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iPhone Blue Ocean Strategy

iPhone Blue Ocean Strategy. INDE 599 11-3-09. Overview. Industry Pre-Launch 5 Forces Analysis 4 Actions Framework Strategy Canvas 6 Paths Risk Assessment Post Launch Success. History of Industry. 2002-2003 2 Very successful iPod sales No desire from Apple to create a PDA

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iPhone Blue Ocean Strategy

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  1. iPhone Blue Ocean Strategy INDE 599 11-3-09

  2. Overview • Industry Pre-Launch • 5 Forces Analysis • 4 Actions Framework • Strategy Canvas • 6 Paths • Risk Assessment • Post Launch Success

  3. History of Industry • 2002-20032 • Very successful iPod sales • No desire from Apple to create a PDA • Steve Jobs believes that cell phones will eventually carry the PDA information • Americans carried cell phones, Blackberries, & MP3 players • 2007 • Cell providers marketing to kids & teens • Boost in consumers wanting smart-phones3 • Motorola losing 2% of market share 1 month after iPhone launch3 • Google reveals cell phone software4

  4. Apple SWOT Analysis

  5. 5-forces Analysis on Cell Phone Industry • Threat of new entrants? • Apple would be the new entrant • Google, Microsoft could choose to produce cell phones, eventually. • Other cell phone companies may re-design their products to compete, later • Bargaining power of buyers? • Minimal—Other devices, Palm Treo, Blackberry do not integrate all technologies efficiently • Threat of substitutes? • Minimal. Palm Treo is only other existing convergence device. • Blackberry does not have all of the same functionality, such as MP3s • Bargaining power of suppliers? • Minimal. Suppliers will want to get involved with new project, beneficial to their sales. • Rivalry? • Medium. iPhone can revolutionize the cell industry. • Immediately, there will be little competition, but there will be competition from all cell phone producers once it is released. (Motorola, LG, Sanyo, Palm, Blackberry, etc)

  6. 4 Actions Framework

  7. Strategy Canvas Relative Scale 2-Highest Rating 0-Lowest Rating

  8. Areas to Change the Rules“6 Paths” Framework • Alternative Industries • Incorporate smart-phone technology • iPod-MP3, email, applications • Strategic Groups within Industries • Trade up from typical cell for smart phone technology • Improved user interface from Blackberry • Chain of buyers • Increase iTunes users • Market to AT&T only • Complementary Offerings • Incorporate iPod and & iPod touch capabilities • Differentiation • Touch features, compared to Blackberry • Integrated applications • “Cool factor” • Look across Time • Revolutionary user interface • Touch screen, keyboard, directly connect to App Store, linkage to Mac/PC

  9. Risks Assessment • First time Apple makes a cell phone • Aligning to a single cell carrier • Ability to successfully integrate software • Problems with battery life • Impacts to iPod sales • High price of product • Data networks sluggish 4 1 6 3 2 7 5

  10. Product Impact Post-Launch • Product Impacts1 • Cell phone carriers realize that phones can win customers & bring in revenue • Upset the carrier-manufacturer balance of power • Opportunities for application developers • Sales • March 20096 • 17 million iPhones sold • 25,000 applications sold on App Store • 800 million total downloads from App Store • October 2009-Apple Profit increases 47%5 • Apple sold 7.1 million iPhones in single quarter

  11. References • The Untold Story: How the iPhone Blew up the wireless industry: http://www.wired.com/gadgets/wireless/magazine/16-02/ff_iphone?currentPage=2 • Steve Jobs: No Tablet, No PDA, No Cell Phone, Lots Of iPods: http://www.macobserver.com/article/2003/06/05.9.shtml • Mobile Phone Industry Already changing due to iPhone: http://arstechnica.com/apple/news/2007/08/report-mobile-phone-industry-already-changing-due-to-iphone.ars • Google Unveils Cell phone software & alliance: http://news.cnet.com/google-unveils-cell-phone-software-and-alliance/ • Apple Profit Surges on iPhone Sales: http://online.wsj.com/article/SB10001424052748704500604574483631612633824.html • iPhone Sales hit 17 Million: http://www.pcworld.com/businesscenter/article/161725/iphone_sales_hit_17_million.html

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