Factors that effect iPhone sales

In this era of globalization, Marketing is the one of important elements to make business success, as sales is the main part for marketing, so this research will study on sales of mobile market because mobile phones play an essential role in day-to-day lives, so this research will find out that what are the key factors that can affect on mobile sales by using iPhone product and focusing on young people. In methodology and research design chapter, this research uses the questionnaire to collect the data for make discussion with secondary data. According to finding and discussion part, will analyze the answer of questionnaire in statistic and then discuss with the secondary data such as product development, competitors in mobile market and mobile technology to find the key factors of sales. In brief, these finding suggest that in general every marketing need to find the customers’ need then provide the product or service to fit customers’ need for gain high income.

Content

Introduction……………………………………………………………………………………………………..4

Literature Review……………………………………………………………………………………………..5

2.1 Apple iPhone Background……………………………………………………………………………………….6

2.2 iPhone SWOT Analysis…………………………………………………………………………………………..7

2.4 Competitors in Mobile Market………………………………………………………………………………….7

2.3 Human Behavior Affects on Product Development…………………………………………………….8

2.5 Mobile Technology……………………………………………….8

2.6 Conclusion………………………………………………………….8

Methodology……………………………………………………………………………………………………9

Finding and Discussion………………………………………………………………11

Conclusion……………………………………………………………………………14

Bibliography…………………………………………………………………………………………………..15

Appendix……………………………………………………………………………………………………….17

7.1 Questionnaire………………………………………………………………………………………………………17

Introduction

In this era of globalization, mobile phones play an essential role in our day-to-day lives. Many people use mobile phones for communicating and establishing networks with participated people such as phoning, watching video clips, using the Internet, searching for information, taking a photo, and listening to music, and also smart phones have become fashion items, especially for young people (Katz and Aakhus, 2002). As a result, many mobile phone companies have innovated and developed their smart phones based on their own product lines and additional technology from their partners. The firm will join with various companies for innovated products to meet both local and international demands. This will lead to increasing in sales and gaining more profits of the smart phone companies. According to Grossman (2007) reported that Apple created a new mobile device, Apple iPhone in 2007. Apple iPhone offers various innovated functions and applications. Consumers can access iTune music store and purchase music directly through their iPhone. Furthermore, the distinguished modern design enables iPhone to be prior to its competitors. Thus, smart phones have become a fashion item, especially for young people (Zheng and Ni, 2005).

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Consequently, this research aims to study the factors that could affect iPhone sale, which is the main smart phone in this present time by focusing on young people. It will help to study how Apple can develop iPhone in the mobile world market to meet customer satisfaction and generate more revenue by examining product development and consumer behavior.

This report is divided into four sections. The first is literature review which explains the overview of Apple’s iPhone. The second is methodology and research design which assist to deal with how to discover the answer that affects the iPhone sales and will include limitation of this research. The third demonstrates and discusses the major affect on iPhone sale. In addition, the questionnaire will help to understand in the customer perspective. The last one contains a conclusion that summarizes main ideas, recommendation and implication for further research.

LITERATURE REVIEW

In the past, letter is a main medium in communication until 1920s Alexander Graham Bell has innovated telephone and this resulted in development of telecommunication industry (Bruce, 1990). In this era, many telecommunication manufacturers have developed telephone and it become to the mobile phone which plays an important role in our day-to-day lives. According to Zheng and Ni (2005), smart phone can be defined as a cellular telephone (cell phone) or mobile phone offering advanced capabilities. Smart phones run complete operating system software, which provides a standardized interface and platform for application developers. This chapter attempt to clarify the factor that can effect to mobile sales market.

2.1 Apple iPhone Background

Apple iPhone refers to a smart phone which came from Apple in 2007 (Katz and Aakhus, 2002). Product development is the strategies of company that provide renew product and/or new product in order to ensure that the product will workable in the markets (Kotler & Armstrong, 2009). During this company, has developed their product by offering three versions which are ‘iPhone 2G’, ‘iPhone 3G’ and ‘iPhone 3GS’. Apple iPhone is a combination between a mobile phone and a laptop computer which is multitasking communicational device (Kelby & White, 2009). iPhone combines features such as auto focus camera, video recording, browser, editing capabilities, wide screen display, and multi-touch screen (Apple’s website, 2010).

Apple’s products are innovated based on evolution of technology and human behaviour by understanding customers’ needs and wants and this will lead to meet the customer satisfaction which depends on the product’s perceived performance fits customer’s expectation (Kotler & Armstrong, 2009; Wright, 2006). Therefore, application can be defined as a designed program which offers appropriate functions for particular user (Lee, Schneider & Schell, 2004). According to Apple’s website (2010), iPhone application offers various advantages for consumers such as business application, fun application, and tools application to meet individual needs and wants as much as possible.

2.2 iPhone SWOT Analysis

SWOT analysis is the main section of the marketing planning which is used for analysis the strengths, weaknesses, opportunities and threats of the company (Kotler& Armstrong, 2009). The iPhone product can be analysed by using SWOT analysis.

Strengths

Weakness

Style/ Strong brand

Advanced technology

Application

No 3G, 3Gs

High price

Insufficient network/system

Opportunities

Threats

Distribute iTunes content

Port existing apps

Highly developed market

Immense competition

Figure 2: iPhone SWOT Analysis

Strengths

The Apple iPhone is a powerful brand in the smart phone device industry, and it is has a variety of features, and unique style including multi touch screen (Lubeck, Nitz, Danforth, & Brannon, n.d). Moreover, Apple promoted the iPhone by using their website. This will help the Apple can save the advertising fees over 400 million. Also, Apple is the first company that offers the combination between mobile phone and lap top computer (Reading et al., 2009; Apple’s website).

Weaknesses

The iPhone has some drawbacks, for instance, it is not a 3G, 3Gs device and might not work in some countries, which have an advanced technology such as Japan and Korea (Kane, 2008). Also, the iPhone features are standard such as camera and its memory cannot remove. It is an ultimate phone, so the price quite high around £350-550, and this phone focuses on the high-end users.

Opportunities

Many people may witch from its competitors to Apple iPhone. The iPhone is a combination between ‘powerful computing’ and ‘entertainment’ in one device. Also, the users who ever use Mac OS applications, they can adapt with their iPhone. The phone allows people can access the internet through Wi-Fi networks, and it is ‘pay-per-view system’ which not including the ‘month-to-month subscription fees’ (Reading et al., 2009).

Threats

The threats of the iPhone emerge from external factors that might challenge the Apple’s performance. The external factors such its competitors: Nokia, Sony, and Google with their particular phones. Also, the iPhone system is not stable when people access the internet, they might spend more money for time consuming (Lubeck, Nitz, Danforth, & Brannon, n.d.; Reading, et al., 2009).

2.3 Competitors in Mobile Market

In the mobile device market, there were a few mainly business players such as Symbion, iPhone, Blackberry, Windows Mobile, Palm, and others. All of them can be compared with their market share, which is the percentage of the total market that company control for a particular type of product/service (Admob’s website, cited in Netmedia 2009).

Figure 2.1: Market share of mobile device competitors

(Admob’s website, cited in Netmedia, 2009)

From this pie graph, it can be seen that ‘Symbian’ smart phone held the largest market share at 44% because many manufacturers use the Symbian Operating System. Moreover, Apple iPhone sold more than Blackberry whereas Blackberry has become to the one of leaderships in the smart phone device market. Also, Palm has some limitations in the terms of usability and software, so Palm got only 4% of the total market share (Admob’s website, cited in Netmedia, 2009).

2.4 Human Behaviour Affects on Product Development

Human behaviour can affect on the iPhone’s sales because many people involved in the buying process. Therefore, to gain more revenues the company should try to understand what features and advantages the customers might be wanting in the future before they might know themselves (Keegan & Schlegelmilch, 2001). Currently, consumer behaviour are changing because people can browsing the internet, reading magazines and newspaper, and watching TV, so this will lead to changing customers’ demand such as they might prefer more benefits, innovated products, value, and services at lower prices (Wright, 2006). Similarly, iPhone innovation is developing more impressive features and applications for people to enjoy with their iPhone by merging the ultimate performance of the iPhone to open up a whole new world (Grossman, 2007).

2.5 Mobile technology

As Sharples, Taylor & Vavoula (2005), powerful mobile technology include mobile phone, camera, music player and portable computer. Another important convergence is well-publicized convergence of mobile technologies, as companies’ design and market mobile computer-communicators, combining the functions and application of phone, camera and multimedia wireless computer. Moreover, mobile application can gain more sales because application can satisfy customers’ demand because application can provide more benefit to fit customers’ need (Wright, 2006).

2.6 Conclusion

In this literature review, it provide the overview related issue of iPhone marketing which include the iPhone background, iPhone SWOT analysis which is used for analysis the strengths, weaknesses, opportunities and threats of the company, competitors in mobile market, human behavior affect on product development and mobile technology. From these review, it will make enhance to understanding more about what can relevant to the sales market.

Methodology

As Bell (2005) points out research is a “systematic method” that the researchers use to acquire new know-how and particular attitude by using “scientific methods”. In this research, a positivist was adopted because the observation and measurement of the phenomenon of external factors were the important part of understanding customer needs and wants (Kotler & Armstrong, 2009).

For collecting data, the researcher employed both primary and secondary data. Primary data was taken through consumer research using questionnaire because it can get the data easy and quick. Additionally, the secondary data is the collection of the data which were already processed in other studies (Bell, 2005). The information was collected from various sources including websites, textbooks, literatures, public journals, research papers and case studies.

For analyzing data, the researcher employed two methods which are qualitative approach and quantitative approach. As Saunders, Lewis and Thornhill (2007), the qualitative approach is subjective because it is based on meanings that are derived from words. While quantitative approach is objective because it is based on meaning that are derived from the well-analysed numbers. In this research, to demonstrate interviewees’ opinion, the researcher employed the qualitative approach and to answer the specific questions or questionnaires, employed the quantitative approach.

For the questionnaire, as Davis & Smith (2005), a questionnaire is the technique of data collection. The questionnaire is one of the most wildly used in collection data. There are two main types of questionnaire that are the interview-administered questionnaire and the self-administered questionnaire. The former is recorded by the interviewer, and the latter is completed by interviewee. As Saunders et al. (2007), the self-administered questionnaire is applied by using questionnaires containing seven kinds of questions: ranking, list, open, rating, grid, category and quantity. The questionnaires in this research includes rating, and list. The reasons are that the rating questions are used to collect the opinion data, and the list questions provide the list of response for interviewees to choose.

The coverage of questionnaires is about the external factors which were the key to understand customers’ needs as well as social trends and the internal factors which are product development, product attributes core product/benefits and support services of Apple iPhone.

For product development, the questionnaires were about product attributes, core product/benefits and support services of Apple iPhone. The product attributes were composed of brand, design, price, features and functions, benefits and value to customer. In support services, it is composed of delivery, installation, warranty and after-sales service. All of them could affect the sample’s choice when customers made decision to purchase iPhone. This was because of increasing sales in the mobile world market. The appropriated lists of answer choices to gain attention from interviewees (Saunders et al., 2007).

To employ the set of questionnaires, subjects were introduced to evaluate the degree of factors, which affected on their decision making of buying Apple iPhone or resorting to use the Apple iPhone. The 20 samples who are 10 females and 10 males aged between 18 – 25 years old and use iPhone were drawn randomly from general young people. The questionnaire survey was taken place in public spaces and in front of the Apple shop in Sheffield. The data collection rate was 100 percent.

For data analysis and results, it starts at review of the research question. After that, use a statistical analysis to generate data into graph by used Microsoft Excel.

According to Easterby-Smith, Thorpe and Lowe (2002), reliability refers to the extent of measuring concept which the exact results depend on how many times to test the concept and the same random target groups. In this study, there are two limitations the amount of samples, the rigid place and the study duration. The amount of the samples in this research was small, so the samples might not represent the universal population or it might be difficult to generalize the result. Secondly, this research focuses on only the mobile market so it limits general of the entire market. Finally, the study was the one-time study, all samples were questioned once so it is difficult to make generalization.

Finding and Discussion

This chapter aims to analyze the primary data collection and discussion with secondary data for answer the research question of this project. In order to find out which key factors that can affect on mobile sales market.

Figure 4.1: Key factors which affected on decision making of buying mobile

According to figure4.1, application is the first factor that 70% of buyer considers before making decision on purchasing mobile so it confirms the previous study that application in mobile technology can affect to the sales (Sharples, Taylor & Vavoula, 2005; Wright, 2006). The second is design which is 50% and then followed by feature, brand and trend at 40%, 20% and 20% in order. As a result, it shows that the mobile phone company should pay the importance to application and feature (camera, music player and portable computer) in order to access to the customers’ needs and wants because at the present time, people live in technology world, so company should make more impressive applications and features to make a powerful mobile (Sharples, Taylor & Vavoula, 2005; Grossman, 2007).

In contrast, from the chart, the less affected factor is trend which is high rated in unattractive which is at 65% because the buyers prefer worthy and more benefits from the product than trend (Wright, 2006). Thus, the research shows that trend is not an important factor that the company might concentrate much. The company should research and develop the mobile with application, feature and design because these three factors are the main points which affected on customers’ decision making of buying mobile.

Figure 4.2: Popularity for each iPhone model

Figure 4.3: Rate of satisfy on iPhone’s product and service

Product development, as part of marketing strategies which consumer behavior are changing by technology, so this will lead to changing customers’ demand such as they might prefer more benefits, innovated products, value, and services at lower prices (Wright, 2006). According to statistic from figure4.2 and figure4.3, it seem that iPhone can develope more impressive product to satisfy customers’ needs and wants because the percentage of using newest of iPhone model (3Gs) and the percentage of satisfy in product is 50% and 95% in order, so it is likely to be growing up in sales. Therefore, it confirms that product development has affected on customers decision making of buying because the company understand what the customers might be wanting in the future and improve product from listen the customers voice (Keegan & Schlegelmilch, 2001), so the product will fit with their need and company can get more sales, and also in service, it is high percentage that customers satisfy with service which service is one factor that customers will make decision on when they buy the product.

Figure 4.4: iPhone replace

According to competitor in mobile market, among smartphones, there were a few mainly business players such as Symbion, iPhone, Blackberry and Windows Mobile. As figure1 from Admob’s website (2010), it can be seen that ‘Symbian’ smart phone held the largest market share at 44% because many manufacturers use the Symbian Operating System and the main operating system used by Nokia smartphones. As a result of figure4.4, it shows that people are using Nokia the most at 60%, so Nokia is the main competitor in this market. If the iPhone want to gain more on sales, iPhone should make differentiate product and make product development to satisfy customers’ needs as much as they can. As figure4.1, it shows that iPhone has competitive advantage in differentiated product such application because iPhone offers various advantages of application for customers such as business application, fun application, and tools application to meet individual needs and wants as much as possible (Lee, Schneider & Schell, 2004; Apple’s website, 2010).

Thus, the heart of marketing is to satisfy customers’ needs and wants so the company must figure out what are the customers’ needs and wants. After that, provide the product and service that can fulfill individual customers’ needs and wants.

Conclusion

According to the study, it reveals that the factors affecting on iPhone sales are derived from Apple iPhone’s strategic management. Apple iPhone could step forward through customer’s satisfaction, the company tries to understand consumer behavior or what features and advantages which customers might be wanting in the future before they might know themselves. Likewise, the phone and lap top computer enables iPhone innovation more impressive. Thanks to its strategic planning, Apple could break through the hot wave of competition. Apple iPhone employs SWOT analysis to assess both internal and external factors: a company ‘s position in the market, commercial viability, a method of sales distribution , a product or brand , a strategic option such as entering a new market or launching a new product, gaining a opportunity to make an acquisition, being a potential partnership, grasping an investment opportunity. The former enables Apple iPhone resort to create its own channel of competition which is not to compete with others but to compete with itself. The latter enables Apple iPhone to response well to globalization and to stabilize in the long run.

Although the research question of this research was met, two limitations were identified in this research. Firstly, the number of 20samples in this research was small, so the samples might not represent the universal population or it might be difficult to generalize the result. Anyway, this limitation creates an opportunity for future study to study more samples than this. Another limitation is this research focuses on only mobile market so future research might explore to the entire marketing service.

Bibliography

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Figures Bibliography

Admob’s website (2009). The Amazing iPhone: A guide to the iPhone opportunity for developersand business owners .In: Netmedia, K. (2009). AdMob Mobile Metrics Report. Retrieved February 21, 2010, from http://theamazingiphone.com/wpcontent/uploads/2009/02/amazingiphonereport_v1-2.pdf