What is the Market Size of iPhones in US?

Product Marketing Management Interview: Market Sizing Question: What is the market size of iPhones in US?

Market sizing, as a concept, involves estimating the potential revenue a product or service could generate if it captured 100% of the market. It's a vital step in strategic planning for businesses, helping them make informed decisions on product development, pricing, marketing, and resource allocation.

Market sizing questions in interviews assess various skills, including analytical thinking, problem-solving, quantitative skills, communication, creativity, and adaptability. Candidates are expected to approach complex problems in a structured, logical manner, emphasizing thought processes over precise answers.

Top-Down Approach vs. Bottom-Up Approach: The top-down approach starts with a large number and refines it, while the bottom-up approach starts with a small number and builds up. For this toothbrush market sizing, we'll use the top-down approach.

---

Step 1: Clarifying Questions

• How are we defining iPhone sales? (e.g., total units sold, total revenue)

• Are we considering all iPhone models or a specific model?

• Is the focus on new sales, including replacements, or only new customers?

Assuming we define iPhone sales as the total number of units (all models) sold to new and existing customers in the U.S. in a given year.

---

Step 2: Developing a Top-Down Framework

1. Start with the U.S. population:

   • United States population: Approximately 330 million.

2. Estimate the percentage of the population that owns smartphones:

   • Assuming 80% of the U.S. population owns smartphones.

3. Estimate the percentage of smartphone users who own iPhones:

   • Based on market share data, assuming 60% of smartphone users in the U.S. own iPhones.

4. Estimate the average lifespan of an iPhone:

   • Assuming an average lifespan of 3 years before replacement or upgrade.

5. Estimate the percentage of iPhones that are replaced or upgraded each year:

   • Assuming 25% of iPhones are replaced or upgraded annually.

6. Estimate the percentage of the population that becomes new iPhone users:

   • Assuming 5% of the U.S. population becomes new iPhone users annually.

7. Estimate the average selling price (ASP) of an iPhone:

   • Considering various models, assume an average selling price of $800.

8. Calculate the Market Size: