Pricing power and policies depending on the market structure
iPad is a brand new category of product for the market; which is in between MacBook and iPhone. It provides entertainment such watching movie, photos and playing game, reading e-book, web browsing and simple task of computing. The target customer for iPad is anyone. It is a perfect replacement of Netbook, which is a cheap and low end notebook for web surfing, watching media and carrying simple computing as well. For iPad, it means high end technology and good taste. Moreover, while connecting to iTune, it provides tremendous digital books, software, media and games etc. for your downloading.
By observation, the market structure for iPad is oligopoly, where only very few companies such as Dell, HP, Lenovo and Samsung could compete with Apple in future. It is because iPad is built up with sophisticated patented technologies including hardware, operating system, software and application. These highly integration of hardware and software design furnish iPad’s way to success, and that’s why there are no similar product in the marketplace right now to rival with Apple’s media tablet. For now, Apple is a dominant oligopoly that has a significant cost advantage over the followers companies. It certainly takes a lead for the market of media tablet and operates as a monopoly to set price and output of iPad for obtaining maximum profit. Apple produces varieties of iPads for targeting different categories of customers for maximizing market base and profit. It also cooperates with telecom companies for providing bundling service with iPad to customer. Moreover, in combining with its unique iTune, iPad serves as device for generating continuous revenue device. Factors affecting price, demand and supply
Apple could have led the market in the media tablet field for couple of years. Therefore, it could set the price of iPad for maximum profit as high as $1000 us dollar as many analysts forecast. But that’s...
Please join StudyMode to read the full document