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Wireless technology is the ability to charge device batteries by using electromagnetic fields to transfer power from a transmitter to a receiver application. It is an emerging technology, which transmits power through an air gap to various electrical devices, mainly mobile devices, for energy replenishment. Wireless charging has been around since the late 19th century when electricity pioneer Nikola Tesla demonstrated magnetic resonance. This technology is attracting a wide range of applications because of its various advantages. It improves user-friendliness, provides better product durability and enhances ﬂexibility. Wireless charging can provide on-demand power, while also avoiding an overcharging problem and minimizing energy costs.
Three major techniques for wireless charging are magnetic inductive coupling, magnetic resonance coupling, and microwave radiation. Previously, there were three competing wireless charging standards focused on inductive and resonance charging specifications: The Alliance for Wireless Power (A4WP), the Power Matters Alliance (PMA) and the Wireless Power Consortium (WPC). The WPC created the most popular of the wireless charging standards – Qi. Qi includes inductive or pad-style charging and short-distance electromagnetic resonance inductive charging. The Qi system includes a charging pad connected to a power source, a containing transmitter, and a power receiver embedded in the device. This wireless charging feature is significantly used by Apple. On September 12, 2017, Apple announced that its new smartphones, the iPhone 8, iPhone 8 Plus, and the iPhone X, will support the Qi standard.
There has been a continuous war between these competing standards, and newer technologies are advancing with time. Recently, the wireless charging company Powermat paired with the WPC, which emphasizes that Qi remains the most dominant wireless charging standard in the market. However, the Qi standard’s inductive charging requires the charger and the devices to be in contact. Companies are working towards more advanced charging techniques that allow devices to be charged even at longer distances. In 2019, over-the-air wireless charging was introduced by Energous called the WattUp, an RF-based scalable technology for distant charging. Over-the-air wireless charging can deliver small amounts of power at a distance from inches to 3 feet the ability to charge devices at odd angles.
Like every launch of new transformational technology, we can only imagine where it starts. The wireless power revolution is upon us and, while the potential impact of wireless power is immense, we must firmly believe the best is yet to come.
Have you ever left the house in the morning to find that your iPhone’s battery level is at 10% because you forgot to plug it in to charge the night before? Are you tired of being plugged into the wall, or lugging around a clunky portable charger while you use your iPhone or iPad at home? What about messy cords and charging stations for all of your family’s devices? With all the personal Apple devices consumers own today – iPhones, iPads, Apple Watches, AirPods, etc., consumers should be able to leave their homes prepared for the day without worrying about what battery percentage remains on their devices. The new and revolutionary wireless Apple Charger Bolt and BoltZ solve all of these consumer problems. They will be the first and only devices on the market that can simultaneously and wirelessly charge multiple mobile devices over a long distance range. The Apple Charger Bolt and BoltZ will automatically charge any connected devices (much like logging into WiFi) that are equipped with the technology and within range.
Apple’s overall market consists of all technology buyers. Of this market, it was found that their primary “active buyers” consist of young, tech-savvy professionals. Apple’s consumers care more about value than price and there are many values that these consumers desire including convenience, belongingness/acceptance, and advanced features and capabilities.
Convenience – When considering convenience, consumers are primarily looking to ensure that their devices are charged quickly without the hassle of being physically tied down via charging cables. With the bustling life of a young, tech-savvy professional, these consumers seek ways to ease their lives in any way possible or to have less things on their to-do lists.
Belongingness/Acceptance – This idea comes from those who believe in “Team Apple.” By creating these “teams,” a divide is created that leads consumers to essentially ostracize those who use non-Apple products. Those who have a desire to belong or fit into this group are considered “switchers” when they switch from a non-Apple product to an Apple product.
Advanced Features and Capabilities – Apple knows how to capitalize on these appeals and they tend to be the major draws towards Apple products. When it comes to state-of-the-art technology and updates, application development, speed of service, etc., Apple has been considered to be a pioneer in technological advancements.
The Apple Wireless Charger will serve the needs and desires of Apple consumers. Consumers can be segmented by demographics, geographics, and behavior.
Demographics – Apple consumers can be categorized by their age, gender, stage of life, income, and occupation. As mentioned earlier, the primary demographic of Apple consumers happen to be young, tech-savvy individuals. When considering age, Apple device consumers primarily tend to be within the range of 20-45 years old, however, it has been found that older men over the age of 65 spent more on Apple devices than any other consumer demographic in 2018. In terms of gender, Apple products appeal to both males and females, but males tend to spend more on Apple devices. Most consumers tend to be in a life stage where they are either bachelors, newly married couples, or full-nesters with a high-earner level income as working professionals, managers, or executives.
Geographics – Apple products are tested locally near Apple’s headquarters in California and are sold across the United States and internationally. Consumer demographics may change based on the needs across the world, however, for the most part, the needs of Apple consumers tend to be consistent with what was noted above. Most consumers are primarily located in urban areas as this is where most young, tech-savvy professionals are employed.
Behavior – Apple consumers are known to have an intense sense of brand loyalty when it comes to Apple products. This ties back to consumers’ desire for belonging and acceptance into the “Team Apple” group. Consumers tend to possess some of the same personality traits including ambition and drive, which are also some of the characteristics of Apple’s primary consumer demographic.
Future possibilities for market testing include testing in California around the Apple headquarters, having Apple employees test the products, or testing the products within Apple stores. Potential options for selling the Apple Wireless Charger include partnering with businesses like offices, restaurants, coffee shops, warehouses, factories, or airports. However, these partnerships may become difficult due to Apple products only working with Apple products.
With advances in high-tech products, charging technology has gained popularity in that the way of charging is getting more convenient. Wireless charging products have had a great breakthrough in recent years. Many companies have already launched various chargers to join the competitive market for charging demands such as wireless chargers, wireless charging pads, and portable chargers, however, wire cables have still remained irreplaceable.
First, some companies are developing zero-contact wireless charging products. Ossia is one of the technology development companies that has Cota Real Wireless Power™, which can charge devices over 15 feet and can cross the wall. Ossia is working with electronics manufacturer Molex to launch the first zero-contact wireless products this year. However, Cota’s efficiency of charging is still lower than cable charging, which is estimated to be less than 30%. Another competitor is TechNovator, which has a new solution for wireless charging called TechNovator XE. Once TechNovator XE is present within the transmitter range (currently a 33 feet radius), it will effectively charge multiple devices simultaneously in automatic mode. However, it cannot power devices across the wall. A third competitor is Wi-Charge, who first installed a stealth light emitter that powers devices at distances up to 33 feet. However, charging efficiency decreased as distance from the Wi-Charge increased. While these products are not yet on the market, their release is imminent and will pose a threat to the wireless Apple Charger.
Second, wireless charging pads have gained popularity in recent years because they eliminate the need for charging cables. Instead, the device is charged by placing it onto a charging board. This not only avoids the risk of electric leakage but also resolves the problem of wire tangling. Despite these benefits, the efficiency of wireless charging pads is relatively low. Since wireless charging converts power into a magnetic force and then converts it back into power, the efficiency during conversion is lower than cable charging; therefore, the time required for charging is also longer. The main wireless charging standard for the charging pad is Qi from Wireless Power Consortium (WPC). As of July 2019, 563 companies maintain membership with WPC.
Third, the most common charging product, aside from the traditional wall cable, is the portable charger. This container stores electricity similar to a large battery, and because it can be recharged repeatedly, users do not have to worry about discarding wasted batteries. Its biggest advantage is the convenience of charging devices on the go when there is no power and nowhere to charge.
Lastly, the wall cable is the traditional and ubiquitous form of charging. With all the emerging technologies, it’s difficult to say that it will remain the dominant form of charging for much longer. However, cables sell at a low price point and it may take consumers some time to switch to new products.
As one of the largest companies in the world, Apple generated a total of 265 billion US dollars in FY 2018. North America has generated more than one-third of its sales from the year 2014, thus making it Apple’s primary target market. Since 2007, the stock of Apple has soared over 700% and up until last November, it was the world’s largest publicly-traded company. The company culture prides itself on top-level excellence, creativity, and innovations. Moreover, Apple’s branding exudes superior quality, value, and a feel of exclusivity that only Apple can bring to its customers. With wireless technology in a boom, Apple will look to tap this market potential and be an unchallenged market leader with its new wireless charging technology.
Apple is known to maintain one of the best-managed supply-chains in the world. Using its stature and global reach, the tech giant can demand high-quality products and impose stricter terms on its suppliers. Apple has hundreds of such suppliers willing to abide by the terms Apple sets forth. What’s more, by outsourcing its supply-chain and assembly operations, Apple can do what it does best – concentrate on designing great products that offer rich functionality and are easy-to-use. Apple needs suppliers and suppliers need Apple – it’s a streamlined relationship that is mutually beneficial. Another advantage for suppliers is that Apple has a reputation for innovation. Regardless of how specific products have performed and despite missteps that have occurred, people expect Apple to come out with something new regularly and eagerly anticipate these products.
Apple’s costs can be broken down into three broad categories – cost of sales, research and development, and selling, general and administrative.
Cost of sales for the Apple Charger is expected to be slightly higher than what Apple has historically seen with their other products. This is due to the need for new, custom components. Apple will need to work closely with suppliers to ensure quality production and accurate specifications. The company will need to compensate suppliers for the new production lines and increased labor costs. After the first year, cost of sales is expected to decrease due to improved relationships with suppliers and more efficient and trained labor with the new components. Cost of sales for the Apple Charger is estimated to be at 65% of projected net sales, yielding a 35% projected gross margin, compared to Apple’s overall gross margin of 38.3% in 2018. Exhibit 1 shows the company’s overall gross margin for 2018, 2017, and 2016 from Apple’s most recent 10-K annual report.
Because innovation is a core part of Apple’s business, the company maintains a steady research and development allocation of 5% of net sales. Accordingly, 5% of Apple Charger’s projected net sales will be dedicated to ongoing technical innovation and product improvements.
Selling, general and administrative (SG&A) costs include all other operating expenses such as headcount-related expenses, professional services, infrastructure-related expenses, and advertising costs. SG&A costs are estimated to be 6% of the Apple Charger’s projected net sales, which is in line with the historical ratio for the overall company. However, a larger percentage of SG&A is planned to be dedicated towards advertising efforts. In 2015, Apple spent a record high of $1.8 billion on advertising. Out of $14.3 billion of SG&A costs in 2015 (Exhibit 2), advertising costs were about 12.5% of the total SG&A costs. Using this as a benchmark, the company plans to budget 15% of the Apple Charger’s first year projected SG&A costs, or $178.5 million, to advertising the new product.
The US Census estimates there are 127.58 million households in 2018. A poll done by CNBC concluded that 64% (roughly 81.6 million) of US households have at least 2.6 Apple products (Liesman, 2017). Households will generally use one wireless charger per household. Apple’s most expensive WiFi router called the Apple Airport Extreme sells for $429 on Amazon. The wireless charger will use many of the same components in the Apple Charger as in the Airport Extreme. Hence, this will be used as a price reference point for the wireless charger. Apple will sell two types of chargers: one priced at $500 (Bolt) and the other priced at $700 (BoltZ). The $500 version will be able to charge 4 devices simultaneously and reach a distance of 35 feet. However, the $700 version can charge up to 6 units and reach a distance of 50 feet.
According to an article by Clive Cooper called “Rising Demand of Smartphones & Other Wireless Computing Devices Driving the Global Wireless Charging Market…”, the anticipated market value of wireless charging is set to hit $35,742.5 million by 2025. Apple will be ambitious with how many projected charges will be sold. Therefore, the expectation is that about 45% of Apple households will buy the charger within the first year (45% x 81.6 million households = 36,720,000 units). Apple expects most consumers to purchase the $500 version because, as mentioned before, 2.6 is the average of Apple products held by most households and this version will be deemed to be enough for consumers. 80% of charger purchases will be of the $500 version and the 20% will be of the $700 version. Total forecast sales for fiscal year ending September 30, 2022 is $19,828,800,000 and total gross margin is $6,940,080,000. See Table 1 and Table 2 for a breakdown by unit and overall projection.
Apple Charger Bolt and BoltZ
One of Apple’s well known marketing strategies lies in the way that they name their products. By naming their products with easy to comprehend names, it allows for consumers to better understand what the product is as well as its purpose. To bolt means to move or proceed rapidly or to break away from control. With the Apple Charger Bolt and BoltZ, the products will give users the ability to break away from their wired cables so that they can move around their locations with ease. This wireless charger will be built to charge devices at lightning bolt speed in comparison to the average wired cable while also avoiding the potential for overcharging.
Both the Bolt and BoltZ will maintain the clean and sleek appearance that is characteristic of Apple products. The Bolt will be modeled after the Apple Airport Express (Image 1),and the BoltZ will be modeled after the Apple Airport Time Capsule (Image 2). For a modernized look, the Bolt and BoltZ will feature a glass outer shell similar to the latest white iPhone (Image 3). Both products will be modified to meet the needs and standards required to fulfill the purposes of efficient and rapid wireless charging. In terms of the packaging, the standard lightning bolt symbol that appears on Apple devices upon charging will be displayed in place of the wifi signal symbol.
Apple promotes its products in various ways, involving different communications channels and parties to reach its target market. The company emphasizes the mega-brand image, customer value and the premium quality of its products whenever it tries to market any of its products or services. The target market also plays an important role in the marketing strategies that Apple decides to adopt. Market segmentation, targeting, and positioning represent the core of its marketing efforts. Apple’s target customer segment for the Bolt and BoltZ feature will include well-off individuals who are willing to pay extra for technology products and services with advanced design, functions, and capabilities.
At Apple, promotions of products are mainly made through commercials and print advertisements. Apple focuses on how the products are premium, the latest technology has to offer and customer-oriented, rather than trying to compare to see if they are better in comparison to those of its competitors. Commercial ads run when a product is first launched, and print ads will keep running all through the product’s life. Ads usually follow the same style using white backgrounds contrasting the stylish black of the products (iPhone, iPad, etc.) and the logo, or an inverse with a black background and white text with a white logo. Ads are simple, straightforward and to the point, usually focusing on key features of their product. The new wireless charging feature offered by Apple will continue to use the same promotional and advertising mix which has been majorly successful for Apple for over a decade for the Bolt and BoltZ.
One key component of Apple’s promotion is the yearly keynote speeches at the launch of new products, with the wireless charging feature also set to make a debut here in front of the best technology audience from around the world. After the product launch, the invitees will be given the first chance to interact with the products and to provide feedback. Each year, Apple sends out limited products with the launch to product reviewers around the world as a gesture of good faith and to maximize customer loyalty. These events themselves are not only a part of Apple’s overall promotion but have become a part of their brand and image. They keep fans and customers interested and provide information on upcoming products.
The communication tactics that are part of Apple’s promotional mix are advertising, personal selling, sales promotion, and public relations. Apple’s marketing mix includes advertising, such as on Google’s digital advertising network and technology news websites on the internet platform. The company has agreements with various prominent websites to advertise and promote Apple products, thus making sure the news of the latest launch reaches and grasps the attention of Apple’s customers. Therefore, we will be using these same promotional mix for our new charger.
The Bolt and BoltZ will be distributed through not just Apple’s own mediums – Apple store and its website – but through its retail partners namely Walmart, BestBuy, and Target. The wireless charger is sold both through direct and indirect distribution strategies. The direct distribution is through the Apple Stores while the indirect distribution is through other mediums. While one would think most of the Apple products are sold through the Apple store, that is certainly not the case. These stores are just one smaller part of the overall Apple distribution strategy. The location of the Apple store plays a critical role as it is important to foster visibility among its consumers. Hence distributing the wireless chargers at stores located near the urban shopping districts would, in turn, attract many customers and lead to an increase in the overall sales.
The company also leverages indirect distribution through third-party cellular network carriers, wholesalers, retailers, and resellers. Such a distribution strategy would enhance the visibility of Bolt and BoltZ among a wide range of consumers. In 2018, according to Apple Annual Report, the company’s net sales through its direct channels accounted for 29% of its revenues when compared to 71% of net sales coming from its indirect distribution channels.
Apple’s pricing strategy has followed the premium pricing model due to its use of superior quality hardware, high-profit margins, and its position as a premium brand. Apple discourages having any type of discount – whether in its retail store or its certified Apple dealers – but it does find ways to reduce pricing by increasing trade-in values, adding a gift card or bundling products. The pricing for the Bolt model is $500 and $700 for the BoltZ. Therefore, a strategy of buying the latest version of the iPhone with the Apple Charger will give them credit ($50-$100, depending on the version of the Charger or iPhone they buy) for future purchase of any Apple products.
|September 2020||Announce new iPhones and Apple Watches, which include wireless charging receiving technology at Apple Annual Event|
|October 2020||Announce new AirPods, iPads, Magic Mouse, and Apple TV remotes, which include wireless charging receiving technology at Apple Annual Event|
|October 2021||Announce Apple Charger Bolt and BoltZ at Apple Annual Event
Launch TV and YouTube advertising
Launch print advertisements
|October 2022||Announce Apple Charger Bolt 2 and BoltZ 2 at Apple Annual Event|
In consistency with Apple’s traditional product launch structure, releases will be announced at the Apple Annual Events. The September event focuses on new iPhones and Apple Watches, whereas the October event includes all other products, including iPads, Macs, and accessories. All newly released products at the September and October 2020 events will include the wireless charging receivers which are compatible with the Apple Charger Bolt and BoltZ to be released in the following year. The Apple Charger Bolt and BoltZ will be officially on the market in October 2021, at which time advertising and promotion efforts will commence full-force. In October 2022, Apple’s goal is to improve the speed and distance over which charging can take place in the following ways.
Device Accommodation – Currently, the Bolt is built to accommodate charging 4 devices simultaneously and the BoltZ is built for 6 devices to be charged simultaneously. By October 2022, the number of devices that the Bolt and BoltZ can support will remain standard at 4 and 6 devices, respectively, however, depending on the number of devices that are being served, this could affect the charging speed and distance over which the charging can take place.
Distance – The Bolt and BoltZ will be able to charge devices at a distance of 35 and 50 feet respectively. By October 2022, Apple’s goal is to be able to increase the distance over which the charging can take place. For example, the Bolt can accommodate up to 4 devices simultaneously at 35 feet, however, if only one device were to be connected, this one device can be charged at a distance of 50 feet.
Speed – The average charging cable will charge an iPhone fully in an estimated 4 hours. The current average speed of the Bolt and BoltZ is comparable to that of the official Apple 12W charger, which is usually sold along with iPads. The Apple 12W charger can charge an iPhone fully in half the time in comparison to the standard charging cable. By October 2022, Apple’s goal is to be able to increase speed and decrease charge time in half by providing comparable charging to that of an 18W charger. For example, the standard charging cable that comes with an iPhone will fully charge in 4 hours, the Bolt and BoltZ will fully charge in 2 hours, and the Bolt 2 and BoltZ 2 will fully charge in 1 hour. With the Bolt 2 or Bolt Z 2, the speed of the charging can increase with lesser devices connected, however, it will not dip below the lowest standard of charging speed if at maximum device accommodation.
The Apple Charger Bolt and BoltZ both use Wattup from Energous. Although they are the first zero-contact wireless chargers on the market so far, the Bolt and BoltZ will not be the only ones in the future. If Energous licenses this technology to other companies, they will be a potential threat to the Bolt and BoltZ.
The Bolt and BoltZ only work for Apple products; however, other companies have already developed a prototype that can not only power Apple’s iPhone but also non-Apple products. The Bolt and BoltZ will have lower purchase intention of consumers who use the products of other brands. The cost of switching to Apple products would be too expensive for those who would want to use these wireless chargers. Consumers may prefer to buy a wireless charger that can charge all kinds of brands.
The Bolt and BoltZ equip Wattup with an RF-based technology; however, they would have some limitations in comparison to IR-based technology, which also uses the zero-contact wireless charger. Increased charging distances via RF-based technology leads to lower efficiency. Nevertheless, IR could constantly charge regardless of distance. Therefore, IR-based technology is better than RF-based technology. If Apple wants to take advantage of the future, Apple must overcome the distance problem.
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