Apple’s iPhone Strategy

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Apple, Inc. (Apple) delved into relatively new territory in 2013 by releasing two new versions of their smartphone, the iPhone. This was the first time they released two versions of their smartphone in the same calendar year. This dual or multi-release strategy is not completely new for Apple, as they have previously released multiple versions of a product type from the same family as early as 1979. That year, Apple, then known as the Apple Computer Company, released three versions of their Apple II computer: the Apple II Plus, Apple II EuroPlus, and the Apple J-Plus. As recently as 2012 Apple released two models from their iPad family, the iPad Mini and the iPad (4th gen). It should come as no surprise that during September 2013 Apple released three versions of their iPhone for the first time: iPhone 4s (8 GB), iPhone 5c, and the iPhone 5s. Was this a flawed strategy considering the versions of the iPhone could cannibalize each other? What about deciding to release a new version of the 4s, the 4s (8 GB)? Could this be considered cannibalization in reference to the two new versions of the iPhone 5? Was this considered a form of price discrimination? Was Apple essentially charging customers group different prices for what some may deem as essentially the same product, the iPhone 5c and 5s? What roles do the phone service providers play in the realm of price discrimination? If a phone company subsidizes the price to the consumer in conjunction with service plan contracts, is this still price discrimination? To understand the answers to these questions one should understand what price discrimination is and the laws behind it. One should also determine if the iPhone 5c and 5s are essentially slight variations of the same...

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