The wait is finally over! Apple has finally announced its highly anticipated smartwatch, joining current smartwatch vendors such as Pebble, Samsung, and Sony. The new product, named Apple Watch, includes health and fitness monitoring tools, along with many standard iPhone apps such as calendar, navigation, texting, and music. And don’t forget Siri – also available on the watch and eager to help you find movies, food, and answer questions. The smartwatch is, in essence, a mini computer that is strapped on a wrist and links to the wearer’s iPhone.
Apple Watch will be available in early 2015 and requires that the wearer use one of the recent iPhone models. The product will have a strong focus on health, including tracking statistics for exercise, movement, and heart rate. The watch is also stylish with six different types of straps including stainless steel and leather.
Pricing for Apple Watch will start at $350 and vary depending on the model. Overall though, sales of smartwatches have been lower than originally expected; 19 million smartwatches, low compared to 1.2 billion smartphones sales. Will this product increase the desire for smartwatches?
Apple’s iPhone 4S, with the Siri voice activation system, continues to increase its market share. In the first quarter of 2012, Apple had revenue of nearly $13 billion in the U.S., more than $10 billion in China, and $8.8 billion in Europe. A lot of that revenue was due to their latest phone with the entertaining voice of Siri fronting for an artificial intelligence system that tries to answers the users’ queries.
The problem with Siri is that it only speaks a few select languages – English, German, Japanese, and French. But what happens if you speak only Spanish – spoken by approximately 3.5 million people in the U.S. – or Mandarin – spoken by one-third of the world’s population? Well then, for now you are out of luck and will have to interact with your smart phone the old-fashioned way – using text!
Apple announced its new iPhone 4S on Oct. 4 and many industry watchers expressed disappointment that it was not the much–anticipated iPhone 5. These people are missing a critical marketing point: Great marketing does not require every product to consist solely of “knock-it-out-of-the-park” innovation. Great marketing also uses more modest product changes to build a company’s advantage, especially when it provides opportunities to tap into a new market segment. In the iPhone 4S, Apple now has a broader product offering, with pricing and partnering variations that allow them to access a new market segment.
Think about it. Smart phones are a still a fast-growing, critical market, but not every consumer has $300+ to spend on a phone. Many consumers do not have the cash, and may want to buy a lower-cost phone. Apple now has a product for that segment. With a two-year contract for services, customers can get the iPhone 3GS for free! Or, they can buy the iPhone 4 for only $99! Suddenly, the iPhone is an alternative to price-conscious consumers, and it gives Apple access to a new segment.
And, as all good marketers know, once you gain a customer’s loyalty, they are more than likely to stay with the company over time, eventually moving to that newer, higher-priced model.
Group Activities and Discussion Questions:
Show any video which details the new iPhone 4S. (There are videos available on several Web sites, including Apple.com, brandchannel.com, and wallstreetjournal.com.)
Market segmentation exercise – Divide students into groups:
Have students identify a different market segment that would be good candidates for the iPhone 3G, iPhone 4G, iPhone 4S.
Have students identify competing smart phones for each of those segments.
What marketing strategy and tactics can be used for each segment?
Buying behavior exercise – Divide students into groups:
Have students build the consumer buying model for purchasing an iPhone: problem recognition, information search, alternative evaluation, post-purchase behavior. Discuss.
Similar to consumer purchasing, have the groups next construct the model for organizational buying: they are the buying team for Medtronic and need to purchase a new phone for 1,000 sales professionals. Discuss.
What marketing strategy and tactics can be used?
(Sources: Wall Street Journal, Advertising Age, Brandchannel.com, Business Week, New York Times)