Apple's Not Thinking Different

Marketer's iPhone Strategy Isn't All That New: Spending Big, Then Scaling Back Already Worked for iPod

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YORK, Pa. (AdAge.com) -- Nothing about the iPhone so far has seemed typical -- yet its long-awaited launch coming this week may well be.
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By sticking to a proven strategy, the iPhone is likely to avoid the undesirable fate of Motorola's Razr, which was initially priced similarly to iPhone at $499.

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If you use Apple's iPod as barometer, the iPhone should follow a tried-and-true marketing path: heavy spending upfront for awareness; a decrease in reach and frequency to give consumers a chance to buy and experiment; and gradual adjustments to marketing volume as warranted by the sales curve.

When it introduced the iPod in 2001, Apple unleashed an all-out marketing and public-relations blitz, spending $28 million in just three months to demonstrate to users how the device worked. The next year it scaled back spending on iPod to $4 million.

So far, Apple hasn't strayed from that model. The iPhone launch began with a barrage of prime-time commercials and plenty of presale PR hype. TV ads again have a subtle how-to feel.

By sticking to a proven strategy, the iPhone is likely to avoid the undesirable fate of Motorola's Razr, which was initially priced similarly to iPhone at $499. Product extensions mostly consisted of new colors, and prices had to be dropped fairly quickly to maintain brisk sales.

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Contributing: Alice Z. Cuneo, Bradley Johnson
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