Entering into the partnership limited the market and its reach. It is estimated that search for iPhone resulted in 69 million hits on Google search engine.
Apple had come out with the future generation of touch screen used in iPhone. They extended the brand image of iMac and iPod to iPhone. It knew that in order to compete with giants like Nokia and Motorola it had to come up with an innovative product that possessed various new features.
This helped in continuously keeping alive the speculations. Apart from maintaining a low key marketing strategy they also ensured that product itself was never out if focus. Prior to the launch of the iPhone the Age on convergence of electronic goods had set in. Complement Goods Smartphone accessories are the most influenced upon the release of an iPhone 6.
Here the competition is also less as compared to a mature market. Apple has a very loyal set of enthusiastic customers that advocate the brand. Based on the law of supply, a higher cost of an iPhone causes an increase in the supply curve. Also the Phone was priced very high which made it limited to higher segment.
This also meant that they need not spend too much in attracting new customers. They relied on word of mouth publicity for its product. Since the market can easily accommodate new players these reasons account for lesser entry barrier into the market.
Inelastic Demand of iPhone 6 Therefore, the existing iPhone models that came out before the iPhone 6 are deemed elastic due to the availability of more advanced smartphones in the market.
The increase of the price of the iPhone 6 produces a new equilibrium P2, Q2 that even if the quantity demanded is merely less, the profits increases considerably area A. Q2-Prepare a note on what should be Apples strategy for iPhone in Europe and Asia except Japanconsidering that Europe is a relatively mature market for mobile phones and Asia is largely an emerging market.
As a luxury item, there are factors that affect the demand and supply of an iPhone. With a limited amount of firms available in the industry, an oligopolist is considered a price searcher, as a small smartphone firms have the ability to make an agreement and control over the market price of their products.
But it also meant missing big numbers in unexploited sales in areas where there is a huge market to tap in Europe. The limited amount of information released by the company further fuelled the speculations.
He also believed that although the market for mobile phones was a competitive one with players like Nokia, Samsung, Motorola already at the top of the charts, it was also a lucrative one if handled with proper planning and adequate strategy.
It generated more publicity for iPhone before its launch than any other product. With such an innovative technology and various new features Apple launched its first iPhone in the U.
This creates a positive demand of iPhone of Apple. Its other innovations included the Safari browser from Apple which provided easy internet access on the iPhone.
The psyche and buying behaviour of customers in an emerging market is totally different than that of a customer in a mature market.
Characteristics Of An Oligopoly Market The market structure of the smartphone industry carries the characteristics of an oligopoly market. Besides the small number of sellers in the industry, the smartphone industry has significant barrier of entry. This helped in creating a wide speculation and curiosity.
It had a sleek and stylish design which helped it differentiate its product from the various other products available in the European market.
With the same price decision, both iPhone and Samsung Galaxy becomes inelastic to price changes. Apple adopted a different marketing strategy for Asian subcontinent. In each of these country with the company adopted the same business model used in the US. It was positioned as an inspirational music player in the market with many more companies following its lead to launch similar music players in the market.
In an emerging market the customer is not comfortable in buying a product about which they do not already have information or market report. On the other hand it meant that the spreading of the information about the product was slow.
Based on Marketing Minds, Apple Inc. One of the biggest platforms which contributed to the phenomenal buzz was internet where a lot of discussions and speculations happened in blogs and chat rooms etc.Application of Microeconomics concepts.
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