Abstract

This case is about Apple Inc.’s (Apple) entry into the mobile phone market by launching the iPhone. The launch of the much hyped iPhone was hailed as the most successful launch of a brand ever by some analysts. The case also discusses the various challenges faced by Apple shortly after its launch including the pricing controversy in the US and the challenges in marketing the iPhone in Europe. Apple raised many eyebrows by reducing the price of its much hyped iPhone by one-third within 10 weeks of the launch. While some analysts felt that adoption of such market skimming strategies and subsequent price cuts by companies selling technological devices was nothing new, others felt that Apple’s decision to reduce the price so drastically just a few weeks after the launch was nothing short of a public relations fiasco. In November, 2007, Apple launched the iPhone in three European markets, Germany, France, and the UK. Analysts opined that despite Apple being a late entrant in the highly competitive mobile phone market, it emerged as a successful player. However, a few analysts were of the view that it remained to be seen whether iPhone would be able to maintain its initial momentum considering that the challenges in marketing the iPhone in the European countries were stiffer. Then there was the challenge of cracking the Asian market. In August 2008, Apple launched the iPhone in India. The company planned to launch its iPhone in other Asian markets like Japan, South Korea, and China by the end of 2008.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the rationale behind Apple’s entry into the intensely competitive mobile phone market
• Understand the challenges faced by Apple while entering a new market with a new product like the iPhone
• Understand the issues and challenges faced by Apple while launching the iPhone in Europe and Asia
• Analyze Apple’s strategy of slashing the price of its iPhone so soon after the launch
• Understand the issues and challenges in pricing a product or service (pricing decisions, premium pricing, market skimming, etc)

Keywords

International marketing, Pricing, Public relations, Public relations, Buzz marketing, iPhone, Apple, Samsung, Nokia, Macintosh, Sony Ericsson, Motorola