Apple Marketing Stratgy

Existing E-Marketing Methods

Company

Apple Computer (Apple) designs, manufactures and markets personal computers and related software, services, peripherals and networking solutions. It also designs, develops and manufactures a line of portable digital music players along with related accessories and services including online distribution of third-party music, audio books, music videos, short films and television shows. AppleЎ¦s products and services include the Macintosh line of desktop and notebook computers, the iPod digital music player, the Xserve G5 server and Xserve Raid storage products, a portfolio of consumer and professional software applications, the Mac OS X operating system, the iTunes Music Store, a portfolio of peripherals that support and enhance Macintosh and iPod product lines and a variety of other service and support offerings. Apple business strategy focuses on bringing the best personal computing and music experience to students, educators, creative professionals, businesses, government agencies and consumers through its innovative hardware, software, peripherals, services and Internet offering (Apple Computer, 2005).

The companyЎ¦s headquarters is located in Cupertino, California and serves the United States as well as Europe, the Middle East, Africa, Asia and Japan.

Products

Apple Computer redefined the portable digital music player market with its launch of the iPod digital music player. This began in January of 2001, when it introduced its jukebox software called iTunes. This software enabled Macintosh users to import songs from audio CDЎ¦s converting them to MP3 format and storing them on the computerЎ¦s hard drive. It later launched the iPod digital music player in October of 2001. The iPod was designed to synch to songs and playlists from iTunes via a Firewire cable connection. Once music was downloaded, the iPod provided for 10 hours of continuous play from its rechargeable lithium-polymer battery. Media is stored on iPodЎ¦s internal hard disk (Day, 2005).

The iPod has evolved with subsequent product generations so that it could be used by both Windows and Macintosh users with iTunes software being made available for each operating system. The iPod features the companyЎ¦s patent pending, Click Wheel, which combines a touch sensitive wheel with five push buttons for one handed navigation. Apple touts this feature as one of the industryЎ¦s first (Day, 2005).

In October 2005, Apple introduced the new iPod containing a 2.5 inch color screen that enables it to display album artwork and photos, and play video including music videos, video podcasts, home movies, short films and television shows. The iPod lineup now includes a 30GB model holding up to 7,500 songs, 25,000 photos, or 75 hours of video, and a 60GB model holding up to 15,000 songs, 25,000 photos, or 150 hours of video. Auto-synch technology allows the iPod to automatically download media on to the iPod whenever it is connected to a Macintosh or Windows computer using USB. All iPods work with AppleЎ¦s iTunes digital music management software. Complementary products include the iPod nano and the iPod shuffle which uses flash-based memory for storage (Apple, 2005).

Situational Analysis

Apple has been successful in developing a near cult following surrounding its iPod. People identify with Apple and when they buy a Macintosh or an iPod, they are buying into a culture or lifestyle choice. Apple has been able to bond with its customers just like Southwest Airlines, Nike and Volkswagen (Chadwick, 2004).

Sales of iPod have proven to be phenomenal. According to Graham (2006), Ў§Apple has sold 42 million iPods -- 76% of them in 2005 and recently reported record revenue for the quarter -- $5.7 billion, compared with $3.5 billion for the same period in 2004.ЎЁ.

Its iPod controls over 74 percent of the market for MP3 players of any kind in the United States. Also, Apple has sold more than 500 million songs or half a billion songs since it opened its iTunes Music Store. It is now selling more than 1.8 million songs per day. Apple possesses 82 percent of the market share in the United States and 85 percent of the global market for music (Thurrott, 2005).

AppleЎ¦s direct competitors include Dell Computers, Microsoft Corporation, Hewlett Packard, IBM, Fujitsu Siemens, Gateway, and NEC. Each of these companyЎ¦s main products includes desktop computers, notebooks, servers, and software. AppleЎ¦s competitors to the iPod Shuffle product include Sony, Samsung, SanDisk, and Creative Technologies Apples indirect competitors include alternative forms of music distribution, specifically CDs and portable CD players, as well as radio - especially web radio and the new and quickly growing