iPhone in 2008: Apple Starts to Dominate
In 2007, the iPhone 2G was born, which began the rise of Apple. This phone was something unlike anything seen before, very different from the Nokia flip phones, which had previously controlled the market.
People were starting to take notice of the innovative design, and the iPhone was starting to gain attention. But it was in 2008 that Apple would begin to show its dominance, taking control of the market. They would also allow developers to start releasing products onto the Apple Store, which would further increase the company’s bottom line. Let’s look at these developments and how they shaped the company.
A Big Challenge
The year started with everyone focused on a massive, seemingly impossible challenge. At his keynote speech during the MacBook Expo in 2007, Steve Jobs had shared that he wanted to sell 10 million iPhones in 2008. Apple had become known for setting audacious goals, but this seemed to be too far out of reach.
To put the size of the challenge into perspective, the company had only sold 4 million iPhone units in 2007. To reach their 2008 goal, the company would have to sell more than double the number of iPhones as the previous year.
But, as the year progressed, it became clear that Jobs had a strategy to achieve these sales goals. Apple started to expand the number of countries that offered the iPhone. Initially, it was only available to be purchased in a handful of countries, such as the U.K. and the United States. The new expansion opened up a range of new possibilities, with more than 70 countries able to purchase the iPhone.
Because of all these new areas, it soon became apparent that Apple would meet and exceed its ambitious goal of selling over 10 million units. By October, they had reached this target. Achieving his goal was a considerable accomplishment, showing how strong marketing at Apple was. As we’ll see later, this target was also helped by the release of a new iPhone.
Financial Ups and Downs
In October, the company decided to change its accounting practices. This change gave the world an insight into just how important the sale of the device had become. It was revealed that this device accounted for 39 percent of the company’s total revenue. This significant percentage of the profits showed just how big the impact of this product was in the few years that it had been on the market. It’s believed that Apple had earned around $4.6 billion in revenue from iPhone sales. Because of the number of transactions from iPhones, Apple chose to spend more time focusing on developing it.
Despite achieving strong sales and starting to develop the App Store, which would have a significant role in the company’s future, bigger problems were facing Apple. In 2008, there were fears of a global financial crisis, caused by poor decisions made by the banks. Because of this, Apple’s share price has fallen dramatically by around 16 percent. This drop was caused by fears of people having to tighten up spending as jobs were lost. Despite this, Apple was determined to provide value to the shareholders and prevent the price from falling any further. One of the best ways for them to do this was to introduce a new iPhone.
New iPhone Is Released
To continue their extraordinary growth, Jobs unveiled a new phone during his keynote speech. There were several unique benefits to the 3G phone. First, there was a slight curve in the back of the phone. Also, the phone featured 3G radio and new GPS software. They were also able to get rid of the recessed headphone jack. Besides all of that, the company had solved one of the biggest problems with the original phone, boosting the memory available to 16GB.
To make sure that the phone remained as appealing as possible, the company decided to reduce the price dramatically. The original had been offered at $599 for the 8GB model. The newer phones would only cost $199 for the 8GB and just $299 for the 16GB option.
By doing this, Jobs was able to ensure that the iPhone was priced in a very similar way to their competitors, so they were able to compete more easily. The competitive price made the phone a more attractive option for most people.
However, the campaign didn’t go as smoothly as Apple would have hoped. One of the most significant issues centered on the claim that the technology would be twice as fast as the previous phones. However, this claim was shown to be incorrect, often depending on where you were trying to using the phone. Because of this, they needed to change an ad in Britain to display more realistic speeds.
Despite these issues, the new version of the iPhone continued to achieve strong sales. In fact, it’s one of the biggest reasons why the company was able to achieve the goal of selling 10 million units.
Major Software Updates
There was another big announcement that Apple had planned, which would change the phone market forever. First announced in March 2008, the company revealed that they would be adding a Software Developers Kit. The kit would make it easier for people to create apps for the iPhone, which could be sold directly to users through the App Store or iTunes.
This ability to create apps for the iPhone made many developers excited, as it was an excellent chance for them to get involved with the growing iPhone market. However, it soon became apparent that there might be a few issues that Apple would need to address. Developers had become bound by more restrictive non-disclosure agreements, which prevented them from discussing the details of their projects. Also, there were multiple apps that got rejected by Apple, often for unclear reasons. During this time, customers were also starting to complain about the high prices they were being expected to pay.
As criticism started to mount, there was a range of measures that Apple had to take to get control of the situation. First, they decided to relax the NDA with developers. It also made it easier for customers to leave reviews on apps, as long as they purchased the product first. Relaxing the NDA helped make the store easier to navigate, as people could find which apps would provide them with good value.
Because the app store was accessible, it started to grow in popularity. Developers were finding it easier to create apps for the store. Just a few months after opening the store, there were already 10,000 apps available to choose from for customers. Moreover, the users started to enjoy the experience of shopping in the App Store and iTunes. In 2008, the company announced that there were 300 million apps downloaded from the store. To celebrate this news, they took out ads in a range of important newspapers, which gave Apple a taste of how popular their app stores could be.
Apple Is Now a Major Phone Supplier
By the end of the year, it was clear that Steve Jobs had turned the company into a significant player in the phone market. In fact, they had now built the top-selling mobile phone in the United States, outselling the Motorola RAZR. Furthermore, it was announced that the iPhone outsold RIM, the company which produced the Blackberry. Outselling RIM was a substantial success, confirming that Apple was now one of the most successful phone companies in the world.
As we discussed, there were multiple methods that Apple was able to use to create this level of success. For example, they reduced the price of purchasing the phone, making it more affordable than ever. However, they were also able to work with a range of new suppliers to help distribute the products. For example, they were able to sell through retail giants like AT&T, Best Buy, and Walmart. Selling the iPhone through large retailers made it easier than ever for customers to get access to their phones.
Part of this success had been changing the customer’s perceptions of the phone. Now, people were starting to focus more on features like internet connectivity and the ability to take pictures. Improving the customer’s perceptions set the stage for the continued growth of the company, as it continued to build a brand that is associated with high-quality products. It would also make it more difficult for other phone companies to keep up with the innovation that Apple would be able to produce.
2008 was a great year for Apple, solidifying them as a significant player in the mobile phone market. It also saw them overcoming a considerable challenge, doubling the number of iPhones sold, compared to the previous years. As we saw, they were able to do this by using a range of techniques. For example, expanding the number of countries where you can purchase the phone and released a new model.
The year 2008 will be known as the time when Apple started to show its market dominance, becoming the third-largest mobile phone seller in the world. This dominance would set the groundwork for the future, allowing Apple to continue its expansion. Growth enabled them to become the market-leading company which we are familiar with today.