Apple Case Study: Challenges Entering the Growth Market

Topics: Mobile phone, IPhone, Apple Inc. Pages: 2 (506 words) Published: September 26, 2013
Apple Overview:
Apple Inc. is currently the world’s most valuable company at over $500 billion as a result of a “user-centric fast follower” business and marketing strategy . Apple has not pioneered completely new-to-the-world products but excels as an innovator of key technologies in growth markets . Apple’s success stems from its Leapfrog Strategy of improving/enhancing its own products based on the mistakes of market pioneers (Walker & Mullins, 2011). With the 2007 release, the iPhone’s sleeker design and innovative software improved some overall functionality of the product compared to existing smart phones in the market. The iPhone did not incorporate 3G technology and the camera offered only 2-megapixals when other companies offered up to 5-megapixals. Nevertheless, improvements over existing technologies resulted in Apple obtaining a share of the mobile phone market over established competitors like Nokia and Motorola.

Although Apple has been successful as a user-centric fast follower, it’s had to overcome some mistakes, including the company’s U.S. pricing strategy and societal and legal issues in European markets. U.S. iPhone Release:

In the U.S., analysts predicted the high price point ($499 to $599) could be a deterrent to early adoption of the new technology multimedia phone for a large consumer base. Apple’s goal was to sell 500,000 to 1 million units in the first two days and 10 million iPhones by the end of 2008 which would equate to 1% of the market . The initial launch in June 2007 resulted in 1,389,000 sales in the first quarter in the U.S. and at initial prices; it is debatable that Apple could reach the 1% of market goal.

Ten weeks after its release, Apple cut the iPhone price by $200, discontinued the 4G model and a 16G model became available . Regardless of the rationale, the move had both negative and positive effects. Stock fell to $158 per share and early adopters were angered. Apple initiated $100 credits to some...
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