The aim is to create a simple, attractive and user friendly way to distribute entertainment, news or educational content. The Apple iLounge will provide people in metropolitan cities a legal way to listen, share, and purchase digital media such as: music, movies, TV-shows, games, applications, e-books, or audio-books. Our long term goal is to successfully combine the experience of a record store or a cafe with the accessibility of online distribution for digital media.

1. Apple iLounge

2. Apple iLounge
Challenge.
“Our goal is to successfully combine
the experience of a record store or a
cafe with the accessibility of online
distribution for digital media.”
- iLounge developer.

3. Apple iLounge
Situation.

4. Apple iLounge
The Situation.
Apple.
Today, Apple Macintosh is one of the worlds largest computer manufacturers,
currently claiming about 10 % of the computer users world wide.
Apple are known to innovate in style, design and functionality, the brand have
a unique “cool” non-comparable in the electronics world.
The company is also spearheading the digital audio and video revolution with
its portable music players and iTunes online music store.
In recent years the ipod, iphone and the itouch have revolutionized their
respective markets. Apple also own software like iTunes, and Apple TV.
2008 Apple overtook the 2nd place on the U.S.A’s top list over music
retailing, only beaten by Wal-Mart.
In January 2009 iTunes store passed 6 billion songs sold world wide, which
accounts for almost 70% of the total online music sales.
The online library has more than 10 million songs (New songs are uploaded
daily) and over 1 million podcasts.
Apple has also bought distribution rights of companies like NBC, Disney, and
Pixar for more than 2,500 movies and 30,000 TV-episodes.

5. Apple iLounge
The Situation.
Changes in Consumption.
Sweden 2008: Download iTunes = 6 billion sold.
revenue higher than CD retail. 5 billion a year illegally.
Record stores closing down. Sweden: 20 million
downloads / year.

6. Apple iLounge
The Situation.
Stockholm.
25% of Swedes live in Stockholm.
35% of the Swedish GDP.
90% of 16 - 35 have computer access.
15% of those are Mac owners.
80% between 16 - 35 own a Mp3 device.
(1.5 million sold annually in Sweden)

7. Apple iLounge
The Situation.
S.W.O.T
Strengths
Top-of-mind in the
Mp3 player market.
+ 10 million song catalog.

8. Apple iLounge
The Situation.
S.W.O.T
Weaknesses
Low profit margins.
Limited experience in service.

9. Apple iLounge
The Situation.
S.W.O.T
Opportunities
Opening a new market niche.
Fluctuating market.

10. Apple iLounge
The Situation.
S.W.O.T
Threats
Failure to find a partner.
Low margin = low profitability.

11. Apple iLounge
The Situation.
Competitive Rivalry.
Supplier bargain power. Threat of new entrants.
Medium. Medium - High.
Both sides are quite Easy to enter. Many
equally dependent on retailers already have
each other. the locations.
Threat of substitution. Rivalry. Buyer bargain power.
Low. High.
Once a owner of Mp3 The illegal downloading
player the CD is gone. is 10 times greater than
the legal.

12. Apple iLounge
Competitors.
Legal Illegal
Some of the most popular alternatives except Bit torrent (peer-to-peer) downloads is one of the
iTunes are: largest threats to the digital entertainment industry.
Mp3.com, eMusic.com Pirate Bay, Torrentz, Demoniod, and WhatCd.
Amazonmp3.com, Beatport.
Pirate Bay is the biggest one and offers a complete
Nokia and Sony Ericsson are also establishing portfolio of movies, series, music, games, e-books,
online music services educational software, and computer software.
Playnow (Sony Ericsson) have already more Pirate Bay have at least 2.2 million individual IP
than 1 million titles available addresses from Sweden downloading every week.
Nokia are showing similar numbers. Limewire, Kazaa, and Bearshare also share digital
content illegally but not in the same scale as the bit
torrent sites.

13. Apple iLounge
Segmentation.

14. Apple iLounge
Segmentation.
Primary target.
50% of Mac users pay for music, but only 16% of the PC
Liberal political and social views
Environmentally aware, buy organic or ecological
products and are ready to pay more for it
Considers themselves intellectually curious
Above average vain and spend more than average on
clothes
Mid - high income
Creative professional or student
Live, study or work in the city centre
Owns a Mac or Apple product (25.000 - 35.000 Mac
users, and approx. 100.000 ipod owners)

15. Apple iLounge
Segmentation.
Secondary target.
Shop, live or study/work within walking distance of
location
Owner of a flash based Mp3 player, or Mp3 capable
phone, (Minimum 200.000 in Stockholm city)
Between 20 - 35
Download music, movies Tv-series or any entertainment
on a regular basis, both legally and illegally
Conscious about environmental issues and aspire to act
“Green” and buy organic foods
Medium or high income

16. Apple iLounge
Marketing Strategy.

17. Apple iLounge
Product strategy.
The iLounge.
Core product:
The iTunes library of music, movies, TV-shows, games,
applications, e-books, or audio-books.
The library is currently 10 million songs, 1 million podcasts.
It’s also full of more than 2,500 movies and 30,000 TV-
episodes, all in high quality.
All of this directly transferable with high performance wifi,
bluetooth, or dock station technology to any laptop, Mp3-
player, Mp3-phone or other gadget.
The iLounge’s database compatible with the existing iTunes
account.
Buy a quick-pass, sit down and listen, then you pay for the
songs you want to transfer to your Mp3-player.
Complementary product:
A fine selection of beverages, snacks, and sandwiches
produced locally from top quality organic products.

18. Apple iLounge
Price strategy.
The library.
The music will be available at one of three price points:
69 cents, 99 cents and $1.29, with most albums priced at $9.99.
Movies are priced between 4.99$ - 9.99$ for renting over a
period of 30 days.
Buying movies range from 9.99$ - 14.99$.
TV-shows will range from 99 cents - 1.99$.
Educational material, e-books, audio-books, applications and
games will all be priced at the level set by the publisher
iTunes Members-only discount plans will be available.
Customer loyalty programs and bonus systems

19. Apple iLounge
Placement strategy.
Södermalm
The iLounge needs approx. 250 - 400 m2 to fulfill the concept.
Focus will of course also lie in creating something innovative
and new for the customer.
The Södermalm district in Stockholm gaining a lot of
recognition as a Stockholm “Soho”, it’s full of conceptual
stores, great restaurants, and culture.
Götgatan, the main street in Södermalm, is particularly know
for it’s relaxed atmosphere, trendy shops and hip bars.
Outside of the 2 busiest streets, (Drottning gatan &
Biblioteks gatan) this is the busiest one.
The whole length of the street is closed for cars and full of life
all day and night.

20. Apple iLounge
Promotion strategy.
Think local.
Frank PR agency (www.frankpr.se) are hired to buy editorial
space in lifestyle magazines. etc.
Acne Advertising (www.acne.se/new/creative) will launch the
ad campaign in lifestyle magazines, fashion media, and on
billboards in the Stockholm centre.
The advertising will run two months, starting one month
prior to the opening and ending one month after the
opening.
Acne are also responsible for organizing a pre-opening of the
iLounge for V.I.P’s in Stockholm.
We will “leek” this trivial information to all the major Apple
forums, and bloggers.
This will inform the most hardcore Apple fans

21. Apple iLounge
Price strategy.
Apple iLounge
Conclusions.

22. Apple iLounge
Evaluation measures.
Are we successful?
Are we able t change our target’s habit, to move people away
from illegal downloading and back to a “store”?
Popularity amongst the product groups, are we selling mostly
audio or is e-books, video and applications popular?
Amount of new customer registrations to iTunes through
iLounge. Is the iLounge a good extension of the iTunes store?
Increased Apple brand notoriety. Can we notice any increase in
popularity of Apple’s hardware products?
Media coverage regarding the iLounge, is the press and general
public positive about the iLounge and the brand?