Product Channel and Pricing Strategies

Product Channel and Pricing Strategies
    Apple Inc. opened 33 brick-and-mortar stores in 2012, of which 28 were outside the U.S. totaling 390 stores worldwide (, 2012). The company plans to replicate 2012 market growth by opening an additional 30 to 35 stores during the 2013 fiscal year (, 2012) according the Apple’s 10-K filing with the Securities and Exchange Commission (SEC). Apple would like to increase its market visibility internationally, expanding the 140 international locations to narrow the gap of the 250 U.S. stores. Despite the decrease in retail’s total contribution to the company’s profit index, individual store achievement was greater year-to-year, with each location garnering an average 51 billion dollars in revenue (Appendix A). Apple began selling the iPhone 4S in China during 2012 adding a second carrier in the country as accession outgrew expectations and was reflective in stock expansion (Appendix B).
Market Trends
    During 2012, sales and smartphone usage surpassed that of the more common “dumb” phones, now capturing more than half of all American mobile consumers (, 2013). With Android making up 51% of all smartphones in the U.S., Apple’s iPhone that commenced the revolution has untapped growth margins with only a 30% market share. The consumer trends of new innovation, which elevated the Apple iPhone movement in years past, could be achieved again with the introduction of the iWatch.

Market Growth and Size
    Global smartphone growth during Q4 of 2012 reached 224 million units, representing almost 40% year-over-year growth due primarily to strong consumer demand (, 2013). Strong smartphone growth, which the iWatch could capitalize on, is a result of a variety of factors; including arduous device subsidies from carriers, especially in mature economic markets, as well as a growing collection of sub 250 dollar smartphones in emerging markets. However, the high price point of the iPhone...