I wrote about Apple Watch. Please read my plan and make Excutive summary based o
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Question
I wrote about Apple Watch.
Please read my plan and make Excutive summary based on my plan.
Company Background
Apple’s current mission statement is said to be: "Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App store, and is defining the future of mobile media and computing devices with iPad.”
This is not the typical mission statement that you may see for some companies, that is short, sweet, and to the point, but Apple hasn’t seen any issues with their business even without a mission statement that people can remember. For a complex, innovative, and disruptive company like Apple, their mission statement makes sense, but could be more catchy and easier to remember moving forward as they change and develop as a company.
Apple is a company that has created a line of innovative products that have disrupted the way technology works and how it works together. Their product line consists of but is not limited to, computers, iPads, iPhones, iPods, headphones, HomePod, Apple TV, iTunes, etc. One quote that we found said “Apple's success is due in large part to its obsessive focus on the user experience. Apple is a designer-centric company that likes to build all parts of a product — hardware, software, and online services — itself. That approach has allowed Apple to build some of the most elegant and user-friendly products ever created.” Apple also offers services that come along with the sales of their products, like phone/chat support, repair services, along with in person classes to teach individuals how to use their brand-new devices.
When looking at who the Apple watch is targeting, they don’t have a specific age group. A lot of the updates that came out in September of 2017 actually had different heart rate reading functions that were created to monitor the older customers more specifically to make sure their
resting heart rate is in a healthy zone. There was one customer that we found that talked about their experience, showing how the watch warned the customer about their heart rate getting so high, and he was able to realize he was on the verge of having a heart attack before it actually happened. The customer's name was Killian, and the story said “then Killian, who wears his Apple Watch to bed three to four nights a week for sleep tracking, says his Apple Watch woke him up around 1 am with an alert from a third-party app called HeartWatch saying his resting heart rate was elevated while sleeping. Killian experienced mild indigestion which can be a sign of a heart attack but says he generally didn’t feel sick.” But they still target people of all ages, constantly adding different workout functions to their workout-tracking database such as HIIT (high intensity interval training) since that is very popular for the fitness world right now. They also added in waterproof functions for the transition to the Apple Watch series 2 to be more attractive to people with an active lifestyle, no matter where their workout takes them.
When looking directly at Apple’s website, some of the main functions that it mentions for the watch that would be of value to its customer or consumer is “phone and messages: make calls and send texts with just your watch. Music: stream 45 million songs with Apple Music right from your wrist. Siri: ask Siri to set a reminder, send a calendar invitation, or give you directions, all without your phone. Notifications: leave your phone at home and still get alerts from your favorite apps. Workout app: track a casual hike, an intense ride, and everything in between.” The possibilities of things that you can do are endless, especially with all the 3rd party apps that are being created to use on the watch for all kinds of issues that people are looking to have solved.
SITUATIONAL ANALYSIS
Industry Background
Apple is in the technology industry, and when looking into the tech industry we found that many people referred to it as the big 5: Google, Amazon, Apple, Facebook and Microsoft. The other companies listed here make competing products such as the Amazon echo speaker compared to the Apple HomePod, the Microsoft Surface to compare against the iPad Pro, or the Google Pixel to compete with the iPhone. All of these companies are challenging one another, creating competition to drive innovation and fight each other to find the next best thing. Where we think Apple has one step ahead of this market is in the smart watch industry, which is the main focus for our plan.
Competition
Within the tech industry, some of the other big companies that are competitors in terms of technological innovation are Google, Amazon, Facebook, Microsoft, HP, Dell, Texas instruments, Intel, etc. But in terms of competition when looking specifically at Apple Watch, we chose to focus most on Fitbit, or Garmin as the main competition smart watch options, but it is also important to keep in mind some other watch companies that may not necessarily be “smart watches”. For example, watches like Rolex, or Tag Heuer can take the place on someone’s wrist instead of an Apple Watch, because not all Apple Watch users are buying for the smart benefits but could also be for the style aspect that comes with it when comparing between other leading watch brands.
Life Cycles
As you will see in the chart from exhibit 1, the Apple watch can range in price from around $329 to $1,399. The watch is made with different materials (stainless vs. ceramic) or can be equipped with a different style of band (sport vs. noir gola leather). The watch itself serves the same purpose, but like the difference between purchasing a Timex and a Rolex, people are buying for look, or for the image/personal feeling that comes with it.
Most of the sport band options are on the traditional side, whereas the leather options are going to be much more contemporary.
As you can see in exhibit 2, the Apple Watch series 3 is still a newer device, and people are still getting used to it, especially with the cellular functions of being able to use it without having your phone nearby. The cellular function is only compatible with a few cellular providers, and is still working to be eligible for all cellular providers in order to be more widely available to all of it’s customer base. For example, T-Mobile is a huge phone company. Anyone on T-Mobile’s cellular plan cannot use the Apple Watch Series 3 with cellular because it is not yet eligible, and for that reason we put it on the growth phase. People are still getting used to them, still upgrading from their series 1 to series 3, and the product has not yet reached maturity because new features are constantly being introduced to improve usage.
Unfulfilled Consumer Needs
Using the segmentation groups shown in exhibit 4, we were able to break down the targeted segments into four different groups shown in exhibit 3; newly married couples ranging in age from 20-45, active individuals with an emphasis on a healthy lifestyle, professionals/managers, and high-income earners. We were able to work through and assign
some of the different Apple Watch options to these different segments based off of lifestyle, income, and assumed preferences. For example, the newly married couples won’t have quite as much money as the high-income earners, or the professionals/managers. It is more likely that they will get the Apple Watch with sport band, as this is one of the most popular options that Apple offers. The bands are more affordable and allow style and class for any occasion that is needed. Although it has very similar functions, someone focused on a very active lifestyle would choose to get the Nike Apple Watch because it comes with a different style band that is more breathable for those looking to stay dry during their workouts. The pricing is similar, but a few of the style functions could come in hand for this separate lifestyle. And lastly, the high-income earners and managers/professionals were similar, so to differentiate the two, we assigned the most expensive leather options to high income, and more of the middle to expensive options to the professionals since they may not have as much income as the high-income earners looking to purchase the best, most contemporary option.
Strengths, Weaknesses, Opportunities, Threats
When analyzing Apple for their “SWOT” analysis, we were able to determine some of their strengths that set them apart from that of the competition, and what makes Apple such an overall dominant company in their industry. Some of the strengths that we found, but are not limited to, are: superior capabilities, and resources with assets values of around 406.79 billion US dollars as of 12/31/2017, strong brand image rank with a number one ranking in top 100 global brand for the year of 2017, exclusive merchandise and control in their retail store environment, a well known and widely recognized brand reputation worldwide, along with their cross device application that is usable on all of their iOS devices as their proprietary software.
When looking into some of the weaknesses that Apple has, we found that the after-sell feedbacks have negative sound, there are issues with battery life on devices (especially as we’re headed into 2018), dependability on other devices (for example the Apple Watch needs the iPhone), maintaining value on the Apple Watch compared to that of other watches, along with repair prices being very expensive if damaged, especially for the Apple Watch.
Looking into some of the opportunities that we believe they could pursue to address some of these possible weaknesses, and more, we said: they reside in a new business area where there aren’t tons of competitors in the smart watch industry, the launch of new and powerful applications or hardware, the expansion of their product line, and the opportunity for growth of sales in the international market.
Some of the threats that may come in the way for Apple, and we feel they need to address are: the high demand local conditions (regulation rules, GPS, Apple Pay), high speed technology changes, and the risk of dealing with competition and their respective innovation such as Samsung, Casio, or Android.
MARKETING STRATEGY
Segmentation, Targeting, Positioning
Positioning of Apple’s Series 3 Watch heavily relies on the attributes and benefits it contains. The Apple Watch Series 3 positions itself in the minds of consumers as a “lifestyle brand” more than anything else, thanks to its simplistic use, smart device capabilities, dedication to a proactive and healthy lifestyle, and superior construction. Although many brands position themselves as lifestyle brands, trying to be with the customer every step of the way, not all can say that they have done it. With the new waterproof design, making the device more rugged, along with looking at many of the ad campaigns that you will see later in this report, Apple is looking to be just that; the brand that is with you every step of the way.
Breaking it down further, we broke Apple’s methods into four parts: geographic, demographic, behavioral, and psychographic. Geographically, Apple is located and recognized worldwide, but for this report we will be focusing on the United States, with an urban density. The urban density involves all people inhabiting a given urbanized area. The demographic of the customer base is set to be males and females from the age of 20-45, across all types of people from the bachelor stage to a full nest second stage, meaning families with children over 6, but younger than college age. Apple typically segments its consumers for the apple watch into upper middle class or high earners, with a professional or managerial occupation. Looking deeper, and focusing on the consumers behavioral types, we found that Apple’s segment on the market for the degree of loyalty is high loyalty people. Typically, the most avid fans of Apple will purchase an Apple Watch only after a great experience with other, more basic Apple brand products - such as the iPhone and MacBook. The benefits sought for this segment of the market are consumers
who tend to be recreational and expressional. Apple segments the market for the Apple Watch into those who tend to be determined and ambitious. Overall, the psychographic research showed that these people are more upper class social status, with an explorative and active lifestyle.
Marketing Channels
Apple has made itself accessible from many different locations. For example, you will see that Apple has a support application, simply for people looking to troubleshoot their issues or connect with Apple support advisors. Besides this, there is an Apple shopping application, that can be used to compare and contrast different products that they are selling in order to make your next purchase easier to decide. They also have their website which is formatted properly to be user friendly on both computer or mobile device.
When thinking back to many of the ways that Apple connects with customers, we see it through applications, tv commercials like shown below in the marketing tactics, along with billboards that are most commonly seen on some of the tallest buildings in large cities like Chicago, New York, or Nashville.
Marketing Communications Mix
While Apple successfully has branded its products, including the Apple Watch in all different facets, it has had most of its success in the following four areas:
From and advertising perspective, the Apple Watch Series 3 now comes with LTE, GPS, and cellular support, and that is the main focus of a lot of their advertisements. Their focus on fitness being implemented into a healthy lifestyle was first shown in their end-of-2016 and beginning-of-2017 holiday ads for an earlier version of the Apple Watch, titled “Swim”,
“Snowboard”, “Soccer”, and “Workout”. All of these advertisements came in the form of 15-second videos with the umbrella term, “The Gift of Go” as seen in exhibit 5. Ultimately, Apple’s focus with these ads was on thrill seeking people aiming for a healthy lifestyle. All of the advertisements shared a similar style, but where the “Workout” ad showed how Apple Music works through the watch, “Swim” focused on the workout app programmed into it. (Potuck).
Apple continually boasts booming sales through advertisement, as advertising is the main form of communicating the product to customers. The company produced multiple dozens of ads throughout 2017, each with a specific goal. One advertisement showed how no matter what your zip code or your upbringing, Apple can be easily implemented in to your life. Another showed how simple it is to pair the iPhone 7 with the new Apple EarPods. Most of their advertisements come in the form of videos.
When reflecting on some of the events and experiences that Apple either hosted or were a part of, Apple held two major events during 2017, on June 5th and September 12th. The aim of these events was to inform loyalists of the Apple brand about changes to the company and upcoming products to generate excitement about what was to come. The June 5th event, otherwise labeled as a Keynote, boasted a proud array of new products, including the enhanced iPad Pro, an expansion to the Mac family, and a brand new HomePod. The September 12th Keynote displayed a new generation of iPhone, the Apple TV 4K, and of course, the Apple Watch Series 3 with cellular connectivity. During the latter Keynote event, which took place for the first time at the Steve Jobs Theater, paid homage to the original founder of the product.
During the events, many influential people spoke of the products. Tim Cook, current CEO, was even one of the guest speakers, introducing the Apple Watch Series 3. Tim Cook also has joined many technological summits during the 2017 year. One of the biggest examples of
this was his arrival at the White House Tech Summit (Lapowsky). This tech summit brought together today’s most influential people in technology and aimed at fixing the ailments at the intersection of government policy and technology.
Being prepared for anything that comes its way, Apple wouldn’t be successful and maintain its solid reputation without its Public Relations strategy (Glean). Apple has an eight-step PR plan that allows them to remain one of the most respected brands of modern times:
** Storytelling. The CEO of Apple recognizes a problem and then offers a solution with one of Apple’s products.
** Simplicity. Press releases of the products were easy to comprehend for consumers.
** Learn from failure. Take failures and alter them to create the next best thing.
** The Golden Circle strategy. Compel the audience and compel your partners – answer what the purpose is, how the company fulfills its mission, and what it does to tackle its core belief.
** Reviews. Pay attention to all reviews – good or bad. Tailor material to different target audiences.
** Top-down secrecy. Do not let word leak on newest product launches.
** Press releases. Use in-depth but easy to understand product descriptions. Use single word adjectives to describe products (e.g. iPhone is revolutionary, iPad is magical).
** Culture marketing. Establish the brand as high-profile, make the product available to businesses and individuals.
When analyzing Apple’s online and social media presence, we found that they have very high relevance and are active, and well known. Apple globally has 137 different online locations, tailored to specific regions, making it easier and more intuitive for all different types of consumers. Apple is definitely location aware, using geolocation to easily communicate with people visiting their website.
Apple has a large social media following as well. On Facebook alone, the company boasts a rather impressive 11 million followers. Apple uses the platform as a more informative approach to connect with consumers. Apple has a main twitter account with 1.76 million followers, but they haven’t used it yet. However, they have alternate separate channels such as Apple Music and iTunes, where they seem to mostly target millennials, offering insight on the products in a “fresh” and “modern” way. Apple’s Instagram is a different story. While they do have a large following (of nearly 5 million people), the pictures they post tell a story more about their consumers than it does talk about the products. It’s a smart approach to give the consumers a sense of connectivity with the brand, vs. feeling like they are being sold something.
Marketing Tactics
During the year of 2017, Apple had three different series of watches: Series 1, 2, and 3. Each series of watch came with their own special functions and features, but most of the marketing tactics for 2017 were for their newest device to the Apple family: The Apple Watch Series 3. What made this device so special was its ability to connect to a cellular connection without having your phone or mobile device nearby. This would allow for its user to send text messages, make phone calls, from wherever you are no matter what you are doing. We saw this
in a one of their advertisements that they called “Surf” which was a 45 second clip, where we attached a screenshot below in exhibit 6.
In the video you will see an individual out surfing and while catching a giant wave, their watch is starting to ring, showing that they are receiving a phone call. This is the first Apple Watch that would allow it to function like this, since the Series 1 cannot even be submerged in water, and the Series 2 you need to have your phone within Bluetooth range which is around 100 meters or 328 feet in order to receive call notifications to your watch.
For this marketing plan that they released for their newest product, we felt that they were mostly targeting more active individuals, who have a high focus on living a healthy lifestyle. With this being said, we are looking at age range of mostly young adults that we would say are around 18 - 27 years of age. Showing the cellular capabilities and showing that no matter what it is you are doing, you can be connected wherever life takes you.
In another advertisement, more focused on the Apple Watch Series 2, Apple released a 1 minute and 15 second video titled “Live Bright” with a screenshot shown in exhibit 7.
In the video you will see several different individuals doing things like stretching, paddle boarding, hiking, going down a water slide, playing basketball, swimming, etc. The Apple Watch Series 2 was their first watch that was fully waterproof, so this was the first watch they really started to push the whole lifestyle device, and pop culture icon symbol, where the video focuses heavily on the use of the fitness tracking functions. You will see individuals “closing their rings” meaning that they stood for a certain number of hours throughout the day, exercised a certain number of minutes, or burned a certain number of calories. With its waterproof functionality, they advertise their addition of swim exercise tracking mode, which they show in the video of an individual swimming and checking their activity rings. You will see other athletes checking their
heart rate, being able to make sure g sure they stay within their desired range in order to achieve their personal fitness goals.
Similarly to Apple’s other advertisement for their Apple Watch Series 3, called “Surf”, we believe that Apple is targeting young adults ranging in age from around 18 - 27 years of age, where fitness and a healthy lifestyle is towards the top of their list of priorities showing this particular group all of the available functions like heart rate tracking during while in exercise mode or the and breathing monitor to help you in the recovery mode during your post workout meditation.
While watching this advertisement, we also picked up on another hidden message that Apple may be portraying. Throughout the video you see lots of diversity: people of different races and ethnicities, along with seeing a wide range of colors and exercises or activities going on. Apple is aiming to reach each and every market, whether you play basketball, or hike, or swim, or skydive, this watch can fit your lifestyle and serve many purposes. Also, we believe all the flashes of colors and different activities also support customization within the watch. When you purchase your Apple Watch, you are given many options for which watch band you would like equipped whether that is the solid colored sport band build for any lifestyle, or the patterned nylon band that focuses on total comfort. Whatever mood you are feeling that day, or whatever activity that you are going to be partaking in, Apple has a band for you, like shown in exhibit 8.
In the next advertisement that Apple released for their Apple Watch Series 3, you see them introducing how the watch can be used with Apple Music, and how you have the capability of listening to 40 million songs, all from the little, yet very powerful device on your wrist. This was shown in a 1 minute and 10 second video called “Roll” with a screenshot shown in exhibit 9. In the video you see an individual that is using three different Apple products or services
and shows the connectivity that the devices have together. This individual has an Apple Watch Series 3 and has his Apple AirPods headphones connected straight to the Apple Watch via Bluetooth, where he is able to wirelessly listen to over 40 million different songs just by picking songs from his watch. In the video you see the individual skating all around public buildings, offices, etc. doing impressive skateboarding tricks while jamming out to his favorite songs. You see his energy become contagious as other people do flips as their final act before disbursing. Music has always had a positive impact on so many people and can make the most gruesome task much more fun and enjoyable. With this being said, Apple is able to help people get connected to their favorite music and jam out to their favorite artists wherever they are, while doing whatever they need to do, like in this video, skateboard.
Similarly, to many of the other marketing ads that we have seen from Apple, especially in the year of 2017, like “Surf”, and “Live Bright”, Apple targeted their younger crowd, particularly young adults from the ages of 18 - 27 who are focused on living active and healthy lifestyles. They are able to be connected to their music wherever they are, without the need for their mobile device to even be on them in that moment. They also are able to bring in their Apple Music service to show the 40 million different options available, while also showing the sleek, simple, and convenient design of the AirPods and how all of these powerful devices and services can work together to bring the consumer one incredible outcome.
One of Apple’s most powerful marketing advertisements was their video called “Dear Apple” (like shown in exhibit 10) which they released and played right before their largest watched event of 2017. They started with this 2 minutes and 38 second video of different individuals from all around the world, speaking their native languages, telling their stories of how the Apple watch has impacted their lives.
Throughout the video, you can meet some very inspiring individuals, telling their stories. You hear from Olympians, ballet dancers, marathon runners, fathers, and even a 99-year-old woman who loves to travel the world. People talk about their journeys with losing weight, and bettering themselves, by closing their activity rings. When their rings aren’t closed, they tell stories of doing jumping jacks, or push-ups to quickly move their rings before the time runs out. Besides the fitness aspect, the emotional advertisement goes on to show individuals in car accidents, where the phone wasn’t accessible, and they were able to call for help using their Apple Watch. The video then goes on to show a concerned dad who can use the benefits of the Apple Watch to monitor his daughter’s diabetes.
We think the video was their most powerful ad for 2017, being one of Apple’s first advertisements to really try and touch viewers’ emotions. Many people think of it as just a watch, where you can track your workouts, or see a text message. But Apple goes on to show that the possibilities are endless of things you can do, and some of the moments where the watch can really serve a crucial purpose in your life.
What we also found interesting about this advertisement was the wide range of ages. You saw a little girl wearing the watch, probably around the age of 10 years old. Or another woman who said she was 99 years old. This is one of Apple’s only advertisements, especially for the Apple watch, for the year of 2017 where the target market was not focused on a specific number, but rather showing all of its users that it can be used in so many different ways, and can be applied to people of all ages, health statuses, and ethnic backgrounds.
Idea Generation
Another aspect of Apple is the importance that it places on keeping customers involved. For example, they have a direct URL site set up for anyone looking to leave feedback. Whether that be a compliment, complaint, or an awesome innovative idea that you would love to see become a reality, each and every submission is reviewed. Beyond this, Apple’s discussion forum is one of the most impressive and most engaged places for the entire consumer base can come together to help each other utilize all of the features on their devices and learn about some of the ways they can resolve the issues that they may be experiencing on their own.
Place, Product, Promotion, Price
Apple markets worldwide, but for this project we will be focusing most on the USA, looking at their marketing tactics, and outcomes with their sales. Our focus is on the Apple Watch, Series 3. Apple is known to have an expansive list of different products, such as the Mac, iPad, iPod, iPhone, Apple TV, and a long list of software. Within that product mix, the Apple Watch has three different series. Their efficient promotion strategy helps apple promote their products to so many audiences. Their mainly being using these four methods to approach their promotion strategy: Cross devices of iPhone/Apple Watch Applications, deeper into social media, easier using Apple pay and lastly, health lifestyle application. We have found that Apple has always been using the hunger sale strategy, in order to increase their sale amount, compared with all kinds of similar products in the market. The table in exhibit 11 shows how the third generation of Apple watch has categorized its products into many series. You will see that the most basic model of the Apple watch
that, Apple also released additional models (difference with design and material). The highest price reaches $1399.
Product and Service Differentiation
People tend to choose Apple, even though it is typically a more expensive option because of reputation as a company that sets itself apart from its competitors. It is the high quality, the durability, and sleek design of the devices - especially with the Apple watch - that catches peoples eye and influences their purchase decision. And for those moments where the device may not work right, or an accident happened, and you need the glass fixed, Apple has some of the best support of any company out there. For example, many of the companies that were mentioned before in the industry in which Apple resides in, like Google for example, they don’t have a way to contact any form of customer service. It is going to be a forum-based support system where other consumers will help address questions based on their experiences over their time of usage. This is where Apple also helps positioning themselves as the lifestyle brand, where they literally show that they are there with the customer, can be reached 24/7, 365 days a year, to help resolve any issue at hand.
Looking a little deeper at the Apple Watch, you will see that it has a product width of two different measurements and two different overall features; 38 mm vs. 42 mm, along with the cellular vs. GPS function of the watch. And then this is broken down deeper into depth of different colors, band styles, and possible collaborations with Nike.
Another feature that many consumers love about Apple products, is the possibility to purchase AppleCare+ warranty for their devices, which gives them an extra year of warranty and allows them different opportunities and lower pricing options when and if a repair is needed. For
example, if you were to break your Apple Watch without AppleCare+ it would be very expensive to repair, could be several hundred dollars. If you have AC+, you are able to do mail in replacement options, or do full unit replacements to receive a brand-new watch for under 100 dollars.
The service that Apple offers to their customers is an intangible experience that customers experience. On average each day, there are something around 1,300 customers waiting in queue at any given moment to speak to an advisor within the iOS department (iPhone, iPad, iPod, Apple Watch, AirPods). The brand has made a strong enough impression to persuade the customers into purchasing the devices, and more times than not many of the people who are waiting to speak with an advisor are first time users, or just need a little push in the right direction in resolving whatever it is that they are calling about. The Apple support culture is something like no other and is driven to separate itself from that of any competition.
These services, along with the Apple discussion forums, and the AppleCare+ warranty is all a part of the postsale strategy that Apple uses in order to be a part of the customer journey until it is time for an upgrade, and they can think back and reflect on the experience that they had to impact their next choice moving forward.
IMPLEMENTATION CONTROLS
Apple Watch enables users to access information in a way, both distinctly personal and attracting attention. You raise your wrist, and can receive and respond to notifications, watch any essential and impactful information in an immediate and convenient way. Including multi-function control: short look, long look, glances, force touch, Taptic engine, Siri, the Friends app, and Apple pay. It consists of two bundles, related to each other: A Watch app bundle and a WatchKit extension bundle. The Watch app bundle encompasses the storyboards plus the resource files associated with all of your app’s user interfaces. While the WatchKit extension bundle lives inside the Watch app bundle and carries the code for managing those user interfaces and for responding to the user interactions, like a UI & a UX. Watch apps also do provide custom notification and complication interfaces: complications defined as small visual elements on the watch face that communicate important information to the user and are visible whenever the user glances at the watch face and are customizable.
Local and remote notifications that incorporate custom graphics and some dynamic content, plus also create time-based and location-based form of notifications. Also, latest news representation: Apple brought updates to Apple Watch users. The upgraded version is watchOS 4.3. It is highly recommended that you upgrade. The watchOS 4.3 mainly fixes bugs, making the system more stable. In addition to controlling the volume and playback capabilities of the HomePod, the new features can also be used to swipe the card for domestic users. For example, In China, Apple Watch users in Beijing and Shanghai can add a transportation card to their wallet application and use Apple Pay to take public transportation. And from the supported models, Apple Watch, one, two, three generations support this function.
When looking deeper at the website traffic that is generated on Apple’s website, we were able to find some interesting statistics for the last 6 months. You will see in exhibit 21 that in the last 6 months, there have been roughly 656.11 million visitors, who spend around 3 minutes on the site at a time, visiting on average 3.27 different pages. These results are up 5.74%, most likely because of a lot of the new products that have been launched from September of 2017. The website traffic can then be broken down further, like shown in exhibit 22, that 51% of viewers are from searching Apple, 28.97% is directly typing in the website URL, 5.22% is from social media, etc. Of all of this data, in exhibit 23, you will see that this customer traffic is made up of 24.19% of people from the United States, 6.91% from China, and so on. With all of this traffic comes a major question? How many of these customers are satisfied with their experience with Apple? When looking at some of their different ratings, I started by looking directly at customer reviews for their Apple applications. For their “Apple Store” application, where customers are able to download the application directly to make shopping an easier experience, it has 5.43 thousand ratings, with a 3.7 start rating. It is ranked the 16th overall shopping application of all the options in the app store. Looking further at their support application, making it easy for any customer looking for further help or troubleshooting with their devices, there are 887 ratings (newer application) with an average rating of 3.6 stars out of 5. Making this the #35 most utilized application in the utilities category.
Looking further into customer satisfaction, one study showed the customer satisfaction with the overall service of Apple, This was on a 5 option basis with very satisfied, rather satisfied, rather dissatisfied, very dissatisfied, and I cannot assess. Of these categories, 50% said very satisfied, and 38% said rather satisfied, giving them an overall satisfied percentile of 88% of their customer base.
FINANCIAL ANALYSIS
2017 was another huge year for Apple, especially when it came to sales for the Apple watch. It was during Apple’s 2017 September Keynote where CEO Tim Cook announced that the Apple watch “has become the top-selling watch globally” surpassing companies like Rolex. Tag Heuer, Fitbit, etc. Other claims were made saying that “the apple watch is the most used heart-rate monitor in the world” and goes on to release information about their newest device to the Apple Family, the Apple Watch Series 3.
When looking at sales numbers, it was estimated that around 21.1 million smartwatches were sold globally, 8 millions of which were just during the holiday quarter. What makes this so remarkable is that research shows that Apple was able to outsell all Swiss made watches combined, like the companies mentioned before (Rolex, Omega, and Swatch). Apple’s sales have not been declining either, with CEO Tim Cook going on to say that “it was our best quarter ever for the Apple Watch with over 50% growth in revenue and units for the 4th quarter in a row and strong double-digit growth in every geographic segment.”
Another source goes on to say that Apple Watch sales grew 54% compared to 2016. With the growth of watch sales comes the growth of many other products that Apple has to offer also. “Apple has pulled so far ahead as it continues to focus on its core iPhone user base. Its recent updates to the Series 3, such as GymKit and Apple Heart Rate Study, are proving to offer compelling use cases, encouraging users to spend more on accessories.”
As the sales growth continued, the graph below in exhibit 12 also shows how many people were interested in purchasing or upgrading to the Apple Watch series 3 upon release in September of 2017.
Looking deeper at Apple as a company overall, since it is a little tricky to find financial numbers only related to Apple Watch performance, one other area that I thought would be interested to focus on is their stock growth like shown in exhibit 13.
You can see in exhibit 14 that anywhere after September of 2016, heading into September of 2017, Apple stock was on the rise, and this has a lot to do with the innovation of many of their new products like the iPhone, and most importantly, the growth of the Apple Watch.
Looking specifically at their net sales, you can also see that Apple is up from 2016, also showing that even at the extremely powerful and successful position that they are in, they are still growing, and thriving through their innovative inventions and technological upgrades to their existing products that are proven to be wanted/needed by their customer base.
The chart shown in exhibit 15 can be broken down much better for our use since we can see a breakdown of the America’s, which is our main region of focus. We see that overall their net sales increased, and we can also see that one of their largest areas of growth for net sales was the “other products” section (with 16% growth), which is where the Apple Watch would be located with other products like the AirPods, HomePod, etc.
In the chart shown in exhibit 16, you will see that Apple also increased their amount of money spent on research and development, and this could be highly impacted because of the addition of their Apple Watch Series 3. We make this statement with confidence, because this is the first smartwatch that has the capability of receiving messages, making phone calls, and staying connected, all while not even needing your phone within Bluetooth range of the device. This was something that required much testing, and innovation because they needed to keep the
device small enough in order to be practical, while also not sacrificing quality of the physical product, and quality of its connection usage.
As you can also see in exhibit 16, their total operating expenses are set at 26,842, or 12% of their total net sales. This is an 11% change from the year before of 2016, showing that they are applying more income into their operations. Although, it is still roughly the same percent of net sales (11% in 2016, 12% in 2017) this means that more sales are occurring, and a little bit higher percent is being applied to these expenses. In exhibit 17, you get a better look at the net sales growth, and the income that is being applied for each fiscal year, as you see a drop in sales from 2015 to 2016, but a big jump from 2016 to 2017.
When looking into Apple’s market share and seeing where they lie in comparison to their competitors, you will see in exhibit 18 that Apple shared around 14.7% market share with their top worldwide competitor, Xiaomi in quarter 1 of 2017. But the statistic that caught our attention, was the growth that it had from quarter 1 of 2016, with a year over year change of 64.1% while Xiaomi had a -3.3%. We then move forward into quarter 2 and see much growth from Apple. In exhibit 19, you will see that Apple now has a 49.60% market share worldwide, and Xiaomi is not on the list specifically, so could fall in the other category. When comparing the market share percentages to that of the consumers, no other company comes close. To see if this growth would continue, we began to look at Apple for quarter 3 in exhibit 20 and saw that they did drop their market share a little bit, now at 41%, still possessing most of the smartwatch market share. This could be because other companies were creating innovative new technologies similar to that of Apple, like waterproof features, and rugged ability allowing similar functions for a competitive or lower price.
Explanation / Answer
Executive Summary
For a disruptive company like Apple, its imssion statement need to be more catchy and easier to remember. Apple is a designer-centric company that likes to build all parts of a product — hardware, software, and online services — itself. That approach has allowed Apple to build some of the most elegant and user-friendly products ever created. Their product line consists of but is not limited to, computers, iPads, iPhones, iPods, headphones, HomePod, Apple TV, iTunes, etc.Apple's success is due in large part to its obsessive focus on the user experience.
Apple Watch is targeting people of all ages. Some functions of the watch include heart rated monitoring, making calls and sending texts, stream music, ask Siri to set a reminder, send a calendar invitation, or give you directions, all without your phone, getting alerts from one's favorite apps etc. Workout app and other 3rd party apps that are being created are really useful.
Apple being one of the big 5 i.e. Google, Amazon, Apple, Facebook and Microsoft , is always competing and innovating. Apple is one step ahead, especially in the smart watch industry. Fitbit,Garmin, Rolex, Tag Heuer are the competitiors of Apple in watch industry. Aoole watch is available at different prices varying from $320 to $1399 and in varitety of designs and material.
Target segments of Apple Watch: newly married couples ranging in age from 20-45, active individuals with an emphasis on a healthy lifestyle, professionals/managers, and high-income earners. Apple watch is positioning itself as a lifestyle brand.
SWOT of Apple Watch:: Strengths: superior capabilities, and resources with assets values.Weakness: Negative feedback on the watch. Opportunities: Working on negative feedback Threats: Competition and changing technology.
Apple improves its sales through advertisement and a variety of marketing tactics in various kinds of advertisements. Apple has an eight-step PR plan that allows them to remain one of the most respected brands of modern times. Storytelling. The CEO of Apple recognizes a problem and then offers a solution with one of Apple’s products.Simplicity, Learn from failure, The Golden Circle strategy, Reviews, Top-down secrecy, Press releases. Culture marketing etc come under their 8 step PR plan.
and has very good online and social media presence. They take continuous feed back from customers and from the website views and surveys it was found that more than 88% customers are satisfied with Apple products.
This projects is mainly focussed on America. It was estimated that around 21.1 million smartwatches were sold globally, 8 millions of which were just during the holiday quarter. After September of 2016, heading into September of 2017, Apple stock was on the rise, and this has a lot to do with the innovation of many of their new products like the iPhone, and most importantly, the growth of the Apple Watch.