ipad market2
TRANSCRIPT
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iPad Market
How has the iPad market changed?How will it affect you as an economic student?
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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)
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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
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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
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Gradient of Supply curve
Easily stored Luxury good Easily transported Supply for iPad is price elastic Gradient- Gentle
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Graph of price against quantity of iPad
Combination of demand + supply curve
Intersection at (Q1,P1)
P1 is equilibrium price Q1 is equilibrium
quantity
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Price of iPad determined
The intersection between demand and supply curve
Demand = Supply Market equilibrium Price of iPad determined by intersection
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Related products of iPad
Complements (paid applications, iPad cover etc) :D
Substitutes (Samsung galaxy tab, net books) D:
Different type of relationship with iPad
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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
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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
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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)
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Changing Taste of Consumers
Introduction of iPad 2 Better features (graphic) than iPad Consumer prefer iPad 2 instead Demand for iPad decreases Ceteris paribus
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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
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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
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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
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How does recent development affect marketing and price decisions? Recent developments caused decrease in
supply/demand of iPad iPad market reaching saturation
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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
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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
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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
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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
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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/
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Thank You!
Thank you for your kind attention Hope you understand the iPad market
better Have a great day :D