The Apple Iphone

Abstract

This case describes the introduction of the Apple iPhone, including subsequent price reductions and market share goals. The case includes publicly available data on iPhone production costs, channel margins, and marketing costs. It concludes with the July 2008 introduction of the second generation 3G iPhone.

Excerpt

UVA-M-0765

Rev. Mar. 15, 2010

THE APPLE IPHONE

Introduction

One percent market share equals 10 million units. This is a giant market. If you [sell] just 1% market share, you are going to sell 10 million phones—this is exactly what we are going to try and do in 2008, our first full year in the market—grab 1% market share and go from there. So we are going to enter a very competitive market, lots of players. We think we are going to have the best product in the world, and we are going to go for it, see if we can get 1% market share—10 million units in 2008—and go from there.

—Steve Jobs, January 9, 2007

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Keywords: Pricing, Innovation, Marketing