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Beauty & Brains

The Competitive Strategy
Behind Apple’s iPod

Title
Fast Cycle Expectations
• Text

• What is a fast cycle industry
• Concept of creative
convergence

Title Apple Cycle Reality • Text • Apple's way of dealing with competition • Apple’s maximizing revenue strategy • Why every company should renew its initial idea • Overcoming competition meant apple had to influence the force of time .

Title • Text FIT • Competitive strategy= relationship with fit • Intutive understanding .

Highest market share  First mover advantage + Name recognition (RIAA lawsuits) .Title CORE COMPETENCIES • Text • 2001: Launched • Competitor:  Diamond Rio (Music digital Player  Rio.

Title RIO VERSUS iPOD Parameters • Rio iPOD 64 MB 16 songs 80 mins 5.) RAM 16 MB 32 MB Introduction date March 1999 October 2001 Price $ 125 $ 399 Storage capacity Text Songs Minutes .000 KB per sec (50 MB/sec.000 MB 1. 50.250 mins Battery life 1x AA (not included) 10 hour rechargeable lithium ion 3 hours recharge time Display Single line B & W LCD 160 X 128 B & W LCD Connectivity Parallel port adapter Proprietary high.250 songs 6.speed firewire Transfer rate 100 KB per sec.

Title INSTITUTIONAL KNOWLEDGE • Text • Eliminate product barriers: 256 MB (1999) • Flash memory storage technology vs hard disks • Industry’s thinnest hard drive (3 years): Partnership with Toshiba .

Hard disk.Title IPOD VALUE CHAIN Hard disk Holds 50+ songs Software Oraganises tracks & selects songs Operating system Runs software Processor Runs operating system • Text LCD Screen Allows I/O readout Battery Power screen. Processor Firewire Fast connection to sync music on PC .

Title ORCHESTRATION • Remaining integrated • Text • Cross-disciplinary capabilities CUSTOMER NEEDS • Aesthetics + Functionality + Usability= Market Needs • Anticipate new ideas + Brand Loyalists= Customers • Early Adopters + Early Majority .

ease of use. • Innovators-5GB hard drive. seamless integration and accessories. • iPod attracted the high-tech innovators and recreational early adopters.Title Product Design • Text • Complexity was turned into an advantage. fast Firewire transfer rate. handsome design. solid construction and rechargeable batteries. . • Early majority-clean.

. Always loyal.Title Product Design • Text • First mover advantage. • Slower adopters-Once loyal.

Title • Text .

• Introduction of Mini-Mac . low learning curve and no fear of incompatibility.Title Pricing • Text • iPod loosens the constraints by giving the public a chance to “get into an Apple” at a lower price point.

.Title • Apple’s advertising strategy • Text • iPod has become a credible extension of Apple’s brand fit. • Apple had to take proactive measures to slowing down the speed of convergence.

software and operating system. NETWORK EFFECTS  Ipod+iTunes music player relationship Consumer need Build an ITunes user base. Reduction in switching cost. .Title CONVERGENCE • Text  Produce its own hardware.

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Title • ITunes music store played a major • Text role in iPod success Protection against lawsuits Napster-music sharing software Court battle between Rio and RAA iPod security .

Title • Text .

Title • Text ACC music standard .

Title • Text ACC Format • IPod being the only hardware player that can play ACC files. Created customer loyalty • Quick time • Pixar .

NETWORK CYCLE .

• Hence .Title • Text Switching Cost • Switching charges for users for using competitors hardware. . • Users will not invest time and money for the same product at same price.customer loyalty.

Title Third party accessories • Text • Creating and augmenting fit new. niche and unaugmented market. . • Building Creditability . • Integration of iPod into their car stereos.

Renewal GOAL: • Realign Ipod With New Market Conditions TITLE INNOVATION • Quarterly upgrades that too via Internet broadcasted public presentation • Upgrades to iPod NetworkiTunes & Music store were via internet. .

Title DYNAMIC PRICING • •Text Stable but premium pricing NO DISCOUNTS SAME PRICE EVERYWHERE .

Title WHAT LIES AHEAD……. . computers & cars. • iLife Text software strategy iPod to is being positioned as entertainment server Integration with TV..

.computers & cars..Title WHAT LIES AHEAD……. • •Text iLife software strategy • iPod to is being positioned as entertainment server • Integration with tv.