As with all Apple marketing, the iPhone marketing strategy is very clear, simple and clever. With the plain and simple apple icon, Apple focuses on the pure innovative style of their products without all the "fluff". The iPhone was released by Apple in June, 2007. The ground-breaking style of the iPhone was touted for months before the initial release and has remained the best of the best when it comes to cell phones over the past several years. Before the iPhone's official release, Apple ran four television commercials promoting the new cell phone.
The first of the commercials portrays the new iPhone as the next step up from the popular iPod. The iPod was all the rage up until this point, and the iPhone was supposed to be the next-generation iPod, oh, and it's also a phone! The advertisement displays all of the enhanced features available in the iPod, and more, the point being "There's never been an iPod that can do this."
"So, say you're watching Pirates of the Caribbean"
Finger clicks on video and displays wide screen movie.
"Mmm, did somebody say Calamari?"
Finger clicks back to menu, selects Maps application to search 'Seafood'.
"The closest would be..."
Map displays all seafood locations and highlights location nearest to you.
"Ah!"
Finger clicks seafood location, and restaurant phone number displayed. iPhone dial's.
The first four iPhone commercials flaunted the convenience, innovation, and usefulness of a single product with the functionality of not only a phone, or a music device, but a product that can, among other things, listen to music, watch videos, view photos, make conference calls, check e-mail, browse the web, and view maps.
Not only does Apple utilize television for their marketing strategy, but they make use of their website by posting videos, they also published a handful of press releases that could have been released in one single document. Apple often uses this tactic to build up hype and leave the consumer wanting more.
With Apple's brief press releases, giving the audience little to go off, "Apple leveraged a law of social physics - news, like nature, abhors a vacuum. In the absence of real information, those who care about a product will grasp at any rumor that comes their way. Apple may publicly disavow the rumor Web sites that scramble for scraps about the companies plans, but secretly their marketing department must be delighted. It would cost a lot to buy that kind of Web advertising." (Silverman, 2007)
The official iPhone website does more than just provide information about the product. The website provides top tips and tricks for the use of an iPhone, as well as a huge focus on apps. Almost the entire iPhone page displays images of apps, provides the "App of the Week," the website also contains sections titled "Apps for Everything," and the "Top Apps." Apple's website is a great marketing tool for current iPhone users and consumers that have an interest in purchasing the iPhone. The promotion of the apps will create a stronger source of revenue for Apple. As customers see top rated applications, they are more likely to download the app, rather than searching through 25,000+ apps to find one that may be of any value to the consumer.
Successful younger men were the target audience that Apple had originally focused on. Apple had hoped that with this target audience, and the fact that 48% of this audience did not already own an Apple iPod, would allow them to reach their forecast of 10 million sales by the end of 2008.
One month prior to the release of the iPhone, Solutions Research Group profiled a cross-section of those aware of the phone. The forecast of potential buyers for the day of the release ranked a majority of T-Mobile customers, AT&T's only GSM-based product competitor, at 15%. The second largest group expected to purchase the new iPhone was AT&T's existing customer base, at 12%. The Solutions Research Group also found that 72% of males, versus 28% of women were most likely to investigate the phone at its minimum price of $499. (Malley, 2007)
The obvious current target audiences for the Apple iPhone include young people between the ages of 20 and 35, affluent teenagers, "jet-setters", and "mobile" employees who work outside of the office.
Apple is known for their simplistic, but catchy commercials. In recent television commercials for the Apple iPhone, "There's an App for that" is the new catch phrase that places a strong focus on the apps available from the App Store. Apps, or applications, are in "every category, from games to business, education to entertainment, finance to health and fitness, productivity to social networking. These applications have been designed to take advantage of iPhone features such as Multi-Touch, the accelerometer, wireless, and GPS" (Apple, 2009). Apple currently claims to have 25,000+ apps available, and counting.
The focus on the variation of apps offered opens up the target audience greatly. There is essentially an app for everyone. As a few of the iPhone commercials advertise, you can find the snow conditions on the mountain, track calories in your lunch, find exactly where you parked your car. You can find a cab in a strange city, find your share of the bill for a table of 5, or learn to fix a wobbly bookshelf. You can read a restaurant review, read an MRI, or just read a regular old book. These are just a few of the features that Apple has promoted through television commercials. iPhone apps provide every functionality that one can imagine.
When the iPhone was initially released, it was priced at a hefty $599. Still, hundreds of thousands of people rushed out to get the new phone, forking over a third as much as they would have had they waited an extra 3 months. 3 months after the initial release, Apple reduced the price of the iPhone to $399. This enraged Apple's loyal customers and consumers who purchased the new phone just months earlier. One year later, Apple again reduced the price of the iPhone to $199, 66% less than the original price.
In July, 2007, the Apple iPhone was all the hype. I believe that Apple's decision to release the phone at $599 was slightly based on greed. However, their product was the most innovative out in the market place, giving Apple the freedom to price the iPhone at whatever they wanted. Many believed that Apple had cut the price after discovering lower than expected iPhone sales. Apple, however, states that the price cut was made "to spur holiday sales and predicted that Apple would meet its stated goal of selling its 1 millionth iPhone by the end of September." (Dalrymple, 2007)
As with the product life cycle of any cell phone or Apple product, including Apple's iPod, prices are often reduced drastically months after the initially release. Tech products are always competing against "the latest and greatest" while maintaining a relevant price in the market place. Had Apple not reduced the price of the iPhone, the customer base would have dwindled quickly as many consumers are unwilling to spend $599 on a cell phone, no matter how many useful features the phone may carry.
As the iPhone remains to be the number one smart phone around, the product continues to grow, increasing size capabilities, increasing the number of applications available, and providing new features that are released through new iterations of the phone, continue to provide a greater value to the iPhone while the pricing remains relevant.
At this time in the product life cycle, Apple continues to release enhanced iterations of the iPhone. With most iPhone users un-willing to purchase a newer version of the iPhone because of price, the target audience for the newer generation phones is new iPhone customers. With Apple's installed base continuing to grow, they have found a way bring in reoccurring revenue from their existing customers through the sales of their application downloads. As more and more people purchase the iPhone, Apple's audience for new customers continues to dwindle. Fortunately for Apple, they have built in another source for revenue that continues throughout the life of the product.
References
(2009). Apple: iPhone. Retrieved April 26, 2009, from Apple
Dalrymple, J (2007, Sep, 11). Lessons learned from the iPhone price cuts. PCWorld, Retrieved Apr 26, 2009, fromhttp://www.pcworld.com/article/137046/lessons_learned_from_the_iphone_price_cuts.html
Silverman, D (2007, Jul, 10). Apple's silence helped the iPhone hype. Chron.com:Computing, Retrieved Apr 26, 2009, fromhttp://www.chron.com/disp/story.mpl/front/4954824.html
Malley, A (2007, Jun, 6). Apple, AT&T neophytes to define iPhone audience - report. AppleInsider, Retrieved Apr 26, 2009, from AppleInsider Website
Mukherjee, A (2007, Feb, 28). iPhone under attack. Business Today, Retrieved Apr 26, 2009, from the business today website
