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iPad Market

iPad Market. How has the iPad market changed? How will it affect you as an economic student?. Brief Facts about the iPad. It has a large screen Camera on both sides to allow facebook video calling etc LED-backlit display for graphic purposes Multi-Touch Advanced mobile operating system

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iPad Market

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  1. iPad Market How has the iPad market changed? How will it affect you as an economic student?

  2. Brief Facts about the iPad • It has a large screen • Camera on both sides to allow facebook video calling etc • LED-backlit display for graphic purposes • Multi-Touch • Advanced mobile operating system • Originated in April 2010 (appeared in market)

  3. How is the price of iPad determined? • Determined by the interaction of supply and demand curve • Intersection between these two curve provides us with the equilibrium point

  4. Gradient of demand curve • Many substitutes of iPad available • Large proportion of income spent (around $SGD 600-900) • Luxury good • Demand for iPad is price elastic • Gradient - Gentle

  5. Gradient of Supply curve • Easily stored • Luxury good • Easily transported • Supply for iPad is price elastic • Gradient- Gentle

  6. Combination of demand + supply curve Intersection at (Q1,P1) P1 is equilibrium price Q1 is equilibrium quantity Graph of price against quantity of iPad

  7. Price of iPad determined • The intersection between demand and supply curve • Demand = Supply • Market equilibrium • Price of iPad determined by intersection

  8. Related products of iPad • Complements (paid applications, iPad cover etc) :D • Substitutes (Samsung galaxy tab, net books) D: • Different type of relationship with iPad

  9. Complements • Products that complement each other and have a positive relation • Increase in demand for iPad would cause an increase in demand for paid applications • Cross elasticity demand (XED) value is always negative for complements

  10. Substitutes • Products that act as sub have inverse relationship with each other • Decrease demand for iPad can cause an increase in demand for sub • iPad 2, an extremely close sub of iPad • XED value is positive

  11. Recent Developments • Changing Taste of Consumers (Consumer POV) • Earthquake in Japan (Income factor ) (Consumer POV) • Conflict in Arab Countries (Cost of Production) (Producer POV) • Introduction of iPad 2- Changing prices of related goods (Producer POV)

  12. Changing Taste of Consumers • Introduction of iPad 2 • Better features (graphic) than iPad • Consumer prefer iPad 2 instead • Demand for iPad decreases • Ceteris paribus

  13. Earthquake in Japan- Income of consumer are affected • Severely affected the income of Japan people • Necessities become top priority according to Maslow hierarchy of needs • iPad is a luxury good • Decrease in demand for iPad • Ceteris Paribus

  14. Conflict in Arab Countries • War in Arab countries increased prices of oil • Cost of production increased • Total revenue being constant as price is fixed • Total profit decreases • Supply for iPad decreases • Ceteris paribus

  15. Introduction of iPad 2 • Released recently, 11 March in US • Better features • Consumers cast higher dollar votes for iPad 2 • Price of iPad 2 increases • iPad and iPad 2 in competitive supply • More resources allocated to iPad 2 • Reduces supply of iPad • Ceteris paribus

  16. How does recent development affect marketing and price decisions? • Recent developments caused decrease in supply/demand of iPad • iPad market reaching saturation

  17. How does recent development affect marketing and price decisions? • Decrease in demand and supply of iPad • Producers should thus decrease price of iPad • Demand of iPad is price elastic – Decrease in price will result in a more than proportionate increase in quantity demanded • Increases the current sale of iPad

  18. In the short run.. • Decrease the price of iPad • Marketing of iPad is now vital due to changes in consumer taste • Establish the uniqueness of the iPad as compared to other goods such as the Samsung Galaxy tab • Increase demand which leads to increase in profits for producers

  19. In the long run… Aim of producers is to maximise profit iPad market is reaching its optimum Decline sets in after optimum due to presence of better products and changes in consumer taste

  20. APPLE in relation to iPad/iPad 2 • Therefore, Apple introduced iPad 2 because iPad is no longer what consumers desire • Apple understands the changes in consumer taste and thus improved the iPad into iPad 2 • Shows that iPad is no longer profitable as demand is lower • Should discontinue iPad production and increase iPad 2 production in due course

  21. Credits • http://www.seattlemet.com/blogs/culture-fiend/archives/2009-07/2009-08/ • http://hothardware.com/News/Are-Tablet-PCs-Killing-The-Netbook-Maybe/ • http://androidmeup.com/articles/samsung-galaxy-tab-hopefully-an-ipad-killer • http://jessieshare.wordpress.com/2010/07/28/cyber-acoustics-launched-portfolio-cover-leather-case-for-ipad/ • http://www.shuttervoice.com/9473/ipad-applications-make-your-tablet-device-useful-for-you.html • http://www.crunchgear.com/tag/ipad-2/ • http://www.themoneytimes.com/articles/20081126/latest_report_shows_cancer_cases_in_the_united_states_is_decreasing-id-1042640.html • http://support.easyonlinecare.com/earthquakes-in-arkansas • http://alansmoneyblog.com/2008/05/22/oil-smashes-135-per-barrel/

  22. Thank You! • Thank you for your kind attention • Hope you understand the iPad market better • Have a great day :D

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