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by Jennifer LeClaire
CIO Today
Jun 8, 2007
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Apple is flexing its marketing muscles with the iPhone hype this week. The buzz engine is revving just as loudly on Friday as it did Monday morning, the day after the first iPhone commercials demonstrated the device's innovative features to the world.
"The foundation of Apple's advantage with the iPhone is in its control of the four Ps. It's classic marketing 101: product, promotion, price, and placement, otherwise known as distribution," said John Jackson, a wireless analyst at Yankee Group.
Jackson said he is not convinced that Apple will sell 10 million units over the next 18 months. However, he said Apple is uniquely positioned to give the mobile industry in the United States a massive jolt. A recent study from Solutions Research Group seems to back him up.
Out with the Old...
The iPhone has broad appeal, according to the study. Of the consumers interested in purchasing a $499 iPhone, 72 percent are male and 28 percent are female. The average age of interested iPhoners: 31 years old. But that's only half the data.
Research also shows that 31 percent of 15-to-24-year-olds are interested in purchasing the iPhone, along with 32 percent of 25-to-34-year-olds and 31 percent of 35-to-49-year-olds. The 50-plus crowd was least interested, with only 6 percent saying they would purchase the device. Of course, that's not Apple's target market anyway.
"When you think about the iPhone, it's more than just a device. Apple has a threefold strategy: device, plus storage, plus jukebox," Jackson noted. "To use a hackneyed phrase, it's a solution in which Apple controls everything."
Apple's Motivation
Indeed, Apple even controls the distribution channels. The way Jackson sees it, Apple's most direct competitors are not Motorola, LG, and Samsung. Apple's most direct competitors are Sprint and Verizon.
"I don't think that Steve Jobs cares much about driving network traffic over the air that AT&T can charge for," Jackson said. "Apple wants to extend its core market into a potentially high volume adjacent market and broaden the distribution at the same time."
All in all, Jackson said he sees the iPhone as "good for the market." While the company might or might not sell the 10 million units it predicted it would sell in the first 18 months of the iPhone being out, he noted, Apple might not mind hitting half that number.
"Apple has enough political capital to engage in hyperbole. You can get away with doing that for a little bit," Jackson said. "The guys from Monty Python put it best: The only thing worse than being talked about is not being talked about."
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