Summary

... but will it tackle it?
iPhone has focused on the high-end multimedia segment, while leaving out the mid-range and less profitable market segments as well as little effort specifically for the business market.
Given that the latest iPhone 3GS had new features and improved performance, there is room to target a wider market.

Analysis

So far though, Apple is not focussing on the mass-market, more price conscious consumers, but still enjoys growth of iPhone sales. This could be thanks to:

  • subsidy
  • cannibalization of it other product lines, as people replace their iPods by iPhones
  • foray into the business segment, as the iPhone 3GS had some features targeted at entreprises.
However, Apple next steps in China, India and South America will not be as smooth as there is no subsidy in those markets, and competition from Android is heating up in the "cool" brand section.

Apple does have room to grow, but may chose to remain the market leader of the high-end premium smartphone, and concentrate on market growth for its newer families of products such as the tablet and e-reader. Either way, Apple as a corporation will show sustained sales growth.

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Analyses are solely the work of the authors and have not been edited or endorsed by GLG.