ASSIGNMENT

WHICH ONE SHOULD BE

RETAINED BY APPLE - I
PAD OR I PHONE ?
2
EXECUTIVE SUMMARY
In this study report, analysis has been performed for iphone and ipad as a product. On basis of
analysis (since apple has to select either of both for its business, the better revenue generation
in future from either of the product becomes a major controlling factor while arriving at a
decision). Recommendation is made that for near foreseeable future pple should retain ipad as
its flagship product. !esides revenue other factors upon which evaluation is carried out are are
discussed at stretch before reaching the final conclusion.
Business Strategy
The Company is committed to bringing the best user experience to its customers through its innovative
hardware,software and services. The Companys business strategy leverages its unique ability to design
and develop its own operating systems, hardware, application software, and services to provide its
customers new products and solutions with superior easeofuse, seamless integration, and innovative
design. The Company believes continual investment in research and development, mar!eting and
advertising is critical to the development and sale of innovative products and technologies.
Business "rgani#ation
The Company manages its business primarily on a geographic basis. $ccordingly, the Company
determined it reportable operating segments, which are generally based on the nature and location of its
customers, to be the $mericas, %urope, &apan, 'reater China, (est of $sia )acific and (etail. The
$mericas segment includes both *orth and South $merica. The %urope segment includes %uropean
countries, as well as +ndia, the ,iddle %ast and $frica. The 'reater China segment includes China, -ong
.ong and Taiwan. The (est of $sia )acific segment includes $ustralia and $sian countries, other than
those countries included in the Companys other operating segments. The (etail segment operates $pple
retail stores in /0 countries, including the 1.S. %ach operating segment provides similar hardware and
software products and similar services.
)roducts "verview and -ighlights
The Company designs, manufactures, and mar!ets mobile communication and media devices, personal
computers, and portable digital music players, and sells a variety of related software, services,
peripherals, networ!ing solutions, and thirdparty digital content and applications. The Company sells its
products worldwide through its retail stores, online stores, and direct sales force, as well as through third
party cellular networ! carriers, wholesalers, retailers, and valueadded resellers. +n addition, the Company
sells a variety of thirdparty i)hone, i)ad, ,ac and i)od compatible products, including application
software, and various accessories through its online and retail stores. The Company sells to consumers2
small and midsi#ed businesses2 and education, enterprise and government customers.
3iscal 45/0 -ighlights
"
*et sales rose 67 or 8/9.9 billion during 45/0 compared to 45/4. This resulted from growth in net sales
of i)hone2 iTunes, software, and services2 and i)ad. 'rowth in 45/0 reflects strong sales of i)hone :,
strong continuing sales of i)hone 9 and 9s, the introduction of i)hone :c and :s, strong performance of
the i)ad ,ini and fourth generation i)ad, and continued growth in the Companys online sales of apps,
digital content, and services. Similar to 45/4, growth in total net sales was higher during the first half of
45/0, rising 8/4.; billion or /9.<7 over the same period in 45/4. 3irst half growth in 45/0 was driven by
i)hone and i)ad introductions at or near the beginning of 45/0. =uring the first quarter of 45/0, the
Company introduced the fourth generation i)ad and i)ad ,ini, a new ,acBoo! )ro with (etina display,
a new i)od touch, a new i,ac, and expanded the rollout of i)hone : which began in September 45/4. +n
September 45/0, the Company introduced i)hone :s and i)hone :c, released i"S <, launched iTunes
(adio, and announced that beginning in September 45/0 i)hoto, i,ovie and i>or! apps for i"S would
be available as free downloads with all new ?i"S devices,@ namely i)hone, i)ad and i)od touch. +n
"ctober 45/0, the Company announced i)ad $irA, its fifth generation i)ad, and i)ad mini with (etina
display.
)roduct )erformance
i)hone
The following table presents i)hone net sales and unit sales information for 45/0, 45/4 and 45// Bnet
sales in millions and units in thousandsCD 45/0 Change 45/4 Change 45//
*et sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 6/,4<6 /;7 8 <E,;64 </7 8 9:,66E
)ercentage of total net sales . . . . . . . . . . . . . . . . . . . . . :07 :57 947
1nit sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . /:5,4:< 457 /4:,59; <07 <4,460
The growth in i)hone net sales and unit sales during 45/0 resulted from increased demand for i)hone in
all of the Companys operating segments primarily due to the launch of i)hone : beginning in September
45/4 and strong ongoing demand for i)hone 9 and 9s. $ll of the Companys operating segments
experienced increases in net sales and unit sales of i)hone during 45/0 compared to 45/4. The yearover
year impact of higher i)hone unit sales in 45/0 was partially offset by a 07 decline in i)hone average
selling prices B?$S)s@C in 45/0 compared to 45/4 primarily as a result of a shift in product mix towards
lowerpriced i)hone models, particularly i)hone 9. $ll of the Companys geographic operating segments
experienced a decline in i)hone $S)s during 45/0.
i)ad
The following table presents i)ad net sales and unit sales information for 45/0, 45/4 and 45// Bnet sales
in millions and units in thousandsCD 45/0 Change 45/4 Change 45//
*et sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 0/,6E5 07 8 05,69: ;/7 8 /6,/;E
)ercentage of total net sales . . . . . . . . . . . . . . . . . . . . . /67 457 /E7
1nit sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . </,500 447 :E,0/5 E57 04,069
The growth in net sales and unit sales of i)ad during 45/0 resulted from growth in i)ad unit sales in all of
the Companys operating segments. This growth was driven by the launch of i)ad mini and the fourth
generation i)ad beginning in the first quarter of 45/0. The yearoveryear growth rate of total i)ad unit
sales was significantly higher than the growth rate of total i)ad net sales for 45/0 due to a reduction in
i)ad $S)s of /:7 in 45/0 compared to 45/4. This decline resulted primarily from introduction of the
#
lower priced i)ad mini and the full year impact of the price reduction on i)ad 4 made in 45/4. The
decline in i)ad $S)s was experienced to various degrees by all of the Companys operating
segments.The yearoveryear increase in i)ad net sales and unit sales during 45/4 was driven by strong
demand for i)ad in all of the Companys operating segments as a result of the launch of the third
generation i)ad in ,arch 45/4, continued demand for i)ad 4, and expanded distribution with new
resellers. The yearoveryear growth rate of i)ad unit sales was higher than the growth rate of i)ad net
sales during 45/4 due to a /57 reduction in $S)s as a result of a shift in product mix toward lower
priced i)ad models, a price reduction on i)ad 4 and an increase in indirect sales due to expanded
distribution through thirdparty resellers.
+ pad is $ppleFs fastestgrowing product in the companyFs history. $pple has sold 4/5 million of them so
far, which is almost twice as many i)hones $pple sold in the same period of time. "ne of the study states
that 6/7 of tablets activated in the enterprise are i)ads. ,eanwhile, nearly all 3ortune :55 companies use
i)ads.
+t is believed that tablet computing is the future.
3rom the boardroom to the server room, i)ad is helping transform the way businesses wor!. *ow itFs
possible to present wor! to clients, collaborate on proGects, and manage important business processes on a
single device that can be ta!en anywhere. >ith up to ;9'B memory, an -= camera, builtin 3aceTime
-=, cellular access and the ability to connect to both your ,acs and )Cs, i)ad is ma!ing it easy to stay
connected to the office from anywhere. i)ad enables employees to access content wherever they are,
whenever they need it, so they can research while travelling or even put together pitches on the fly.
%mployees can share information with colleagues via email or through a custom app, or incorporate
screencaps, images and handwritten comments into meeting notes to create a fuller picture of what a
client needs and facilitate future collaboration.
But perhaps the biggest advantage of i)ad is that it allows us to do everything create, edit, print, share,
organise, present, schedule meetings and !eep in touch with colleagues on a single device, meaning any
mobile wor!er has constant access to every resource they need. >ith no need to move between devices,
virtually no startup time and a growing number of enterpriseready apps that will help facilitate realtime
collaboration, i)ad is perfect for anyone who wants to wor! better, faster.
3acilitate collaboration and communication
>ith 3aceTime included as standard and a range of conferencing apps available, i)ad ma!es it easy for
ontheroad employees to chec! in with the office, attend !ey meetings and presentations, or even present
remotely. There are also plenty of collaborative tools included, from scheduling tools to the iCloud
bac!up service, which allows you to share content seamlessly between devices and locations.
+mproves the customer experience
>ith an increasing number of service des! apps available on i)ad, its easier than ever for staff to access
customer records, carry out more comprehensive C(, and respond more quic!ly to queries, wherever
they are. +t also means field operatives have access to richer resources onsite, for example graphics of
equipment that needs to be repaired or the precise specifications for a new build.
$
%he central theme to any negative view point on i&ads is a lac' of awareness of(
/. Houng peoples habits and practices since the birth of devices I social media
4. 4/st century priorities and that +T has become integrated in all life and not a separate school
subGect
0. 657 of people dont want a technical relationship with the device and want the simplicity that so
many school technicians realise would remove much of their wor!load.
#. )earning and dapting
:.
i)ads do Gust wor! more often and with more ease that all the others. They are also capable of
achieving /557 of most students educational needs.
(enowned choreographer 3ero# !han uses ipad air as a tool to choreograph his dances and almost
every aspect of his epic dance scenes, from finding the perfect costumes to perfecting every last
gesture and twirl. listening to songs on + tunes to collaborating with his team using shared photo
streams, .han used to do more in less time with ipad air. Choreoghapher 3ero# .han found it not
only incredibly tedious but also challenging to share a clear vision across multiple channels and
team members J especially when things were moving fast, which they inevitably were. >ith
i)ad $ir, .han is able to adopt an entirely new approach that enables him to save precious time
and share his input more simply and cohesively. .han can set up a shared photo stream and invite
his team to view photos and videos in a single, organised album. -is colleagues can add
comments.
$pple, the company that turned digital music into a mainstream phenomenon, said it was buying Beats
%lectronics, a rising music brand, for 80 billion, in a move that will help it play catchup with rivals that
offer subscriptionbased music services.
$pple and Beats executives said the companies would wor! together to give consumers around the world
more options to listen to music. The the world more options to listen to music. The Beats brand will
remain separate from $ppleFs, and $pple will offer both BeatsFs streaming music service and premium
headphones.
$pple said iTunes, which sells individual songs and albums and offers a streaming radio service, would
be offered alongside the Beats music service. This decision will further strengthened the ipad as a prodt,
3inal Conclusion
+n my views, if $pple has to retain one2 + would recommend + pad as it can provide a better prospect in
terms of revenue generation in future. + pad can be considered as a hybrid prodt which provides all the
*
benefits of a phone with better features and also can be used as a )C to a certain extent. $pple is !nown
for innovations and with (I= done on this prodt, a niche can be created. + phone is facing great
challenges from competitors li!e androids. Survival in future for iphone with present profit margins
seems to be difficult. +pad has multiple applications2 unli!e + phone..it can be used for business purposes,
in education and of course entertainment. Similarly, its application is various fields to get better results
can be explored. The gradual increase in the screen si#e of apple iphone and with introduction of mobile
communication system in ipad has blurred the distinction between iphone and ipad. i)ad performs all the
functional which were performed by iphone. So, ipad can be considered as a better choice for future.
REFERENCES
+. ,lass case study on apple
2. pple financial report for year 2-+" as filed with ./I%01 2%%02
securities and e3change commission.
". 4artner research for worldwide tablet demand and sales
#. 0mar'eter research on digital media
$. Iphonein,anada.ca
*. International data corporation
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