Apple IPod

Communication
Strategy

A Report By: Saurabh Sharma

Roll No.: 34
PGDM : 2009-11
BULMIM

A lot of companies have chosen to downsize, and maybe that was the
right thing for them. We chose a different path. Our belief was that if
we kept putting great products in front of customers, they would
continue to open their wallets.

- Steve Jobs

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Table of Contents
1. Introduction .......................................................................................................................................... 2
1.1 Company Overview ............................................................................................................................. 2
1.2 Apple iPod ........................................................................................................................................... 4
1.2.1 Invention of iPod .......................................................................................................................... 4
1.2.2 About iPod.................................................................................................................................... 4
2. COMMUNICATION METHODS............................................................................................................... 5
2.1 Introduction ........................................................................................................................................ 6
2.1.2 Target Group ................................................................................................................................ 6
2.2 Advertising Strategy ............................................................................................................................ 7
2.4 Some of the pictures of the advertisements of the advertisement campaign of Apple iPod. ......... 10
2.5 Positioning......................................................................................................................................... 12
2.6 References in popular culture........................................................................................................... 12
3. Critical Analysis ................................................................................................................................... 13
3.1 The iPod Launch in 2001 – An Absolute Flop (Limitations) .............................................................. 13
3.2 Benefits of the communication strategy .......................................................................................... 14
REFERENCES ................................................................................................................................................ 15

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 1. Introduction

1.1 Company Overview

The Apple logo designed by Rob Janoff

Type Public (NASDAQ: AAPL)

S&P 500 Component

Industry Computer hardware

Computer software
Consumer electronics
Digital distribution

Predecessor Apple Computer, Inc. (January 9, 2007)

Founded Cupertino, California, U.S. (April 1, 1976)

Founders Steve Jobs

Steve Wozniak
Ronald Wayne

Headquatrters 1 Infinite Loop, Cupertino, California, U.S.

Number of 300 (August 2010)

locations

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Area served Worldwide

Key people Steve Jobs (Co-founder, Chairman, CEO)

Tim Cook (COO)
Peter Oppenheimer (CFO)
Bob Mansfield (Mac and iPhone Hardware Engineering)

Jonathan Ive (Industrial Design)

Products Mac (Pro, Mini · iMac · MacBook, Air, Pro · Xserve),iPod (Shuffle, Nano, Classic,

Touch),iPhone (Original · 3G · 3GS · 4), iPad, Apple TV, accessories, Mac OS

X (Server), iLife, iWork, iOS

Services Stores (retail, online, App, iTunes, iBooks)

MobileMe

Revenue $65.23 billion (FY 2010)

Profit $14.01 billion (FY 2010)

Total assets $75.18 billion (FY 2010)

Total equity $47.79 billion (FY 2010)

Employees 49,400 (2010)

Subsidiaries Braeburn Capital, FileMaker Inc.

Website Apple.com

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1.2 Apple iPod
1.2.1 Invention of iPod

Few people know - and few market analysts too - that the iPod + iTunes business idea was not conceived
inside Apple, but was proposed to Apple by an outside source, a music lover and Engineer named Tony
Fadell, who was later hired by Apple. Fadell had approached other companies before Apple, including
Microsoft, and Microsoft had turned away Fadell and discarded the project as “ Uninteresting”.

Microsoft executives turned down Fadell and the iPod + iTunes business idea saying: "This will not
make any money”.

The iPod was developed by Tony Fadell and his team in just 12 months.

The name iPod was proposed by Vinnie Chieco, a copywriter who was called by Apple to figure out how
to introduce the new player to the public. After Chieco saw a prototype, he thought of the movie "2001:
A Space Odyssey" and the phrase "Open the pod bay door, Hal!".

1.2.2 About iPod

iPod is a portable media player designed and marketed by Apple and launched on October 23,
2001. The product line-up currently consists of the hard drive-based iPod Classic, the
touchscreen iPod Touch, the iPod Nano, and the compact iPod Shuffle.. As with many other
digital music players, iPods can also serve as external data storage devices. Storage capacity
varies by model, ranging from 2 GB for the iPod Shuffle to 160 GB for the iPod Classic. All of the
models have been redesigned multiple times since their introduction. The most recent iPod
redesigns were introduced on September 1, 2010.

Apple's iTunes software can be used to transfer music to the devices from computers using
certain versions of Apple Macintosh and Microsoft Windows operating systems.

The iPod branding is also used for the media player applications included with
the iPhone and iPad; the iPhone version is essentially a combination of the Music and Videos
apps on the iPod Touch. Both devices can therefore function as iPods, but they are generally
treated as separate products.

Figure: Some variants of Apple iPod

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 2. COMMUNICATION METHODS

One of the most effectively used by

Apple : “Technological Innovation “

Tony Fadell
Jonathan Ive
SteveJobs

Word of Mouth

The communication method used by Apple iPod was that of

 Group influence and

 Word of Mouth Publicity.

Figure: Explaining the communication method used for Apple iPod

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"To launch the iPod, Apple used no fewer than seven types of innovation. They included
networking (a novel agreement among music companies to sell their songs online), business
model (songs sold for a buck each online), and branding (how cool are those white ear buds and
wires?). Consumers love the ease and feel of the iPod, but it is the simplicity of the iTunes
software platform that turned a great MP3 player into a revenue-gushing phenomenon."

- Larry Keeley, Innovation Consultant, Doblin Inc., in April 2007.

"How will we remember the iPod? As something that embodies who we were -and who we were
going to be -in the early part of a century bound to take us places we couldn't hope to imagine?
It was our fetish and our future. Its irresistible contours made us hungry to possess it. But it
possessed us. Taking full advantage of the flexibility and fungibility of digital technology, the
iPod changed our behavior, made business winners and losers, and made everything it touched
just a little bit cooler."

- Steven Levy, Author, "The Perfect Thing: How the iPod Shuffles
Commerce, Culture, and Coolness" in 2006

2.1 Introduction
In April 2007, US based Apple Inc. (Apple) was adjudged the world's most innovative company
from among 50 companies, according to BusinessWeek-Boston Consulting Group study. Apple
occupied this position for the third consecutive year. BusinessWeek wrote, "The iPod creator is
a master of superb product, store, and experience design.

2.1.2 Target Group

 It also named iPod the "Omnipresent Icon of Design". Commending Apple on iPod's
marketing strategy, TII Innovation Journal said, "Today, innovation is about much more
than new products. It is about reinventing business processes and building entirely
new markets that meet untapped customer needs”.

 Most important, as the Internet and globalization widen the pool of new ideas, it's
about selecting and executing the right ideas and bringing them to market in record
time. Apple had launched iPod, a portable digital music player, in October 2001. Since
then, Apple had designed and sold different generations of iPod. iPod had created a
market for almost 4000 iPod accessories. This market was also known as iPod
ecosystem.

 By the year 2004, gained a clear market leadership status in the global digital music
player industry. Apple undertook incessant advertising for iPod.

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  The advertisements featuring silhouettes dancing to the beats of their iPods were seen
everywhere -print, television, and billboards. In a very short time, Apple created an
iconic image for iPod that attracted the young and the old alike.

 It was placed as a product of the present generation and presented a picture of

"coolness". Commenting on the fad that iPod had created, John Zhang, Professor,
Wharton University said, "All MP3 players do the same thing, but nobody else has the
'cool' factor of iPod. It's a status symbol: You're young, cool, and vigorous if you have
one.


2.2 Advertising Strategy

 Apple advertised extensively for iPod. Just when iPod was launched, an introductory
campaign which would explain an unfamiliar product was needed. For this, Jobs
thought a traditional campaign was preferable. Hence, the first iPod's commercial
showed a man listening to the songs on his iPod and dancing.

 The commercial illustrated iPod's portability and ability to easily play songs
downloaded from one's computer. All media channels including television, print,
hoardings, posters and wrap advertising were used to advertise iPod.

 Apple has used a variety of advertising campaigns to promote its iPod portable digital
media player. The campaigns include television commercials, print ads, posters in public
places, and wrap advertising campaigns. These advertising techniques are unified by a
distinctive, consistent style that differs from Apple's other ads.

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 Figure: Apple Garamond was used in most of Apple's marketing.

 The more notable commercials and print advertising feature dark silhouetted
characters against bright-colored backgrounds. The silhouettes are usually dancing, and
in television commercials are backed by up-beat music. The silhouettes are also usually
holding iPods and listening to them with Apple's supplied earphones. These appear in
white, so that they stand out against the colored background and black silhouettes.
Apple changes the style of these commercials often depending on the song's theme or
genre.

 The original television commercials and posters featured solid black silhouettes
against a solid bright color, which usually changed every time the camera angle
changed. Some of the television adverts also depict highlights on the silhouettes using
darkened shades of the background color, and shadows on the floor. Since then, various
commercials in the campaign have changed the format further:

1. One live action TV commercial made reference to the silhouette theme to

emphasize its icon status. It involved a man walking past a set of silhouette
posters, which came to life and danced when his iPod was playing, but froze
when he paused it.
2. In 2004, Wired Magazine featured a new service where people could create their
own ipod ads from their personal photos. Service is still active at: iPod My Photo
3. The TV commercials for the iPod shuffle used a green background with black
arrows moving in the background representing the "shuffle" icon. The
silhouettes danced on top of the arrows as if they were a moving floor while
listening to iPod shuffles hanging from white lanyards.
4. In September 2006, Apple once again reimagined their vision of the silhouette ad
campaign to go with the new iPod nano aluminum case. They made a departure
from the contrasting background and characters. Both the characters and the
background are thrown into deeper shadow than we've ever seen before, and, in

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 order to showcase the new colors of the nano, the characters swing their nanos
around while dancing, which leaves a luminescent light trail.
5. In November 2006 Apple used their original style again in their Latino TV Ad.
6. Also in November 2006, Apple released a new ad for the second generation iPod
shuffle, which featured people clipping the minuscule player to different articles
of clothing while jamming to the beat of Prototypes' "Who's Gonna Sing?".
7. At Macworld 2007, Apple debuted their new ad campaign, featuring a reverse
color scheme of previous campaigns: Colored silhouettes on a black background,
as well as a second styled ad featuring colored silhouettes amongst a dynamic,
moving and multi-colored background.
8. Paul McCartney walking and strumming a mandolin performing his song "Dance
Tonight" being very much like an updated version of the Eminem commercial,
having backdrops of buildings and featuring McCartney walking with animations
of shapes around him.
9. In November 2007, Apple released a new ad using a similar formula to the one
used with the "Mi Es Tropical" ad, but with a light emanating from the
background as if the characters were on a stage. This time the ad is
featuring Mary J. Blige along with a group of dancer in silhouette form. The song
is "Work That" from the album "Growing Pains".
10. YouTube member njhaley (More commonly known as Nick Haley) created a fan
commercial of the iPod touch. Apple was impressed with the commercial and
then contacted him about putting the commercial on the air. He and Apple's
advertising agency TBWA then got to work on making a more polished version of
the Ad which ran during the 2007 World Series on Fox.

Hyperlink to the advertisement: http://www.youtube.com/watch?v=dIttOsrKdBE

11. In April 2008, a new ad was released following the original formula – but with
animated backgrounds and more detailed silhouettes. The song was "Shut Up
and Let Me Go" by The Ting Tings
12. On May 20, 2008, a new ad premiered during the American Idol finale. It follows
the original form but with even more animated backgrounds and Coldplay is
shown in the shadow. The song was Viva la Vida by Coldplay.

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2.4 Some of the pictures of the advertisements of the advertisement campaign
of Apple iPod.

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2.5 Positioning
The advertisements and commercials of iPod focused on the 'coolness' aspect as it made the
viewers believe that having one would make them accepted among their peers. Analysts
commented that the hype surrounding iPod was created due to its unique advertising, word of
mouth publicity by the users and the look and design of the product.

2.6 References in popular culture

1. MAD Magazine – In the Series of Unfortunate Events movie spoof, Lemony Snicket is
always shown in shadow (as is the case with the movie). In one panel of the spoof, he is
shown with an iPod. In the MAD March 2006 issue the cover was a parody of the iPod
silhouette ad and inside there were panels that spoofed the silhouettes.
2. On the Family Guy episode "Petarded", Peter laments that losing the kids because of his
mental retardation was worse than when Stewie starred in an iPod commercial. The
next scene shows Stewie dancing to Scandal's "The Warrior" in the same style as the
people in the iPod commercials.
3. An episode of Weebl and Bob ("Piepod") shows them dancing in the style used in the
advert.
4. In the episode of The Simpsons 'Thank God It's Doomsday', a poster on the wall of the
Christian shop Homer visits displays a silhouette of God wearing an iPod. The caption
reads 'iGod', and is a clear reference to the advertisements.
5. Québécois rock band Simple Plan's When I'm Gone music video featured scenes similar
to the second generation iPod Nano commercials.
6. Scary Movie 4, one scene simultaneously parodied the iPod and War of the Worlds
(2005 film): an alien triPod emerges from the ground, in of a classic iPod, and flips to a
playlist of 1980s hit songs. It plays "Karma Chameleon" as the crowd nods approvingly,
then switches to another playlist: "Destroy Humanity."

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 3. Critical Analysis

 Apple communication has a unique style. As in the tv ads, as in print ads, and in the online
communications and in packaging. A lesson to be learned by many companies in the world.
Well, of course when you have great products it is much easier to entice the costumers, but
nevertheless doing it with style and cleverness is a very good point. It boosts sales, but enhances
the brand value too.

 Apple communication is simple and minimalist. Apple does not hire famous actors as George
Clooney - “No Martini, No Party” Tv ads, or Andie MacDowell - L'Oreal.

The communication method used by Apple iPod was that of

 Group influence and
 Word of Mouth Publicity.

Everybody knows how successful the iPod has been in the last 5 years, and how it
turned the fortunes for Apple.
250 million iPods have been sold worldwide until December 2009. In March 2003 the
Apple share value was $7, in July 2008 the Apple share value was $180. In the years
between 2003 to 2008 the Apple share value increased a spectacular 2500%.
There is no doubt that the iPod has been the main driver in the Apple huge success in
the years between 2004 to 2008.

3.1 The iPod Launch in 2001 – An Absolute Flop (Limitations)

 Few people however are aware - and few market analysts too - that for the first 3
years the iPod was an absolute flop. The iPod was originally launched in october 2001,
and between 2001 and 2004 iPod sales were between 100-200 thousand units per
quarter, very far from today's 10-20 million units per quarter, and the iPod sales were
not even covering the product research & development costs.

 Then, in June-Aug 2004 something happened, and iPod sales began to grow strongly,
quarter after quarter. Today, we all know where the iPod stands, and what a
remarkable success it is

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  The iPod made the fortune of Apple, and it stands out as the major turning point in
the company growth.

Reason: Probably it was a product ahead of its time. One factor certainly was that internet
connections were very slow in 2001. Broadband was very rare both in the US and Europe. Apple
probably also did mistakes in the original Communication Strategy for the iPod, investing too
little and not properly in advertising the iPod. Infact the main factor on which Apple relied
about the iPod was the buzz created by word of mouth.

3.2 Benefits of the communication strategy

 Apple Executives was in the ability to listen, catch on the business idea, build a team
around Tony Fadell, make a smart development process, and finally coming out with an
excellent product beautiful styled by Jonathan Ive.

 Apple finally introduced in September 2007 the iPod Touch, utilizing the revolutionary
touch interface initially developed for the iPhone.

 Reduction in advertising cost.

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 REFERENCES
1. WWW.WIKIPEDIA.ORG
2. WWW.VERTYGOTEAM.COM
3. WWW.GOOGLE.COM
4. WWW.APLLE.COM/IN/

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