iPhone is the line of smartphones by Apple based on its iOS operating system. It is the core product of the company accounting for the largest part of its revenue and net income. A lot of good news has followed Apple’s release of iPhone 11. Its shares have hit an all time high of $237.64 per share in October, 2019 compared to the last highest of $233.47 per share in October, 2018. Market cap of the company has touched an all time high of close to $1.11 trillion (NASDAQ, Oct 25, 2019). Apple has overtaken Microsoft in terms of market capitalisation. Since the release of iPhone 11, which is enjoying strong popularity and higher sales, the company has experienced a sharp rise in its market cap. The new iPhone 11 is being touted as the best iPhone ever. Apart from a sharp jump in processing speeds, the new phone also comes equipped with better cameras. Another reason that iPhone 11 has been so popular is Apple’s pricing strategy. Apple released the new iPhone 11 in three variants. As a result, sales were just so high that the company had to increase their production by around 10%. Last year, sales of iPhones were weaker. This year the company is enjoying higher sales and in the emerging economies too, the demand is quite strong. iPhone 11 is truly an attractive set and customer reviews all over the internet show that the buyers are highly satisfied whether they are first time buyers or old users upgrading their iPhone. Read about what made iPhone 11 such a huge success in the global market through this marketing mix including the product’s features, pricing, placement and the promotional strategy Apple employed for the latest iPhone.
iPhone 11 is the latest in line of Apple iPhones. The product has been launched in three variants – iPhone 11, iPhone 11 Pro and iPhone11 Pro max. The basic iPhone 11 is equipped with dual camera whereas the iPhone 11 Pro and Pro max come with triple cameras. There are several more features that the iPhone 11 comes loaded with and which make it the most efficient iPhone. The new iPhone 11 comes with extra battery life which is the highest of all the iPhones released till date. The battery life of iPhone 11 Pro max is five hours higher than the iPhone Xs Max and the iPhone pro gives a battery life which is 4 hours higher than iPhone Xs. These phones are also equipped with a smarter chip – ‘A13 bionic chip’ – which is more efficient and performs faster than the last A12 chip. While it is faster and smarter on the one hand, one the other it is also 30% more efficient, meaning it consumes less power compared to previous chips. This is also a reason behind the longer battery life of the latest iPhone 11. The A 13 bionic chip with next generation neural engine makes the iPhone the best smartphone in terms of performance.
Other features that make the iPhone 11 a better phone are its display and camera. Both Pro and Pro Max versions come with triple 12 mp ultra wide, wide and telephoto cameras with night mode. Pro Max version of iPhone 11 comes with the largest 6.5 inches large display whereas iPhone pro has 5.8 inches and iPhone 11 has a 6.1 inches large display. iPhone11 Pro is the lightest of the three models weighing only 188 grams or 6.63 ounces. The basic version weighs 194 grams or 6.84 ounces and the Pro Max version weighs 226 grams or 7.97 ounces. Both Pro and Pro Max have super retina XDR displays whereas the basic version has liquid retina HD display.
This time Apple has left no stone unturned to make its iPhone 11 the best smartphone in the market. The pro versions are also made water resistant to a depth of 4 metres for upto 30 minutes. The basic version is water resistant to a depth of 2 metres for upto 30 minutes. According to Apple, Pro and Pro Max have the toughest glass of all smartphones. Other smart features that make the iPhone 11 (all three versions) excellent include haptic touch, FaceID and true depth 12 MP camera with 4K video recording upto 60 fps. The pro versions have a capacity (expandable memory) of upto 512 GB and the basic version of 256 GB. Overall, Apple has made some major improvements for which most online reviews have hailed iPhone 11 pro and Pro max as the best iPhones that give you a bang for your buck. For those who want extended battery life, iPhone 11 truly delivers the kind of performance they want. Another important attraction of iPhone 11 is the iOS 13 which provides a seamless experience. Apple had released its first iPhone in 2007. Its earliest iPhones were not so great in terms of performance and features. However, with time the company has continued to make improvements that make every new piece irresistible. However, this time Tim Cook has managed to create a somewhat better balance between performance and pricing.
Faster performance is one of the leading reasons behind iPhone 11’s popularity but the triple camera and higher battery life have also made it customers’ favourite in most corners of the world. The demand for iPhone 11 grew very fast following its release and Apple was forced to ramp up production. However, this is also a period when smartphone demand around the globe has started softening. iPhone 11 has proved to be a huge success but Apple is trying to not to be over-optimistic and will continue to play more cautiously than ever.
Apple is headquartered in Cupertino, California, United States. However, the company has managed a strong global presence through local production facilities, R&D facilities as well as a global sales and distribution network that spans the entire world. Apple’s supply chain network is also spread globally. Its substantial part of hardware and components including the iPhone are manufactured by outsourcing partners located primarily in Asia (Apple Annual Report, 2018). Moreover, a significant part of the production is concentrated in the hands of a small number of manufacturers who carry out the production mostly at single locations. Apart from that, the company has outsourced most of its transportation and logistics management. These factors have reduced the operational costs of the company but also reduced the control on the making of its products that Apple had in its hands. Most of Apple’s iPhones are produced in China.
Media resources quote that Apple has decided to move some of its manufacturing out of China. This might be being done to reduce the impact of tariff imposition by the Trump government. Apple is already producing some of its iPhone models in India including the cheaper iPhone SE models through its manufacturing partner in India named Wistron, a contract manufacturer. According to Fortune, Apple might also move the manufacturing of iPhone X to Foxconn facilities in India. China will still account for a substantial part of iPhone production which is because the Chinese consumers form a large part of Apple’s customer base and moving production away from there could alienate them and drive operational costs for Apple too high. Producing locally in India and China helps Apple cater to local demand and manage prices in these markets more efficiently. By managing lower prices of iPhones, Apple has been able to drive the demand for its products higher in emerging economies. Its sales of iPhone 11 indicate how Apple has successfully balanced demand and supply for iPhones by producing in India and China. However, moving iPhone production away from China entirely would be a real costly move for Apple.
As for iPhone sales worldwide, Apple is utilising several sales channels including its website, company branded stores, authorised sales partners and other e-commerce websites in various markets including Amazon and Flipkart. Its own website and retail stores play a central role in the distribution and sales of Apple products including iPhones throughout the world. Apple tries to ensure that its customers have a high quality buying experience in which the emphasis is on service and education. In this regard, it is continuously expanding its number of company owned retail stores worldwide so that the customers get best in class buying experience. While these stores which are mainly located in high traffic locations and malls, ensure a superior buying experience for customers, on the other hand, they also help attract new customers. Apple has designed its stores in a manner that makes the promotion and marketing of its products easier. The company also places highly experienced personnel in its stores that offer service, knowledge and training related to Apple products as well as peripherals and a number of hardware, software and accessories built by third parties that complement its own products. Apple has also used a premium reseller program to drive sales and offer education and training related to its products. As a part of this reseller program, third party resellers which are a part of the program provide high level product expertise, integration and support services for Apple products. For the promotion of its products and to drive sales, the company places high quality fixtures, merchandising materials and other resources within third party locations. Third party resellers also play a major role in the sales and distribution network of Apple. The company also uses its own website for the marketing and promotion of iPhones and to drive direct sales to customers in key markets. Customers can analyse the various models of iPhone including iPhone 11 models and the other previous models and compare their features easily on Apple website. Apple, apart from its main U.S. website, has also created versions for other select markets where it ships its products.
Apple has several authorised resellers in the U.S. which include online resellers like Amazon and major retail brands like Walmart or Target as well as Sam’s Club and Macy’s. Third party cellular network carriers like AT&T, Verizon, Sprint, TMobile and U.S. Cellular are also among the authorised resellers of Apple.
Having a strong sales, marketing and distribution network can lead to favourable sales. Moreover, Apple cannot rely on just few sales and marketing channels for the promotion and sales of its iPhone. Availability and accessibility are important factors that affect sales. Simply put, customers have too many options if they want to buy an iPhone 11 and whether they like to walk into the nearest Apple store or purchase one online, there is no difference in the product or accessories. However, if there are long lines before Apple stores when a new iPhone is released then it is because of the superior buying experience that these stores offer. In 2018, the direct sales channels of Apple accounted for 29% of the company’s net sales whereas the indirect sales channels accounted for 71% of the total sales. Overall, utilising several sales and marketing channels helps Apple achieve the best sales and revenue for each of its products. However, the availability of iPhone 11 on online resellers like Amazon, Flipkart and other online channels has also added to the overall sales of the product ensuring higher availability in the emerging markets.
In terms of pricing, Apple’s most products come with a large price tag. Apple is well known for its premium products and premium pricing strategy. However, the reason behind the premium pricing strategy is not mainly to influence the higher end customers. These products are quiet great in terms of performance and overall user experience. Each iPhone or Mac user is familiar with the wide difference in the experience Apple products offer and those made by its rivals do. While there are several competitors of iPhone currently in the market including those made by Samsung and Huawei, Apple focussed upon performance and efficiency as well as simplicity and delivering full value for every penny that the customer was paying. However, this time Apple’s focus was also on strengthening the iPhone experience and creating something that was simpler but a lot better than any previous version. Asian Nikki Review has termed Apple’s pricing strategy for iPhone 11 as a budget conscious strategy. Prices start from $699 only. However, apart from great screens, the iPhone 11 also offers a lot more which the Apple customers have been expecting from it. The pricing strategy of Apple was targeted at two things – one was retaining customers in the emerging markets and that’s why it did not price the basic version very high. The second was to attract and retain the customers from the higher end segment who wanted the best in class smartphone in the market. It is why the company released three versions of the same phone.
The average customer who cannot afford to spend $1000 or more on a smartphone but still wants to have an iPhone can go for the basic version and still not be disappointed. The Basic version retains most of the special features. Each version has the A13 bionic chip which is much superior to the older chips including A12 in terms of performance, speed and energy efficiency. The challenge before Apple was not just from the mid-tier phones but lower tier smartphones as well as premium products made by Huawei or Samsung as well. So, actually the success of iPhone has also come as a blow for its competitors in each market. The sales would have been much lower had it released only the pro versions. The release of the basic version at a more affordable price led to heavy demand. Apple CEO Tim Cook is happy with the performance of iPhone 11. Apple’s market cap and share prices have surged very fast in the last few days reaching an all time high of close to $1.11 trillion on October 25, 2019. The performance of iPhone 11 is certainly better than his expectations. However, the competitors can blame it on the pricing strategy Apple has used for iPhone 11.
Apple did not disappoint the higher end consumers, but it simultaneously and successfully retained its customers in emerging markets and that too without making any major sacrifices in terms of performance, quality or the overall experience. The good news is that it is mostly the basic version driving the heavy demand. There is a significant difference in the prices of the basic and pro versions. Prices of the iPhone pro and pro max start from $999 and $1,099 respectively. So, Apple has used a more balanced pricing strategy this time. Except for the triple camera, the basic version has nearly everything including the high performance chip and offers an equally immersive experience. It is why the buyers are highly satisfied by what is on offer in the basic version. Following the drop in iPhone sales last year, Apple decided to move carefully. This pricing strategy was designed mainly to touch customers from both the upper and the middle class. However, even at $699, iPhone 11 is not cheap. However, the pricing of the basic model does not dilute the iPhone experience. Instead it has only strengthened it because the customers are happier. At last what matters is how happy you leave your customers whether it is with your product or its pricing. Apple has definitely struck a proper balance through its pricing of iPhone 11 this time.
Tim Cook has worked hard to get the iPhone 11 the reception it deserved and apart from the regular channels of promotion, this time there was somewhat higher emphasis on social media and television promotions. Apple CEO combined paid Twitter promotions with his own active promotion of the iPhone 11 through his own Twitter account, thus engaging Apple fans and followers on one of the social media networks which provides the best real time engagement.
“Apple’s most impressive iPhone yet.”— Tim Cook (@tim_cook) September 17, 2019
Three days until iPhone 11! You’re going to love it. https://t.co/izYIMgmoJB
However, the promotional mix of iPhone 11 had certain other outstanding features too. A large range of features from a revolutionary, high performance chip to a mind blowing screen as well as textured matte glass and stainless steel design, Apple has put everything into the iPhone 11 to make it stand out against each smartphone on the shelves. Moreover, Apple has decided to give the new customers free access to Apple TV+ which is launching on November 01. However, this offer is not exclusively for the buyers of iPhone 11 but also for those who buy other Apple devices like the iPad and Macbook pro. New customers are definitely winning with this offer and that is also going to drive sales of new iPhone units. TV+ will also be available to the existing iPhone owners but at a monthly charge of $5. However, that’s a paltry sum for existing owners of iPhone. Apple’s marketing strategy has always focused first on the product. A distinct and truly unique experience is generally at the core of each Apple product and it is why critics say that Apple does not make just products but creates experiences.
Apple has not relied exclusively on online channels and ads for promotions and marketing. However, the company instead mixed several channels to derive the best results and to create a great ad experience. This time the ads of iPhone were also visible on television in Asian markets. The ‘It’s tough out there’ ad showed frequently on television highlighting that the iPhone 11 was a tough smartphone. Apple used several such ads to entice television audience as well as customers on social media. Television advertising is not dead and you can still find a substantial number of your customers stuck to their television sets. However, instead of bombarding them with ads you should carefully tailor and curate ads to create something fresh, engaging and outstanding. Apple promotes its products online first and mainly from its own website. Apart from Apple newsroom, you will find a detailed guide on iPhone 11 and its different versions on the Apple shopping website. The customers are growing increasingly conscious regarding prices and product features as well as everything that is included as a part of the package. Apple engages the existing users and attracts first time buyers from its website and highlights everything that must have the customers’ attention on its website. Like every other iPhone, iPhone 11 also received its due share of media attention and publicity. With time a lot has changed inside Apple. However, they still care for the consumers’ taste whether in terms of product or promotions. Amazon and other online resellers also play a central role in the online promotions of the product. There are hundreds of customer reviews of iPhone 11 to help the first time buyers and familiarise them with what to expect if they are buying an iPhone for the first time. The market is flooded with smartphones and to stand out from the crowd requires a multichannel sales and marketing strategy. However, like in the time of Steve Jobs, the Apple stores are still the most important avenue where a lot of marketing takes place. Whether it is Tim Cook’s in-store interactions with customers and fans or the opening of a new store, Apple stores are always at the centre of the picture. Not just selling iPhones, but Apple uses these stores to bring the attention of existing and prospective buyers to a large range of existing and upcoming products and services. Apple customers will find the best buying experience inside the stores which also makes them most suitable for promoting new products or services. It is why so much focus remains on the Apple owned retail stores. Overall, Apple’s marketing strategy has worked and it showed in the form of high demand and sales of iPhone 11.
According to Tim Cook, iPhone 11 is the most impressive smartphone ever by Apple. The Apple CEO is quite satisfied with the performance of the latest iPhone. However, the best thing about this one is its camera. The three eyed camera on the back of the smartphone has grown its appeal for both old and new iPhone users. Apart from technical aspects, the pricing strategy Tim Cook employed for iPhone 11 is also excellent. The basic version has just two cameras on its back but it is still the best seller among the three models. The most satisfying thing about iPhone 11 is its performance. The new A13 bionic chip inside the smartphone has brought with itself higher performance. Another benefit that iPhone users are getting is a free Apple TV subscription. Apple has balanced all the four P’s in its marketing mix to derive the best performance. An attractive product, a balanced pricing strategy, better channels of reaching the customers and a smart promotional strategy have made iPhone 11 an amazing success and helped Apple begin a new chapter in its history.
Apple Annual report 2018 and quarterly financial reports 2019.