Iphone Pricing Strategy

Topics: Apple Inc., Steve Jobs, Apple Store Pages: 15 (4686 words) Published: March 11, 2009


1. Introduction & description of iPhone
2. PEST analysis
• Political factors
• Economic factors
• Social factors
• Technological factors
3. Consumer analysis
• Target customer
• Target Positioning
4. Marketing Mix analysis
• Pricing
• Response to iPhone’s Pricing
5. SWOT analysis
• Strengths
• Weaknesses
• Opportunities
• Threat
6. Recommendations
• 4Ps

The iPhone is a revolutionary product from Apple. Currently, there is no hardware interface superior to the iPhone. With its smartphone, touchscreen and wireless internet capabilities the iPhone is certainly a one of a kind product. Other features include a 3.5-inch touch screen display, built-in camera with resolution of over 25,000 pixels per inch, 4GB or 8GB flash memory cards with tiny dimensions of 4.5 x 2.4 x 0.46 inches. Pricing and Specifications

|Model |Price |
|4GB model |499 |
|8GB model |599 |

|Ship Date |Ship Date |
|United States |June 2007 |
|Europe |December 2007 |
|Asia |2008 |
Technical Specifications:
|Screen size |3.5 inches | |Screen resolution |320 by 480 at 160 ppi | |Input method |Multi-touch | |Operating system |OS X | |Storage |4GB or 8GB | |GSM |Quad-band (MHz: 850, 900, 1800, 1900) | |Wireless data |WiFi (802.11b/g) + EDGE + Bluetooth 2.0 | |Camera |2.0 mega pixels | |Battery |Talk / Video / Browsing - Up to 5 hours | | |Audio playback - Up to 16 hours | |Dimensions |4.5 x 2.4 x 0.46 inches / 115 x 61 x 11.6mm | |Weight |4.8 ounces / 135 grams |

PEST Analysis
One of the main political barriers that are a large concern for the iPhone is the existence of gray markets. Gray markets are created when so called "store owners" import goods from a foreign country at a cheaper price and sell it at their store front at a price that is usually cheaper than what is being given at authorized retailers. Sometimes these goods are not readily available within the home country in which these gray market goods are being sold. iPhone belongs in this category; iPhone is not a global commodity and is currently only being sold in a select few countries, those being the United States, United Kingdom, Germany, France, Ireland, and Australia. Gray markets are considered legal and are very commonplace in many countries, such as Hong Kong, China, Brazil, etc. Through these gray markets, the iPhone is being distributed and opens the market for the iPhone prematurely and without the approval and consent of Apple. This poses a large problem for Apple because they lose a lot of the sales and revenue they would get during product launch into new markets. Also, introducing such a high tech phone into foreign markets will generate imitators and bootleggers who can and will mimic its technology.

Another political issue brought on by the iPhone that is being discussed widespread is the single carrier contracts that so far iPhone has signed in each of the countries that...

References: Bbc.co.uk. (July 2003). DynaTAC 8000X - the World 's First Mobile Phone. Retrieved April 25th 2007, from http://www.bbc.co.uk/dna/A1082521
Burke, R. (January 2007). Are Consumers Ready (To Pay) For The iPhone?.
Retrieved April 25th 2007, from http://blog.compete.com/2007/01/18/apple-iphone-price/
Dilger, D, E (2008). Inside the iPhone: Mac OS X, ARM, and iPod OS X. Retrieved January 27, 2008,from Roughly Drafted Magazine Web site:
http://www.roughlydrafted.com/RD/RDM.Tech.Q1.07/081A0C60-AD28-40EE- 89EED54F1024FDBB.html
Cheng , J (2008, January 23). The truth about the iPhone 's sales numbers. Ars Technica, The Art of Technology, Retrieved January 28, 2008, from http://arstechnica.com/news.ars/post/20080123-the-truthabout-the-iphones-sales- numbers.html
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