Product Design, Operations Management, Steps in Designing, iPhone.

1. RAHUL BABAR

2. What is product design ?
Product design is the process of creating a
new product to be sold by a business to its customers.
It is essentially the efficient and effective generation
And development of ideas through a process that leads
to new products.

3. Why is product design concept
used ?
Profit Maximization in Long run
Upgrade desired product quality
Reduce development time and cost to minimum
Ensure producibility or manufacturability

5. Steps in Product
Designing

6. Idea Generation
 Customer & competitor
research
 Brainstorming sessions
 Surveys
 Customer input
 Research & Development team

7. Concept screening
 Is there a real, clearly defined
customer need or want for this
product or service ?
 Can we fully develop this
product or service ?
 Is the profit potential for this
product large enough to justify
it’s development ?

8. Competitive analysis
 “ Best of ” ideas are incorporated
to mitigate any competitor
advantage.
 Verify buyer market size for
similar offerings to validate
development investment.

9. Concept Testing
 Principle target is to quantify
actual customer enthusiasm
for the product or service.
 Get solid feel that the market
of buyers is genuinely
interested in the concept
before we develop it into a
tangible offering

10. In-depth analysis
 Formal list of features &
benefits, key USP (unique
selling proposition), etc.
 Summary of all resources
needed for development.
 Marketing plan with ROI
projections.
 Summary of competitive
products, pricing, packaging
etc.

11. Prototype Development
 Product name, specific marketing messaging, etc,
are solidified.
 Prospective buyers review the prototype and asked
if they like it, would they buy it, what would make
it better, etc.

12. Commercialization
The product is finalized and
launched full scale

14. iPhoneApple

16. Resistive
Technology
Capacitive
Technology

18. Manufacturing Cost Estimates
Flash Memory & RAM
$20.85
Display & Touchscreen $44.00
Processor $17.50
Sensors $6.50
Cameras $18.00
Cellular Radio $34.00
Wireless Radio $5.00
Battery $4.50
Power Management $8.50
Mechanical Parts $33.00
Packaging $7.00
Production $8.00
Licensing Fees $20.00
Total Cost $226.85
Operating Cost Estimates
Research &
Development
$18.85
Software &
Administrative
$42.33
Total Cost $61.18
The Total Estimated Cost
Manufacturing $226.85
Operating
Expenses
$61.18
Wholesale to
Retail Markup
$68.90
Total Cost $356.93

19. R&D cost of US$ 150 million
Total Cost per piece $356.93
Price per piece $599
Profit per piece $242.07
Sold 6.1 million first generation iPhone units over five
quarters
By the end of 2010, a total of 73.5 million iPhones were
sold.