This second section consists of some basic secondary research into the mobile phone market.

Introduction
I am using secondary data to research into the mobile phone market for several reasons. Secondary data is very easy to collect, is cheap, fast, and is readily available:

• Easy to Collect- Secondary data is available from many places. I collected mine from various sources, including a library, the Internet, and marketing journals.

• Cheap – When collecting data from the Internet, or a library, generally the only cost is that to print out or photocopy the data and statistics you have found.

• Fast – Because the data is very easily available, it can be found quickly. It is not like a questionnaire where it has to be passed out, collected back, and then have all the information typed back into a computer.

I obtained my data in several ways. Most of my data was collected from computers, and the library. I have outlined each piece of data I have used below:

• Snapshots Statistics – From CD-ROM at the Huddersfield Library
• Mintel Reports – From the Huddersfield University
• BBC News Articles – From http://www.bbc.co.uk
• Keynote Market Report – From http://www.keynote.co.uk

Findings

Market Size
The mobile phone market is very large, with over 76% of the adult population of the UK owning a handset in 2003. In 2003, there were over 53 million subscribers to mobile phone networks (Mintel). The volume of the market is very large. In the same way, the market size by value is very large, worth over 6.86 billion in 2003. The sheer size of the mobile phone market means that it would be a very good market to enter. There is a huge target audience, from 13/14 year olds, through to OAP’s. However, because of the large market size, there is already established competition (such as Nokia, Sony Ericsson, and Siemens). This means that if Apple does launch a new mobile product, it would have to stand out from the competition to gain a reasonable market share. A positive side of such a large, active market is that even a small market share can bring significant profits to a company.

Market Growth
The mobile phone market saw very rapid growth during 1999, with over 59% growth. The number of subscribers to mobile networks increased from 27.2 million in 1999, to 43.5 million in 2000. However, now it seems that the market has become saturated, as almost three quarters of people in the UK own a mobile phone. The main market growth likely to occur in the future is from people upgrading their existing handsets, either as part of a contract, or through their own initiative.

Market Share
From the Mintel marketing report, I can create a pie chart, to show the market shares of the different companies in the mobile phone market.

This graphical representation shows clearly that Nokia holds the main market share, although the other proportion of market share is held fairly evenly by other companies, including Sony Ericsson, and Siemens. The fact that there are strong competitors means that Apple will have to work hard to try to break into the market to take a proportion of the market share away from competitors. However, Apple have shown that they have ability to do this, as they did when they launched the iPod into a market held by companies such as Sony Minidisc and Panasonic.

You can see from the market share that some companies are growing rapidly (such as Siemens and Nokia), whereas others are declining even faster (for example Philips). This shows that it is an active market, and customer trends and opinions can make or break a company. Some companies are becoming more fashionable, such as Sony Ericsson (introducing the K700i recently, and the T630), and others (for example Philips latest phones) do not live up to the high expectations of consumers. If customers do not accept your product, then it could be the downfall for your company. This means that Apple should try to make a phone that is appealing to customers, and is a design statement and a fashion icon.

Market Trends/Developments
There are several new developments in the market at the moment that will have to be noted by Apple, and considered when they are designing a new product. I have tried to note some of these here:

Bluetooth – Bluetooth is a new wireless technology, which is incorporated into most new mobile phones. This allows all Bluetooth equipped devices to communicate with the mobile phone. This could allow you to play multiplayer games, use your phone as a modem or share messages (google.com).

3G - Third-generation protocols intended for applications other than voice, such as video transmissions and full Internet access. Many new phones work on 3G networks, and Apple may want to consider launching at least one model of phone that supports this technology (Carter and Burgress).

Video Camera – Most new mobile phones have the facility for the customer to use it to record video, and send it to their computer, or send it to friends with a phone supporting the facility. It is growing to be expected in a new phone by most subscribers.

Contracts Promoted by Network Providers – Currently, network providers are prompting new customers to opt for contract payment packages instead of the pre-pay packages, which have proved to be popular up to today (Mintel). This push is strengthened by pushing the price of pre-pay phones up tremendously (by up to 40%). This has implications for Apple because they should aim their phone at the pre-pay market to make more sales.

Social/Ethical/Technological Issues
There are several different issues associated with mobile phones. These include health issues such as the aspect of radiation, and technological issues such as the fast rate of technological advance (research and development).

Radiation – Many people think that the prolonged use of mobile phones can lead to brain damage, and cause cancer. This is because of the fact that microwaves are used to communicate data with mobile phones. However, there is no definite proof of this theory, and there is no proven link between the use of mobile phones and brain cancer. If fears and concerns over this matter grew, then the market may be caused to decline, but that is a risk that Apple would have to take if they entered into the market (BBC News).

Technological Advance – The mobile phone market is advancing at a very fast rate. The changes in technology are very rapid, and mobile phones become obsolete very quickly after they are brought into production. This is a problem for many companies, because although their mobile phone may be cutting edge when initially launched, it may be at the bottom of the pile after 6 months. This means that if Apple were to launch a line of mobile phones, they would have to spend a considerable amount of money on research and development to ensure that they were staying ahead of the competition.

Mobile Phones in Cars – Another major issue at the moment is the problem of the new law introduced banning mobile phone usage in cars. This means that there is more and more pressure on the mobile phone manufacturers to include wireless connectivity in their phones, such as infrared, and to a greater extent Bluetooth. This allows connectivity with hands free devices such as wireless headsets and car kits (BBC News).

These concerns are not so much reasons for not entering the market, but ways in which Apple should be careful to create a product which appeals to a wide a range as possible.

Conclusion
In my conclusion, I will summarise the advantages and disadvantages of Apple entering the mobile phone market, and try to show what exactly Apple should try to do when crafting a new mobile phone for the market. I will first cover the positive factors, reasons why Apple should enter the mobile phone market:

Advantages

The mobile phone market appears to be an active one, with new products being launched regularly, and the market share of various companies changing from year to year. If Apple could launch a new product which appealed to lots of people, it seems as though it would be relatively easy for them to achieve a proportion of the market share.

One advantage about this market is that there is plenty of room for Apple to advance ahead of their competitors in the technological sector. New ideas and features are constantly being developed (such as the recent addition of 3G, and Video Messaging), which Apple could research into and try to exploit to gain an edge over their competitors.

The mobile phone market is very large (over £6.86 billion in 93’). Such a large market ensures that even if Apple can only initially secure a small market share, they will still bring significant profits into the company. There is a very large target audience, and they could aim their product at many age ranges.

Disadvantages

Nokia and Sony Ericsson hold very large market shares, are reputable brands, and would be very difficult to fight against. The competition against new phone manufacturers is very strong, and if Apple do not have a great deal of experience in the mobile phone field, then the may be outstripped by these long standing competitors who have been selling products since the first mobile phones launched.

The mobile phone market is no longer growing at the same rate it was originally. The market is now almost saturated, which means that Apple could not aim a new product at people who do not yet own a phone. They would be better aiming it at either standard consumers wanting to upgrade, or businesses looking to provide a good quality phone to all their employees.

There are several social and ethical issues associated with the use of mobile phones, and these must be taken into account by Apple. If for example, a link between the use of mobile phones and brain cancer was proven, then the mobile phone market would collapse, and Apple’s share in it would be worthless. There is a very slim chance of this happening, but it would have catastrophic consequences.

Evaluation
There are several factors about this project which I would like to evaluate. I will break my evaluation down to cover how useful my data was from each source, and any problems and difficulties I encountered when collecting and analysing data.

Snapshots Statistics – This data was the most easy to interpret, and one of the most useful pieces of information I collected. The most useful part of the report was the extensive use of graphs and charts. I was able to copy these into my project, and analyse the trends and patterns within the graph. This was very useful when looking at market size, growth and share. The only problem with this report is that it is not as detailed as it could be, and it does not cover any social/technological issues. Also, it focused mainly upon the service providers, rather than the mobile phone manufacturers.

Mintel Report – The Mintel report was by far the most detailed set of information I had. Although it did not have as many visual aids as the Snapshots research, it covered the market in much more detail (particularly the market share of the various phone manufacturers). One downside was the fact that because it went into much more detail, it was much more difficult to interpret, and took more time to analyse.

Other Sources – The BBC news articles were useful when looking into the social and ethical issues, as they provided an insight into recent news articles and new laws which have been passed. Also useful was the Keynote marketing report I found on the internet, which gave Keynote’s opinion on how they thought the market was set to change in the future.

I did not really encounter too many problems when collecting my data. The main problem I encountered, typical to secondary research, was that the data was not completely up to date. Often, the data I had found was from 2002/2003, and the market may have changed since it was collected. This is true in the case of Sony Ericsson, whose market share has increased dramatically in recent months with successful new product launches.

Because most of the data I found was located online, it was very easy to find and print off. The other two locations which were conveniently in Huddersfield were the University Library (Mintel Report) and the Huddersfield Library (Snapshots CD-ROM). It was no problem to collect the data from these sources, and they were easy to find.