Magazine article Marketing

Mark Ritson on Branding: iPhone Orgy Enlivens Stale Industry

Magazine article Marketing

Mark Ritson on Branding: iPhone Orgy Enlivens Stale Industry

Article excerpt

The iPhone has arrived. Friday's scenes of frenzied shoppers in Apple stores across the US spoke volumes about Apple's ability to confound the sceptics and create excitement in the otherwise predictable world of consumer electronics.

Only a fool would question Apple's ability to launch products successfully. Nobody does it better. But, although all the initial pre-launch excitement has paid off in an orgy of launch publicity, Apple now faces a much tougher strategic question: will the iPhone meet its sales targets?

Apple chief executive Steve Jobs very clearly laid out the expectations for the iPhone when he said: 'We've got two strong legs on our chair today: we have the Mac business, which is a dollars 10bn business, and music: our iPod and iTunes business, which is dollars 10bn. We hope the iPhone is the third leg on our chair.' To become that third leg, Apple needs to sell 10m iPhones by the end of 2008. That means gaining a 1% global market share in just under 18 months.

It's a very ambitious target. To put it into perspective, the BlackBerry has yet to reach the 10m figure globally, despite having been in business considerably longer than 18 months. There are many people who doubt Apple can achieve such an aggressive goal. Edward Snyder, an analyst at Charter Equity Research, says: 'Implementing a cell phone is more difficult than anything Apple's done to date ... I don't think its going to be a big player in this at all.' This is a conclusion shared by media agency Universal McCann.

So far, however, the market appears to be responding positively. Early figures from research firm M:Metrics suggest that 9% of the US market and 16% of UK subscribers have a strong intention of buying an iPhone More than 1m consumers signed up at the Apple website to be notified when the iPhone was available. Although Apple has not officially announced how many handsets were sold over the launch weekend, most estimates suggest it was between 400,000 and 500,000.

To some extent, these sales were almost guaranteed: a fervent congregation of tech-savvy Apple devotees were always going to snap up the iPhone the moment it appeared in-store. The interesting sales data is likely to come in August and September as the more discerning early majority replace these early adopters of the iPhone. These later consumers will make or break iPhone's ambitious market goal.

The iPhone already appears to be making a dent in the competition. …

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