An Apple a generation steps up the innovation – latest developments around 3G model and the iPhone sales issue

In 1984, there were personal computers but then Macintosh was launched and it gave us the Graphical User Interface (GUI) and revolutionized the concept of PC’s through iconic innovation! This was Generation 1; I’ll call it Epoch I.

Epoch II: Before 2004 people knew and heard digital music but then iPod came into existence and the rules of the game were changed. iPod provided us with ubiquity and the way we live the music. 

Epoch III: Before 2007 people used smart cell phones, heard music on the move, even surfed the net through these gizmos, but iPhone changed the rules of the game again. It integrated everything into one device, not only made it attractive, user friendly, easy to navigate but more importantly started the beginning of a new era of innovation.

Exactly Apple has been changing the way the game is being played. By introducing innovative products in the market through focused and dedicated approach, Apple has been bringing cool products to the consumer market. And these products are not only smart but also simple for the common man to use. This mix of simplicity and smartness defines the way Apple plays the game, and with each new product marking the start of a new generation and fuelling fresh innovations in the market.

iPhone and its business: with the launch of the iPhone Apple has created a buzz in not only the music and computing industry but it marks the entry of the innovation giant in the field of telecommunications. At the launch iPhone was available in select markets of the world with full available facilities to be used. Moreover the company released the iPhones with only the AT&T network to be used for the next one year. Second, the company did not allow third party to develop software to be running on the trendy iPhone. These factors led to a lot of negative criticism and to some extent affected the sales of the new gadget.

Surprisingly before the launch of the new 3G model, a few months back Apple came out with the SDK (Software Development Kit) for the iPhone enabling many third party companies to develop and market software for the iPhone. This gave iPhone a much needed breakthrough and helped improve sales, which had slowed down after the initial craze subsided which had sent the sales sky high. Till now Apple has managed to sell about 6 million iPhones and has targets of selling 10 million by this year end. So how is Apple going to manage it? Let us check out.

Cool features of the iPhone 3G: the 3G model boasts of a GPS (Global Positioning system) which enables the phone to track its exact location. Apart from the user friendly nature of navigating through the touch screen iPhone, it also supports 3G, i.e. the third generation of mobile systems. 3G brings along with it high speed data transfer ability, thus enabling live streaming video, faster internet access etc. Moreover another striking feature is that in case of theft iPhone completely erases all the data (which could be sensitive) present in the memory.  

Apple’s business model for iPhone 2G: Initially, the iPhones were being licensed through AT&T in a deal which entitled AT&T to share with Apple some of the monthly usage fees of the iPhone users. This helped make Apple profits through not only sales of the phone but also its usage. AT&T benefitted from the increased customer base, and with the number of value added services iPhone supported, it would help AT&T in a greater way.

 Apple’s business model for iPhone 3G: with the release of the 3G model Apple has come out with a new set of business model, it has effectively reduced the price to around 199 USD to boost the sales in mass market by making it affordable. Industry experts feel reducing the price below this would have consequences not good for Apple in a mass market model. However the deal is still not pinching Apple that much! Why? In the new deal the iPhone is going to be released worldwide in around 70 countries with the local mobile service providers promoting it. So how is Apple gaining despite cutting down the cost of the iPhone considerably?  Unlike the 2G the service providers are going to subsidize for the cost of the phone and in return they are not going to share the monthly usage fees with Apple. In this way Apple is going to lose out on some profit it could have made but it wasn’t boosting the sales so much. With the reduced cost of the iPhone and mass marketing by not only Apple but also the MSP’s the iPhone sales are going to improve and Apple is going to profit from the subsidy provided by the MSP’s. Whether it is a win-win situation for both Apple and Msp’s has to be seen. But surely Apple has adopted a strategy the major handset players like Nokia and Samsung have adopted and hopes to boost its sales.  

Apple has always been the harbinger of innovation, while we wait here in India for the release of the 3G iPhone, somewhere in the silicon valley, Apple is already gearing up for Epoch IV.



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