The Libertad will be designed as a communications and collaboration platform, making the process of customizing its many features seamless within the production process. From a software standpoint, the foundation of the Libertad will be the Google Android operating system, customized to allow for easy integration of components and functional add-ons. The Google Android operating system is chosen as the basis of the offering as it is open source and open license, two attributes that have contributed to its rapid ascent in popularity with handset and tablet PC manufacturers (Hardy, 2010). Apple has a very closed architecture and does not allow for this level of customization overall (Apple Investor Relations, 2013). Apple also tracks the sales of devices and regularly publishes their analyses in their form 10Qs, 10Ks and reports filed with the Securities and Exchange Commission (Apple Investor Relations, 2013). An analysis of smartphone, feature phone and connected device shipments based on Apple's released documents is shown below, Figure 4, Distribution of Sales by Operating System.
Figure 4: Distribution of Sales by Operating System
Source: (Apple Investor Relations, 2013)
c. The Communication Plan
Inherent ion any successful communications plan is the ability to give the prospective customer an opportunity to see how the benefits being discussed help them specifically and directly. The communications plan for the Libertad will concentrate on the aspects of device customization, giving the customer an opportunity to see how they can quickly get this smartphone designed to meet their exact requirements. Using primarily social media including Twitter, websites, YouTube and LinkedIn, the product will be launched at an event that gives key influencers including bloggers and analyst, in addition to distribution partners an opportunity to see and use the device.
The communications plan will focus heavily on customer success stories communicated through social media. Specifically concentrating on these success stories and using them to amplify the value of the Libertad will bring credibility and trust into the communications plan as well. Using social media to amplify the customer benefits of a product can provide target audience members greater clarity and focus on benefits than a static website (Bernoff, Li, 2008). The goal of this communication plan is to get the Libertad so interesting and valuable that prospective customers will configure and buy them online.
The distribution strategy for the Libertad will be both indirect and direct distribution. Using direct sales through the website to customers will be a primary channel, as will be direct sales to resellers, partners and Original Equipment Manufacturers (OEMs). An indirect selling strategy targeting WalMart, Costco, Tesco and Carrefour, all global discount retailers, will also be completed.
Based on the analysis completed, it will require an initial investment of $1M to prepare the Libertad for product launch, with a total investment of $3.65M over the first year of the product's lifecycle. The following table provides a breakdown by each financial quarter of the first year of the product's life. It is anticipated that at the $3.65M level of investment the Libertad will return $4.2M in sales.
Figure 5: Proposed Libertad Product Development and Launch Budget
Figure 6: Graphical Analysis of Product Development and Launch Budget
Based on the assumptions included in this analysis, it is anticipated the Libertad will return $550,000 in profits the first year of operation, a 15% Return on Investment (ROI). This is both reasonable and achievable given the current constraints in the market.
Other Resources Required
There will also need to be contract manufacturing centers in place and support from a legal standpoint to ensure Service level Agreements (SLA) stay consistent over time for the baseline unit or platform. These legal costs can be significant as Apple has often seen in their many efforts to bring new products to market through contract manufacturer Foxconn (Apple Investor Relations, 2013).
The continual growth of smartphone sales has shown that the market is stable, growing and secure from an investment standpoint. By creating a unique build-to-order strategy that can economically produce a build-to-order smartphone, the market for smartphones overall can increase by 67% or more (Apple Investor Relations, 2013). The differentiating aspect of the Libertad is the opportunity for customers to design its many features to align perfectly to their needs, an option no competitor can match today from a manufacturing workflow standpoint.
Apple, Investor Relations (2013). Investor Relations. Retrieved May 22, 2013 from Apple Investor Relations and Filings with the SEC Web site: http://www.apple.com/investor/
Josh Bernoff, Charlene Li. (2008). Harnessing the Power of the Oh-So-Social Web. MIT Sloan Management Review, 49(3), 36-42.
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Tripat Gill, Jing Lei. (2009). Convergence in the high-technology consumer markets: Not all brands gain equally from adding new functionalities to products. Marketing Letters, 20(1), 91-103.