1. Industry Analysis

2. Gadgets – The Smartphone Age I love them! Nielson estimates 64% of the US population now owns a smartphone and 80% of the recent phone purchase has been a smartphone iPhone ◦ Global market share ◦ Talk about its competitors ◦ What can Apple do to increase market share?

3. iPhone’s Global Market share What is the iPhone’s global market share? ◦ 14% What is Android’s? ◦ 80% as of 2013 ◦ Up from 53% in Q1 2011 (iOS was 28%)

4. iPhone’s Global Market Share Has the iPhone sales dropped?

5. The Competition vs iPhone Two different product philosophies iOS – closed, controlled, optimal experience that Apple wants you to have Android – Open, Unrestricted – 3 rd party developers are free to improve the experience as they see fit

6. The Competition - Android Android Manufacturers are free to release new products as a market tester eg. Bigger phones, water-resistant phones, phones with IR blasters

7. iPhones Premium device, boasts intuitive design One device per year (except for 5C) Older devices serve as the Entry level devices when new one comes out

8. Emerging Markets & Europe Apple has fallen significantly in market shares in emerging markets People in India with GDP per Capita of $1,400 cannot afford a phone that is priced $700. Europe market share fell to 20% where Android sored to 69%

9. Apple’s answer iPhone 5C “Unapologetically plastic” – Jony Ive ◦ Cheaper to manufacture ◦ More competitive price point $549 still too much for unsubsidized emerging market (5C not doing so well)

10. Possible solution May be too risky to change philosophy Premium phone for less price ◦ Partially subsidized (or loss leader) strategy Google Nexus 4 Premium spec $299 unlocked $29 on contract Price subsidized by Google

11. Possible solution New segmentation 9 Million (possibly 5.5 million) iPhone 5S and 5C sold on first 3 days ◦ Proved that there is still a big market for a smaller one-handed premium device 30 Million Galaxy Note 2 sold ◦ Develop a new bigger device with the same premium design

12. Conclusion Global market share may have fallen significantly but revenue still up Samsung, Sony, HTC and LG creating new markets for themselves Adapt to new market demands No matter who wins, we win!