A Strategic Innovation in Mobile Device Industry: Apple’s Challenge and Others’ Response

This teaching case illustrates the strategic innovation of Apple in the smartphone industry. Before the entry of Apple, the market was dominated by three major players:Nokia, Research in Motion and Samsung. These players had been increasingly competing with each other. They had similar set of activities in customer segment of rich and busy business people, and offered hand-held computers with fast CPUs, PDAs and QWERTY keyboards. They defined their business as hand-held computer and focusing more towards hardware side of the device. Apple entered the competitive market and redefined the business in a very different way. The iPhone in 2007 entered as an entertainment device. The features included: touch screen monitors, various applications and contents at its own App Store and iTunes. The target customer changed towards people who wanted to have fun while they move or during leisure time. Also, the product was based on more towards software side. Furthermore, they actively increased the number and quality of applications and contents at Apple App Store by attracting numerous software and contents providers. Stimulated by the success of iPhone, existing players actively implemented imitation strategies by changing the features and strengthening the software side of their products.