Apple Inc. Case Study

Calla Fasano

MK 4620

Campagna

September 12, 2016

                                    Apple Inc. 2015 Case Study

Question: Cook appeared supremely confident at an Apple Watch event. But could Apple Watch and Apple Pay be the next iPhone and iTunes? And what steps did he need to take to drive that success?

        While Apple Watch and Apple Pay are both technologically advanced products, they are not highly unique on the scale or innovation or necessity. When Tim Cook announced the Apple Watch in 2014, for sale by 2015, the market was already saturated with multiple competitors selling similar smart-watches for over two years. While not all of these products may have been at the same level of quality or sophisticated design as the Apple Watch, they fulfilled their function and were less expensive. With the launch of the Apple watch, Apple continued the history of providing offerings at a premium price, pushing this item into the luxury sector. But with this, their differentiation model was lost in the process.

        The iPhone and iPad were seen as higher priced alternatives in the smartphone and tablet market when first arrived on the scene. However when them came brand new concepts and contained features that no other item in the category had. The iPhone was first in the industry to combine a phone, calendar, calculator, music and video player, book reader, and computer capable of email and Internet surfing. The same thing cannot be said with the Apple Watch who came late to the game. Within 1 year of release, there are also already complaints about speed, and the ability to use your phone by the time the application loads.

        To increase the chance of long-term success, the price-point of the Apple Watch should be decreased and made more affordable to Apple’s original key demographic. By having the cost range from $350 to $17,000 this item is out of reach for teenagers and young adults that grew up with iPods, iTunes, iPhones, and iPads. Seeing as how the competition has a starting model with a cost of $150, Apple made a smart move this year in bringing down the base unit to $299 and distributing through retailers such as Target for $249. Price is also important if Apple wants the watch to be a hit in emerging markets, as with the success the iPhone reached in China. Geographically, the Apple Watch has not yet reached as many countries worldwide.