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CCID Consulting Analyzes Apple's Strategy on 3G iPhone

CCID Consulting Analyzes Apple's Strategy on 3G iPhone

BEIJING, July 11 /Xinhua-PRNewswire/ -- CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), releases its report on Apple's Strategy on 3G iPhone.

Apple stands out amongst other digital manufacturers with innovative products. Its Mac or iPod+iTunes bundle successfully attract global attention by adopting a style that is both fashionable and distinctive. The original idea in 2007 behind iPhone was to share telephone fee and service income with carriers, which caused a stir among mobile phone manufacturers that are used to traditional sales means. However, amid global mobile phone market competition, Apple has to restructure its marketing strategy that is to be adopted by its 3G iPhone.

Firstly, as for price, compared with the first generation iPhone's $499 and $599, entrance price for 3G iPhone starts from $199, which rocked the market with a surprise. Apple changes its high price strategy as part of its product highlight, that although iPhone was launched just one year, in order to achieve high profit, Apple puts out a new slogan ''Twice as fast, Half the price'' for its 3G iPhone. Supporting WCDMA, assisted with GPS, and Chinese Handwritten Input, also compatible with HSDPA network, its low price attracts consumers' attention again. Secondly, Apple strengthens market share, that with challenges from Nokia, Samsung, LG and RIM, iPhone's market share in the American smart phone market share raised from 19.2% in 2008Q1, to 26.7% in 2007Q4. In order to satisfy users' demands and further stimulate iPhone's sale, this low price strategy is the effective means to guarantee selling 10 million sets of mobile phones by the end of 2008.

Secondly, as for sales mode, Apple enlarges iPhone's global sales scope. 3G iPhone will be launched in 22 countries and areas on July 11, including Australia, Austria, Canada, Finland, France, German and Hong Kong. 3G iPhone will then debut in 48 countries and areas, such as Argentina and Brazil. Compared with 3G iPhone, the first generation iPhone is only sold in six countries. On the other hand, Apple now has a ''subsidy plan'' with carriers, that instead of taking away part of the service revenue from carriers, Apple will split revenue from sales, thus clearing the obstacles for 3G iPhone entering global market. Thirdly, first generation iPhone limits its sales potential by confining to only one carrier per country, so Apple gives up this exclusive carriers' sales mode. These series of measures review Apple's ambition to push 3G iPhone market share in the global market.

However, behind low price and a new sales mode, 3G iPhone is not as easy to get as it sounds. For those who would like to acquire iPhone with $199, they will need to pay more money to carriers. Taking AT&T as an example, AT&T up-regulates 3G iPhone users' tariff standard: the lowest service charge is $39.99 every month; if users would like to use unlimited data service, they have to pay another $30 every month. According to AT&T and Apple's two-year' cooperative agreement, Apple will acquire $432 sales subsidy from every user, on top of sales profit from just the iPhone. For Vodafone 3G iPhone users, 8GB iPhone is 499 Euro, and 16GB is 599 Euro.

Apple adjusts its products and business mode to push 3G iPhone to its global sales peak. However, if Apple would like to sustain in the smart phone market and expand its influence in the mobile phone industrial chain, it should further cater for market's actual demands to capture a broader portfolio of users.

About CCID Consulting

CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: 8235.HK), is directly affiliated with China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu, with over 300 professional consultants after many years of development. The company's business scope has covered over 200 large and medium-sized cities in China.

Based on major areas of competitiveness: industrial resources, information technology and data channels, CCID Consulting provides customers with public policy establishment, industry competitiveness upgrading, development strategy and planning, marketing strategy and research, HR management, IT programming and management. CCID Consulting's customers range from industrial users in electronics, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to becoming the No. 1 advisor for enterprise management, the No. 1 consultancy for government decisions and the No. 1 brand for informatization consulting.

For more information, please contact: Cynthia Liu Coordinating Manager CCID Consulting Co., Ltd. Tel: +86-10-8855-9080 Email: [email protected]

CCID Consulting Co., Ltd.

CONTACT: Cynthia Liu, Coordinating Manager of CCID Consulting Co., Ltd.,
+86-10-8855-9080, or [email protected]

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