Apple VR Headset Marketing (Research Paper Sample)

Apple VR Headset Marketing
Name
Institution
Author’s Note
Virtual Reality (VR) Headsets
Market Overview
Industry, Market, and Trends
The VR headset industry has witnessed tremendous growth in usage and revenue globally after its introduction in the market. In 2016, HTC Vive and Oculus Rift headsets were first introduced by the respective parent organizations (Epp et al., 2021). Since then, the virtual reality headset industry has gained wide usage globally, especially among young users who prefer exploring these platforms. Consequently, the total installations globally are expected to grow from 14 million as recorded in 2018 to 51 million by 2022 (Epp et al., 2021). In addition, the attached revenue is equally expected to rise from $3.3 billion to $13.7 billion during this projection period (Epp et al., 2021).
The installed software in the VR headsets allows for entertaining interactions between the users and the gaming services in the system. In comparison, VR has been shown to provide more enjoyment and fulfillment in gaming systems than conventional non-VR models (Epp et al., 2021). However, the VR system provides control challenges to the gamers and is associated with most uncompleted tasks during playing time. Therefore, the systems still face the challenge of adequately integrating skills into many users. In addition, this technology may expose its users to cybersickness conditions, unlike the non-VR gaming technologies.
Apple VR Headset
Apple intends to launch a virtual reality headset for the first time in its history. However, the product is expected to cost more than the rival products in the market. The device will comprise a detailed 3-D digital environment with gaming, video display, and communication (Schroeder, 2021). This device is expected to comprise high-quality silicon chips that are more likely to impact the final pricing of the product. As a result, the product is expected to be more expensive than rival products. In addition, the Apple VR headset will feature custom prescription lenses that will serve people with poor eyesight problems to ensure high-quality entertainment in the product.
Segmentation Strategy
The company will use the concentrated (Niche) marketing strategy to target high-end consumers. The product will be targeting individuals’ wealthy individuals aged between 18 to 35 years. Most of the individuals in this category are young and seek adventure and fun in their lives. In addition, this category of individuals provides the best category of consumers to the product due to the heavy involvement in the gaming activities considering that gaming activities account for the most prominent use in VR technology.
Pricing, Promotion, and Distribution Strategies
The cost of Apple's VR headset is expected to be more expensive than the rival products in the market. Most rival products like HTC Vive and Oculus Rift cost between $300 to $900 in the market (Schroeder, 2021). However, Apple's VR is expected to cost around $5,999 due to the exceptional features of the model. The company intends to sell at least one product daily across the company's 500 global stores. The projected annual sales are expected to be 180,000 units worldwide (Bloomberg, 2021).
Apple intends to compensate for the high cost of the product by incorporating more powerful chips with will translate to higher quality resolutions in the headsets compared to the rival technologies. These devices are expected to be more powerful than the processors used to build Apple M1 Mac (Schroeder, 2021). Apple will be using fabric to reduce the product's weight, unlike before, when the company used metallic surfaces for the products. This design will signify a significant departure from the original plans; therefore, the design is expected to generate great attention from the consumers, leading to more income for the company.
Positioning and Differentiation
Competitors
Facebook
The company joined the VR game market after completing the acquisition of Oculus Rift in March 2014. Facebook's VR headset is entirely compatible with Samsung's Android smartphones (Schroeder, 2021). The company's strategy is to increase the volume of premium content on its online platforms by delivering large volumes of headsets to the final consumers. Consequently, the company charges lowly for the hardware with the expectation of gaining more revenue from the subscribed content on the company's online platform. Most users can access this content by browsing through Facebook posts. Also, the consumers can access the content via Facebook Oculus Store. The content available on these platforms is extensive and expected to grow with the number of users over time. Despite being in the early stages, Facebook has recorded tremendous effort in the VR headset industry by accounting for 38.7% of the industry as of 2020 (Bloomberg, 2021). As a result, the company serves as the most prominent VR service provider.
HTC Vive
HTC Vive delivers VR services on a small scale. The company provides the most expensive and sophisticated systems, with a single unit of HTC Vive retailing for about $799.00 on Amazon (Bloomberg, 2021). In addition, the company provides the best quality immersive gaming experiences in the industry. However, the software requires a powerful PC to run the content properly. Despite possessing high-resolution content, HTC Vive has limited access to non-gaming content. This strategy seeks to attract a niche of gaming fans who would accept high charges for the exclusive content on the company's platform. In addition, the company's consumer plan comprises a "closed architecture" that prevents any access to external content. The consumers are restricted to using the company's viewing content only.
The high pricing model and the average VR consumer on the platform, usually males aged 30 to 39 years, provide a better marketing platform for many advertisers to push their brands in the market (Bloomberg, 2021). However, the strict restrictions against outsourcing content provide significant limitations to many product promoters due to the lack of assurance whether their content will appear on the advertisement platform. Despite the lack of non-gaming content, a survey conducted by Sketchfab in 2017 indicates that HTC Vive had the most significant prevalence (42%) among VR headset consumers (Bloomberg, 2021).
Figure 1: Market share of various VR headset users as of 2020. Source: Bloomberg Report.
Differentiation and positioning
Apple VR Differentiation Strategies
Most brands use a product differentiation strategy to distinguish between their products and those of the competitors in the market. For instance, Apple has applied different differentiation strategies since its formation in the 1980s to distinguish itself from other competitors in the market (Schroeder, 2021). Apple seems to communicate with the consumers that the company's products always stand out from the rest of the products in the market.
Product design
The primary differentiation strategy of Apple comes from the design of the products. The company's products display a different visual style with unique features that stand out from the competitors. For instance, the company will introduce a magnifying lens to the Apple VR headset to assist the visually impaired in using the product. This feature will be customized to suit the consumer's requirements. The company seeks to place the consumer at the center of the project to inspire brand loyalty. In addition, Apple will use more powerful silicon chips in the design of the VR headset to ensure the brand attains more visual quality than other competitors in the market. The company will then charge a higher fee for the product based on the quality delivered.
Pricing Strategy
The company seeks to develop a top-notch VR headset that will attract profit proportional to the quality of the product. The price of rival products in the market costs between $300 to $900, with HTC's Vive being the most expensive product (Bloomberg, 2021). However, Apple VR headsets are expected to be the most expensive headsets after their launch. The products will be designed based on a quality that matches the price tag. Consequently, the company seeks to produce less volume of the product and charge higher margins to ensure higher product profitability. In addition, the relatively higher cost of Apple VR headsets will be expected to inspire a higher sense of value for the product.
Retail Outlets
The company's differentiation strategy will also involve a limited supply of VR headsets in retail shops. The limited supply of the product in the retail stores provides a great advantage for Apple shops to advertise its products, creating colossal brand awareness in the market. For third-party retailers like Walmart, Apple will impose a minimum advertised price policy to prevent third-party stores from undermining Apple VR headsets in the market. As a result, the company will be expected to maintain higher margins for its products in the market.
Brand Loyalty
Apple has successfully differentiated itself from other brands by inspiring great brand loyalty (Schroeder, 2021). Therefore, most customers are willing to wait for the release of the new product regardless of the price. Therefore, the company expects to exploit the brand loyalty from the customers to promote the distribution of the new Apple VR headsets. The returning customers are expected to generate higher income from the product's sale.
Positioning
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