New Product Innovation at Apple: The iPad 2 and 3
Skeptics yawned a bit when Apple rolled out its iPad 2. Reviewers acknowledged that Apple’s updated tablet did have two cameras and a gyroscope. But the prelaunch prediction was that the new version was basically the same as the iPad, only thinner, lighter, and twice as fast. Then people began using it, and they discovered once again that Apple had further transformed the digital experience.
There are many reasons that firms need to innovate and develop new products. The diffusion-of-innovation theory can help marketers determine which types of customers will buy their new products immediately when introduced, as well as later as they gain acceptance in the market. Firms typically go through a series of steps in developing new products before they are actually launched. Once introduced, successful products go through a pattern of sales over time, which is called the product life cycle. The product life cycle helps firms make marketing mix decisions on the basis of the product’s stage in its life cycle.
Read the case below and answer the questions that follow.
A tablet is meant to be held, and the iPad 2 is a pleasure to hold. It is 15% lighter, only .34 inches thick, is speedier than ever, and has a battery that will hold a charge for 10 hours. It has one high-definition camera on the back to record video and a low-resolution camera on the front for video phone calls. The more expensive models offer online capability. With a $40 adapter, the iPad 2 can be connected to an HDTV for viewing slideshows, presentations, or movies. One of the simplest innovations is the new SmartCover, a rigid hinged sheet of polyurethane (also available in leather for $70). This can be used to prop up the iPad so the user can freely watch movies and use the onscreen keyboard with both hands. Opening and closing this cover turns the device on and off almost instantaneously.
Apple also transformed the overall user experience—there are no buttons to press or menus to scroll through. Using the iPad 2 is like reading a book. Users just open the device and can read email, the news, or even a novel. Apple’s other advantages in the tabloid market are the 65,000 iPad apps and the 290,000 iPhone apps that can be used on the iPad. Perhaps its biggest competitive edge was that the starting price was the same as the original iPad: $499. This is much lower than Samsung’s Galaxy and Motorola’s Xoom. Within 9 months of the iPad 2 launch, Apple sold 15 million devices, which generated $9.5 billion in revenue.
The digital tabloid market appears on the verge of an explosion. Forrester Research estimates that one-third of U.S. adults will own a tablet by 2015. It predicts the market will generate $35 billion in revenue. User habits have changed, and affluent consumers like the fact that the tablet offers an online shopping venue. Many retailers report that customers who browse their sites with a tablet are more likely to make a purchase than those who use computers or smartphones.
After launching the iPad 2, in almost no time, Apple faced nearly 100 competitors. Some offered benefits not found on the iPad 2, such as the Flash capability offered by Androids for viewing videos and animation on the web. Others have the ability to dictate text. Another popular option is a GPS-like navigation application. Amazon jumped into the market with the Kindle Fire, an updated e-reader with digital tablet capabilities priced at $199.
With the mounting competition, observers predict Apple will need to make key changes in its next iPad release. There is a rumor Apple will include Siri, a sophisticated vocal interface, on the iPad 3. Apple has announced that it has added digital textbooks to its next iPad, which Amazon’s Kindle and Barnes & Noble’s Nook already offer. Proponents suggest that digital textbooks offer students a wealth of benefits: interactive connections to information, access to constantly updated study material, lighter backpacks, and lower prices than paperbound texts. Apple’s entry into this market is fueled by its partnership with a number of textbook publishers. Apple offers these partners three key capabilities: iBooks2 (an e-reader app), iBooks Author, and iTunes U (an online commerce platform for textbooks). Once again the maker of the MacBook, the iPhone, the iPod, and the iPad is moving to secure a competitive edge.
1. According to the case, the digital tabloid market is at which stage of the product life cycle?
Decline
Maturity
Innovation
>Growth<
Introduction
2. Apple is known for innovation. When first introduced, the iPod was a new-to-the-world product. In marketing terms, the iPod was a _______ product and had the advantage of being a(n) ______.
>pioneer; first mover<
beta; first mover
pioneer; innovator
concept; first mover
pioneer; early adopter
3. If the iPad 2 was in the growth stage of the product life cycle, which adopter group(s) would be purchasing it?
Innovators
Late majority and laggards
Late majority
Innovators and early majority
>Early adopters and early majority<
4. Few customers keep their older iPads until they stop running. Buyers are excited by the features of the new iPad 2, and Apple sustained growth through its sales. In this regard, the development of the iPad 2 helped Apple to avoid the problem of ______.
needing to innovate
fashion cycles
market saturation
>competition<
changing consumer needs
5. The iPad 2 is not just an e-reader. It is a multi-purpose tablet device that is fast, easy to use, has a SmartCover, and can access thousands of apps. According to the diffusion-of-innovation theory, the iPad 2 would rate high on ____ and low on _____.
>relative advantage; observability<
compatibility; complexity
trialability; observability
complexity; relative advantage
relative advantage; complexity
6. In offering its products to an international market, which aspect of the diffusion-of-innovation theory would Apple need to be particularly aware of?
Observability
>Compatibility<
Trialability
Relative advantage
Complexity
7. In the development of the iPad 3, it is very likely that Apple will develop an initial ______ and then test its performance and potential problems with consumers in a real-use environment using _______.
>prototype; beta testing<
test market; beta testing
lead user; trade shows
prototype; alpha testing
prototype; reverse engineering
The one with the >_____< are my answer. I missed 1 question, and my teacher won't let me know which question I missed. Please help me find that one question. Thank you in advance
To find the question that you missed, let's go through each question and its corresponding answer choice:
1. According to the case, the digital tabloid market is at which stage of the product life cycle?
- Maturity
2. Apple is known for innovation. When first introduced, the iPod was a new-to-the-world product. In marketing terms, the iPod was a _______ product and had the advantage of being a(n) ______.
- Pioneer; first mover
3. If the iPad 2 was in the growth stage of the product life cycle, which adopter group(s) would be purchasing it?
- Early adopters and early majority
4. Few customers keep their older iPads until they stop running. Buyers are excited by the features of the new iPad 2, and Apple sustained growth through its sales. In this regard, the development of the iPad 2 helped Apple to avoid the problem of ______.
- Competition
5. The iPad 2 is not just an e-reader. It is a multi-purpose tablet device that is fast, easy to use, has a SmartCover, and can access thousands of apps. According to the diffusion-of-innovation theory, the iPad 2 would rate high on ____ and low on _____.
- Relative advantage; observability
6. In offering its products to an international market, which aspect of the diffusion-of-innovation theory would Apple need to be particularly aware of?
- Compatibility
7. In the development of the iPad 3, it is very likely that Apple will develop an initial ______ and then test its performance and potential problems with consumers in a real-use environment using _______.
- Prototype; beta testing
Based on this analysis, it appears that you missed the question:
1. According to the case, the digital tabloid market is at which stage of the product life cycle?
You selected "Growth" as the answer, but the correct answer is "Introduction."
Please note that the response is based on the answers given and the information provided in the text.