Christina Hand, Ray Philips, Emmet Flynn, Cat Guerrera,
Christa Rehmeyer, Mike Norton, & Nikolas Morrow
August 6, 2012
Factors that affect demand, supply, and equilibrium prices in the market in which the competing organization operates; define the market for your chosen product, including an analysis of its competitors, potential customers, or potential buyers. The cell phone market is a massive market; some studies conclude that more than half of the United States has cell phone accounts (Simon, 2004). One attribute that defines the cell phone market is the idea of consumers giving up their land line use. Many individuals are now giving up their land line use in favor of using only a cell phone. This causes a large influx of customers into the market for cell phones. As technology continues to advance new types of cell phones are developed and marketed to different segments of the population. Now cell phones are available for business purposes and social purposes such as social networking, text messaging, or gaming, and the leader in cell phone sales is Apple Inc. “Started by Steve Jobs, Steve Wozniak, and Ronald Wayne, Apple has expanded from computers to consumer electronics over the last 30 years, officially changing their name from Apple Computer, Inc. to Apple, Inc. in January 2007.”(CrunchBase, 2012) Among many products that Apple Inc. offers, the iPhone, which is available in over 90 countries, is the most innovative in the cellular world and is constantly evolving. The iPhone is a cellular device that also acts as a media player, a way to instant message, an iPod, a computer of sorts as it surfs the web over wi-fi, a GPS system, a camera and video camera, a tool to control home lighting and the starting of a car, and much more. It has a 3.5 inch touchscreen that can be used horizontally or vertically and has a full keyboard. “Moreover, the iPhone has a built-in spell-checker, predictive word capabilities and a dynamic dictionary that retains new words.”(Nowak, 2012) The demand for this device is very high and has proven that Apple is at the top of the food chain. Apple Inc., like any other corporation, supply and demand is affected by variety of factors. In fact businesses create products and offer services based on their customers’ demands and the demands of the customers or the lack thereof affects the available supply. One of the main issues that drive demand of a product is customer preference. The preference of the customer and the desire of the product that a company sells can affect the demand curve. As more customers want a product like the IPhone the demand curve shifts to the right. Families, friends and colleagues strongly contribute to a person’s choice of cell phone. When all of an individual friends and family members have an IPhone the consumer is more likely to purchase the phone because everyone else is getting it and talking about it. Apple Inc. marketing strategies caused the IPhone to become very popular and its strategy keeps Apple products in the news media. Because of increased advertising Apple Inc. was able to raise the demand of the IPhone, the rising demand of the IPhone caused a temporary shortage of the supply because Apple Inc. was not able to produce IPhones fast enough to meet the demand (Yahoo Inc. , 2012). To regulate the demand for the product Apple Inc. then raised the price of the IPhone to restore equilibrium. A technological breakthrough allowed Apple Inc. to produce more IPhones for cheaper and easier (LaPedus, 2007). The breakthrough caused the Apple to be able to supply stores with more IPhones but with the increased price the demand for the IPhone did not keep up with the supply. As a reaction to the increased supply sitting around Apple dropped to the price of the IPhone to eliminate the surplus. The size of the market also has an effect on demand for a product like the...