Apple iPhone: Life in the Technology Lane
1.Apple CEO Steve Jobs alluded to the price a customer may have to pay to own an iPhone when he said that the steep and sudden price change was simply part of “life in the technology lane.” What did he mean? Beyond the simple exchange of money, what else might the price of such a product include?
Life in the technology lane can be defined according to Steve Jobs in the Apple website, as a “bumpy road”. This road will always be facing change, innovation, and improvement. There will always be early adopters who buy a product before a cutoff date and miss the new plus, new price, or new adaptation made to the product. For instance, if you are of the consumers that will be waiting for a new price reduction or for the new improved model to enter the market, you will, most likely, never buy any technological product. There will always be something cheaper and better to come. That relationship and development in technology is what is referred to as life in the technology lane. Price in a technological innovation includes the idea, in other words, the creation of the idea. It is what made the product possible and what made the product unique and a leader in the market. Additionally, price includes the time of creation of the product, and, most importantly, the value of creating the iPhone in terms of what the manufacturers believe will match the customers’ expectations and benefits.
2.Discuss the role that product demand played in pricing the iPhone. How did this demand influence Apple’s decision to price it high in the beginning and then lower it two months later?
Demand can be defined as the quantity of a product that is bought by consumers in the market at various prices under a specific period of time. It has multiple determinants, but the most important is price. Price is inversely related with the quantity demanded. For instance, the higher the price the less...