The mobile telephony industry is one of the industries that have evolved very fast. The evolution has been attributed to the millions of money that has been invested in research and development by multinational companies in a bid to get an edge over competitors. The catalyst to this evolution can be said to be strong competition with companies yearning to acquire the lions share in the mobile market and industry (Kerin, 2006)..
iPhone has been in the forefront setting the trend in the mobile phone industry. Since its inception in 2007, the brand has introduced several firsts in the industry and thus setting the trend that competitors have been forced to follow. The iPhone is attributed to being the first phone that combined a mobile phone with several other devices that made it extraordinary and highly demanded. Amongst its features were a wide screen iPod, an internet device, a multi-touch screen, and a lot of useful applications such as Google maps and the ability to stream wireless YouTube videos. This was a first in the industry. The world had never seen such a device before. As a result, the brand was able to sell several units in pre-orders even before it hit the market (Hoskisson, Hitt, M., and Ireland, 2009). The iPhone is also attributed to setting the trend in developing features like visual voice mail which gives users the ability to see the list of their voice mails and be able to choose the ones they want to listen to first. This is contrary to the sequential order common with other carriers. It also set the trend in offering free e-mail services in partnership with Yahoo, as well as free push mails.
iPhone’s International Presence and the Entry Modes
The iPhone has certainly ventured into the international markets. The brand is an international brand that is recognizable everywhere in the world. The company uses the technology and the relatively low-priced resources to manufacture the iPhone in Asian countries. Taiwan, in particular, plays a significant role in the manufacturing of iPhone (Prats, Sosna, and Sysko-Romanczuk, 2014). The country’s technology has been of importance to many electronics manufacturers. iPhone has a presence in Europe as well. It is using international mobile phone carrier companies such as Vodafone, France Telecom, Telefonica and T-Mobile to sell its products in Europe. The strategy to use mobile phone carrier companies to sell iPhone products is meant to cut costs for the company as the multinationals already have the necessary assets in the respective countries.
The iPhone has used various modes to penetrate the international market. One of the modes is through contract manufacturing in Asian countries. Contract manufacturing enables the company to utilize the advanced manufacturing facilities that are in Asian countries (Prats, Sosna, and Sysko-Romanczuk, 2014). The Asian countries in which iPhone assemble its products can also provide a market for its products. In Europe, the company is entering the market through exporting its products to the European markets. iPhone products are exported to the United Kingdom, France, and Spain. The exported products are sold through mobile phone carriers who act as agents for iPhone. The use of telecommunication companies provides iPhone products with a ready market since the firms already have client bases. The companies also benefit from the arrangement in return since an estimated 50% of the customers, who buy the iPhone product also subscribe to the companies' services. The partnership between the companies, therefore, become beneficial to both of them (Barney, and Hesterly, 2010).
iPhone has been leveraging in the international markets in different ways. For instance, in the Taiwanese market, the brand leverages by using the economy’s low-priced labor force and their advanced technology in manufacturing. iPhone parts are not produced in one country. The company’s strategy is to produce the device at least possible price hence, the sourcing of different parts from different parts of the world where they are manufactured at a reduced price (Garcia, 2014). The company does its assembly in Asia because of the availability of cheapo labor in Asia.
In Europe, the company is leveraging by using established telecommunication companies. The advantage of using such companies is that it saves iPhone from using huge resources in advertising and promoting its products since these companies already have market bases. Furthermore, iPhone is leveraging its competitive advantage by negotiating deals that puts it in the driving seat and hence, leaving it with a greater share of the revenues as compared to the other companies. For example, in its deal with AT&T, the company is described as having been in the driving seat and, therefore, taking a substantial customer revenues. Barney, and Hesterly, (2010), say that when a company has the kind of competitive advantage like the one enjoyed by iPhone, it becomes easy to sell it and it also becomes easy to get partners to work with. It is because of the company’s competitive advantage that it has been able to sell thousands of its gadgets even before they hit the market for the first time.
Barney, J., & Hesterly, W. (2010). Strategic management and competitive advantage. Upper Saddle River, N.J.: Prentice Hall.
Garcia, R. (2014). Creating and marketing new products and services. Boca Raton, Florida: CRC Press.
Hoskisson, R., Hitt, M., & Ireland, R. (2009). Business strategy. [Mason, Ohio]: South-Western Cengage Learning.
Kerin, R. (2006). Marketing. New York: McGraw-Hill/Irwin.
Prats, J., Sosna, M., & Sysko-Romanczuk, S. (2014). Entrepreneurial icebreakers. Basingstoke: Palgrave Macmillan.