Apple Inc.'s iPhone: Can iPhone Maintain its Initial Momentum?

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Case Details:

Case Code : MKTG201
Case Length : 18 Pages
Period : 2007-2008
Pub Date : 2008
Teaching Note :Not Available
Organization : Apple Inc.
Industry : Consumer Electronics
Countries : UK; Europe; USA

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Introduction Contd...

Ever since Apple announced its plans to launch the iPhone in January 2007, it had created a buzz among consumers who sought to buy the product as soon as it was launched. The craze for the iPhone was evident from the fact that Apple's fans formed long queues outside Apple's stores to ensure that they got it immediately after the launch. iPhone was a revolutionary mobile phone, the first from Apple, and it featured some advanced features like a multi-touch screen and high memory capacity (Refer to Exhibit I for the key features of the iPhone). Some analysts said that it was one of the best launches of a new product.

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However, a controversy erupted when Jobs announced a steep price cut on the iPhone in September 2007, barely two months after the product was launched. The announcement left early adopters who had purchased the iPhone at a premium, seething.

While the company justified slashing the prices within 10 weeks of its launch, some analysts opined that the price cut was nothing short of a public relations (PR) fiasco for the company. Other growing concerns for Apple were the discrepancy in the number of units sold by Apple and number of connections activated by telecom major, AT&T Wireless Services Inc.5 (AT&T).

In addition to capturing a share in the US mobile phone market, Apple aimed to tap other markets for its iPhone. In November 2007, Apple launched the iPhone in three European markets, Germany, France, and the UK...

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5] AT&T Wireless Services Inc. (AT&T), headquartered in Redmond, Washington, USA, is one of the leading wireless carriers in US. In the US, Apple entered into a two-year network contract with AT&T for the iPhone.


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