Current Market Conditions Competitive Analysis
When it comes to Apple iPhones the elasticity or inelasticity of the price per unit does not change until a “new and better” product comes on the market. When the iPhone 5S was released to the market the demand far outweighed the supply on hand yet, the price did not change. Colander (2010) stated, “Formally, demand or supply is elastic when the percentage change in quantity is greater than the percentage change in price. Conversely, demand or supply is inelastic if the percentage change in quantity is less than the percentage change in price.” (p. 135).
The iPhone 5S®, launched by Apple on September 20, 2013, accounted for only 27 percent of all iPhones® in stock at that time, but that number tumbled as the quantity demanded rose beyond the quantity supplied. Although, the quantity supplied could meet the quantity demand at a later date as statistics of other iPhones® have shown in the past. (Whitney, 2013). Thusly, since the demand for the iPhone 5S® is high, even though the price is high, the price is inelastic because even at the given price the demand cannot be met.
Apple is continually on the cutting edge of technological advances in the cellular phone industry with better innovations to their products. The iPhone 5S® is the most recent technological advancement to the iPhone® with an improved camera, a next-gen CPU and motion tracking chip, and fingerprint sensors. Major drawbacks are that it still has the four inch screen like the original iPhones®, the fingerprint sensor only works with Apple applications at this time, the 64 bit A7 processor and the M7 motion-tracking chips do not have any “killer apps” yet, and the iOS 7 may boggle the minds of longtime iPhone users; the iPhone 5S is by far the fastest and most technologically advanced of the Apple SmartPhones® to date. (C/net.com, 2013).
The relationship between