Development Plan of Apple - Essay Example

?MARKET RESEARCH AND BUSINESS PLAN INTRODUCTION Success in business rests with business capa to develop innovation and take lead in launching theproduct that is still in thought process of competitors. Innovation has been the defining characteristic of Apple Inc. Launch of an iPod and then iPad took Apple on leading position to technology drivers. Or more appropriate to state would be fact that the technology has been following the Apple way. With continuous innovation being Apple’s defining trait, this report develops plan for another innovative edition of laptops from Apple Inc. The innovative series of laptop will constitute D-Roll innovative version of laptop for details see Figure 1 Therefore underlying report is proposal developed in following sections: 1. Section I- Market assessment for the product 2. Section II- Product plan 3. Section III- Future Planning 4. Section IV- Limitations 5. Section V- Conclusion SECTION I- MARKET ASSESSMENT FOR THE PRODUCT To date, market has not made its way to launch of proposed model as it is innovation suggested. Personal computer category industry at yahoo finance categorises only Apple Inc and Dell. On contrary to this, companies categorised within other categories are competing with Apple on products such as Samsung, Galaxy etc. The underlying report accounts the performance of tablets of Apple Inc. and its immediate rivals going head to head in competition as current market revolves around it. Assessing market trend and performance with the latest tablet invasion is also very difficult as large number of companies have landed in with their versions. Tablets are differentiable on the basis of brand, size, features, storage size, text formats, interface etc (PC World, 2013). There are almost more than 35 brands of tablets present in the market; within three sizes; five types of operating systems; six features variation parameters and four storage sizes (Cnet, 2013a). Apple has been in competition with Samsung’s Galaxy, Google’s Nexus and Amazon’s Kindle Fire (Bradshaw, 2012). Market has been gradually sharing the Apple’s market share pie to Samsung’s broader variation offering as and to Amazon’s reasonable offering (Osawa, 2012). Graphically it is shown in Figure 2 However, Apple has been dominating market with its high price; for instance, Apple Mini iPad launched at price of $499.00 in US whereas the analysts presented an estimate of material bill for Apple Mini iPad to be $188.00; gross profit of $ 311.00 or 62% per unit. Whereas Amazon is offering its latest Fire Kindle for $ 199.00 while latest Samsung Galaxy Tablet is offered with price of $ 358.00 and Asus Google Nexus tablet is being offered for $267.36 (Bradshaw, 2012; Osawa, 2012 ;PC World, 2013). Further, Asus Transformer tablet version is also charging price of $.499.99; 0.99 cents higher than iPad mini. Prices range for tablet has been from $.79.72 offered by Pan digital R70D256 1 GB Wi-Fi White E-Reader to $.3199.99 offered by Motion Computing (HP3C4A3C3C3B2A).  Despite huge variation, various website rate iPad as the first choice and while on second place suggestions are made on the basis of various aspects as shown in the Figure 3. Comprehensive comparison of the iPad’s two closes competitors is as shown in Figure 4 in the appendix. Analysts have been largely favoring Apple iPad over rivals and associate the presence of competition to Apple’s high price weakness (Dolcourt, 2012). While Apple Inc considers price of Apple iPad mini justified in light of the popularity of the earlier original version of iPad despite its huge price (Westaway, 2012). Moreover, nurturing the debate over price factor, critics also hold opinion that Apple’s price is dominant factor of its strategy to keep product as luxury while superior product and mass market are mutually exclusive factors. Further, despite its most debated high price, it is within capacity of sizeable population (Cox, 2013). Another factor that supports the high priced iPad over other competitors is the fact that over 91% of the web traffic is driven by iPad (Westaway, 2012). Apple dominance of market is also attributed to network effect. Apple products have been taking lead with core of its business model of software and platform based model unlike Google that follows distribution based business model. This distribution based business model has to undergo challenges with third party developers and service providers. On the same note, business of Amazon also does not have comparison with Apple’s one. Therefore, despite the challenging competition the core of innovations rests with Apple. See Figure 5 Evident enough from the above assessment is also the fact that competition gears up in the market based on technical, small technological and little changes in shape aspect once the newer style is introduced. For instance, since launch of tablets constant upgrades are introduced to market with every new version. Moreover, despite various companies launched similar product the Apple’s launch ranked at priority by market as well as customers. Market is also having critical eye on the future of tablets in the light of the high paced innovation characteristics of technological sector. There has been debate related to life of tablet form in year 2013, once 2012 is over with huge focus on the product. Tablets being great for music, movies, meeting, and reading seem to continue the growth in 2013. However, lacking aspects of email checking, internet browsing and document typing if added to the product then tablets are expected to take up laptop market. This update in the product will bridge the gap between work and home. For instance, as proposed by Microsoft Surface that allows detaching keyboard once the related work is over and take up benefits of tablet (Ziraba, 2013). For details see Figure 6 Hence, following points shall be considered concluding remarks of market assessment: Apple Inc.’s launches have fetched sizeable market despite the hot debate of comparative prices. Tablets are expected to continue over the period in longer run or at-least for the current year. There is an opportunity in the market related to tablet that allows other conveniences of laptop integrated in newer versions. SECTION II- PRODUCT PLAN Apple Inc. being leader of technological domain has always been change driver of industry. The proposed plan for Apple Inc. is to undertake another dimension of change with changing shape. Discussed in this section is complete product plan for the proposed D-Roll or Digital Roll laptop. 1. PRODUCT: The product is originally planned by Hao Hua (Industrial Designer in Chicago). The product addresses following dominant issues still attached with laptop (for graphical presentation see Figure 7) The product design has managed to make up place among listing of futuristic laptops and models. Its basic designed components constitute super thin screen; keyboard is also to be wrapped around the axle carrying main machine. The hanging straps provide option of double as USB ports while working. In addition to this, the products also carries the detachable webcam that when not in used can be wrapped around the wrist (Chip, 2010). The product or D-roll can be hanged easily on shoulders with straps while moving to destination. The eye catchy product along with easy handling feature shall contain specifications categorised as students and working class. Focus of the product shall centrally remain on change in design than product in all. Hence, with some added feature, it shall be launched by another version of tablet cum laptop in cylindrical format. See Figure 8 Analysts have found this model practical from production point of view along with being realistic (Carlos, 2012). PRICE Despite Apple has gained success with its high price; this product shall be launched at slight higher than iPad price. This will also benefit Apple in winning the competition on Tablet from competitors with new product and not extra high price. Price and cost calculation is as follows: CASH FLOWS (projected)         TIME year 0 year 1 year 2 year 3 year 4 Initial Investment $ (11,500,000.00)               Sales Projections       Price $ 599.00 $ 650.00 $ 699.00 $ 700.00 Units 20000 35000 45000 25000 Revenue $ 11,980,000.00 $ 22,750,000.00 $ 31,455,000.00 $ 17,500,000.00 Cost       40% of sales $ 4,792,000.00 $ 9,100,000.00 $ 12,582,000.00 $ 7,000,000.00 Gross Profit $ 7,188,000.00 $ 13,650,000.00 $ 18,873,000.00 $ 10,500,000.00 Payback Period           Cumulative Cash flow $ (11,500,000.00) $ (4,312,000.00) $ 9,338,000.00 $ 28,211,000.00 $ 38,711,000.00 Pay Back Period   1.32 years     Following assumptions have been made for above cash flows: Price has been determined accounting for the current price level of Apple Inc.’s iPad with slight increase for new functions and well as inflation etc. Also supported by survey results that consumers are more willing to pay for next tablet for details see Figure 9 ( Morgan Stanley Research, 2012). For sales projection, 62% of iPad units sold in year 2011 has been projected as the sales of year one (Apple, 2011). With success in the launching year, sales in following years have increased and assuming further technological advancement in years to come sales trend for the fourth year has been projected to decline. Initial investment is also based on assumption. It is comparatively low as new product is not an extensive change in technology. Hence, assembly line changes have been assumed to conduct stated investment. Payback period for the investment is 1.32 years; pay-back period refers to the time project requires to return initial investment. PLACE First market for the product shall be US being home market and based on Figure 10 forecast for iPad. Immediately after launch, Apple shall launch it in its other leading market. Demand for tablet and specifically for the android system is constantly on rise in UK as given in Figure 11 and Figure 12. Further, demand for tablet in China is also on constant rise and Apple to dominate the supply by 70% (Drinkwater, 2012). PROMOTION Apple D-Roll shall be promoted with same luxury product proposition. The promotion shall target specifically students and working class. Promotion shall stress the features of excess benefit than original tablet that does not provide keyboard benefit as well as easy carry ability feature. Along with stated ones emphasis on the large screen, touch screen quality, processor, battery life etc shall be made as these factors are priorities under consideration before tablet purchase (Morgan Stanley Research, 2012). HR SKILL Since Apple already has been technological business and is among the most innovative peoples within its research and development department; therefore, it does not require an additional investment in product development. From the basic idea of product, the research and development department of Apple retains capacity to shape hardware. SECTION III- FUTURE PLANNING D-Roll or Digital Role has already been regarded as the design for next generation. Hence, adoption of idea or product launch is idea of today. Moreover, the projection has been developed with conservative projection and efforts will be directed to prolong the life of idea. The life of the project can be enhanced with innovations on various aspects. These innovations may range from updating size of the D-Roll. For instance, the current size of the product is considerably big; therefore, adjustment with respect to size. Further variations with respect to weight etc can be value added. Future planning especially in technological innovation is constant process. Based on responses and reviews about the features of D-Roll, Apple Inc. shall consider the further development. SECTION IV- LIMITATIONS The proposed product is a new innovation and customer response in the respective area is not known. Moreover, entire projections are made on the basis of performance; projections as well as response from customers for Tablet computer. Hence, the proposal has limitation that product may not receive the response in similar trends and manner as tablet. Resultant will be increased reputational and project failure risk. Further, any failure on this part would also have detrimental impact on other products especially demand for Apple iPad etc. SECTION V- CONCLUSION Apple Inc has been regarded as innovation leader in technology. Its innovation have resulted in changing the dynamics of technology industry and led other giants to follow. Based on this, the underlying report developed a project proposal for Apple Inc to launch D-Roll laptop and change the market dimension by changing shape. The proposal has accounted the performance of Apple Tablet in market overall along with customer response has been taken as reference. The proposal also suggests product, price, place and promotion dimensions for the D-Roll. However, improvement in the proposed project can be made in any aspect. With base assumption and its respective limitation, it can be concluded the project D-Roll will be another success for Apple. Appendix Figure 1 (Carlos, 2012) Figure 2 (Morgan Stanley Research, 2012) Figure 3 (cnet, 2013b) Figure 4 (Dolcourt, 2012) Figure 5 (Morgan Stanley Research, 2012). Figure 6 (Morgan Stanley Research, 2012). Figure 7 Figure 8 (Carlos, 2012) Figure 9 (Morgan Stanley Research, 2012). Figure 10 (Statista, 2013) Figure 11 (Arthur, 2011) Figure 12 (Arthur, 2011) References Carlos. (2012). ‘D-Roll Laptop Concept: Inspirational’. Trends update, Available from http://trendsupdates.com/d-roll-laptop-concept-inspirational/ [Accessed 12 January 2013] Cnet. (2013a). Tablets Reviews. Available from http://reviews.cnet.com/tablet-reviews/?filter=1000036_3808675_#filter=1000036_17618454_1000036_3808675 [Accessed 12 January 2013] Bradshaw, T. (2012). ‘Apple’s Share Of Tablet Market Slips’. Financial Times, Available from http://www.ft.com/intl/cms/s/0/a5cca4cc-2757-11e2-9863-00144feabdc0.html#axzz2Hn8HR3gk [Accessed 12 January 2013] Osawa, J. (2012). ‘Apple Cedes Share in Tablet Market’. The Wall Street Journal, Available from http://online.wsj.com/article/SB10001424052970203347104578103000176188528.html [Accessed 12 January 2013] PC World. (2013). Shop and compare. Available from http://www.pcworld.com/product/pg/directory.html?partnerCategory.pageId=5908 [Accessed 12 January 2013] cnet. (2013b). Tablets. Available from http://reviews.cnet.com/tablets/ [Accessed 12 January 2013] Dolcourt, J. (2012). ‘iPad Mini vs. Google Nexus 7 vs. Amazon Kindle Fire HD’. 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Forecast of tablet PC sales in the United States from 2010 to 2015 (in million units). Available from http://www.statista.com/statistics/200248/forecast-of-tablet-pc-sales-in-the-united-states-from-2010-to-2015/ [Accessed 12 January 2013] Arthur, C. (2011). ‘iPad to dominate tablet sales until 2015 as growth explodes, says Gartner’. The Guardian, Available from http://www.guardian.co.uk/technology/2011/sep/22/tablet-forecast-gartner-ipad [Accessed 12 January 2013] Apple. (2011). Annual Report. Available from http://investor.apple.com/secfiling.cfm?filingID=1193125-11-282113&CIK=320193 [Accessed 12 January 2013] Drinkwater, D. (2012). ‘Apple’s iPad accounts for 70% of tablets in China: study’. Tab Times, Available from http://tabtimes.com/news/ittech-stats-research/2012/08/08/apple-ipad-accounts-70-tablets-china-study [Accessed 12 January 2013] Morgan Stanley Research. (2012). Tablet Landscape Evolution. Available from http://linkback.morganstanley.com/web/sendlink/webapp/BMServlet?file=d614826u-3odb-g000-b1ed-002655214000&store=0&d=UwBSZXNlYXJjaAA0MzI1NTg%3D&user=kgdo4nhav6s1-81&__gda__=1464644568_4b89eefacb98aea2fe1033ac691c184c [Accessed 12 January 2013] Read More