
7. Ecosystem of company From chip manufacturing to
propriter retail store.

8. Revenue generation and updated softwares.

9. First app store - Apple store and Apple store V/s
Google Play.
10. Apple maps up to five times more efficient than
Google maps.