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Economics WebQuest – iPad (Project B)

Economics WebQuest – iPad (Project B). Group Members:. Crystal Yong Siang Saranya Adliya Zi Yan Wee Ping. Task.

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Economics WebQuest – iPad (Project B)

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  1. Economics WebQuest – iPad (Project B)

  2. Group Members: • Crystal • Yong Siang • Saranya • Adliya • Zi Yan • Wee Ping

  3. Task • Discuss how recent developments would affect your marketing and pricing decisions for the iPad. You should concentrate on the four main factors,2 from the consumer point of view and 2 from the producer’s point of view. Use the economic tools to support your answer.

  4. Recent Developments for iPad • Android Tablets gain on Apple iPad in fourth quarter • iPad clears government hurdle in china • More than 300.000 iPad sold on launch date in US • Kindle or iPad: which will change reading • Acer seeking piece of iPad market with introduction of 3 Tablet devices • Apple slashes original iPad price to us$399 (wi-fi enabled with 16GB memory space)

  5. Consumer’s Point of View

  6. Assumptions • The law of demand starts that the higher the price of the good, the lower the quantity demanded, ceteris paribus 

  7. Price 

  8. Price  • Popularity and good reputation of Apple products mean that iPad will be in high demand • Loyal Apple customers do not mind paying a premium for quality iPad • Wide availability of complimentary complements for iPad in the market • Multimedia entertainment features are appealing to customers • Recent launch of iPad 2 reduced price of iPad, thus increasing its demand

  9. Features iPad

  10. Convenience • Free shipping lower price for consumers • >100million iBooks downloaded from more than 2500 publishers. Consumers can store books in iPad, making learning easier on the go. •  200 million Apple ID with credit card and 1-click purchasing.

  11. Promotion

  12. Producer’s Point of View

  13. Cost of Production • Designed in California • Assembled in China • Product of globalisation • Cost of Production:US$259.60

  14. Cost of Production

  15. Price of an iPad

  16. Price of an iPad

  17. Price of an iPad (Limitation)

  18. Changes in Prices of Related goods • Related goods: iPhone, iPod, accessories of Apple products • Joint supply: goods that are produced jointly together with the same resources (technology products with similar functions)

  19. Changes to price of related goods • Diversion of resources • Decrease in supply of iPhone/iPod • An increase in demand for iPad • Demand for iPad related accessories • Quantity demanded surged • Higher profit margin for Apple • Increase in supply of Apple accessories

  20. Government Policies • Ad valorem tax: tax that is a fixed percentage of the price of the good (eg. VAT,GST)

  21. Government Policies

  22. Expectations for future prices • popularity of Apple product leads to surge in quantity demanded for iPad, a new Apple product

  23. Expectations for future prices • Release in iPad 2 leads to fewer quantity demanded for iPad • A decrease in price of iPad is seen (via price mechanism) • Lower profit margin per unit • Fewer quantity supplied

  24. Supply Markets • Major emerging markets in developing world: BRIC countries (Brazil, Russia, India, China)

  25. Supply Market

  26. Supply Market

  27. Credits • http://www.electronista.com/articles/10/04/07/apple.still.keeps.margins.on.tablet.costs/ • http://www.nytimes.com/interactive/technology/personaltech/2010-tablet-computer-comparison.html?ref=technology

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