Apple Ipad - in What Stage of the Product Life Cycle (plc) Is Your Group-Project Industry?

Section 3: Industry Analysis

3.1 In what stage of the product life cycle (PLC) is your group-project industry?

The tablet PC market appears to be in the middle to end of the growth phase in its product life cycle. The consumer tablet market was ignited by the introduction of the Apple iPad in April 2010; however the tablet PC or slate PC market has been around for many years. The focus of the traditional tablet market has been for ruggedized portable PC’s for niche applications. This market is mature with numerous participants such as General Dynamics, JTL Mobile, and Mobile Demand. According to Standard and Poors, the total estimated tablet sale’s in the consumer market was approximately 18 million units in 2010. Of these, Apple’s iPad accounted for approximately 15 million units which equates to a market share of approximately 83%. Demand forecasts for 2011 indicate strong growth with unit demand being estimated within a range of 40-60 million units. This represents an estimated growth rate of approximately 120%-230%. According to a Standard and Poors research report for the tablet PC industry, Apple’s share of this total market is expected to fall to 66%, or roughly 26-40 million units for the iPad 2. The tablet PC market is defined by fierce competition, and product differentiation. It is estimated that at least 12 firms plan to release a tablet PC product in 2011, in addition to existing competitors. Many of the recent entrants into this market offer similar features to existing products, and competition will begin to focus on price differentiation.

3.2 What are the PLC characteristics of your group-project industry?

There are 4 stages in the product life cycle, the iPad 2 appears to be in the growth stage, however, there are signs that the maturity stage is near.

Figure 3.2.1: Product Life Cycle

IHS ISuppli forecasts that Apple will ship 39.7 million units for all models of the iPad this year. Apple is expected to retain its short-term dominance in the tablet market because of the iPad's advantages in the areas of content, marketing, supply, pricing and momentum, based on the iPad being the first product to enter the market. Consumer demand is high as the iPad 2 sold out in many countries as demand has outstripped supply.

The marketing team may expand the distribution. More trade channels are now willing to keep the product and one generally observes softening of prices. Also, there will be price competition as competitors enter the market. Pricing is yet another area where Apple has a temporary edge over the competition. Given its reputation as a seller of premium products, pricing is the last category where