Apple in Wireless: Strategic Options in a Converged Marketplace

• Apple’s core products and services
• The company’s strengths and weaknesses
• The opportunities that exist for its entry into wireless
• The impact of such a move on Apple and the cellular/wireless industry

• How does Apple manufacture, distribute and market its products and services?
• How do these products and services interact or overlap with the cellular industry?
• What is the Apple’s strategic vision and future product roadmap?
• As a digital content retailer, Apple is leading the market - can it transfer this success and its brand across to wireless? What strengths would Apple be able to leverage with potential entry?
• What opportunities and threats would Apple’s entry into mobile create?
• What impact would this have on both Apple and the industry?
• How would becoming an MVNO change Apple’s business model?
• What impact will French legislation have on Apple and DRM in general?

• Mobile operators - Find out how to maximise the value of hosting an Apple-branded MVNO on your network. Also discover what kind of competition Apple would offer were it to become an MVNO.
• Handset vendors - Assess Apple’s iPod strategy and the likely impact of that the iPhone device would have on your business. Find out what specifications Apple would demand from a mobile phone.
• Content providers & media companies - Learn what opportunities exist in partnering with Apple. Gain insight into Apple’s general strategy and how it compares to yours

Chapter 1 Executive Summary

1.1 Success in innovation

1.2 iPod and iTunes have redefined the market

1.3 Apple’s changing business model

1.4 New technological advancements at Apple

1.5 iPhone on the horizon

1.6 Wi-Fi and VoIP-enabled iPods

Chapter 2 Products and services analysis

2.1 Apple is surrounded by an entire ecosystem

2.1.1 The iPod is penetrating home and in-car connectivity

Chart 2.1: US cars with iPod connectivity, 2006-2011 (%)

2.1.2 How the iPod shaped the MP3 player and legal download markets

2.1.3 iPod's simplicity is its major appeal

2.2 Despite low R&D, Apple enjoys greater ROI

Table 2.1: Comparative R&D expenditure by company ($ billions), 2003-2004

2.3 Impact of French DRM legislation on Apple

2.3.1 The US response

2.4 Possible regulation in the US

2.5 Other disputes

2.6 Product overview

2.6.1 Hardware

2.6.1.1 AirPort Express

2.6.1.2 AirPort Extreme

2.6.1.3 iBook G4

2.6.1.4 iPod

Chart 2.2: iPod shipments, 2001-2006

2.6.1.4.1 iPod’s evolution

2.6.1.4.2.1 iPod Photo

2.6.1.4.1.1 Fifth generation iPods

2.6.1.4.1.2 Future models

2.6.1.4.2 The iPod mini

2.6.1.4.3 iPod Nano

2.6.1.4.4 iPod Shuffle

2.6.1.4.5 iChat AV and iSight

2.6.1.4.6 iPod Hi-Fi

2.6.1.5 MacBook Pro

2.7 Software

2.7.1 iLife

2.7.2 iTunes Music Store

2.7.2.1 Impact of Apple's iTunes on the music market

2.7.2.1.1 Device-service integration

Table 2.2: iPod sales before and after iTunes launch

2.7.2.1.2 Value

2.7.1.1.3 Portability

2.7.1.2.4 DRM and personal use rights

2.7.1.2.5 Alternative to illegal file sharing

Table 2.3: Pros and cons of iTunes

2.7.1.2.6 Audiobooks

2.7.1.2.7 Content

2.7.2.2 iTunes 4.9 and podcasting

2.7.2.3 iTunes has shown online downloads can succeed

Chart 2.3: iTunes downloads, 2004-2006

2.5.13 QuickTime

Table 2.4: QuickTime features

2.6 iPod applications and accessories

2.7 Apple’s manufacturing and supply

2.7.1 In-house vs outsourced work

Table 2.5: Apple’s manufacturing partners by product

2.7.2 iPod components

2.8 Market expansion

Table 2.6: Global iTunes statistics

2.8.1 Pan-European

Table 2.7: iTunes European penetration

2.8.2 Japan

Table 2.8: Vehicles offering iPod integration in Japan

2.8.3 Australia

Chapter 3 The iPod

3.1 A lost niche?

Chart 3.1: Apple revenues by product, 2005

3.2 Phone functionality remains a whole in Apple’s convergence picture

3.2.1 Why the iPhone will succeed

3.2.2 Taking on the wireless carrier market

3.2.3 iPod and VoIP

3.2 Podders

Chart 3.2: iPod ownership by age group

Chart 3.3: iPod penetration by household income

3.3 Latest device releases

3.4 Future models

Chart 3.4: iPod market share

3.5 Competition

3.5.1 DNET DM751

3.5.2 Play Station Portable

3.6 Does Apple have sufficient scale and know-how for an iPhone?

3.7 Positioning the iPhone with the iPod

Chapter 4 The handset market

4.1 Current market landscape

4.1.1 Loss of brand value

4.1.2 Combating brand erosion

4.2 Mobile video and TV

4.3 Competitor line-up

Chart 4.1: Shipments of mobile phones with built-in MP3 players, 2004-2010

4.3.1 ROKR

4.3 iPod's and iPhone’s odds

Chart 4.2: Global sales of portable stand-alone MP3 players, 2003-2010

Table 4.1: Apple’s strengths and weaknesses

Table 4.2: Most popular MP3 player models, December 2005

Chapter 5 An Apple MVNO?

5.1 Apple’s likely market positioning

Figure 5.1: Niche MVNO positioning in the MVNO business model

5.1.1 The reseller model

5.1.2 Pure/full MVNOs

5.1.3 Niche MVNOs

5.2 he benefits of MVNOs

5.3 Rationale for becoming an MVNO

5.4 Set-up costs to become an MVNO

5.5 Factors affecting the success of MVNOs

5.6 The importance of MVNO branding

5.7 Lessons from Virgin Mobile UK

5.7.1 Why Virgin failed in Singapore

5.8 MVNO landscape

Table 5.1: MVNOs in the US

Table 5.2: Most attractive markets for new MVNOs

5.9 Apple could leverage multiple benefits with an MVNO

5.9.1 Appealing to music and video consumers

5.10 Step 1: MVNO partnerships

5.10.1 Helio

5.10.2 Disney Mobile

5.11 Choosing the right carrier partners

Table 5.3: Most suitable countries for an Apple MVNO

5.12 Retail outlets and service pricing

Chapter 6 Recommendations

6.1 For handset vendors

6.2 For applications providers & media companies

6.3 For mobile operators

Appendix A Lead author’s profile

Appendix B About visiongain

Appendix C Report evaluation form