The Icharge: No More Wires - No More Problems

...

The other part of our innovator and early adopter target market is young tech-savvy consumers. This group is less likely to be caught up by the Apple lifestyle. The key psychological factor at work for this group is their intense interest in the newest technological innovations, and the social importance of adopting new products before the masses.

Each of these two factors will, to a lesser extent, be present in the minds of the larger segments that we hope to attract in the medium to long-term. Students, young business professionals and families will all find value in the iCharge. Casual owners of Apple products will find reassurance in their choice of smartphone or laptop by buying the iCharge which will increase the value of their existing Apple products, confirming their original product choices. Moreover, as the iCharge gains prominence, consumers will purchase the iCharge in order to feel up-to-date with rapidly changing technology. We estimate that the potential size of our target market in Canada is 3.38 million people (see appendix 1). This figure is based on the number of existing Apple customers in Canada aged 20-44.

Industry Analysis

The iCharge is part of the consumer electronics accessories market, which includes any hardware or software that perform a supplementary role for electronic or digital equipment. According to a 2014 Consumer Technology Association report, the consumer electronics accessories market generated revenues of $8.5 billion, which is $13M more than the last year result and $228M more than 2013. It is also worth noting that wireless charging sets accounted for sales of 55 million units in 2014 and is expected to increase to nearly $15 billion by 2024 (CNET, 2014). According to the study of the global mobile phone accessories industry conducted by market intelligence and consulting firm Future Market Insights (FMI) this particular segment of industry is expected to register an annual growth rate of 6.9 % during the period from 2015 to 2025 (FMI, 2015). Falling prices of mobile phones and tablets is also supporting the future growth potential of accessories market of the whole consumer electronics market.

There are two main obstacles for entering this market. The first of these barriers is the issue of compatibility across devices, as any electronic accessory will be limited by the number of brands with which it is compatible. The second barrier to entry is the large financial resources and technological expertise needed to create a new consumer electronic product.

Opportunities & Threats

Rapidly changing technology means that many people will be buying new laptops, tablets, and smartphones in the years to come. This gives us an opportunity to introduce iCharge compatibility to the next generation of Apple devices which will soon replace existing non-compatible devices. Additionally, as consumers begin to use more electronic devices (for instance adding a tablet to go with one’s laptop and smartphone) the ability to charge multiple devices simultaneously will become more important. Loyalty to the Apple brand is another significant opportunity. According to 2014 data from Morgan Stanley's AlphaWise tracker that collect data through web search analysis, 90% of iPhone users stick with the brand when purchasing another phone, which is considerably higher than any other brand in the smartphone industry (Statista, 2014). Another opportunity could be a first-mover advantage due to the lack of similar products in the market. The closest competitors offer a technology that require a contact between the charger and the electronic device and can only charge one device at a time.

There are several potential threats to our plan. The lack of compatibility with non-Apple products severely limits the value of the product, and competitors may launch a universal version of the wireless charger in the future. There will also be some doubts regarding the effectiveness of this new technology, and there is no guarantee that consumers will be convinced of it’s utility. Finally, as the first to launch a product in this field, Apple may bear the cost of initial missteps while competitors can learn from these mistakes and potentially launch a superior product in the future.

Competitive Overview

There are no competitors currently offering the same product as the iCharge but Apple still faces competition as there are several substitutes to long range wireless charging. The main substitutable product to our iCharge is wireless charging pads which are offered by companies such as Duracell, Qualcomm, Nokia, Samsung, LG and many other aftermarket manufacturers. The large number of these aftermarket manufacturers that coexist with the companies that already offer wireless chargers as complementary products indicates that the market is monopolistically competitive as no single company or group of companies control the market.

Differentiation Strategies

While the wireless charging pads all accomplish the same functionality, they differ from one another with regards to several specific characteristics that can be narrowed to (1) price, (2) aesthetics and personalization, (3) efficiency and speed, (4) weight and size, and (5) ability to integrate the technology in other consumer goods. Hence, companies decide which attributes to focus on from the ones described above as not all of them are easily compatible. Appendix 2 illustrates the main focus of the majors companies in the industry with regard to the various differentiation criteria. While it may seem as though all of the five main characteristics are exploited by at least one company, there is still one specification, which is not included in the list, that Apple can exploit to gain a competitive advantage: (6) charging distance.

Apple’s iCharge will position itself according to two broad specifications that include several of the six described above (see appendix 3). Firstly, we want the consumer to perceive the iCharge as more convenient than other chargers. Convenience can be defined as the ability to charge more than one device simultaneously, a higher distance between the charger and the device, a reasonable weight and a faster charging speed. Secondly, with all of these superior attributes we expect consumers to view the iCharger as more expensive. Yet, we assume it will reflect Apple’s pre-existing quality and performance brand image.

Market Share

The relatively newness of the wireless chargers implies that it is difficult to assess and determine the exact market share the various companies control. Although