CHAPTER 01

Industrial Scenario

1.1 History / Evolution of the sector

Throughout its history, telephony has changed, new ways of communication have been devised, new models
have been launched to meet the constantly changing demands of society, and at times, creating needs
inconceivable up until then. The first telephone device was invented at the end of the 19th century. No one
could have imagined that phones would evolve so remarkably and have such wide-reaching effects 135 years
later. Telephone communication is part of our daily life regardless of age, sex or social status. Land or cable
lines have been further supplemented by mobile phones, which are beginning to be considered essential parts of
personal and business life. Particularly striking is the rapid expansion of mobile phones in emerging economies
and even in developing countries. In China, India and Brazil, mobile phone acceptance has been demonstrated
beyond all doubt. We saw an increase of about 900% between 2000 and 2011.

The first telephone device was invented at the end of the 19th century. No one could have imagined that
phones would evolve so remarkably and have such wide-reaching effects 135 years later.

Cellphones have evolved rapidly since handheld mobile phones first appeared in the 1970s. Today, a 1990
phone or even one from later in the 1990s looks laughably primitive to people used to seeing a smart phone
running iOS or Android. Generally, phones have evolved to be more compact, to have longer battery life and to
allow addition of features beyond making calls, like running apps and sending text messages.

Motorola launched the first major handheld mobile phones in roughly 1973. Those devices weighed about 2
pounds each.Since then, cellphones have gone from being expensive devices that complement landlines for busy
workers and travelers to the only phones many people use or carry. They've gone from large, clumsy devices
with poor signals to reliable instruments that can easily be slipped into a pocket or purse.

The industry has also made changes to cellphone infrastructure and policies, from introducing unlimited calling
plans to standardizing networks so phones can roam from one carrier's system to another, often without
incurring fees or dropping calls.
While the invention of the wired telegraph enabled people to rapidly communicate over long distances, the
telephone was the first instantaneous communications device to find its way into large numbers of homes and
businesses.

Alexander Graham Bell patented the invention in the 1870s, and within a few decades millions of the devices
were in use. Phones enabled people to connect with neighbors and, for a larger fee, friends and family around
the country and around the world. The technology gradually improved to enable calls without operator
assistance and, eventually, to allow direct-dial long-distance and international calls.

Landline phones gradually evolved from models that connected the user simply to an operator who would place
a call to rotary phones, enabling automatic dialing, then to touch-tone phones, allowing for speedier calls.
Answering machines were developed to record messages from callers when recipients were away or busy. And
public pay phones popped up to let people make calls on the go.

Fax machines also became common in offices, especially starting in the 1980s. These allowed use of telephone
lines for sending document copies relatively quickly without having to mail them or send them by private
messenger.

In 2007, Apple CEO Steve Jobs famously debuted the iPhone, the first modern smart phone. The device enabled
full access to the World Wide Web and email, as well as traditional phone features like calling and texting. The
iPhone, and Google's rival platform, Android, soon had support for third-party apps that would let users do
anything from ordering food to checking bank balances.

At the same time, social media companies like Facebook and Twitter took off, allowing users to connect and
share information online without requiring the IT skills needed to build a traditional website. As smart phone
popularity grew, they became natural hubs for social networking, and these two technological advancements in
communication grew in tandem.

New kinds of phone-first social media, including Instagram and Snapchat, appeared, as did smart phone-focused
messaging tools like WhatsApp and Telegram. Many of these tools took advantage of increasingly powerful
cameras built into modern smart phones.

1.2. Overall working of the sector

Smartphones, mobile phones with more advanced computing capabilities and connectivity than regular mobile
phones, came onto the consumer market in the late 90s, but only gained mainstream popularity with the
introduction of Apple’s iPhone in 2007. The iPhone revolutionized the industry by offering customer friendly
features such as a touch screen interface and a virtual keyboard. The first smartphone running on Android was
introduced to the consumer market in late 2008.
The smartphone industry has been steadily developing and growing since then, both in market size, as well as in
models and suppliers. Smartphone shipments worldwide are projected to add up to around 1.48 billion units in
2023.
By the end of 2020, 46.45 percent of the world’s population owned a smartphone. With many people using
more than one smartphone, the actual number of smartphone subscriptions is much higher. As of 2021,
smartphone users are using an estimated 6.4 billion smartphone subscriptions, a figure that is expected to climb
to 7.5 billion by 2026.

Apple and Samsung lead a competitive field

In the fourth quarter of 2020, Apple regained the crown of leading smartphone vendor based on shipments, with
23.8 percent share of the market. Samsung held a 19.1 percent share of the smartphone market in the fourth
quarter of 2020 but were able to reclaim the top spot from Apple in the opening quarter of 2021, after the effects
of Apple’s iPhone 12 launch wore off.

The back and forth between Apple and Samsung is typical at the top end of the market, but the fight for the
remaining places among the top five vendors is hotly contested. Huawei once had a solid hold on this position,
even leading the market for a time, but trade restrictions have taken a heavy toll on the Chinese smartphone
manufacturer. The gap left by Huawei’s decline has largely been filled by other Chinese manufacturers.
Xiaomi’s smartphone market share has increased from 10 percent in the first quarter of 2020, to 18 percent in
the first quarter of 2021.

Smartphones: a rapid integration with everyday life

The smartphone industry has been steadily developing and growing since then, both in market size, as well as in
models and suppliers. Smartphone shipments worldwide are projected to add up to around 1.48 billion units in
2023. By the end of 2020, 46.45 percent of the world’s population owned a smartphone. With many people
using more than one smartphone, the actual number of smartphone subscriptions is much higher. As of

2021, smartphone users are using an estimated 6.4 billion smartphone subscriptions, a figure that is expected to
climb to 7.5 billion by 2026.

Global smartphone shipments from 2007 to 2020, by vendor

Impact of the coronavirus (COVID-19) pandemic

The outbreak of the coronavirus (COVID-19) pandemic has caused significant delays across the length of the
smartphone supply chain. The impact of the pandemic on vendors caused a significant decline in smartphone
shipments during the first quarter of 2020. The overall number of smartphones shipped in Q1 2020 fell to just
275.8 million, the lowest volume since Q2 2013. While all manufacturers suffered a dip, Apple smartphone
shipments saw the greatest decline. However, in Q4 Apple shipped more smartphones than any other vendor,
with over 90 million shipments out of the total smartphone shipments of 386 million shipments.
Economic factors influencing end users, the closure of physical stores, and lack of availability also led to a drop
off in the number of smartphones sold to end users. However, smartphone sales to end users recovered in the
last quarter of 2020 too.

Although shipments are down at the moment, analysts expect the smartphone industry to recover well once the
pandemic is under control. Originally, smartphone shipments were expected to grow 1.5 percent in 2020 and 2.4
percent in 2021. However, the predictions in the revised forecast indicate an increase of 6.3 percent in 2021.

1.3. Challenges faced by that sector in India

A recent report in Reuters.com prepared by Sankalp Phartiyal and Aditya Kalra illustrated five challenges faced
by Apple in India, the world’s second-biggest smartphone market, to grow the business.
First, Apple has battled India’s telecom regulator TRAI over a demand that it allows the use of the
government’s anti-spam app for almost two years. Telecom regulator warned last month that non-compliance by
Apple could result in iPhones being “derecognized” from the country’s networks.

Second, the Cupertino, California-based company has just 1 percent share in the rapidly growing smartphone
market in India. Korean brand Samsung has regained its number one position from China’s Xiaomi in the recent
quarter. Apple could not sell its innovative, but costly products, in India.

Third, Apple has not received the tax breaks it has sought for technology suppliers to expand local
manufacturing. The strategy of Apple is to avoid steep import duties that have made its iPhones, already pricey
for many Indian consumers, even more expensive.

Fourth, local content prerequisites have also stopped the US tech giant from opening its own retail stores. The
lack of direct sales channels has helped make it vulnerable to discounting and prompted it to recently embark on
a major overhaul of its retail strategy.

Fifth, Apple has failed to get support from Prime Minister Narendra Modi’s administration when it comes to
tariffs. The government has imposed import duties in order to encourage local manufacturing of smartphones.
The above telecom statistics prepared by research firm Canalys shows the smartphone market share of Xiaomi,
Samsung, Vivo and Oppo in India in Q2 2018. Phone brands shipped 32.6 million smartphones in India in Q2
2018 against 26.8 million in the same period previous year.

A base model iPhone is priced at nearly $1,400 in India – some 40 percent more than in the United States.
Apple, which assembles only two low-end iPhones in India, has said tariff-free imports are critical for
smartphone component suppliers and essential to make local manufacturing practical. Samsung Electronics
builds all its Indian phones locally and last month opened the world’s biggest mobile manufacturing plant on the
outskirts of New Delhi – which is slated to become an export hub. A key supplier for China’s Xiaomi, another
major Apple rival, this week said it would spend $200 million to build a plant in southern India.

Competition among retailers has led to rampant discounting, at both physical stores and online, and Apple’s
policy to keep prices uniform within a single market has collapsed in India.Apple appointed company veteran,
Michel Coulomb, as its new India sales chief late last year and he has cut its national distributors from five to
two.

At a June meeting with around 20 of Apple’s distribution channel partners, Coulomb outlined a new program
aimed at eliminating discounting and improving the shopping experience.

Apple India aims to make financing plans that it offers in partnership with banks more attractive.
Apple is some time away from opening its stores in the country due to the requirement that direct sales outlets
have 30 percent local content.

Make In India
History shows that manufacturing follows trade. In 1914, India was the world’s largest importer, not of British
textiles, but of British textile machinery. That is, India was becoming a major textile manufacturer. This
happened because merchants of British textile had developed mature markets in India and had themselves
started manufacturing. The case with smartphones would be no different if things were that simple.
Unfortunately, complications abound.

Morgan Stanley expects India to overtake the US as the second-largest smartphone market in 2018, with an
expected compound annual growth rate (CAGR) of 23%. India will grow nearly five times faster than the
world’s largest smartphone market China, where growth has decelerated. Morgan Stanley estimated that there
are only 225 million smartphone subscribers in the country, accounting for 18% of the total population.
Therefore, there is tremendous untapped potential for growth.

India has also shown impressive growth in manufacturing smartphones, almost tripling the value of output from
Rs18,900 crore in 2015-16 to Rs54,000 crore in 2016-17. This is expected to increase to Rs94,000 crore in
2016-17. But all these “Made in India" smartphones, including those from home-grown companies like
Micromax and Karbon, are only assembled in India. Smartphone companies import semi-knocked down (SKD)
units, in which all the key high-value components are already soldered. The value addition happening in India
was only 6.1% of the smartphone’s value in 2016.

There are tangible reasons why smartphones are only assembled in India. In the 2015-16 Union budget, the
government increased the differential excise duty structure for mobile phones from the earlier 5% to 11%,
which gave domestic manufacturers a benefit over imported phones. This move has managed to flip the share of
imported mobile phones from 69% in 2015 to 33% in 2016.This is problematic for many reasons. First, tariffs
get entrenched in the system and are difficult to revoke. Because protected industries benefit from tariffs, they
lobby tooth and nail to keep them in place, often resorting to politically palatable reasoning like potential job
losses and the health of the economy. This is precisely what the government did in August 2013 when it
increased the import duty on flat-screen televisions to 36% on the pretext of a rising current account deficit
(CAD). The CAD has since fallen to manageable levels, but the tariff is still 36%.

Second, tariffs enrich a particular industry at the expense of millions of consumers. The point of production is to
be able to consume goods that we like, whether Italian shoes or Japanese cars. By differentially taxing foreign-
manufactured electronics, the government makes it more expensive for Indian consumers to purchase high-end
smartphones and laptops, just to support inefficient local manufacturers.

Third, a special privilege for one industry inadvertently comes at the cost of another industry. If importers of
smartphone components don’t have to pay import duties, then the commensurate loss to the exchequer has to be
financed by taxing another economic activity. If the policy is revenue-neutral, that means the consumers bear
the full burden of the inefficiency of the favored industry and have to pay extra for their purchases—money that
could have been spent to buy something else, perhaps from an efficient business in India. What is seen is that
jobs are created in one industry, but the job losses due to the higher taxes in another industry are not seen.

It must be underlined that the increase in mobile phone “manufacturing" is only a shift towards assembling
smartphones owing to the tax benefits provided by the government. While this has succeeded in creating jobs in
the country, the step forward from assembling to manufacturing of components is not guaranteed. The
government launched a Phased Manufacturing Programmed (PMP) in May 2017 to increase local value addition
from 6% in 2016. Starting with the battery, charger and headphones in 2016-17, the plan is to increase the share
of local value addition to the camera and touchscreen in order to boost the overall local value addition to more
than 25% in 2019. Under the PMP, this is going to be achieved by slashing excise duties for the components—
starting with the charger, batteries and headphones—to 2% (instead of 12.5%) in 2016-17.

This strategy of giving preferential treatment to domestic producers is unlikely to be successful in the absence of
broad-based reforms in the economy. While India has good market potential owing to its growing middle class
and data usage, legacy problems continue to haunt its manufacturing sector. These are well-known: too

much regulation and associated paperwork, arcane procedures for land acquisition and environmental
clearances, unfavorable labor laws and poor infrastructure.

As Pradeep S. Mehta recently argued in this paper, an effective industrial policy cannot be merely a collection
of sectoral policies. If India has to increase its manufacturing output and employment, it needs to focus on
improving its competitiveness. The Ease of Doing Business rankings have consistently ranked India to be worse
than 130 other countries in the world, while China is ranked 78th in 2017. Bridging this gap is the key to
becoming a manufacturing hub. Preferential taxes for domestic products are not going to take us very far.

1.4. SWOC Analysis

India is the second largest mobile handset market in the world (after China), and is poised to become an even
larger market. Revenues of the Indian mobile handset market grew by 15% to touch USD 6.75 Bn in 2010-11
from USD 5.88 Bn a year back. The mature Indian mobile consumers' increasing preference for high-end
handsets and the younger demographics' desire to use mobile Web technologies could see the Smartphone
markets revenues soar. Smartphone shipments are expected to rise sharply from 11.2 million units in 2011 to
73.4 million units in 2015E comprising 25% of the total mobile handsets market in India. Growth in
smartphones is likely to surpass the overall growth in the mobile handset industry. The segment is anticipated to
continue its ride with a CAGR of 60% during 2011-2015, while the mobile handsets will register a CAGR of
13% in the same period.

STRENGTHS
1. Large customer base

2. Higher margins 3. Hi-end Technology – No compromise!

WEAKNESS
1. Low manufacturing Base

2. High focus on R& D

OPPORTUNITIES
1. Rising 3G uptake 2. Rising Data usage

3. Growing rural numbers 4. Rising disposable income

THREATS
1. Competition 2. The Chinese presence!

3. Virus Attacks
India's mobile market is making strong strides with the improvement of economy and consumer sentiment. The
total market for ICT products and services in India is expected to increase from $16.3 billion in 2010 to $34.3
billion in 2014, which will influence the mobile industry in the country. In spite of excessive government

regulations, mobile industry growth continues to be strong. As of December 2010, India had 791,381,574
mobile phones, equating to roughly 66.36% of the population (Business Monitor International, 2010). The ratio
of landlines and mobile phones is significant (35.77 million landlines when compared with 791 million)
considering that the GNI of the country in 2008 was only $1,040 (Business Monitor International, 2010a).

In terms of strengths, the Indian market has a large number of mobile phone users. The Indian cell phone market
has benefited from competition. The market plays host to a large number of strategic investors including
Singapore's SingTel, Vodafone of UK, Telekom of Malaysia, Norway's Telenor, Etisalat of UAE, Japan's NTT
and DoCoMo, and Russia's Sistema. Demand for mobile value-added services is strong and expected to grow.
Finally, there is also an abundant availability of skilled and technically qualified workforce with English
language proficiency (Business Monitor International, 2010).

In terms of weaknesses, the mobile market is still highly skewed towards prepaid users – as such, high inactivity
levels may be bringing down revenue. There are some delays in 3G licensing due to conflicts between
government bodies. The mobile network infrastructure in rural areas remain limited. Multinationals dominate,
which has significantly hampered the development of successful local ICT hardware and software
manufacturers. India occupies seventh place in regional ranking. India's infrastructure is overall inadequate to
support the large population and number of ICT users. There is weak ICT patent protection and high piracy and
patent violation rates. The government has been slow to enact regulations and guidelines for the mobile sector.
Finally, security issues increasingly weigh on the minds of investors (Business Monitor International, 2010). In
terms of opportunities, there is a great push to expand and upgrade to 3G. Government license fees will be cut
by 33% to cover wider areas, which is encouraging for the industry. Finally, the government could enhance the
competitiveness of the mobile industry through further liberalization and deregulation (Business Monitor
International, 2010a).In terms of threats, the government's conservative measures may inhibit 3G and other
licensing processes. Network capacity could struggle to keep up with demand. If migration were made easier, it
would add pressure on operators to retain existing customers. Finally, the global economic slowdown and rising
costs could slow growth (Business Monitor International, 2010)

1.5. Major Players in the sector

1. Apple
Apple is perhaps one of the few brands on this list that needs no introduction. It is the most profitable
smartphone developing company in the world. Apart from its popular iPhone line-up, Apple also produces
computers, laptops, handheld tablets and more.

iPhone Mobile Range in India - Apple is, without a doubt, one of the top mobile brands in India and its higher-
end smartphones range between Rs. 1 Lakh and Rs. 1.5 Lakh. Popular iPhone Models - The iPhone XS, iPhone
7, iPhone 7 Plus, iPhone 11 and iPhone 6s are the most popular Apple phones in India.

Best Features - Both iPhone 11 Pro Max and iPhone 11 Pro come with the following:

Superfast processor

Superior camera quality

Brilliant display

Upcoming iPhones in 2020 - Being one of the best mobile brands in India, consumers are already gearing up for
the company’s 2020 smartphone line-up.Apple is expected to launch two new devices, tentatively titled, iPhone
12 and iPhone 12 Pro in September this year. (1)

2. Samsung

South Korean company Samsung has always been one of the primary competitors for Apple in India. Unlike
Apple, Samsung launches several smartphones each year, including premium, medium-end and low-end
devices. Samsung Mobile Range in India - For buyers looking for premium specifications, the Samsung Galaxy
S10 Plus provides plenty of features. It costs between Rs. 1.1 Lakh and Rs. 1.2 Lakh.
Popular Samsung Models - The Galaxy S9, Galaxy M30, Galaxy A50s, Galaxy S9 Plus and Galaxy M30s are
some of the most popular phones from the brand.

Best Features - Samsung is one of the best phone companies in India for a reason and the latest Galaxy S10
Plus sports the following features.

12 GB RAM All-screen display with no bezels. Impressive Quad HD+ screen resolution, showcasing the
clearest visuals. Upcoming Samsung Phones in 2020 - Samsung’s Galaxy S11 is slated to hit the Indian market
in February 2020. Galaxy Note 11, on the other hand, will also hit shelves later this year.

3. Google

Google’s smartphones line, named Pixel, is in high-demand across India. Running stock Android OS, these
phones are extremely fast, while also featuring cutting edge tech upgrades.Google Mobile Range in India -
Today, Google Pixel 4 XL is the flagship smartphone from the Alphabet Inc.-owned company, with prices
ranging between Rs. 1 Lakh and Rs. 1.1 Lakh.

Popular Google Models - The Pixel 3a, Pixel 3 XL, Pixel 3a XL, Pixel 2 and Pixel 3 are five of the most
popular smartphones in the company’s lineup.

Best Features - The top-end Pixel 4 XL is fitted with the following:

Updated processors promising lightning-fast performance. Its

Display resolution is set at 3040 x 1440 pixels

Unmatched Android OS performance and updates

Upcoming Google Phones in 2020 - Google has confirmed the launch of several new smartphone devices in
2020, including the Pixel 4a, Pixel 4a XL, Google Pixel 3 Lite and more.

4. Huawei
Based in Shenzhen, China, Huawei is another company that is providing tough competition to all other
smartphone companies. Although restricted from selling their devices in the United States, Huawei’s global
sales numbers remain strong.

Huawei Mobile Range in India - Huawei P30 is the company’s most feature-rich offering, priced between Rs.
80,000 and Rs. 82,000. Popular Huawei Models - The Huawei Y9 Prime, Huawei P9, Huawei Honor 3X,
Huawei Y9 and Huawei P30 Pro are some of the models from the company that makes it one of the top 10
mobile brands in India. Best Features - Huawei’s top-end P30 Pro comprises 8 GB RAM

6.47-inch crystal clear display Triple rear camera setup comes with 40 MP, 20 MP and 8 MP lenses

An internal memory slot of 256 GB

Upcoming Huawei Phones in 2020 - The Huawei P40 Pro, the successor to its current flagship device the P30
Pro, is expected to drop in the market sometime later this year.

5. OnePlus

Another one of the top mobile brands in India OnePlus operates out of Shenzhen, China. In recent years, it has
found great Favour amongst Indian smartphone users. Owing to the great response from consumers, OnePlus
has expanded its operations into the television sector as well.OnePlus Mobile Range in India - The OnePlus 7T
and OnePlus 7 are priced similarly, between Rs. 32,000 and Rs. 35,000, while OnePlus 7T Pro may set you back
by around Rs. 55,000.Popular OnePlus Models - The OnePlus 7T, OnePlus 7, OnePlus 7 Pro, OnePlus 7T Pro
and OnePlus 6T are the company’s most popular handsets in the market. Best Features - You can expect the
following features from premium OnePlus smartphones.

The best processor, leading to lightning-fast speeds The OnePlus 7T variants run Android 10 out of the box Fast
charging facility

Upcoming OnePlus Phones in 2020 - While OnePlus has yet to confirm what lies in store for its smartphone
market officially, rumors suggest that the OnePlus 8 and OnePlus 8 Pro are already in the making.

6. Xiaomi

One cannot talk about the best smartphone brand in India without speaking about Xiaomi. Another China-based
company, Xiaomi, entered the smartphone market in India when consumers lacked decent options for quality
low and mid-range handsets. Since then, it has managed to become one of the top mobile phone sellers in the
country.

Xiaomi Mobile Range in India - Today, you can avail a Redmi K20 Pro device at prices between Rs. 25,000 and
Rs. 30,000.

Popular Xiaomi Models - Redmi 8, Redmi 8A, Redmi Note 7 Pro, Redmi 7A and Redmi Note 7S are some of
the popular offerings from the company.

Best Features - The Redmi K20 Pro was Xiaomi’s boasts the following features:

Bezel-less design Full HD+ resolution further enhances the display abilities of the smartphone Extremely fast
performance across gaming and other processor intensive applications Upcoming Smartphones in 2020 - If you
are looking forward to owning a Xiaomi smartphone, the company has an impressive list of devices expected to
release this year, including the Redmi K30 Pro, Redmi Y4 and Mi A4.

1.6. GDP contribution by that sector

The contribution of mobile industry to the country's GDP will increase to 8.2 percent by 2020, a government
report said today.

The joint report, released by the Department of Industrial Policy and Promotion and the Department of
Telecom, said the industry contributes 6.5 percent to the GDP currently.

"The mobile industry in India, currently contributing 6.5 percent ($140 billion or roughly Rs. 9,60,783 crores) to
country's GDP, and employing over 4 million people (direct and indirect), is projected to grow rapidly in the
coming years.

"By 2020, the industry is expected to contribute 8.2 percent to country's GDP," the report said. It attributed the
projection to 'The Mobile Economy, India 2016' report of global telecom industry body GSMA.

As per the previous data shared by former telecom Minister Ravi Shankar Prasad in Parliament in December,
revenue generated by the telecom sector in 2014-15 was Rs. 2,42,900 crores, accounting for 1.94 percent of
total GDP.

However, the ratio of revenue size and its contribution in terms of percentage to the GDP varies every year due
to variation in the growth of economy, the minister had said.

In 2011-12, the telecom sector accounted for 2.1 percent of GDP with revenue of Rs. 1,85,930 crores, while in
the next year it stood at Rs. 2,07,498 crores (2.07 percent of GDP). The DIPP-DoT report said that the mobile
industry will add 800,000 more jobs.

"In terms of unique mobile phone subscribers, India is expected to cross the 1 billion marks by 2020. India will
see an increase in adoption of 4G services with number of 4G connections estimated to grow to 280 million by
2020 from just 3 million in 2015," the report said.
Total Foreign Direct Investment in telecom sector from April 2014 to March 2016 was around $4.19 billion
(roughly Rs. 28,729 crores). Investment in telecom operator Vodafone lead the chart with investment of
$1,500.79 million (roughly Rs. 10,299 crores) followed by Videocon International Electronics with $719.76
million, Telenor $573.15 million, Sistema Shyam Teleservices $451.83 million, Bharti Infratel $240.37 million,
Idea Cellular $123.22 million. Mobile manufacturing units generated 38,300 new jobs in last two years with
Taiwanese electronics company Foxconn being top employer with workforce of 8,000.

1.7. Global Perspective

The global mobile marketing market size was valued at USD 65.06 billion in 2019.and is expected to grow at a
compound annual growth rate (CAGR) of 22.9% from 2020 to 2027. Mobile marketing is a multi-channel
digital promotional activity to reach the target audience through their mobile devices, such as smartphones and
tablets, via email, SMS and MMS, social media, websites, and apps. Based on research conducted by the Global
System for Mobile Communications Association (GSMA) research, approximately 75% of the total number of
mobile users would be using smartphones by the end of 2025. The rapidly growing adoption of smartphones and

tablets coupled with robust internet penetration in developing countries, such as China and India would
significantly drive the market.

Mobile marketing is one of the key digital marketing strategies adopted by organizations to promote their
products and services. It also helps organizations eliminate paper costs and denotes a fast and convenient means
to interact with target customers. It enables the integration of new, innovative methods of advertisement with
the same marketing strategies to increase their impact and approachability in terms of target users. Several
surveys conducted by many companies denote that more than 90% of the youth use smartphones to access
information or content. Approximately 49% of smartphone owners use mobile internet to access search engines.
Such factors are anticipated to create growth opportunities for the key players operating in the market for mobile
marketing.

Geofencing is a technological service that uses Radio Frequency Identification (RFID) and Global Positioning
System (GPS) to define geographical boundaries. Organizations procure data from mobile applications and
analyze them to understand consumer preferences. Companies use this data to advertise relevant products and
services to their target customers. Geofencing for mobile applications is a convenient way for mobile
application marketers to take advantage of Location-based Marketing (LBM). It helps organization design
effective campaign strategies and to drive sales and audience engagement.

Rising adoption of geofencing across various industries is expected to significantly drive the mobile marketing
market over the forecast period. Additionally, proliferation of Artificial Intelligence (AI) and Augmented
Reality (AR) in retail sector to understand consumer behavior and to send notifications accordingly is projected
to propel the growth. Rapid increase in viewers accessing Over the Top (OTT) content is anticipated to create
significant opportunities for digital enterprises over the forthcoming years. Increasing adoption of ad-block
software by smartphone users to avoid unwanted ads is the key factor restraining growth. Furthermore, stringent
government regulations related to mobile ads coupled with privacy and security concerns are anticipated to
hamper the growth.

Enterprise Size Insights

The large enterprise segment captured approximately 61% of the market share in 2019 owing to the rapidly
growing adoption of mobile marketing strategies by large organizations across various industries. Large retail
companies are adopting new technologies such as AI and AR to enhance the visual presentation of
advertisements, which in turn improves viewer engagement. The proliferation of smartphones along with
inclination of consumers towards smartphones is positively influencing the growth.

Rise in the number of small and medium enterprises (SMEs) has led to intense competition. The companies are
adopting various marketing strategies to reach the target audience. They are opting for mobile marketing as the
fastest way for communicating with their customers. Mobile marketing helps SMEs create brand awareness and
thus encourages customer loyalty along with growth in sales. Start-ups are making significant investments in
digital marketing to create consumer awareness regarding products and services. Hence, the rapid rise in the
number of start-ups in developing countries coupled with increasing investments in digital marketing is
anticipated to drive the segment growth.

1.8. Summary
A mobile phone, cellular phone, cell phone, cellphone, handphone, or hand phone, sometimes shortened to
simply mobile, cell or just phone, is a portable telephone that can make and receive calls over a radio frequency
link while the user is moving within a telephone service area. The radio frequency link establishes a connection
to the switching systems of a mobile phone operator, which provides access to the public switched telephone
network (PSTN). Modern mobile telephone services use a cellular network architecture and, therefore, mobile
telephones are called cellular telephones or cell phones in North America. In addition to telephony, digital
mobile phones (2G) support a variety of other services, such as text messaging, MMS, email, Internet access,
short-range wireless communications (infrared, Bluetooth), business applications, video games and digital
photography. Mobile phones offering only those capabilities are known as feature phones; mobile phones which
offer greatly advanced computing capabilities are referred to as smartphones.

The development of metal-oxide-semiconductor (MOS) large-scale integration (LSI) technology, information

theory and cellular networking led to the development of affordable mobile communications.[1] The first
handheld mobile phone was demonstrated by John F. Mitchell [2][3] and Martin Cooper of Motorola in 1973,
using a handset weighing c. 2 kilograms (4.4 lbs.).[4] In 1979, Nippon Telegraph and Telephone (NTT)
launched the world's first cellular network in Japan.[citation needed] In 1983, the DynaTAC 8000x was the first
commercially available handheld mobile phone. From 1983 to 2014, worldwide mobile phone subscriptions
grew to over seven billion; enough to provide one for every person on Earth.[5] In the first quarter of 2016, the
top smartphone developers worldwide were Samsung, Apple and Huawei; smartphone sales represented 78
percent of total mobile phone sales.[6] For feature phones (slang: "dumbphones") as of 2016, the top-selling
brands were Samsung, Nokia and Alcatel.[7]

CHAPTER 2

Profile of the selected Company

2.1, 2.2 - Name & Location of Company and Branches

Apple
Location Of the Company: - Los Altos, California, United States

Branches: - The complete list of countries that have at least one active Apple owned and operated
brick-and-mortar retail store as of December 2018 is below. The list is arranged alphabetically by nation.

Australia Apple Stores are located in all the major cities, including Canberra, Adelaide, Perth, Brisbane,
and Sydney.

Austria's sole Apple Store is in Vienna.

Belgium has just one Apple Store, located in Brussels.

Brazil Apple Stores are located in Rio de Janeiro and Sao Paulo.

Canada Apple Stores are located in the provinces of Quebec, Ontario, Nova Scotia, Manitoba, British
Columbia, and Alberta.

China Apple Stores are located throughout the country and in major cities, including Shanghai, Beijing,
and Nanjing. One of the company's newest is in Suzhou.

France Apple Stores are located in Bordeaux, Dijon, Lyon, Nice. There are three in Paris, including a
new flagship on the Champs-Élysées.

Germany Apple Stores are located in Berlin, Dusseldorf, Frankfurt, Hamburg, Cologne, Munich, etc.

Hong Kong Apple Stores are located in Tsim Sha Tsui, Causeway Bay, Kowloon Tong, and Central.

Italy Apple Stores are located in Bologna, Firenze, Rome, Torino, and, as of this year, Milan.

Japan Apple Stores are located in Osaka, Miyagi, Tokyo, Fukuoka, etc. One of the company's newest is
in Suzhou.

Macao's two Apple Stores are both in Cotai shopping centers.

Mexico has one Apple Store.

Netherlands Apple Stores are located in Amsterdam, Den Haag, and Haarlem.

South Korea's sole Apple Store is in Seoul.

Singapore has one Apple Store.

Spain Apple Stores are located in Madrid, Barcelona, Malaga, Valencia, etc.

Sweden Apple Stores are located in Helsingborg, Malmö, and Taby.

Switzerland Apple Stores are located in Basel, Geneva, Gatherum bee Wallis Ellen, and Zurich.

Taiwan's sole Apple Store is in Taipei.

Thailand is home to one of Apple's new 2018 stores, in Bangkok.

Turkey's two Apple Stores are located in Istanbul.

United Arab Emirates Apple Stores are located in Abu Dhabi and Dubai.

United Kingdom Apple Stores are located in Aberdeen, Bath, Belfast, Birmingham, Brighton, Bristol,

Cambridge, Cardiff, Edinburg, Glasgow, Kingston, Leeds, Manchester, Newcastle, Sheffield,

Southampton.

United States Apple Stores are located in every state except for Montana, North Dakota, South Dakota,
West Virginia, and Wyoming.

2.3, 2.4 Years of Establishment & Brief History

The world is changing day by day, this world is comprised of Visionaries who work day and night
tirelessly for the better future and offer their services to deliver the best to the inhabitants of this world.
Steve Jobs was one of the visionaries who wanted to change the world by making use of technology.
Steve Jobs was an unconventional leader with a great vision of entrepreneurship and a lead his creation
to be the most important creation in the history of technological advancement. He was the chairman,
Chief executive officer (CEO) and co-founder of Apple Inc. Moreover, CEO and major shareholder of
PIXAR. He was member of The Walt Disney Company’s board of directors following its procurement
of PIXAR. Jobs and Apple’s co-founder Steve Wozniak are recognized as the pioneers of
microcomputer revolution. The two Steve Jobs and Wozniak were the main founders of Apple, but it
would not be fair to continue with mentioning their friend Ronald Wayne without him there might be no
iPhone iPad or iMac today. Steve Jobs convinced him to take 10% of the company stock and act as an
authority should he and Woz naik come to misfortunes, but Wayne quit out 12 days later, selling for just
$500 a stock that would have future value of worth $72bn 40 years later. The Company trades its
products all-inclusive through its retail stores known as Apple store, online stores and direct sales force,
as well as through third-party cellular network sellers who have signed a patent with Apple, wholesalers.
Moreover, the Company retails a diversity of third-party Apple-compatible products, includin
application software with reference to system software and numerous accessories through its sales and
online stores. The Company retails to clients, small and mid-sized businesses and education, initiative
and management trades. The Company’s financial year is the 52 or 53-week period that ends on the last
Saturday of September. The Company is a California corporation established in 1977. Apple Computers,
Inc. was founded on April 1, 1976, by college dropouts Steve Jobs and Steve Wozniak, who came up
with idea of new company, a new vision of using the computers and ought to change the view of people
towards computers. They aimed to make computers small and portable enough for the people to use
them easily at their homes or offices the idea was based on two alphabets “PC” Personal Computer.
They wanted to change the design and construct a machine which is human friendly. Jobs and his friend
Wozniak started out building Apple I and sold the machine without keyboard, monitor. The response
was not enough to make another machine but they worked hard to meet the demands of customers and
introduced Apple II which revolutionized the computer industry with the introduction of first ever colour
graphics PC sales jumped from $ 7.8 million to 1978 to $ 117 million in 1980 from this point Apple
went public in the rest of 1980’s Apple was getting the maximum outputs from the consumers and in
early 1990’s they posted their highest profits. This was because of Job’s innovation and entrepreneur
skills which gave the company a boast and he signed a deal with a small company named “Adobe”
creator of the Adobe Portable Document Format (PDF). Together the two companies joined hands to
create a new marvel of Desktop Publishing. By the invention of Windows

3 Company Background | POLITECNICO DI TORINO Operating which comprised of a graphical

interface similar to Apple. In 1990’s Apple’s share in the market suffered slowly and many of the
experts in the Apple thought that this would be the end of the company which aimed to change the
world. Microsoft Inc. became one of the biggest competitor of Apple Inc. This was the time when Apple
was in desperately need of an operating system so Apple Inc. decided to buy NEXT software which was
Job’s Company. Jobs was recognized as interim CEO he forgot all alliance with Microsoft and made the
popular operating system. Jobs restored the decline company and introduced the concept if iBook which

was a portable computer mostly known as laptop. His visionary ideas were only the source which saved
the company from being demolished by their competitor so he started to branch out company into
different regimes and making new products uch as iPod (Mp3 player) and media software iTunes. This
was Job’s best move to restore its strength in market, his move turned out to be an asset for the company
and now devices apart from computers such as iPod, iPad and iPhones and Apple TV have become the
most profitable sector of the company.
One of the milestones in the history of Apple Inc. was its initial public offering or IPO. The company
became available for the public to invest in it in 1980. The IPO was far more successful in comparison to
some of the leading brands that existed in the market at that time. One of the examples was Ford’s iPod.
Apple’s IPO generated a huge sum of investment, which triggered a new era in the history of Apple.

One of the important things that you would want to know from the first meetings with the shareholders
is that Steve Jobs wanted to deliver a great speech about the company and its products etc. But as there

were too many interruptions, he left this idea and started talking about the emotional content. That
speech had a great audience. And he became prominent for his public speaking skills at that time too.

Apple Inc. — originally known as Apple Computers — began in 1976. Founders Steve Jobs and Steve
Wozniak worked out of Jobs' garage at his home in Los Altos, California. On April 1, 1976, they
debuted the Apple 1, a desktop computer that came as a single motherboard, pre-assembled, unlike other
personal computers of that era.
The Apple II was introduced about a year later. The upgraded machine included an integrated keyboard
and case, along with expansion slots for attaching floppy disk drives and other components. The Apple
III was released in 1980, one year before IBM released the IBM Personal Computer. Technical failures
and other problems with the machine resulted in recalls and damage to Apple's reputation.

The first home computer with a GUI, or graphical user interface — an interface that allows users to
interact with visual icons — was the Apple Lisa. The very first graphical interface was developed by the
Xerox Corporation at its Palo Alto Research Center (PARC) in the 1970s. Steve Jobs visited PARC in
1979 (after buying Xerox stock) and was impressed and highly influenced by the Xerox Alto, the first
computer to feature a GUI. This machine, though, was quite large. Jobs adapted the technology for the
Apple Lisa, a computer small enough to fit on a desktop.

In 1976, Steve Jobs co-founded Apple in his parents' home on Crist Drive in Los Altos, California.
Although it is widely believed that the company was founded in the house's garage, Apple co-founder
Steve Wozniak called it "a bit of a myth". Jobs and Wozniak did, however, move some operations to the
garage when the bedroom became too crowded

Decline and restructuring

After establishing the foothold with Apple, I and registering monetary gains, Apple introduced a new
and advanced version Apple II. It was really popular in that time, owing to its remodeled TV interface
which aptly handled the graphics and colors.The future endeavors demanded money and thus the
investments came from Mike Markkula. Markkula was deeply impressed with the success format
explained to him by Steve Jobs and invested a flamboyant sum of $92,000 and further $250,000 which
came as a bank loan. Markulla also played the role of mentor in both Jobs’ and Wozniak’s life and
provided them with expert management and business solutions. The first CEO of Apple – Michael Scott,
the person who suggested the invention of floppy, was also brought by Markulla.Macintosh, which is the
most famous product of Apple, was actually the first computer to make use of graphic mouse interface.
It was formed after one of the Apple employees, Jef Raskin repeatedly stressed over the need to develop
easy looking computers for a common man.

The beginning stages saw the incapability of Steve Jobs to manage the firm on his own. He lacked the
vision and maturity of the strategist and was no linear in his approach. He later invited Sculley to help in
the functioning the company. Sculley, with his years of experience and market expertise, was the best
choice and brought about stability and efficient management in the organization. Sculley was the mind
behind shrewdly raising the price of Macintosh from $1,995 to $2,495. Apple could barely stumble
through its way in the 1990’s. IBM launched a computer force which was effective in pulling up the
audiences and the same time all of Apple’s products like Quadra, Centries and Performa failed to
perform. Apple also introduced its range of PDA’s named Newton, which also failed miserably. All
these failures were attributed to poor management and the value of its stock dropped down considerably.
Steve Jobs, on the other acquired an animation organization, Pixar and founded another company called
neXT. It was again a failure due to high prices, but laid down the foundations for Mac OS X and also
motivated Time Berners Lee to come up with World Wide Web.

2.5: - SWOT Analysis Of the Company i.e, Apple

2.5.1 - Strengths
1. Most valuable brand

Apple is ranked # 1 for the 8th consecutive year by Interbrand – with a brand value of $322 billion.

2. Globally Iconic -

Apple is one of the most reliable company when it comes to personalized advanced computers and
smart technology devices. It has millions of loyal customers with steady increment.

3. Top Technology

Apple was the first to introduce some of the most innovative products that have changed the world
(iPhones, iPads). Apple is still determined to build and craft better, more proficient technology devices.

4. Brand of Choice

It isn’t big news that Apple is a demanded brand in corporate offices. Apple has a specific business page
that offers top quality technology solutions for every corporation’s needs.

5. Proficient Research

Apple puts dedication into its product designs. Careful study is initiated and further research is
performed to help understand customer needs and requirements.
6. Sustainability made Possible through Liam

Liam is an iPhone recycling robot that breaks down and dissects an iPhone. It strips them all the way
down to a single bolt. Most parts of an iPhone can be reused.

Liam is designed to yield as many reusable parts as possible. These reusable parts are then categorized
and safely stored so they can be used for new manufacturing.

7. Expansion in services

Apple has been expanding its services portfolio for many years. For example, about 19% of Apple’s
annual revenue ($53 B out of $274 B in FY 20) came from its services, which is the second biggest
contributor to its revenue after the iPhone (50% of its revenue). Apple’s services include digital content
stores, streaming services, iCloud, AppleCare etc. In addition, Apple has introduced many new services
in 2019, such as Apple TV+ (launched in Nov 2019), Apple news+ and Apple Card (credit card
services), Apple Arcade (game subscription).

2.5.2 - Weaknesses
1. High Priced Products Apple’s products can be considered a luxury due to their premium prices. The
products are priced for middle and high-income consumers. Low-Income consumers can’t simply afford
Apple products. Due to their premium pricing, only middle or high-class individuals can afford their
products.

2. Limited advertisement & promotions Apple has solidified their grounds by establishing loyal
customers, even with limited advertising resources. Apple marketing relies heavily on its iconic and
flagship retail stores.Because of their success, Apple does not feel the need to have excessive spending
towards advertisement in comparison to other big brands such as P&G, Coca Cola and Samsung
technology.

3. Entering into area of non-competency Apple is rapidly expanding into new services such as video
content streaming, game streaming, credit card – competing with the dominant players such as Netflix,
Disney, Citi, Chase, PayPal, etc. Hey might be entering into areas in which they lack competencies;
remember the failure of Apple maps.

4. Incompatibility with Other Software When a customer buys an apple product, they enter the Apple
universe. Apple’s products do not support other software or technologies making them incompatible
with other devices. Customers have to exclusively purchase Apple apps or accessories to continue using
their Apple products.
5. Allegations of Tracking Tracking users undermines trust. Apple has been accused of using tracking
apps in its phones, which revealed the precise location of users. Even though the latest version of
Apple’s phones gives users the right to decline the tracking, trust is difficult to regain once it is lost.

6. Unfair business practices Apple is under investigation for unfair business practices after receiving
payments to make Google’s search engine as the default search engine for its Safari web browser.
Collusion between the two giants makes it difficult for rivals to enter and expand into the search engine
market.

2.5.3 - Opportunities
1. Consistent Customer Growth Apple has been dominating the technology sector for years now. They
provide top quality and cutting-edge technology that offers a breakthrough in customer experience. Their
customer retention rate of 92% is phenomenal. Apple can always rely on the power of the internet for
future opportunities to gain new customers and form new alliances.

2. Qualified Professionals Apple’s researchers, developers, and product specialists are a team of highly
qualified professionals that have years of experience in branding consumer products. With the expansion
of their team, Apple can continuously build new opportunities.

3. Expansive Distribution Network Apple Inc. has the opportunity to expand its distribution network.
Currently, the distribution network that Apple has is very limited and leaves room for minimal growth.
Apple can generate higher revenue and sales if it focused on creating an expansive distribution network.
Furthermore, the company can benefit from diligent marketing and promotions.

4. Lack of Green Technology Apple is yet to launch products that are created using green technology.
The company has not yet implemented or participated in creating sustainable technology that is eco-
friendly.

5. Smart Wearable Technology Smart wearable technology will soon dominate the world. According
to Forbes, smart wearable technology device sales will double by 2022. It will become a $27 billion+
market with 233-million-unit sales. Apple has the opportunity to continue to grow beyond just Apple
watch and Air Pods into other wearable categories.

2.5.4 - Threats
1. Coronavirus Outbreak Apple is highly dependent on China for its manufacturing and supply chain.
In addition, about 14.5 % of its $274 billion in revenue came from China (a big market for Apple). The
outbreak has significantly affected and may continue to disrupt Apple’s sales in the fiscal year 2021.
2. Supply Chain Disruption The recent events have significantly affected and disrupted its operations.
It reported flat revenue in Q2 of 2020 and declined to offer annual revenue estimates for FY2020 due to
supply chain uncertainties.

3. Apple Bullied by Counterfeits Apple has become vulnerable to third world countries illegally
utilizing the brand image to sell counterfeit products. The illegal dealers sell Apple counterfeit products
at the same value as an original Apple product. Counterfeit products can make potential customers
believe that it is a product made by Apple with low quality. big news can result in negative reviews and
bad publicity for the company.

4. Increasing Competition Although Apple as a brand has solidified itself, it still faces threats from
competitors. With the advancement in technology, brands like Samsung, Google, and Dell are giving
Apple tough competition. As the competition is getting stronger, Apple either has to introduce new
technologies or revise its pricing policy to stay ahead of its competition.

5. Market Penetration There has been a significant change in market penetration by other brands in the
smartphone market. Companies like Samsung, HTC, and Lenovo are using Android software to create
new smartphones. Currently, Android has captured 72.23% of the market share, while Apple has only
24.55% of the market share globally.
 CHAPTER 4

Marketing Department

4.1 List of Products and services

1 Apple MacBook the MacBook is a brand of Macintosh notebook computers designed and marketed
by Apple Inc. that use Apple's macOS operating system since 2006. It replaced the PowerBook and
iBook brands during the Mac transition to Intel processors, announced in 2005. The current lineup
consists of the MacBook Air (2008–present) and the MacBook Pro (2006–present). Two different lines
simply named "MacBook" existed from 2006 to 2012 and 2015 to 2019. On November 10, 2020, Apple
announced models of the MacBook Air and MacBook Pro incorporating the new Apple M1 system on a
chip. Apple will continue to sell versions of the MacBook Pro with Intel processors.The MacBook
family was initially housed in designs similar to the iBook and PowerBook lines which preceded them,
now making use of a unibody aluminum construction first introduced with the MacBook Air. This new
construction also has a black plastic keyboard that was first used on the MacBook Air, which itself was
inspired by the sunken keyboard of the original polycarbonate MacBooks. The now standardized
keyboard brings congruity to the MacBook line, with black keys on a metallic aluminum body.

The lids of the MacBook family are held closed by a magnet with no mechanical latch, a design element
first introduced with the polycarbonate MacBook. Memory, drives, and batteries were accessible in the
old MacBook lineup, though the newest compact lineup solders or glues all such components in place.
All of the current MacBooks feature backlit keyboards.The MacBook was discontinued from February
2012 until March 2015, when a new model featuring an ultraportable design and an all-metal enclosure
was introduced. It was again discontinued in July 2019 following a price reduction of the 3rd generation
MacBook Air and discontinuation of the 2nd generation model.

MacBook Air

The MacBook Air is Apple's least expensive notebook computer. While the 1st generation was released
as a premium ultraportable positioned above the 2006 - 2012 MacBook, lowered prices on subsequent
iterations and the discontinuation of that MacBook has made it serve as the entry-level Macintosh
portable. The 2010 to 2017 base model came with a 13-inch screen and was Apple's thinnest notebook
computer until the introduction of the MacBook in March 2015. This MacBook Air model features two
USB Type-A 3.0 ports and a Thunderbolt 2 port, as well as an SDXC card slot (only on the 13inch
model). This model of MacBook Air did not have a Retina Display. A MacBook Air model with an 11-
inch screen was available from October 2010 to October 2016. In 2017, the MacBook Air received a
small refresh, with the processor speed increased to 1.8 GHz.

On October 30, 2018, the MacBook Air underwent a major design change, dropping the USB Type-A
ports, MagSafe, and the SD card slot in favor of two USB-C/Thunderbolt 3 ports and a headphone jack.
It was updated with a Retina display and Intel Y-series Amber Lake i5 CPUs, as well as a Force Touch
trackpad, a third-generation butterfly mechanism keyboard, and the Touch ID sensor found in the fourth-
generation MacBook Pro, but without the Touch Bar. The base price was also raised, although the base
configuration of the 2017 model was retained until July 9, 2019, when it was discontinued along with the
Retina MacBook.[2] The base price of this model was also dropped to $1099 ($999 for students) on the
same day.[3]
On November 10, 2020, Apple announced that the MacBook Air would use the new Apple M1 system
on a chip. The new Air does not have a fan, ensuring silent operation, but limiting the M1 chip speed in
sustained operations. Performance was claimed to be higher than most current Intel laptops.

MacBook Pro

The MacBook Pro is Apple's higher-end notebook available in both 13-inch and 16-inch configurations.
The current generation 13-inch MacBook Pro was introduced in October 2018. It features a touch-
sensitive OLED display strip located in place of the function keys, a Touch ID sensor integrated with the
power button, and four USB-C ports that also serve as Thunderbolt 3 ports. The 13-inch model was also
available in a less expensive configuration with conventional function keys and only two USB-
C/Thunderbolt 3 ports, but since July 2019, the base MacBook Pro model has the Touch Bar as well as
quad-core processors, similar to the higher-end models, although it still has only two USB-C /
Thunderbolt 3 ports.[4] The May 4, 2020 refresh adopts many of the upgrades seen in the 16" 2019
MacBook Pro, including the scissor mechanism keyboard ("Magic Keyboard") and a physical Escape
button.

On November 13, 2019, Apple released the 16-inch MacBook Pro, replacing the 15-inch model of the
previous generation, and replacing the butterfly keyboard with a scissor mechanism keyboard (dubbed
the Magic Keyboard by Apple), reverting to the old "inverted-T" arrow key layout, replacing the virtual
Escape key on the Touch Bar with a physical key, and replacing the AMD Polaris and Vega graphics
from the 15-inch model with options from AMD's Navi graphics architecture, as well as reengineering
the speakers, microphone array, and the thermal system compared to the 15-inch; the latter had thermal
limitations in the 15-inch model due to its design. In addition, the 16-inch is available with up to 64 GB
of DDR4 2667 MHz RAM and up to 8 TB of SSD storage. It also has a 100 Wh battery; this is the
largest battery that can be easily carried onto a commercial airliner under U.S. Transportation Security
Administration rules. On November 10, 2020, Apple announced a new model of the MacBook Pro
incorporating the new Apple M1 system on a chip. Apple will continue to sell versions of the MacBook
Pro with Intel processors. The M1 Pro incorporates a fan, allowing sustained operation of the M1 chip at
its full performance level, which is claimed to match or exceed that of Intel versions. Unlike Intel Pro
models, the M1 version only comes with a 13-inch screen, has only two Thunderbolt ports and has a
maximum of 16 GB random access memory (RAM).

The Macintosh the Macintosh 128K was released in January 1984 "with all the showbiz of a car
launch". And what a launch it was. No technology company would have dared dream about flaunting a
personal computer in a multimillion-dollar Superbowl slot, but Apple did. The Macintosh 128J was
different thought – it wasn't especially for business or bespectacled engineers; it was comparatively easy
to use.

The iPod Unveiled a decade ago this month, the iPod is the one device that transformed Apple from a
computer company into a mass-market electronics giant – and would later spark a revolution in digital
music. Though many who bought it had to hack their computers to store music on it, the first-generation
iPod was a stylish MP3 player boasting a 10-hour battery life and space for 1,000 songs. "Listening to
music will never be the same again," said Jobs at its launch in October 2001.

The iPod nano Steve Jobs discontinued the iPod mini at the height of its popularity in September 2005.
His indefatigable drive for design and efficiency saw it replaced with the much smaller nano. Apple
reinvented the nano in September 2010 with its sixth iteration. At 21.1g the new nano was 15g lighter
than its predecessor and half the height.

The iPhone is a line of smartphones designed and marketed by Apple Inc. that use Apple's iOS mobile
operating system. The first-generation iPhone was announced by former Apple CEO Steve Jobs on
January 9, 2007. Since then, Apple has annually released new iPhone models and iOS updates. As of
November 1, 2018, more than 2.2 billion iPhones had been sold. The iPhone has a user interface built
around a multi-touch screen. It connects to cellular networks or Wi-Fi, and can make calls, browse the
web, take pictures, play music and send and receive emails and text messages. Since the iPhone's launch
further features have been added, including larger screen sizes, shooting video, waterproofing, the ability
to install third-party mobile apps through an app store, and many accessibility features. Up to 2017,
iPhones used a layout with a single button on the front panel that returns the user to the home screen.
Since 2017, more expensive iPhone models have switched to a nearly bezel-less front screen design with
app switching activated by gesture recognition. The iPhone is one of the two largest smartphone
platforms in the world alongside Android, forming a large part of the luxury market. The iPhone has
generated large profits for Apple, making it one of the world's most valuable publicly traded companies.
The first-generation iPhone was described as "revolutionary" and a "game-changer" for the
mobile phone industry and subsequent models have also garnered praise. The iPhone has been credited
with popularizing the smartphone and slate form factor, and with creating a large market for smartphone
apps, or "app economy". As of January 2017, Apple's App Store contained more than 2.2 million
applications for the iPhone.

iTunes Until Jobs unveiled iTunes in January 2001, no one had been able to convince music label
executives that people might pay for songs online. Announced at the back end of a 90-minute keynote to
launch the new Macintosh, iTunes was an unexciting "all-in-one digital music program" that brought
together MP3 playback, internet radio and CD writing. This week Apple began letting people access
their digital music across any of their devices wirelessly. It is the beginning of Apple's cloud revolution.

The iPad Apple's so-called "Jesus' tablet" was everything that everyone didn't need on its launch in
January 2010. Less than a year later, Apple had invented a new market and intentionally spawned
hundreds of poor-man copycats. Dubbed "the oversized iPhone" with a 9.7in screen, Apple's lean-back
device would be the Saviour of the media industry. Research group Gartner last month forecast that
tablet computers will see an explosion in sales over the next four years, selling 60% as many units as
PCs by 2015 – and Apple's iPad will still have almost half the market by then.

iOS App Store Apple announced a new milestone for its App Store in July this year: 15bn downloads
(of more than 500,000 apps) since it launched in July 2008. The App Store has become the cornerstone
to the iPhone's success, with the world's media giants all scrambling for a prominent place on the
smartphone of choice – and spawning a new market for software developers. Pundits called it the future
of mobile consumption, and Apple has since expanded its App Store to OS X computers, potentially
ushering in a new age of software development.

4.2 Number of customers / overseas customers

Apple says there are now more than 1 billion active iPhones, an enormous milestone for the company
that speaks to the phones’ continued success and longevity. There are now 1.65 billion Apple devices in
active use overall, Tim Cook said during Apple’s earnings call this afternoon.The milestone had been
approaching for a while. Apple sold its billionth iPhone in 2016, and in January 2019, Apple said that it
had hit 900 million active iPhone users. Apple counts a device as active if it has engaged with an Apple
service within the past 90 days, a spokesperson told The Verge. The stat would suggest that a substantial
number of the iPhones ever sold remain in active use, at least by Apple’s definition. BNN Bloomberg
reported last year that analysts believed Apple would be approaching its 1.9 billionth iPhone sale by the
end of 2020, though the company hasn’t announced if it’s passed that milestone.
Apple’s announcement came during an enormous quarter for the company, in which it set an all-time
revenue record. iPhones did particularly well during the final quarter of 2020, with sales of $65 billion,
another record (though one that was helped by delays pushing iPhone 12 sales fully into the holiday
quarter). And the company saw more iPhone “upgraders” than ever before. Cook also said that a record-
setting number of FaceTime calls were made on Christmas 2020 — a milestone that was certainly
helped along by the pandemic keeping many families and friends apart.

While sales are up and usage is at an all-time high, Apple has spent the last several years trying to
diversify its product line as iPhone unit sales slow. Analysts have estimated a decline in overall phone
shipments and sales in recent years, and Apple hasn’t been immune to the trend. But even if fewer
iPhones are being put into people’s hands each year, people are evidently hanging on to them for a long
time.

4.3 Specific distribution channel

When it comes to distribution channels companies, usually use a direct or indirect approach. In many
other cases through a mixture of direct and indirect channels make more sense.For instance, the Apple
business model leverages both on direct and indirect channels. Apple sells its products directly via its
Apple Stores.This is critical to Apple success as it enables it to deliver a high-quality buying experience
for its products in which service and education are emphasized. That is also why Apple keeps expanding
its stores worldwide. While this is a critical part of Amazon distribution strategy, it is also quite
expensive. Yet Apple has full control over the customer experience and control over a distribution
strategy requires massive resources. With this approach, Apple can employ experienced and
knowledgeable personnel able to offer a wide selection of third-party hardware, software and other
accessories that complement Apple’s products. Indeed, you can see how a good chunk of Apple‘s
revenues also comprise services (13%) and other products (5.6%). This means that the Apple stores are
an essential driver of sales. And it makes sense given how much the company spends in running them.
To have a bit of context, in the next ten years Apple will spend over nine billion dollars in operating
leases as reported on its financial statements. Yet if Apple were relying solely on its retail operations,
this would be too risky. Indeed, those retail stores are subject to financial risks and if sales were to rely
exclusively on them would, when slowing down, it would easily create trouble for Apple long-term
business success. At the same time, Apple Stores have a high impact on the company’s brand. Indeed,
they create visibility for the brand and the company’s products. How? Let’s do this simple exercise. if I
were to ask you “where do you think Apple sells most of its products?” I’d bet you would probably
answer, via its Apple Stores. However, if I were to ask you “where did you buy your iPhone?” (Which is
the primary driver of Apple sales) chances are you’ll answer “not at the Apple Store!” In short, I like to
define Apple distribution strategy a creating a “positive cognitive gap in perception” for its consumers.
Consumers might associate Apple with the image they get primarily via its Apple Stores. Those stores
are just one smaller part of the overall Apple distribution strategy. Not by chance, Apple ‘s retail stores
are typically located at high-traffic locations in quality shopping malls and urban shopping districts. The
aim is to create as much visibility independently from sales. I’m not saying sales are not significant. The
main point is that Apple can leverage its stores to have control of its branding strategy, thus the way
consumers perceive the overall company. Yet that is not where most of the sales happen! In short, the
Apple Store isn’t just a retail store. As highlighted an Apple Store is a branding and marketing effort to
create a controlled experience and imaginary in the mind of its consumers. If it is easy to assume that
most of Apple ‘s revenues are coming from its direct channels, Apple employs a variety of indirect
distribution channels that comprise:

1 Third-party cellular network carriers

2 Wholesalers, retailers

3 Resellers

Besides the Apple Store, you will find an Apple product also at Best Buy, Walmart, Target, Radio Shack
and Sam’s. And chances are you bought an Apple product there. Why? In 2018, according to Apple
Annual Report, the company’s net sales through its direct channels accounted for 29% of its revenues.
Compared to 71% of net sales coming from its indirect distribution channels!

4.4 Market Segmentations

Apple Inc understands the need for market segmentation and thus operates in different market segments.
Apple Inc applies the strategy of studying the market and then targeting specific user experiences. The
company then builds a product around the experience accordingly. There are two types of market
segmentation. These include Psychographic and behavioral segmentation. Psychographic segmentation
is the grouping of customers as per their lifestyle. Interests, activities, and opinions are a good way of
measuring lifestyle. Behavioral segmentation, on the other hand, is the actual behavior of the customer
towards the company’s products. Some of the variables in this segmentation method include usage rate,
brand loyalty, sought benefits, readiness to buy, and user status. For different segments to be practical,
they must be accessible, identifiable, substantial, unique, and durable. The market segmentation of
apples includes demographical bases, geographical bases, behavior bases and psychographic bases. The
demographic market segmentation of Apple is successful in that the company develops products based
on lifecycle, age, and occupation of the customers. The products are supplied to different areas while
categorizing the PCs on family size and age (Al-Refaie & Bata, 2016). A good example is a PC with
more games for kids and a PC with latest software and features for professionals. In addition, the
younger generation is more into fun as compared to the older generation. A phone with a high graphic
resolution is favored by the young people while a digital watch with the capability to monitor one’s
pulse rate would be favored by the older generation. Another market segment is based on geographical
areas. Apple has established itself all over the world. The company’s brand is known all over the world.
Apple Inc has retailed stores in 45 states out of the 50 states in the United States of America. It also has
stores in more than 18 countries all over the world. In addition, the company’s products can be accessed
from the online retail stores from anywhere in the world. In recent times, the company has chosen to
apply a vertical growth strategy. This strategy involves expanding the retail stores which are owned and
controlled by the company (Al-Refaie & Bata, 2016). In addition, the company is also selling its
products through third parties through the Internet, websites, iTunes and other online stores. Through
such methods, the company can reach many customers and also expand its market. The other market
segment is based on behaviors of the customers. These behaviors include usage, attitudes, product
knowledge and responses. Through advertising, Apple Inc provides enough product knowledge to the
customers. Advertising is done on search engines, mass media, and social media. In addition, the
company has created a strong brand image. Using the brand image, the company continuously innovate
new products and ideas that attract more customers. The company’s response rate is very high given that
customers are looking for innovative products, and new designs which are the company is readily
providing. The company’s products are also user-friendly. The psychographic market segment is another
segment that the company competes in. the company is successful in this segment in that it develops
products based on the customers lifestyle. A good example is the Mac book meant for the younger
generation. It is very compatible with the aspiring and fun-loving youths. In addition, personality is very
well incorporated in the company’s products (Al-Refaie & Bata, 2016). The products come in different
colors for those who like fancy colors. The good brand image of the company also adds value to the
products and services. In all the market segments, Apple Inc has managed to remain competitive over
the years. This is due to the company’s efforts to study the market and applying the user experiences into
the innovative process. The market segmentation of Apple including demographical based, geographical
based, behavior based and psychographic-based enables the company to remain as the world’s largest
information technology company by revenue and total assets. Apple Inc understands that people have
different needs and thus cannot be handled using the same methods. A specific need calls for a specific
method. Its marketing strategies including pricing and segmentation are also strategic in the
competitiveness of the company.

4.5 Positioning Strategies

Apple has been able to build a lifestyle-brand by making Apple mean “Creative” and “Superior-class” in
the sub-conscious minds’ of consumers. The question remains how was Apple able to create this
positioning in the minds of its customers. There is a popular saying that Simple is stylish

This is what Apple stood by all these years and defined its positioning around three core tenets:
Simplicity, Creativity, and Humanity. Apple communicated this positioning through one of its most
successful marketing campaigns till date: Think Different
The act of thinking differently represents; smart, innovative, clever, and creative. The company has lived
up to the claim of ‘thinking differently’ by actually ‘acting differently’ by going against the norm –
always asking the question; “what’s different about this?” It's this attitude of thinking different, what
made Apple one of the most valuable tech companies of today’s time. But all this strategy won't have
been possible without Apple’s razor-sharp execution Like a famous saying “Vision without execution is
a delusion “Let’s have a look at how Apple has translated “Think Different” into all its brand touch-
points.

PRODUCT DESIGN:

“Simple is different” – Apple has always lived by this motto and have never attempted to overdo things
in its product design. From colorful iMacs to iPods, iPhones, and iPads – Apple has always added
elegance to simplicity and this is what has been liked by the customers and has worked wonders for the
brand.

INTERFACE DESIGN:

Right from its birth, Apple has laid special emphasis on its interface design. The brand has made sure
that its interface is simple and easy for its each and every customer, irrespective of what walk of life he
belongs to. With an aim to improve the customer experience, off late Apple has started following Human
Interface, that enables them to make application interfaces more intuitive, learnable, and consistent.

OFFLINE STORES:

Not just the digital touch points, Apple lays special emphasis on its offline stores as well (considering
they are the hubs where customers get to experience Apple products). Again, Apple does not attempt too
hard in designing its stores and prefers to keep it simple and minimalistic. Apples retail stores basically
visualizes brings a creative lifestyle to life through a combination of product and retail design. Products
aren’t sorted by type and stocked in shelves in Apple stores, but are rather displayed together on tables
for customers to walk through and experience.

PRICE:

If you are paying a premium price, you expect an unmatched product quality. And this is what is
expected from Apple as a brand. “YOU GET WHAT YOU PAY FOR”

Apple enjoys one of the highest price points in the industry, to the envy of its competitors, who all bang
on about ‘value for money’.
4.6 Promotion Tools Used
Apple’s promotional marketing mix strategies include advertising, public relations, and sales
promotions. In other words, Apple is using innovative advertising to attract and inform its customers
about Smartphones both in mass and digital media.

Besides, the firm utilizes public relations as one of the promotional strategies. Essentially, Apple uses its
corporate social responsibility to appeal to many people as a method of maintaining public relations. The
success of the firm on public relations improves goodwill and attracts public attention. Further, Apple
provides special offers as a good way to stimulate and retain its customer’s loyalty.

Firms have to create good relations with customers in order to understand and satisfy their needs (Nissen
& Ruud, 2000). The capability of identifying the needs of customers is a critical competitive advantage
to the firm (Cole, 2013). Essentially, understanding the needs of customers originate from market
information. Market information can be used to create products that are highly valued by the customers
(Cole, 2013). In fact, firms should use market information to create highly competitive products. One of
the ways through which the firm can increase its competitive advantage is by utilizing the market
information to create quality products that are highly valued by the clients. As such, Apple should utilize
the market information to identify features that customer value in Smartphones. Such information is
critical in creating the valued products that create additional competitive advantage. In other words,
Apple should utilize market information to create Smartphones with features that add value to the client.
The features should differentiate the firm’s Smartphones from the competitors. In addition, Apple should
utilize market information to create new Smartphones with increased quality and with unique features,
which are highly valued by the target market. Market information should be utilized to bring into the
products rare features that cannot be easily substituted or imitated by the competitors. In essence, the
firm should utilize its technological prowess and market information to create products that are highly
valued, with rare features, inimitable, and non-substitutable to differentiate the product from the
competitors. Such capabilities would increase their competitive advantage. Generally, most firms in the
industry are producing and distributing similar products. As such, the product differentiation strategy
that targets quality and unique features would be critical in attracting the target clients (Armstrong &
Kotler, 2011) Market information is critical in establishing what the client need and value. The market
information is used to create products with differentiated value, which in turn increases the competitive
advantage to the firm. Just one word can be used to describe the Marketing strategy that Apple has been
using; Empathy. Empathy is simply the ability to understand another individual, to be able to connect
with them at a deeper level, get deep into their innermost desires and wants and provide them with a
product that greatly benefits them to the point that they practically cannot live without it. Apple chose to
get their customers a product that is so useful to them that they would not even think of going for its
substitute. They opted to go for a product that is easy-to-use, clean and simple to ensure that their
customers were getting what they want without having to put too much effort into it. This is what set
Apple apart from all other companies in the entire world and this is also what contributed to the huge
success of their marketing strategies. Steve Jobs came back to Apple in 1996 and at this point the
company was almost going bankrupt They had reported a $1 billion loss the previous year and they had
just ninety days left before they hit bankruptcy. Steve then came back and put his marketing strategies in
4 place Apple then reported a $5.9 billion profit. Steve then raised Apple stock market cap to $702
billion from a mere 43 billion. This is actually more than Google who have $218 billion and Microsoft
who have 4226 billion. You might be wondering how he was able to achieve all this. Mind you, he was
able to do all that in just ten years. It all started with the brilliant mindset that Steve had. First and
foremost, Steve said that so as to take Apple to the top, the mindset that Microsoft has to first come
down has to go. The competing mindset had to be let go of, immediately! He instead chose to work with
the mindset that for Apple to get to the top, it has to really work hard. The most important thing should
be Apple’s ability to create value; Apple should be able to make great contributions to the industry. The
following year, Apple released the premier computer that gave users easy access to the internet. At that
time, for one to connect to the internet on most computers, they had to contend with hours of complex
set ups. Apple brought in the Mac that allowed one to connect to the internet in just ten minutes, at most!
It was very clear to Steve Jobs that he needed to concentrate on meeting the customers’ needs and giving
them exactly what they wanted if they were to continue spending their money on Apple products.

4.7 Pricing Methods

Apple Inc.’s pricing decisions revolve around cost objectives that are anchored on the value of the
product. In other words, the firm emphasizes the provision of high-quality products. For instance, Apple
is dedicated to providing quality Smartphones, which can be used effortlessly by the customers in
accessing the internet, watching movies as well as reading books from any location (Armstrong &
Kotler, 2011). In fact, the pricing objective is to ensure that the cost of the product reflects its quality.
The pricing strategy will go a long way in attracting and retaining the esteemed clients. Besides, the firm
aims to maximize sales and proceeds by offering superior prices. Superior prices can only be attained
through the exploitation of available prospects in the market. In addition, the firm aims to procure
paybacks emanating from increased sales and amplified returns by charging higher prices. Besides, the
firm’s pricing objective is anchored on warding off competition through price leadership capabilities in
the Smartphone market. Based on the pricing objectives, the firm utilizes price inducements and
establishes higher reference prices for competitors. Additionally, the corporation bundles the price
components making its products look cheaper but of high quality. In fact, through the utilization of price
inducements capabilities, Apple comes up with price points that make its Smartphones look superior. In
fact, using price decoys, Apple often offers Smartphones in series according to prices. Second, the firm
is capable of setting high reference prices that the competitor cannot achieve. However, after the launch
of the product, the prices are moderated to reflect the decreased value of the product. In principle, Apple
utilizes a first-iteration pricing strategy to portray the product to be having high value and within the
consumers’ means. Third, Apple normally disguises the reference prices from the consumers. In other
words, the firm makes all its products unique. As such, they are comparing the prices of the products
becomes difficult. Lastly, the firm also bundles the price components of the product. Based on this
pricing strategy and for every Smartphone purchased from Apple, clients spend more on the gadget
downstream in terms of additional values.

Price skimming Price skimming is a strategy followed by premium brands where the products are
priced very high with higher profits so that fewer sales are needed to break even for the manufacturer.
Brands who are looking to separate themselves from competitors by positioning their offering as the
‘leader’ in terms of quality, customer satisfaction, popularity, etc. are most likely to use price skimming
as a strategy for their new products. Since 2007, iPhones and all smartphones have become increasingly
costly, but given the versatility that phones have achieved in that period, it is not an exaggeration to say
that the rise in price was expected. The most premium iPhones have a price range from $1200 to $1400,
and this is only if you’re lucky enough to live in the United States. The prices of iPhones in all the other
parts of the world are much higher with some of the highest-end models priced at around $2000 in
Eastern Europe.

Decoy Effect the Decoy Effect is a phenomenon where the consumers will tend to have a change in
preference between two options when presented with a third option that is asymmetrically dominated.
you don’t quite understand this concept, I’ll give an example to make it clearer. Consider that you’re in a
movie theater and the theater sells you two options for buying popcorn buckets — a small bucket for $4
and a large bucket for $7. Most of us tend to want to spend less and hence go for the cheaper option. To
combat this, instead of giving a discount the theater will give a third option of a medium bucket for
$6.50. This is called the decoy pricing and is a proven method for tricking our minds into comparing the
larger buckets and eventually buying the most expensive option thinking that it is more value for the
money. In 2019, Apple used this effect where the iPhone 11 was priced at $649, while the iPhone 11 Pro
was priced at $999 and the iPhone 11 Pro Max at $1099. Here, the iPhone 11 Pro was acting as the
decoy. Now let’s assume that the medium bucket was priced at $4.50 rather than $6.50. Then the small
bucket would act as the decoy as the medium one. This strategy was followed by Apple in 2017 when
they were pushing the sales of the iPhone 8 Plus and the iPhone X being a limited-edition model. It was
even followed by the 2020 Galaxy S20 models.