Professional Documents
Culture Documents
Apple
Apple was founded by Steve Jobs and Steve Wozniak by creating their
first computer in 1977 in the United States. The then CEO Steve Jobs
made history with the devices as iPhone, Mac and iPad and is the one who
lead Apple to its success. He died in 2013 and the new CEO Tim Cook is
getting things ready.
Apple is a world wide known leading luxury brand in electronic devices
such as smartphones and computers. Apple requires a cash amount of
over $200 billion. This is a huge amount, but considering that Apple owns
10% of the corporate cash reserves worldwide makes their position even
more than clear. Apple has been the top American cash holder since 2011
followed by companies like Microsoft and Google.1
makes clear, how significant the Apple cash was rising till 2012. The
second graphic shows the amount of Apples cash in comparison to other
companies.
1 Appleinsider.com, R. Fingas: Apple cash reserves greater than those held by most US
industries combined, 2015
2 Businessinsider.com, S. Ro: Apple has more cash on hand than all these different
countries, 2014
Besides Apple Music and all the high technology Software of Apple they
offer following products.
Apple Watch
iPad
iPhone
MacBook Air/Pro
iMac
Mac mini
AirPort
Apple TV
iPod nano/shuffle/touch3
3 Apple.com, Products, 2015
The top selling electric car is the Nissan Leaf, a small city car with a low
price in comparison to other electric car manufacturers. The price of
purchasing this model is only about 24.000.5
One of Apples biggest competitors will be Tesla Motors. The company is
the high end luxury manufacturer in the electric car market. They sell and
4 https://www.iea.org/publications/globalevoutlook_2013.pdf
5 Nissan.de, electric vehicles, 2015
design premium sport cars. They serve as catalyst and example to other
car makers and opened their technology patent on battery for everyone
since 2014 in good faith. Of course they still own other intellectual
property which prevents a direct copying of their vehicles.6 Their price
position is high, about $100.000 is the average price for a new car.
Other car makers like BMW, Volkswagen with Audi and Porsche, as well as
Mercedes already announced, that they are working on electric vehicles
too. So the competition will not be small.
biggest
mobile phones factory. Rather, the risk is that Apple could turn carmakers
into simple hardware producers and control the profit.11
8 http://www.macrumors.com/roundup/apple-car/
9 http://www.macworld.co.uk/news/apple/will-apple-make-icar-project-titan-rumourroundup-bmw-3425394/
10 http://www.bloomberg.com/news/articles/2015-11-04/steve-jobs-consideredbuilding-an-apple-car-in-2008
11 http://www.straitstimes.com/world/whats-next-for-apple-icar
The
following
SWOT-
analysis
shows
the
strengths,
weaknesses,
Strengths:
-Financial Position, Tinancial requirements
-Market position
-sSrong brand loyalty
-Battery tech advantage
-value-orientated marketing
-Wide knowledge from hired individuals
-High demand on electric cars in society
Weakness:
-No experience in car industry
-No own knowledge
-Apple depends on external workers
Opportunities
-High support by community
-Could be the most successful product ever
-Awareness of environment protection in society is stronger than ever
-Could turn big car manufacturers into simple hardware producer
Threats
-If the introduction fails, Apple as brand would be affected negatively
-Potential clients could be afraid, because Apple is not a car manufacturer
--Established car manufacturers could introduce electric cars with better
technology
-Car users could show brand loyalty to their brands
Pricing
Apple could set the pricing level high, because of their normal premium
standard products. But why do not try and set the price lower so the
normal user gets the chance to buy it? In my opinion it would not make
much sense. Apple is known for its high standards and also has a huge
support of their loyal consumer base.
A survey confirms that there is a very high percentage of the current
Apple users, that plan to stay with Apple instead of current Android users,
who are partly planning to buy an iPhone in future. Of course they are
established in the smartphone market and we can not reflect that on the
introduction of a car, but it shows how successful they are at what they
do.12
I think Apple should stick to their high pricing with their great marketing.
In the following paragraph I will analyse the pricing strategy for the apple
car according to some of the eight steps to a better pricing.
Assess what value your customers place on a product or service
As I already pointed out, the majority of Apple users are very loyal to the
brand and the apple services in general. This is the result of a very valueorientated marketing strategy. Apples marketing is so effective because of
the fact, that values and beliefs are not just static ideas. Actually when
values are activated they infuse with deep emotions of a consumer. That
is what happens to most of the Apple customers, they start to identify
personally and build up a relationship with the brand. These feelings lead
to a very strong and desperate desire of an apple-product, even if there is
no urgent need.
13
welcomed with big feelings by the apple community and they would even
agree to pay a high price because they already have an emotional
relationship with the brand. I even think that Apple customers would not
be happy if apple sets the price low, because it would not fit into the
current premium image of the brand. Apple users are confirm, that the
products are high quality and willing to pay a high price for good services.
After the announcement Apple should take into consideration the
emotional reaction of their customer base and according to that reaction,
decide where to position the new product until they release it.
12 http://bgr.com/2015/06/29/apple-vs-samsung-brand-loyalty-survey-rbc/
13 http://articles.bplans.com/apple-echoing-consumer-values-30-years/
14
Branding
According to the 3Is by Philip and Milton Kotlers of branding apple has a
great advantage because the brand is the most established worldwide
with a customer loyalty, that other brands only can dream of.
Apple also covers the Brand Equity Drivers:
There are only a few people that are not aware of the brand Apple, it is
the most popular brand worldwide. With a high differentiation Apple
created an empire. Apple only fits with Apple, so Apple has it own
software and can hardly be connected to software which is not Apple. As
already mentioned, Apples marketing strategy is high value-orientated
and creates an emotional relationship and trust with the customers.
The accessibility of Apple products is quite special. Apple has developed
the great model of their Apple Stores, which numbers keep growing.
Nowadays Apple products are purchased all over the world, through Apple
Stores, Resellers or the internet. As a result Apple today is the most
powerful brand and is flexible and as it shows in the current project they
have the unique ability to hire and retain very talented employees.
In my opinion the move of introducing a car will make the high brand
position stronger than ever. And the iCar will be launched as the most
successful product in Apples history. They have all the requirements they
need. As a move of diversification they will enter a new market and
change it for ever, as they did with other products before.
Conclusion
At the end I am sure, that Apple will perform great with positioning their
car at a high price. According to the quote Apple users love their Apple
stuff; their huge and loyal customer base is used and willing to pay high
prices for Apple products because of positive emotional relationship. Apple
keeps their promises, they always did and that is the reason why
consumers trust in their technology.
Our society is more aware than ever, that our environment has to be
protected, emissions should be reduced to the minimum. Apple has the
opportunity to change the car technology for ever. Pioneers as the
mentioned Tesla Motors made it possible and created a fundament for
Apple
that
electric
car
technology
is
the
future.
Apple
has
the
requirements that justify a high price and as pointed out in the text above
the pricing and branding support the project at its fullest.
I really appreciate the Project Titan and hope that Apple will change the
car industry, because the reduction of the car emission is a big part of the
environment pollution.
Good luck Apple.
References
1. http://appleinsider.com/articles/15/05/07/apple-cash-reserves-greaterthan-those-held-by-most-us-industries-combined, accessed 18.11.2015
2.
http://www.businessinsider.com/global-cash-reserves-companies-