Trend Analysis – Launching the iPhone
Trend Analysis – Launching the iPhone
Research category: T/Trend
In December 2009, the first iPhone device was launched in Israel – only eight months after the Apple importer officially announced the launch of their smartphone, which became a worldwide hit. However, iPhone's debut was also accompanied by mass confusion: on the one hand, the cellphone companies were trying to offer their customers upgrades from older devices to iPhones; on the other hand, the device was also offered for sale in private stores without the cellphone companies’ obligation period or web package. At the same time, even before the official import began, iPhones that needed to be unlocked began to trickle into the country from abroad.
Buzzilla conducted comprehensive mapping research of the market in order to better evaluate the Israeli market's readiness for the iPhone, as well as pinpointing the Israeli public's main concerns about its launch, which constituted purchasing and upgrading issues. For four months, encapsulating the time period leading up to the launch and afterward, hundreds of conversations were checked and analyzed to reveal what the consumer public really thought about this new brand name product and its distribution. We specifically wanted to examine the positioning of cellphone companies as iPhone suppliers – not the ranking of the three largest operators (which all came up with similar advertising and marketing lines), but rather the operators as a group vs. the alternate distribution channels. Special attention was given to young people's opinions of the brand, and whether their discussions reflected different feelings and thoughts from those of the general public.
The iPhone certainly succeeded in stirring up Israeli emotions before its launch in the local market. In the two months before and the two months afterward, no less than 26,000 discussions about the iPhone sprung up on the Web – approximately 0.5% of the total number of conversations during that period. For the sake of comparison, 39,500 online discussions were logged about "Big Brother", whose first-season finale was one of the most talked-about topics on Israeli websites.
The segmentation of conversations about the iPhone launch in those four months revealed that 60% of the conversation took place on various forums. Talkbacks to articles constituted 21% of the conversation, and Twitter contributed an additional 13%. In the month before the launch, there was a leap in volume in all the arenas, but one site clearly stood out: iphones.co.il.
Among the forums, most of the conversation took place in the arenas that specialize in the technical aspects of cellphones. The goals were to compare notes, give guidance and express opinions without significant emotion. An in-depth analysis of forum discussions identified the responders: experts active on professional forums, who have the knowledge and experience to be perceived as authorities on the technical and financial aspects of iPhone purchases.
The main topics of conversation were split into three main groups: (1) uncertainties and inquiries before the purchase (is it worth buying? should I buy it from a cellphone company vs. an alternative purchasing channel? when should I buy it?); (2) technical support (requests for help with problems and unlocking the device); and (3) ways of using the device (help with basic functions, cameras, games, and downloading applications).
The most interesting conversations about the iPhone launch were discussing various distribution methods. Despite the focused marketing efforts of three cellphone companies, the online audience was closely examining three alternative purchase methods: a foreign supplier, private stores in Israel and abroad, and the secondhand market. The first revelation raised by our analysis was that the perception of the high price asked by the cellphone companies, together with the binding commitment and expensive web package, were the main reasons for not buying the iPhone through a cellphone company. In fact, this purchase method was perceived as the most expensive way to acquire the device. Beyond this, the messages of the cellphone companies that high-volume customers who use a lot of minutes can benefit from a preferred price, plus payment flexibility, did not receive much web response. And the web package – a virtual necessity for an iPhone – was perceived by the public as a penalty, and just another way for the cellphone companies to constrain their customers.
Additional insights related to the option of purchasing an iPhone abroad – the most talked-about online purchasing channel. Beyond its general popularity, the prospect of acquiring the iPhone from a foreign source involved a high level of complexity. However, for many users this was not seen as a real barrier. The required information was easily accessible online, as well as many experts who were happy to offer guidance from their personal experience, and this helped many people to deal with the confusion surrounding challenges like unlocking the iPhone or acquiring a SIM-free device. Apparently the warranty offered by cellphone companies in Israel for the device was not a decisive consideration, based on the perception that a warranty provided in Israel is limited and problematic from the outset.
Segmentation of conversation about purchase channels:
Purchasing the iPhone abroad was perceived as cheaper and more worthwhile than purchasing it in Israel. Beyond the savings, it seemed that Israeli consumers were making a deliberate effort to avoid committing themselves to the cellphone companies. One contributing factor was that, in the two years since the iPhone had been launched abroad, awareness had developed and extensive collective experience had been accumulated regarding purchasing the device overseas, unlocking it, and converting it for local use.
In contrast to acquisition from abroad, purchasing the iPhone from a private store in Israel was perceived as easier, with a lower perceived risk, and – most important – more worthwhile than acquiring it from a cellphone company. The discussion about acquiring it through private stores primarily dealt with the trustworthiness of the specific stores, and was focused on requesting opinions.
Analysis of the conversation revealed an important insight for the cellphone companies. In order to improve the attractiveness of purchasing the iPhone from them, they needed to address public perception of their prices. A change in the way the web package was presented was likely to change the perception of it as a “penalty” imposed by the companies, transforming it into real added value that enables the consumer to benefit from the iPhone.
Purchase via cellular provider is perceived as the most expensive option, but also as the safest and simplest.
An additional insight pertained to the youth market. Based on their conversation, young adults and teens clearly preferred the iPhone over competing devices, because of its advanced multimedia abilities, varied games, and abundance of applications. However, this brand-name product was still perceived as an over-priced device, a definite obstacle to a target audience which already suffers from relatively limited purchasing power.
Increasing the iPhone's penetration of the young target audience is a valuable opportunity for the cellphone companies, because of their high use of multimedia services which generate additional revenue for the companies. Here, too, addressing the perception of the unattractive price, and creating packages that suit the needs of youth, are measures which are likely to help increase access to this important market and minimize the perceived attractions of acquiring the iPhone from abroad.