This is a case study that investigates the reason why Apple's iPhone has not been successful in the Japanese market compared to other markets. Using international marketing theories, we have analysed various factors such as the market, culture, utilisation of FSA, and standardisation.
3. Apple US
o1977: Founded by Steve Wozniak & Steve Jobs
oDeveloped one of the first Personal Computer (PC)
oSuffered serious setbacks
o1983: The First Apple Macintosh released/ Steve Jobs
ousted
o1990's: Went through series of highs and lows
o1996: Steve Jobs returns to Apple
oReleased the i-Mac, i-Pod and i-Phone with great success
4. Apple Japan
oSmall Japanese firms originally imported Apple with no license
oEntered the JP market in 1980 through Toray, a textile
merchant, not very successful
o Another try: ESD labs but the price of the computer doubled
oFor better distribution of computers: Used high profile
companies, Pioneer, Mitsubishi and Canon.
oApple develops its own subsidiary - Apple Japan
oRelease of Japan specific products, ex. JP Kanji characters
5. iPhone JP market release in July 2008
Seek for partnership with a Mobile
Phone Carrier
Begins negotiation with DoCoMo,
#1 carrier with 58 million
subscribers.
Move to negotiations with Softbank,
#3 carrier with only 11 million
subscribers
Apple Japan not involved in the
negotiation process
5
6. iPhone Features
oMP3 player
o2MG pixel camera
oTouch screen tech
oHigh resolution screen
o3G internet & e-mail
oiPhone Apps
oGPS
oBluetooth
oWifi
6
7. Japanese Market:
More than 80% is occupied by JP local brands
Sharp, 17.2
Others
Nokia
Panasonic, 14.9
LG Sharp
Panasonic
Samsung
Toshiba
Mitsubishi
Fujitsu
Samsung
LG
Nokia
Others
Fujitsu , 12.5
Toshiba, 14.5
Mitsubishi, 14.2
Euromonitor International, data of 2007
8. Japanese Mobile Market
Strong partnership
Developed 3G, Smart
between the carrier
independently from phones with high
and the
the rest of the world functionality
manufacturers.
10. Japanese Mobile Culture
Use of Emoticons for rich and humane
Mobile as a fashion item
communication
Importance ofRich and togetherness among
feeling warm communication with
Emoticons and Photos
peers
Importance of feeling togetherness
among peers; Compatibility
11. What factors in the Japanese Market prevented
iPhone from succeeding?
Consumer
Needs
High Product
Functionality
12. What factors in the Japanese Culture prevented iPhone from
succeeding?
13. Why didn't standardisation work in the Japanese market?
Core
Competency
Market Power
Competitive
Structure
14. Why didn't Apple’s FSA (Firm Specific Advantage) overcome some
of the problems faced?
Strong Scale economies advantage
Minimal production advantage
Low distribution advantage
Low marketing advantage
No utilisation of managerial expertise
15. What could have Apple done
differently to release the iPhone?
Japan Overview;
The Competitive Power: High
The Supplier Power: Very High
The Customer Power: Neutral
Should have taken the Japanese market & culture into
consideration from the start of iPhone development
Better utilisation of FSA
-Knowledge of Apple Japan
- More Product Adaptation
Notas do Editor
Apple was formed in 1977 by Steve Wozniak and Steve Jobs. They were the first computer company to sell a fully assembled personal computer (PC). They had tremendous success from this product, but this was short lived as many other computer companies rushed to the market. The market was quickly dominated by IBM. The first Apple Macintosh was released in 1983 and although this had some success, internal turmoil saw Steve Jobs ousted from Apple. The company went through a series of highs and lows as it tried to define itself in the market. By 1996 the Apple’s board had had enough with the poor performance and lack of market credibility. Steve Jobs company NeXT was purchased and shortly thereafter he was made CEO of Apple. Jobs has been instrumental in turning the company around. The release of the i-mac, i-pod and the i-phone which has had great success except for one country.
Apple computers first entered the Japanese markets through small domestic firms but they had no license from Apple. Apple was a “XXXXXXXX Importer”. Apple decided to use Toray as its sole distributor in Japan in 1980, which subsequently stopped all the smaller firms from importing. However Toray was a textile merchant and it had little contacts in the computing industry. Sales were less than stellar.Apple dropped Toray and then used ESD labs, a computer research firm, as its distributor but soon found that the prices for its products were being charged doubled that of the US.Apple persisted with other distributors and approached the likes of Pioneer, Mitsubishi and Canon to distribute its products.Apple shortly thereafter opened its own subsidiary, the only country subsidiary in Apple’s company. Apple Japan would look after the marketing and support whilst keeping its distributors to keep on distributing. An integrated distribution approach.Apple Japan still struggled with average sales. It soon identified the problem; it was selling an English product to the Japanese with American executives running the subsidiary. A Japanese CEO was put in place and he quickly installed native Japanese to the management team.Apple also realised that it needed to develop Japanese specific products and software. It created the first keyboard to type roman and Japanese kanji characters.Apple Japan has only had moderate success with graphic artists and designers being the majority of buyers. Apple’s greatest success has come from the iPod and iTunes where sales have been quite high for the company. It was hoped that this success would be translated with the introduction of the iPhone.Play Video
For those who are unaware here are the iPhone feaures;MP3 player2MG pixel camera (no camera flash, no video recorder)Touch screen techHigh resolution screen3G internet & e-mailiPhone Apps GPSBluetoothWifiI will now pass on to Remi who will talk about the JP mobile market
Developed independently from the rest of the worldJapanese handsets come standard with high functionalitiesStrong partnership between the carrier and the manufacturers.
Mobile as a fashion item Compatibility with friends' mobile phone is important, because Japanese consumers seeks \"oneness\" with particular peer groups. Importance of feeling togetherness among peers
Strong domestic players, with mobile phones developed specifically to meet JP consumers’ needsWeak product competitive advantage where high-tech mobiles are a norm.Disadvantage in relationship with mobile carriers vs Domestic manufacturers. They could only make a deal with Softbank, the #3 player
Little match with the Japanese mobile culture. Lack of compatibility with other JP mobilesResearch shows that Japanese people tend to perceive US products inferior compared to Japanese products.
Apple may have core competency, possess dominant position in the market, so that it prevents competitions from entering,,, in the global market Apple has that power, however not in JP, US and JP has different mrk structure as JP market developed independent from other markets, and more than 80% is dominated with JP mobile manufacturers.
Loss of distribution advantage because of the partnership with SoftbankLoss of mktg advantage because of weak brand power/ Parent company did the negotiation, no utilisation of managerial expertise.