Apple's iPhone Strategy

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Apple, Inc. (Apple) delved into relatively new territory in 2013 by releasing two new versions of their smartphone, the iPhone. This was the first time they released two versions of their smartphone in the same calendar year. This dual or multi-release strategy is not completely new for Apple, as they have previously released multiple versions of a product type from the same family as early as 1979. That year, Apple, then known as the Apple Computer Company, released three versions of their Apple II computer: the Apple II Plus, Apple II EuroPlus, and the Apple J-Plus. As recently as 2012 Apple released two models from their iPad family, the iPad Mini and the iPad (4th gen). It should come as no surprise that during September 2013…show more content…
In order to understand the assessment of the situation from an economic standpoint, one has to understand the applicability of the terminology. Businessdictionary.com defines cannibalism in the marketing realm as a, “situation where the sales of a new or differently branded product eat into the sales of other products within the same line.” Investopedia.com defines market cannibalization as, “The negative impact of a company's new product on the sales performance of its existing related products.” Considering the Apple release involved three new versions of their iPhone and discontinued previous versions, this multi-release does not fit either version of the definition of market cannibalization above. But the general concept is the same, where one product takes away market share from another similar product, especially when the same company produces both products. This can also occur when the sales of one product decreases the sales of another product. (Froeb et al, page 140) But did the iPhone 5c cannibalize the 5s? When Apple released three versions of the Apple II in 1979 one could argue that this could lead to cannibalization. But this multi-release strategy of the various versions of the Apple II family enabled Apple to become the leading PC vendor during the second generation of the personal computer (PC). (Juliussen, page 21) Considering
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