Impact of iPhone Upgrade Program on Revenue Recognition and Investor Decision-making for Apple Inc

This report analyzes the impact of Apple's iPhone Upgrade Program on revenue recognition and investor decision-making. It discusses the program's launch, impact on revenue recognition, investor decision-making, and financial success.

ACCOUNTING
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Apple introduced iPhone upgrade program.................................................................................3
Impact of upgrade program over revenue recognition................................................................5
Impact of upgrade program over investor decision-making........................................................7
Apple's financial going forward to assess the success of the upgrade program..........................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Business expansion is demonstrated as enhancement of the business operations entertain
by the business venture. The project is based on the case study of the Apple Inc in context to
launching its new product. The organisation is established in the year 1976. Headquarter of the
company is located in California, United States. Company is currently serving at a global level
with holding approximately 514 retail stores at different geographical landmarks across the
world. The aim of the study is to provide a conceptual detail in respect to practice adopted by
business entity for achieving success against the product launch. Henceforth, report will
emphasis over the new iPhone upgrade program launched by the Apple Company. The core
values new extension will allocate to the company will further be demonstrated under this
project. Details about the revenue recognition will also provide. Furthermore, financial aspects
related to the new program will also come under observation in this report.
MAIN BODY
Apple introduced iPhone upgrade program
Apple Inc Company has launched a new iPhone upgrade program to attract more number
of customers at a global level to buy products of company. This program is allow the customers
to purchase the iPhone in a whole new or modified way. In the year 2015 company has launched
iPhone 6 and iPhone 6s models and at the same time the organisation has also launched to the
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new program. This program made payment more convenient by allowing the suer a 24 months
loan facility to repay the value of the product with the alliance of Citizens Bank in America (Lee
and Mohammad, 2020, PP 125). This program allowed customers top switch towards the
wireless carriers based on the contract terms. Extended warranty and support service also
allocated to customers under the scheme. In this scheme post one-year tenure customers also get
to switch to a new iPhone with against a feasible payment options of 2 years’ payment
obligation. This program was launched by aiming one is to improve the feasibility of the iPhone
brand in term of payment accessibility and also to improve the service area of the organization.
This program facilitated customers take easy payment with the use of easy monthly instalment
facilitates. The brand categorizes into the luxury brand category that allow the organisation to
keep the prices high in comparison to other competitors in the respective target market. The price
structure of product target to upper class economic background and the upper middle class
category of customer base. The new policies of the organisation could further support the
business venture to attract more number of customers in the market. This program supported the
Apple Inc Company to also approach to the lower middle class economic background as well.
Instalment payment system create a less financial burden over finances of the customers (Lv,
Wan and Wu, 2017, PP 12 - 22). UBS Analyst also quoted that the “Upgrade program is a smart
move by the company. This could make the product more like an annuity business for the
company. It has supported the company to reduce the financial burden by making a single
payment rather customers get to pay in 24 instalments. This allows extra time to arrange
resources for making the payment done.
The launch of the Upgrade program has supported the customer value as well. Earlier the
product is accessible for the limited customer but due to this program now the product become
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more feasible for variety of customers. The overall price burden is segregated into 24 months
that allocate more time and balance to make the payment against the product is purchased
(Verma and Sambhav, 2020, PP 11). In this program customer satisfactions and values also kept
on a focus area. Company tried to improve the service experience of the end customers with the
launch of this campaign. The target customers of the company is highly influenced especially the
upper class economic background of customers with the services allocated by the organisation
against the product launch.
Impact of upgrade program over revenue recognition
Upgrade program of the Apple Inc will not make change the way or mode revenue will
be recognized in the income statement of the company. IN the new scheme the finances are
allocated by the Citizens Bank which denote that Apple Company will get all its value at the
time purchase is made. The bank will finance the value of the phone to customers. This practice
will not create any change in the mode of recognizing revenue in the income statement of the
company. The impact of this campaign is that total number of sales of the company has also
increased. UBS analyst also quoted the fact that program is a big deal for the company. The
prediction was such that 75% of the customers would immediately be switch over the upgrade
program (Siqi and Yi, 2021, PP 239 - 246). The entire campaign has provided a greater and
brighter growth opportunities in term of number of sales along with increasing the customer base
of the company. The program could boost sales of company at such level that company was
charging $50 on every piece that is sold. The impact of this program is such that not inly new
customers attracted but the exiting one could also get to switch towards the new program.
Making one single payment against the iPhone is very costly and create a huge burden over
finances of the consumers. This program has further created a scope for the potential customers
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in market to allocate the overall financial burden in 24 monthly terms. Segregating the value into
24 instalments make product look more feasible to buy and procure. The level of customer
experience has also increased by the company in against to launch of this new campaign. The
price feasibility and improved service quality has given a huge support to the business entity for
enhancing the success of business venture in respective target market.
All the possible changes occurred in the income statement and balance sheet due to the
upgrade program will be monitored and recorded. Upgrade program supported the Apple Inc to
maximise the growth possibilities and profit making opportunity for the business house. The
launch of new program could support the company in maximisation of the overall growth and
development possibilities of the business entity (Balaji and Prasathkumar, 2020). The main
impact was such that due to the upgrade program revenue of the company could increase. More
sales has been reported in company books of accounts. AS the program has also provided the
opportunity to the existing customers to switch to the new program. The campaign has offered a
service fair of $32.41 and $44.92 a month. This program has not only created an opportunity to
sale the services of the organisation along with boosting up the trade of different products offer
by the business venture. In context to the Apple Inc target customers the quality of services
organisation offer become the decisive factor while making the buying decision. The improved
service quality has supported the organisation to increase sale of other existing products offer by
the business venture (Amawate and Deb, 2021). This program would not create any opportunity
to improve the accessibility of the financial position of the organisation as this do not involve up-
gradation in the form of new accounting software or such like factors. The aim of the program is
to maximise the business growth by attracting new customers along with motivating the existing
one to enhance the trade. There is not any direct role of the campaign with improving the
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accounting features in the organisation. The accounting records kept on presenting in the same
way even after introduce the new campaign or program.
Impact of upgrade program over investor decision-making
Every business decision-making and policy influence the decision-making investor's take
to deal with the business venture. Investors are the one who put the stake in the company's
business operations. The major decision investor take is to put the money in the finances of the
business venture. Apple Inc Company is among the leading business solution in the information
technology market. In term of business success organisation hold plenty of options in regard to
its investors. Every time any of the investor of company look forward to invest in the business of
organisation it always looks forward to the potential or the ability to gain the return against the
investment is made. The aim of the investor is to earn potential value against the investment is
made (Mongardini and Radzikowski, 2020). The return is further demonstrate as thee
expectorations investor carry in against of delivering the investment decision-making in the
business operations of the Apple inc Company. Risk is also a key element or factor influence the
investment decision-making of the investor. If the level of risk is more in the investment decision
this clearly demonstrate the fact that investor would contain more expectations against the
investment is made in the project. Risk is a key driving factor or element influence the level of
return investor would get against the investment is made in the business operations of the Apple
Inc Company.
The upgrade program launched by the Apple Inc Company has precisely attracted to
more investor towards the business operations of the company. As the campaign could
fundamentally support and drive the business entity to maximise the possible outcome against
the business operation deliver by the company. The effect of this campaign was such that the
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business venture could attract to new potential customers towards the business operations
entertain by the company along with sustaining the existing customer base of the organisation.
Further ths campaign could motivate to its existing customers of company for buying new
products and recent launched products of the company (ENGINEER, 2020). As the new
campaign or policy could offer a 24 easy monthly instalments to repay all the value of the
product which could further support the customers for buying more expensive product range.
Buying luxury products or approaching brands like Apple create a huge financial burden over the
pocket of the customer every time the consume look for any buying option.
The easy instalment of 24 months could reduce the overall financial burden over the
customers at a very minimum level. This has supported the motivation of the customers to buy
and procure the latest launched iPhones like 6 and 6S. The boost in the sales could further
motivate the overall growth of the company towards a right direction. Along with the product
sale company has also offered the services that could motivate the old or existing customers to
switch on the program. The demand of the product has increased at such a level that Apple Inc
Company has increased the product price $50. This clearly indicate the fact that the business
venture could certainly support the customer services associated with the business venture.
Investor always look for the level of customer satisfaction customers get against dleivreing the
business services. Investor also look for the profitability of the company and the growth rate of
business venture earn against delivering the business operations. Investors at the Apple inc
company involve shareholders, private finances, investment bankers and such other respective
stakeholder. The existing shareholders of the company could get more value in the form of
dividend in against of launching the program (Verma and Sambhav, 2020, PP 11). Other investor
or aspiring investors of the company could evaluate the profit margin of the organisation along
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with the increased market share of the Apple Company that could further influence the
investment decision of all types of potential investors associated with the Apple Inc Company.
The launch of the new program could support the investors both existing and the possible
investors to invest heavily in the business practices of the company.
Apple's financial going forward to assess the success of the upgrade program
Success of any program is measure with the statistical interpretation related to how many
people became part of the campaign, how many new people become associate with the
organisation, the venture could sustain to how many people already associated with the
organisation and all these elements. The success of the campaign launch by the business entity is
highly measure with support of analysing about how much the new customers become part of
the company, the sustainability Apple Inc Company could achieve with its existing customers of
the venture and such like elements. The financial aspect also needed to measure by the investor
in order to assess the success of the upgrade program, launched by the Apple Inc Company. The
record clearly show that in the year 2015 the revenue of the company could go up in comparison
to the year 2014 (Manjee and Watkin, 2020, PP 163 - 164). The year 2015 the revenue of the
company was 25471 million whereas in the year 2014 the revenue was 24079 million. This
clearly demonstrate the increasing trend of the revenue of company in against to the launch of
the new campaign. This can further demonstrate that the growth of the company has also
increased in against to the launch of the new campaign. The overall success of the campaign can
be measured with the use of the sales value or figure of the business venture. Values of sales
clearly depicting the fact that the business venture could deliver the positive sales value in
against to the launch of the campaign. The impact of the campaign was also such that service
oriented revenue of company has also increased (Feeley, 2021, PP 5). IN context to the financial
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viability this can be demonstrated that this whole upgrade program of Apple Inc Company has
been a huge success of the company in its existing market. The campaign could motivate the
business venture to enhance the customer base of the business venture along with attracting new
customers in the respective target market. The overall success of the upgrade program is
precisely noted with the proper evaluation about the performance of the business venture. This
can be considered as the fact or aspect which clearly demonstrate that the upgrade program has
been one of the major policy that could enhance the financial feasibility of the business entity at
a global level.
CONCLUSION
Upgrade program is launched by the Apple inc Company in which the buyer of the
product of the company get a 24-month loan facility to repay the entire due. This program has
supported the customers of the Apple Company to get access to financial support so that overall
support in term of financial resources can be catered to the potential customers of company in
market. This campaign could boost up the sales of the company along with supported the
business venture to sustain the existing customers in market. The impact of the campaign was
such that company could successfully improve the level of customer satisfaction business
venture has achieved against the launch of the campaign.
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REFERENCES
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Amawate, V., & Deb, M. (2021). Post acquisition brand identity: acquisition of Flipkart group by
Walmart Inc. Emerald Emerging Markets Case Studies. (PP. 125)
ENGINEER, K. C. (2020). Annual Report for 2019.
Feeley, E. (2021). Can David Really Beat Goliath? A Look into the Anti-Competitive
Restrictions of Apple Inc. and Google, LLC. IPCLJ. 5. 1.
Lee, D. S. & Mohammad, H. J. (2020). Descriptive Analysis of the Afghanistan Apple Farming
System.
Lv, H., Wan, Y. & Wu, F. (2017). Effect of online personalization services on complementary
firms. Electronic commerce research and applications. 24. 12-22.
Manjee, K. G., & Watkin, W. G. (2020). Do Deeper Levels of Cervical Biopsies Preceded by a
Pap Smear Diagnosis of LSIL, ASCUS, or NILM/HPV+ Increase the Yield of
Identifying Clinically Significant Lesions?. American Journal of Clinical
Pathology, 154(Supplement_1). S163-S164.
Mongardini, M. J., & Radzikowski, A. (2020). Global Smartphones Sales May Have Peaked.
International Monetary Fund.
Siqi, W. & Yi, W. (2021). The Digital Heritage of Covid-19's Governance: How to Upgrade and
Use the" Health Code" in the Post-Epidemic Era. Jurnal Audiens. 2(2). 239-246.
Verma, N. & Sambhav, S. (2020). Development of iOS: A Revolutionary Transformation and
the Future. International Journal of Advanced Research in Engineering and
Technology. 11(6).
Balaji, S., & Prasathkumar, V. (2020, January). Dynamic Changes by Big Data in Health Care.
In 2020 International Conference on Computer Communication and Informatics
(ICCCI) (pp. 1-4). IEEE.
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