Apple Inc.'s iPhone: Can iPhone Maintain its Initial Momentum?

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Case Details:

Case Code : MKTG201
Case Length : 18 Pages
Period : 2007-2008
Pub Date : 2008
Teaching Note :Not Available
Organization : Apple Inc.
Industry : Consumer Electronics
Countries : UK; Europe; USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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“When Apple's iPhone first went on sale in Europe six months ago, hopes were high that the device would be just as big a hit there as it had been in the U.S. But analysts are now raising concerns that the iPhone may not translate as well overseas, with sales sluggish in Europe because of the device's high price and strong competition from Nokia (NOK) and others.”¹

- BusinessWeek, in 2008.

“When you consider that it launched part way through the year, with limited operator and country coverage, and essentially just one product, Apple has shown very clearly that it can make a difference and has sent a wakeup call to the market leaders.”²

- Pete Cunningham, Senior Analyst, Canalys³, in 2008.

Introduction

For the quarter ending June 2008, Apple Inc. (Apple) announced that it had posted revenues of US$ 7.46 billion and a net profit of US$ 1.07 billion. The company attributed these results primarily to the sales of Macintosh computers and iPhones. Apple sold 717, 000 units of the iPhone in the third quarter of June 2008 compared to 270,000 units in the third quarter of June 2007. Commenting on the results, Steven Paul Jobs (Jobs), CEO, Apple, said, “We're proud to report the best June quarter for both revenue and earnings in Apple's history.”⁴

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1] Jennifer L. Schenker, “The iPhone in Europe: Lost in Translation,” www.businessweek.com, April 16, 2008.

2] “iPhone Takes 28% of the Smartphone Market,” www.ipodnn.com, February 5, 2008.

3] Canalys, headquartered in Grazeley, Reading, UK is a leading consultancy and market research firm for technology companies.

4] “Apple Reports Record Third Quarter Results,” wwwwww.apple.com, July 21, 2008.


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