1. iPhone Blue Ocean Strategy
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2. Overview Industry Pre-Launch 5 Forces Analysis 4 Actions Framework
Strategy Canvas
6 Paths
Risk Assessment
Post Launch Success

3. History of Industry 2002-20032 2007 Very successful iPod sales
No desire from Apple to create a PDA
Steve Jobs believes that cell phones will eventually carry the PDA information
Americans carried cell phones, Blackberries, & MP3 players
2007
Cell providers marketing to kids & teens
Boost in consumers wanting smart-phones3
Motorola losing 2% of market share 1 month after iPhone launch3
Google reveals cell phone software4

4. Apple SWOT Analysis Strength Weakness Opportunity Threat
iPod 16% company revenue
Favorable perception of brand
Ability to capture & retain customers
Launch of iTunes for music
Weakness
Existing “convergence device”-Palm Treo
Need to create a new OS for the phone
Accused of having a niche market
Fault screens & batteries in early iPods
Opportunity
3G phones gaining popularity
Wi-Fi phones coming soon
Price of storage plummeting
Fast & efficient cell phone processors
Threat
Success of rival music stores
Data networks sluggish
Success of Palm Treo
Wireless carriers that dictated hardware devices
Highly competitiveness IT industry

5. 5-forces Analysis on Cell Phone Industry
Threat of new entrants?
Apple would be the new entrant
Google, Microsoft could choose to produce cell phones, eventually.
Other cell phone companies may re-design their products to compete, later
Bargaining power of buyers?
Minimal—Other devices, Palm Treo, Blackberry do not integrate all technologies efficiently
Threat of substitutes?
Minimal. Palm Treo is only other existing convergence device.
Blackberry does not have all of the same functionality, such as MP3s
Bargaining power of suppliers?
Minimal. Suppliers will want to get involved with new project, beneficial to their sales.
Rivalry?
Medium. iPhone can revolutionize the cell industry.
Immediately, there will be little competition, but there will be competition from all cell phone producers once it is released. (Motorola, LG, Sanyo, Palm, Blackberry, etc)

6. 4 Actions Framework Reduce Eliminate Create Raise
Carrying separate devices: phone, MP3, PDA
Requirement to always hook up to PC
Difficult user interface-make touch screen
Eliminate
Difficulty in text messaging-use keyboard instead
Create
Device to download music directly
Hold more songs
Simple user interface, no user manual required
Sleek design
Raise
User interface & improve navigation
Hold more music
Applications-games, money management, news, etc.
Wireless internet on phone

7. Strategy Canvas
Relative Scale
2-Highest Rating
0-Lowest Rating

8. Areas to Change the Rules “6 Paths” Framework
Alternative Industries
Incorporate smart-phone technology
iPod-MP3, , applications
Strategic Groups within Industries
Trade up from typical cell for smart phone technology
Improved user interface from Blackberry
Chain of buyers
Increase iTunes users
Market to AT&T only
Complementary Offerings
Incorporate iPod and & iPod touch capabilities
Differentiation
Touch features, compared to Blackberry
Integrated applications
“Cool factor”
Look across Time
Revolutionary user interface
Touch screen, keyboard, directly connect to App Store, linkage to Mac/PC

9. Risks Assessment First time Apple makes a cell phone
Aligning to a single cell carrier
Ability to successfully integrate software
Problems with battery life
Impacts to iPod sales
High price of product
Data networks sluggish 4 1 6 3 2 7 5

10. Product Impact Post-Launch
Product Impacts1
Cell phone carriers realize that phones can win customers & bring in revenue
Upset the carrier-manufacturer balance of power
Opportunities for application developers
Sales
March 20096
17 million iPhones sold
25,000 applications sold on App Store
800 million total downloads from App Store
October 2009-Apple Profit increases 47%5
Apple sold 7.1 million iPhones in single quarter

11. References
The Untold Story: How the iPhone Blew up the wireless industry:
Steve Jobs: No Tablet, No PDA, No Cell Phone, Lots Of iPods:
Mobile Phone Industry Already changing due to iPhone:
Google Unveils Cell phone software & alliance:
Apple Profit Surges on iPhone Sales:
iPhone Sales hit 17 Million: