Leveraging competencies for

focused differentiation
Five generic strategies
 Broad-Differentiation
Strategy
 Offer more products to a
broad of buyers
 Deliver value to customers by
differentiating

 Focus-Differentiation
Strategy
 A narrow market niche
with unique needs
 Premium Price to target
high-end consumers ,
business market
Cashing on opportunity and create a need

Smart-phones allow
users to:

• e-mail, internet

• store information,

• entertainment

• install programs,

• along with using a

mobile phone in one
device
 Industry driving forces

• Provides new capabilities & applications

Products at anywhere and anytime

• Business tools to cool items for

Technology entertainment

• Google – the next powerful entrant

Competition • No sign of major firms exiting

• Although 3G still fresh, talks of 4G

Innovation already on the way
 Where is the opportunity ?

• Market size and growth rate

• Number of rivals
• Product Innovations
• Learning/experience curve effects

Total Mobile Sales:

- Mobile phone
sales to exceed
1billion in 2010
- More than 200
million smart-
phones will be
sold in 2010.

Source:
http://www.palminfocenter.com
 Competitive analysis
1. Consumers market

2. Corporate market

1. VoIP 1. Carriers
Skype… AT&T …

2. PDA phone 2. OS
Palm… providers
Linux, WM…
3. Features
phone 3. Hardware
Nokia, LG … makers
Intel …

1. Establish
1. More
mobile
companies
manufacture:
enters…
LG, Samsung
2. Strong
2. Software
brands and
giants: Google,
finance
MSFT
The players and strategy

Source: www.wikinvest.com

Apple

RIM HTC

PALM
Samsung

Nokia
Motorola
 The future is in wireless technology

Source:
http://blog.bryanstarbuck.com
 Key success factors

Consumer-oriented Factors

Technology Marketing Skill and Distribution

Capability
------------------- ------------------- ------------------- --------------------
- Internet driven - Well-know and - Value added - A strong network
force well-respected (cheaper, faster, of wholesale
- Replacing brand name more convenient distributors/
communication than the dealers
- Market alternatives)
tools segmentation - Fast introduction
- Next generation - Design and and application of
- Targeting and innovation
experience Pricing services
expertise
effectiveness

“This is a difficult industry, part of it is technology;

part of it is fashion…”
 Apple time line
Apple Timeline
Jobs back as "interim
Jobs became chairman
CEO" in 1997

iPhone launched
IBM released its first 6/29/2007
PC
iPhone 3G hit market
Founded (4/1/1976) 7/11/2008
Introduced Macintosh

1975 1980 1985 1990 1995 2000 2005 2010

I Pad
1/1/1977 - incoporated iApple ?

Jobs left Apple iTunes unveiled

by Steven Jobs & Apple was in trouble
Steven Wozniak 1990s iMac released

iPod went to life 2001

Hand spring time line
Hand spring product development cycle
 The value chain

Supply Sales and

Operation Distribution Service
chain Marketing

China –
Shenzhen
Assembly
Facility Taiwan
–
Facilities of
camera,
circuitry,
connectors,
stainless
casings

US –
Singapore
Facilities
of touch –
screen, Facilities of
specific CPU,
parts processing
Source: http://www.shmula.com chips
 Sharp rise in consumer
demand
 56% of smart-phone buyers
prefer iphone

 New target market –

price reduction attract
more customers

 High Potential Software –

upgradable; can add new
features

 3G Apple iPhones to
captivate business
demand worldwide
Source: http://www.linuxdevices.com
 New powerful entrant - Google

 Many similar or substitute

products

 Intense competition with major

rivals

 Increasing bargaining power of

buyers
  First mover advantage

 Ownership of

technological patents

 Apple is one of the most

established brand

 Customers loyalty

 Cultural, fashion identity

Source: http://www.appleinsider.com
Dependence on third party provider:
 AT&T, Content Provider, Application provider

Less appeal to corporate customers

 Technological complication

Gorilla arm

Limitation of particular features

Application slow down and freeze

 Distinctive competency in action

iTunes : Synchronization
between the iTunes - App
store and Apple devices.

User interface of
consumer gadgets and
computing devices
Intuitive design, easy-to-
use and self-discoverable
Core Competence
Users’ experience

Source: http://blog.wired.com
 Product success
Apple may well pass Microsoft,
which has $23.7 billion in cash, and could have $40 billion in 2 years

Source: http://www.businessweek.com
 Product success
iPhone
5%

iPod Mac
36% 59%

Revenue Contribution
Q2/2008
 Product success
PROFIT MARGIN
Apple has recently doubled its net income
8000%

7000%

6000%

5000%

4000%

3000%

2000%

1000%

0%
2008 2007 2006 2005 2004 2003

Profit margin Net income Net sales

Data: Standard & Poor’s

Successful focused differentiation strategy

Source: http://www.artechnica.com
Successful focused differentiation
strategy
A onetime audio engineer who now works as
a consultant for Stereo Exchange, an upscale
audio store in Manhattan, Mr. Zimmer lights
up when talking about high fidelity, bit rates
and $10,000 loudspeakers.
But iPods and compressed computer files —
the most popular vehicles for audio today
January 2012 - 50 million
October 2011 - 32 million
June 2011 - 25 million
March 2011 - 19 million
Jan. 18, 2011 - 14.8 million
Sept. 2010 - 7.5 million
July 21, 2010 - 3.27 million
May 31, 2010 - 2 million
May 3, 2010 - 1 million
April 8, 2010 - 450,000
April 5, 2010 - 300,000
Last Updated: April 25, 2012