Analysis on Apple iPhone
An Analysis Of Apple’s iPhone In Smartphone Industry
The report studies the impact of smartphone innovations in the smartphone industry through economic theories. As Apple inc. is known for creating innovations; the factors that caused the shifts in the demand and supply of smartphones have enabled Apple inc. to dominate the largest market share. Moreover, with the advancements in iPhone products, the elasticity of iPhone demand impacts its complement and substitute goods as well. Apart from the Apple inc. iPhone analysis, the market structure was found to be an oligopoly market, where firms in the smartphone industry are interdependent on each other for maximizing revenue where in the long-run, the industry will experience a positive economic profit.
TABLE OF CONTENTS
1. INTRODUCTION ............................................................................................................. 4
2. DEMAND AND SUPPLY OF IPHONE .......................................................................... 5
2.1 Cause Of The Shift In Demand Curve ............................................................... 5
2.1.2 Preference Of Smartphone Brand ........................................................... 5
2.2 Cause Of The Shift In Supply Curve ................................................................. 6
2.2.1 Price Of Relevant Resources .................................................................. 6
3. ELASTICITY .................................................................................................................... 8
2.1 Price Elasticity Of iPhone Demand ................................................................... 8
2.1.1 Time Factor ............................................................................................ 8
2.2 Cross Elasticity Of iPhone Demand .................................................................. 9
2.2.1 Complement Goods
The report studies the impact of smartphone innovations in the smartphone industry through economic theories. As Apple inc. is known for creating innovations; the factors that caused the shifts in the demand and supply of smartphones have enabled Apple inc. to dominate the largest market share. Moreover, with the advancements in iPhone products, the elasticity of iPhone demand impacts its complement and substitute goods as well. Apart from the Apple inc. iPhone analysis, the market structure was found to be an oligopoly market, where firms in the smartphone industry are interdependent on each other for maximizing revenue where in the long-run, the industry will experience a positive economic profit.
TABLE OF CONTENTS
1. INTRODUCTION ............................................................................................................. 4
2. DEMAND AND SUPPLY OF IPHONE .......................................................................... 5
2.1 Cause Of The Shift In Demand Curve ............................................................... 5
2.1.2 Preference Of Smartphone Brand ........................................................... 5
2.2 Cause Of The Shift In Supply Curve ................................................................. 6
2.2.1 Price Of Relevant Resources .................................................................. 6
3. ELASTICITY .................................................................................................................... 8
2.1 Price Elasticity Of iPhone Demand ................................................................... 8
2.1.1 Time Factor ............................................................................................ 8
2.2 Cross Elasticity Of iPhone Demand .................................................................. 9
2.2.1 Complement Goods
References: Arnold R. A. (2011). Principles of Economics: 10th Edition. United States: Southwestern, Cengage Learning http://www.ida.gov.sg/Infocomm-Landscape/Facts-and-Figures/Telecommunications The Statistical Portal. Global smartphone shipments forecast from 2010 to 2018. Retrieved from http://www.statista.com/statistics/263441/global-smartphone-shipments-forecast/ The Wall Street Journal. New iPhone: A Sapphire Screen and a Higher Cost. Retrieved from http://online.wsj.com/articles/new-iphone-a-sapphire-screen-and-a-higher-cost-1408042296 Brown, R. 2012. The Cost Of Making An iPhone. Retrieved from http://www.investopedia.com/financial-edge/0912/the-cost-of-making-an-iphone.aspx Cunningham, A. 2014. Apple breaks revenue, iPhone, and iPad records in Q1 of 2014 Retrieved from http://arstechnica.com/apple/2014/01/apple-breaks-revenue-iphone-and-ipad-records-in-q1-of-2014/ Welker, J. 2012.Understanding Oligopoly Behavior – a Game Theory overview. Retrieved from http://welkerswikinomics.com/blog/2012/03/23/understanding-oligopoly-behavior-a-game-theory-overview/ Blodget, H. 2012. In Case You Had Any Doubts About Where Apple 's Profit Comes. Retrieved from http://www.businessinsider.com/iphone-profit-2012-8#ixzz3CZ1Uc0cy Shermen, J. 2013. Spendy but indispensable: Breaking down the full $650 cost of the iPhone 5. Retrieved from http://www.digitaltrends.com/mobile/iphone-cost-what-apple-is-paying/#!bOunwD