Introduction
Apple inc. introduced iPod on October 23, 2001. Since then there is no looking back. As of march 2008, it has sold over 140 million worldwide (Charles Gaba). The launch of iPod was a landmark event in the history of music. Although apple’s iPod was not the first MP3 player to be launched in the market but it still became a huge success. Apple identified the weakness of earlier MP3 players, which were their bulky design and limited storage, to name a few.
Apple planned a marketing strategy and identified the big opportunity in the digital music market. Apple identified this opportunity in Feb 2001 and launched the iPod in October 2001. The total time was just eight months. This is faster than any other major product launch in the company’s history (Brent 2001). Apple timed iPod’s launch very diplomatically. First, its speedy launch warded away potential competitors, secondly the launch in October just ahead of Christmas season assured maximum sales. The market launch of iPod was highly successful.
IPod came from apple’s “digital hub category.” IPod is a small portable music player. It comes with apple’s iTunes digital jukebox software, which gives users the ability to organize their music into play lists (schlender 2001). At that time, it was a hit since it can store up to 1000 songs with 5 GB hard drive. Since its launch in 2001, it is upgraded many times, each significant up gradation is called a “generation.”
Apple tried to add new features and more advanced technology in each generation. The newer versions were also lighter than the older versions and include a click wheel; uses of color display, and flash memory which replaced the hard disks. The current line includes iPod shuffle, iPod nano, iPod classic and iPod touch. The iPod unique
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features made it the best selling digital audio player. With the launch of iTunes software in 2003, the sales shoot up. Apple proved itself by launching several versions, which can store music; photos, videos and some can even store hard copies of the documents. The current line includes iPod shuffle, iPod nano, iPod classic and iPod touch.
The market launch of iPod was highly successful. According to Bloomberg online, the iPod sales made the market shares to increase from 31% to 65% during January 2004 to January 2005, and in July 2005, this market share was at 74%. In January 2007, the iPod market share reached 72.7% (Bloomberg Online). In January 2007, Apple reported record quarterly revenue of $7.1 billion, of which 48% were from iPod sales. On January 22, 2008, Apple reported the best quarter revenue and earnings by reporting record revenue of $9.6 billion and record net quarterly profit of $1.58 billion of which 42% was from iPod sales (Apple sales report).
The main reasons of its success were that it was highly adaptable for both mass and windows pc’s. The product is popular in all the age groups. According to advertising age 2005, iPod launch is among the top ten most successful product launches. Smith (2004), also said that iPod is one of the most successful products launched in the last decades. The main reasons of success of iPod can be as follows.
- Innovative idea- The business week named iPod the “Omnipresent Icon of Design.” TII Innovation Journal said, “Today, innovation is about many more than new products. It is about reinventing business processes and building entirely new markets that meet untapped customer needs. Apple has been very creative in launching new designs and innovative models to suit every need. The original model can store up to 1000 songs and today the state of the art of the model can store up to 16000 songs.. Apple made a click wheel design in some models of iPod, which gave them an uncluttered look.
- No competition- the features and designs of the iPod are such that it left all other competitors far behind. Many established electronics companies such as Sony, Samsung, Toshiba, and Panasonic have tried to confront the iPod onslaught and largely failed (BusinessWeek.com, 2006). Apple is far ahead from all of its competitors; no doubt, it has nearly 70% of the market share.
- Highly popular in teenagers- Apple is very successful in marketing the iPod among teenagers. The young crowd just loves the product. The reason behind this is that they knew apple products since elementary school, and secondly the product’s design suits their needs. The creative team of apple has made the designs sleek shiny and trendy. The teenagers adored this product very much.
- Seamless integration with iTunes- One of the primary reasons of iPod’s success is its seamless integration with the iTunes. Once it connects to the computer, music transfer to it using certain versions of Apple Macintosh and Microsoft Windows operating systems. For users who choose not to use Apple’s software or whose computers cannot run iTunes software, several alternatives are also available to those users who do not want to use apple’s software. In many new models, one can also transfer photos, videos, games, contact information, e-mail etc. with the help of iTunes.
Success of Apple iPod 5
- Outstanding design and functionality- Apple uses a proper design team to design the product it uses quality material in construction and makes sturdy and sleek designs. Apple pays attention to buyer’s need and tries to fulfill their every need.
- Good value for money- The products are a good value for money as it is very easy and handy to use. The product utility makes it a very good product.
- Effective advertising campaign – Apple planned the launch of iPod very meticulously with proper advertising campaigns. As the product was new to people, its advertisement were made in such a way to develop the interest of the people. The adds were shown everywhere in TV , print media ,hoardings etc. Apple also added some surprise element in its advertising campaign, which added quite a buzz regarding the product.
- Supported by other publicity events- The advertising of iPod was supported by others publicity events also. For example, the launching and review of the product in other news programmes, newspaper websites, provided free publicity to the products. Many celebrities also came out and supported the product in public interviews. All of this strengthens the market of iPod.
- Brand value- Apple is one of the premium brands in the world. The brand name is big enough for the users to use the product repeatedly. They enjoy the product and talk about it. Apple has its own loyal fan following and its customers are proud to use the iPod.
- Constant improvement in design to sustain leadership status- Apple always tries to improve its designs and all the new products are better than the older versions. As apple wanted to stay ahead of its competitors, it is always introducing new designs and features. For example, some older versions said to have low battery life. Therefore, the company launched new product whose battery life is said to be 50% more than the earlier product. To give it an uncluttered interface, the click wheel is used. Therefore, we can say that apple always tries to prove its creativity to retain its status as no. 1 in the market.
- Good marketing strategy- The marketing strategy of apple includes the branding strategy. Apple tries to simplify the product and make it easy to use and includes as many features in one product.
Role of promotion and distribution in its success
Advertising and promotion is very important in any product launch because it can increase the awareness of the product (Crawford,2003). The promotion and distribution plays the most important role in iPod’s success. The promotion of the product is very important to build a market and platform for its launch. Apple has always shown creativity in the branding of the product. The marketing and advertising strategy are very different from others; Apple launched a meticulously planned advertising campaign for its iPod product.
Once the news spreads about the launch of new product, it reduces their advertising effort ands let the word of mouth and other media to advertise for them. Apple largely benefited from free publicity by other media. The surprise factor which apple incorporated in the launch of every iPod helps in its success. People wait for the launch of new product. The main strategies used in ipod are marketing were partnership, pool casting and co branding. Apple devised a new distribution strategy for the iPod.
The retail stores were set up and iTunes stores were all the part of the distribution network. The company started to took over the distribution by setting up the stores and avoiding the muddling of other retailers in between. The combination of retail stores and online stores boosted up the sales. The iPod-iTunes combination created several new distribution channels.
Firstly the windows users can use the product without using Macintosh, secondly it also opened a new market for iPod accessories which itself is a big market today. As the sales of iPod increased the market for iTunes also increased. The iTunes store became very popular as it offered a whole music library. The iPod-iTunes became the new distribution channel of apple as it avoided the intermediary and created a direct relationship between the customers and the company.
Prospects for future success
The success of iPod is likely to continue in the future. The iPod makes the companies fortune and it boosted its growth when it was incurring heavy losses.
According to Business Week-Boston Consulting Group study in April 2007, US based Apple Inc. (Apple) was the world’s most innovative company among 50 companies. Apple occupied this position for the third consecutive year. Business Week wrote, “The iPod creator is a master of superb product, store, and experience design.” It also named iPod the “Omnipresent Icon of Design”. Commending Apple on iPod’s marketing strategy, TII Innovation Journal said, “Today, innovation is about much more than new products. It is about reinventing business processes and building entirely new markets that meet untapped customer needs.
It has been seven years since iPod launch in 2001, but it is still one of the most influential launches in recent times. Today’s model bore a very little resemblance to the original model. As compared to the storage capacity of 1000 songs, new model can store up to about 16,000 songs with GB data. The designs are also slimmer and smaller Today, iPod is not only an entertainment devise it is a business devise as well. It has won many awards and great reviews.
Many mobile companies are modifying their products in order to work better with the iPod. Microsoft has also chosen to work in tune with the iPod. Its use includes as a tool for communication and training and giving lesson plans educational institutions ,international organizations, government departments. The product has a great future and is here to stay.
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