Apple iPod

Company OverviewHistory of ProductStrategic IssueSituation AnalysisStrategic ResponseKey Reasons for SuccessLessons Learned

Agenda

Company Overview

1976-1980 : The Early Years

Established on “April Fool’s” day in 1976 by Steve Jobs & Wozinak, both college drop outs

1976-1980 : The Early Years

The Apple I went on sale in July, 1976 for $666.66.

Apple was incorporated on January 3, 1977. The Apple II hits the market in 1977. Apple soars to $1 million in 1980 and went public.

Apple faced saturated market after the launch of IBM’s PC.

Apple introduced Lisa with hefty price of $ 10,000. Jobs resigned from Apple in 1985 and founded NeXT Inc. Apple seeking to make big splash,

introduces the Macintosh commercial during the Super Bowl XVIII on January 22, 1984.

1981-1985 : Lisa & Mactintosh

1986 – 1993 : Rise & Fall

The period between 1989-1991 was the “Golden Age” of Macintosh.

Apple introduces Mac II & Apple was again in spotlight.

1986 – 1993 : Rise & Fall

Apple introduce Power Book & system 7. 1993, Sculley was ousted after his pet project (Digital cameras, Speakers & TV appliances) Micheal Spindler takes over the

Apple’s operations.

1994-1997 : Attempts of Reinvention

1994, Apple aligned with IBM, Motorola in AIM alliance and introduced Power Macintosh

1995, Gilbert pushes out Splinder after sales suffered due to parts shortage.

Apple acquired NeXT Inc., which reunites Apple with Steve Jobs.

1998 : New Beginning Apple introduces iMAC, featured

current technology & ground breaking design.

Apple stunned Wall Street by earning $ 45 million in first quarter of 1998.

History of Digital Audio Player

The first mass produced DAP was “MP Man” in 1997. It was branded as “Eiger Labs MP Man F-10” to North American market in 1998.

History of Digital Audio Player

“Rio PMP300” from Diamond Multimedia was introduced in 1998.

History of Digital Audio Player

In 1998 Compaq developed the first hard drive based DAP called “PJB-100”.

2.5” laptop HD. 4.8 GB. 1200 songs.

History of iPodFirst Generation

October 2001, Apple unveiled first generation iPod. 1.8” Hard drive 5 GB

March 2002, Apple intoduced 10 GB model of first generation iPod.

Second Generation ipod was introduced on July 17, 2002.

Touch sensitive wheel

10 GB & 20 GB

Second Generation

Third Generation iPod was introduced on April 18, 2003.

Thinner

10 GB,15 GB & 30GB

Third Generation

Timeline of iPod

Situation

• In 2000, Steve Jobs Candy colored iMac was leading the change for Apple’s come back, but to further spur sales, company started asking :

“What can we do to make people more macintoshes ????????”

Fork in the Road

Line Extension of iMac

Launch a new Product

Situation Analysis

Industry Overview

Strides of Window platform was narrowing the edge of Apple’s products.

Hard disk based Music Player are too big to carry & weighs ½ KG.

New Music Players Let You Cram CDs With MP3 Favorite.

Situation Analysis

Enviroment Overview

Companies were planning to extend the use of its personal storage solutions into MP3 players.

consumer-electronics companies are rushing out their own digital-audio products.

SWOT Analysis

Strenghts High quality product which makes Apple

different than its competition Apple niche audience provides the

company with insulation from direct price competition.

Weakness Weak presence in business arena Dependency of new product launches

SWOT Analysis

Opportunity Large population Gen(X&Y) which are

extremely indivisualistic & brand consious

Booming MP3 player market Threats Intense Competition Changing technology

SWOT Analysis

Leverage

Apple leveraged the fact that high quality product which is different than its competition and targeted to Gen (X&Y) which were extremely individualistic and brand conscious.

Marketing MixProduct

“Apple iPod – First Generation”Small & User friendlyBlack and white screen 5 GB Hard Drive stores 1000 songs

Place

Apple opened its stores in Virginia & California.

Price

US $ 399.00

Promotion

TV CommercialsPrint ads (music, sports & men Magazine)Posters in public place

Strategic Response

The first commercial for iPod aired in 2001.

Strategic Response

From 2003 to 2005, Apple ferociously promoted iPod.

Silhouette Campaign was the most popular

Strategic Response

Target Market Targeted at young, style conscious,

& music enthusiasts.

Brand Position iPod positioned itself as the best

MP3 player.

Ability to Build Brand Equity

Identity iPod changed the game in the brand

identity. iPod differentiated itself from MP3 playerIntegrity iPod perceived to meet customers’

expectations. Resonance iPod got connected to customer lifestyles

& aspirations.

Is it a success or a failure ???

Great success for Apple

Reasons for Success

Apple shifted the brand identity from company context to context of customer.

High Quality products and design make it different from competitors.

Lessons Learned

Create brand equity in context of customer.

Focus on your core competency.

Differentiate yourself.

Questions?