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 Originated in April 2010 (appeared in market)

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

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

Gradient of Supply curve

Easily stored Luxury good Easily transported Supply for iPad is price elastic Gradient- Gentle

Graph of price against quantity of iPad

Combination of demand + supply curve

Intersection at (Q1,P1)

P1 is equilibrium price Q1 is equilibrium

quantity

Price of iPad determined

The intersection between demand and supply curve

Demand = Supply Market equilibrium Price of iPad determined by intersection

Related products of iPad

Complements (paid applications, iPad cover etc) :D

Substitutes (Samsung galaxy tab, net books) D:

Different type of relationship with iPad

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

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

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)

Changing Taste of Consumers

Introduction of iPad 2 Better features (graphic) than iPad Consumer prefer iPad 2 instead Demand for iPad decreases Ceteris paribus

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

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

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

How does recent development affect marketing and price decisions? Recent developments caused decrease in

supply/demand of iPad iPad market reaching saturation

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

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

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

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

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/

Thank You!

Thank you for your kind attention Hope you understand the iPad market

better Have a great day :D