Transcript Econs Holiday Homework

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Econs Holiday Homework
Team Leader: Shirong
Tai Ming Shayne
Mingkhim Tee
Nur Hafizah
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Project A
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Project A
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It was announced on January 27, 2010 by Apple and released in April.
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The price of the iPad is determined by how much memory is present and whether it is Wifi or 3G. The bigger the
memory space and with 3G available, the price of iPad will definitely be higher compared to an iPad with lower
memory space and only has Wifi available, because Wifi is free whereas consumer have to pay in order to use the 3G
function.
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Some of the related/associated products for ipad are complements like , iPad casing , charger , headphones/earpiece ,
camera connection kit .These products are complements which are related to iPads . They get affected when market of
iPad is affected. Complements are goods that are jointly together to satisfy some particular wants. A fall in price of
ipad will lead to more quantity demanded and hence cause an increase in the demand for complements since they
need to be used jointly. The closer the two goods are as complements , the greater will be the increase in the demand
for complements, given a fall in the price of iPad.
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Another type of products related / associated to iPads are substitutes such as , Kindle , Notion Ink , Microsoft Courier ,
Hewlett Packard ,ICD Ultra. These are alternatives. The range of substitutes can be narrow or broad .A fall in price of
ipads will lead to a rise in quantity demanded for Ipad but a fall in the demand for the substitutes ( Kindle, ICD Ultra ) .
The closer two goods are as substitutes , the greater will be the fall in demand for Kindle, ICD Ultra.
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http://en.wikipedia.org/wiki/IPad
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http://www.compareappleipad.com/buy-ipad/ipad-buying-guide/
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http://www.ipad-answers.com/is-there-any-substitute-for-the-ipad/
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Project B
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Project B
 Price
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Of Substitutes – View Point of Supplier
The basic price of iPad is $499 up, while the top four substitutes of iPad
and their prices are as follow – Notion Ink($399), Microsoft Courier
($600), Hewlett Packard ($499) and ICD Ultra ($249). The prices of
substitutes all all roughly the same price of iPad with variations of $100$200 above/below the iPad. However, competition is almost nonexistent. All the other ‘supposedly’ iPad competitors/substitutes will
have their tablets shipping ‘end of the year’, and many of the more
formidable iPad competitors will be only out at 2011. Thus with this said,
iPad have almost the whole market to itself, with its huge customer
target – where its usable for ages as low as 7 to any age. By having
literally no substitutes along the tablets market and having almost no
age target, the price of iPad is inelastic and any price along $499-$699
would not change the demand of iPad much.
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Project B
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Expectations – View Point of Consumer
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The general expectation of price of iPad among the customers is that iPad
price WILL not change. This point is very heavily discussed by Steve Jobs
himself that the price of iPad would not change. It is a market strategy that
Apple Inc. uses that it does not drop it price of it products as it wants to
assure all it customers that their products do not have any defaults or Apple
have made a mistake in price setting. A change in price would also anger a
lot of Apple customers as many would feel shortchanged or find
troublesome if a refund was made. The Apple customers know this that
Apple Inc. would insure their ‘customer expectations’ and thus with this
expectation that prices would not change, customers would not have the
‘wait and decide’ mindset towards getting an iPad. Thus this is beneficial to
the demand of iPad as less customers would wait, which often results in
changing over to other tablets.
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Project B
 Taste
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On March 2nd 2011, iPad 2 was officially introduced to the world. iPad 2
promised a new features and technology. New features and technology
will lead to a decrease in the demand for iPad as consumers feel that
iPad 2 will be better. Based on economics tools, the demand curve will
shift to the left. With lesser demand for iPad due to the introduction of
iPad 2, it would be rational to lower to price of iPad so as to bring
quantity demanded to an equilibrium level. Therefore, Apple may
decide to decrease the price of iPad. However, iPad is normal good. A
decrease in the demand for iPad will not necessarily affect the price of
iPad to fall. In this case, with iPad’s price staying constant, the only way
to respond to declining demands is through marketing. Marketing
increases the cost of production of the iPad. Hence, Apple may decide to
reduce the marketing for iPad so that they can reduce production cost.
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Project B
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Price of the product
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There are many iPad rivals which are known as substitutes due to recent
developments in the tablet industry. Such substitutes can affect the demand
of the iPad. One main factor that will affect the demand of the iPad is the
prices of substitutes.
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For example: The Motorola Xoom will cost $800. The HTC Flyer will cost
around $700 and it’s only a 7-inch tablet (compared to the 10-inch iPad). The
Hewlett-Packard TouchPad based on Palm’s webOS looks like an excellent
alternative, but will also cost $700. However, the iPad starts at $500 for the
16GB Wi-Fi model.
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The huge difference of around $200 between the iPad and its substitutes is
the main reason why the demand for iPad remains high. This will also not
cause the price of iPad to fall as it is already the cheapest alternative out of
all the tablets that is in the market.
Credits:
http://www.apple.com/ipad/features/
http://www.techrepublic.com/blog/hiner/the-one-big-reason-why-ipad-rivals-cant-compete-onprice/7724?tag=discussion-thread
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Recent Developments impacting
the market for Ipad
 HP
webOS Tablet
Not only do the renders physically look
like the current iPad — sans the home
button at least — but the specs line up
with what most assume are going to be on
the next iPad build. There’s a set of
speakers, front-facing camera, and a
micro-USB port, which will no doubt
handle the charging and file transfer
duties. But the one place where this tablet
sets itself apart is where it counts most:
The OS.
http://www.crunchgear.com/2011/01/18/hp-webostablet-leaks-looks-like-an-hp-ifed-ipad/
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Recent Developments impacting
the market for Ipad
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Android Tablets
Google Inc.’s Android software boosted its
share of tablet computers almost 10-fold in the
fourth quarter, narrowing the lead of Apple
Inc.’s iPad, market researcher Strategy
Analytics said.
Android devices captured 22 percent of
global tablet shipments in the three months to
Dec. 31, up from 2.3 percent in the preceding
quarter, the Boston-based researcher said in a
statement today. The iPad accounted for 75
percent of shipments in the period, down from
about 95 percent, it said.
http://www.bloomberg.com/news/2011-01-31/android-tablets-gain-on-ipad-in-fourth-quarter-researchersays.html
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Recent Developments impacting
the market for Ipad
 Blackberry
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The Canadian company
behind the BlackBerry is
branching out with a tablet
computer meant to compete
with
Apple's
popular
iPad.Research in Motion
Ltd. unveiled its PlayBook
tablet on Monday, pledging
to launch the device in early
2011, less than a year after
Apple Inc. kickstarted the
tablet market with the iPad.
Playbook