COMPANY ANALYSIS: IPHONE Nicole Webb

NATURE OF APPLE: Established 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne as Apple Computer Publicly –Traded Company Largest Shareholder: The Vanguard Group, Inc. Designs and Sells: Consumer electronics and Computer Software Mac Computers, IPod, IPhone, IPad, IOS Software Sells Products Worldwide through: Retail stores Online stores Third-party cellular network carriers (AT&T, Sprint, Verizon) Mission Statement: “ Design the best personal computers in the world" “Lead the digital music revolution" “Reinvent the mobile phone“ “Define the future of mobile media and computing devices" Company Goals: Satisfy personal consumer demands Improve performance and stability

IPHONE MAKES HISTORY First release: June 2007 as a Combination of an Internet-enabled smartphone and the iPod Major Breakthrough in cellphone technology Product Innovation Introduced: iOS mobile operating system App Store (2008 release) Internet Communications Navigating Screen (Pinch and Swipe) Built in software capabilities Target Segment: Professionals, students, corporate users, entrepreneurs,and health care workers Same as all other Apple products Apple Stores the Apple website distribution

COMPANY STRATEGY Brand Loyalty Provide superior software iOS operating system Mobile applications in the App Store Design (Ease of Use) Use Product Differentiation, positioning the iPhone as the versatile, convenient, and a device for personal and professional use Convenience of having one device for communication, but also music, pictures, and video, and full Internet access Promotion Press Releases Presentations (producing a new product, Videos) Hype (Secrecy Prior to launch) Promotion of Apps

COST STRUCTURE: The 16GB model carries a bill of materials approximately worth $199, $207 when manufacturing costs area added to produce the iPhone 5 at a low cost. The iPhone 5 costs Apple an estimated $200 in materials. While the 16GB will cost $200, it also requires a two- year wireless contract. Buying it off-contract would require $649 for the 16GB model, $749 for 32GB, and $849 for 64GB Apple products are designed low cost to make maximum profit Major Cost DriversHardware & Manufacturing Cost (16GB for iPhone 5) Display + Touchscreen (Cover Glass) $44.00 User Interface & Sensors$6.50 Battery$4.50 Camera (8 Megapixel +1.2 Megapixel) $18.00 Wireless Section/BT/GPS$34.00 NAND Flash$10.40 SDRAM (1 Gbyte)$10.45 Processor (A6 Processor)$17.50 Dual Band Wireless$5.00 Mechanical/Electro- Mechanical $33.00 Power Management (4G LTE$8.50 Box Contents$7.00 Total:$198.85

APPLE’S REVENUE SOURCE IPHONE 60% of Apple’s revenue consists of iPhone and iPad sales 4 th Quarter: $36 billion in revenue $8.2 billion in net profit by selling 26.9 million iPhones Geographic Market: 250 carriers in over 100 countries Increase of unit sales

CONSUMER DEMAND iPhone demand spikes immediately following an iPhone release and then returns to a lower mark Remained higher following the iPhone 4S launch because of voice and speech comprehensiveness of Siri iPhone 5 had the highest consumer demand when it released but also dropped 21% in consumer demand (biggest decline since iPhone 3G release in 08’) Reasons for Consumer Drop: Demand satisfied Threat from Competitors Expectations not fulfilled

COMPETITION: Samsung with the highest percentage of market shares and units sold Nokia units sold and market share decreased but dominated Apple’s market share and units Market Share for Android O.S. increase 18% knocking the iOS down 3% Samsung widened market lead

SWOT ANALYSIS (S)trengths:  Innovative  Compatibility  Ease-of-Use  Brand Awareness (W)eaknesses:  Cost Structure  Limited Editions (O)pportunities :  Partnerships  Upgrades  Innovation (T)hreats:  Increased Competition

SOURCES Rassweiler, A. (n.d.). Retrieved from Change-But-Most-Suppliers-Remain-the-Same-Teardown-Reveals.aspx Change-But-Most-Suppliers-Remain-the-Same-Teardown-Reveals.aspx Tamer, Y., & Moustafa, H. (n.d.). Retrieved from Rob van der Meulen. Gartner says worldwide mobile phone sales declined 1.7 percent in Retrieved from