Differentiating Between Market Structures
Differentiating Between Market Structures
We live in a world where a person is describe by the technological gear that they carry. Whether they carry a beepers, flip phones, or the revolutionized smart phones, people are always characterizing themselves and others with the cellular devices they carry. Apple has created a phenomena when they released the innovated iPhone to the world in 2008 which took this company to new heights. Apple Inc started its revolution of the technological industry in 1976 with its found Steve Jobs. Apple Inc has evolved throughout the many years; starting with motherboards for personal computers to later developing their own systems. Apple has always been making strides to becoming the leading provider for personal devices. Upon the success of the iPods, Steve Jobs developed a new pioneering product that would take the cell phone industry to the next level, in 2007 Steve Jobs stood in front of a panel of consumers and demonstrated his new creation of the iPhone First Generation. The crowd stood up and gave a roaring applauds that echoed throughout the room. After that day, he worked to perfect his creation with adapting it to many different functionalities through his various versions of the project.
Apple has always been in a leauge of their own until other companies decide to compete with the iPhone. The smart phone uproar has begun with companies like Samsung, LG, Pantech, and HTC started to develop their own interpertation of a smart phone. Companies utilize their consumer’s different personality to find them a perfect suit for their needs. Apple started their smart phone as a monopoly for the first couple months until the release of the first Samsung smart phone to combat the epidemic of the phone that could do it all. Apple has created and released their phone in many different versions (iPhone, iPhone 3G, iPhone 3GS, iPhone 4, iPhone 4S, iPhone 5, iPhone 5C, iPhone 5S).
The current phone is the iPhone 5S which sold over 6.5 million devices in the first month of it”s launch. Apple deemed this to be a huge success for the end of the quarter for their company. Apple’s strategy for the sales are to keep consumers cosntantly guessing to what the new phone will feature and when their device will launch; this tactic creates a massive demand for the product. Upon release, the iPhone was a monopoly for the simple fact that it was the first phone with the largest display screen as compared to the typical screen size on the other phones. For the first time a phone did not incorperate a keypad and a full touch screen to include dialing and sms features. Apple also insured their products would reach new heights when they intergrated the iPod into their phones to allow whatever the consumer downloaded prior to the phone to be played all on the same device where they make phone calls.
The smart device market is a oligopoly for the simple fact that few companies manafacture and distribute cellular phones. Their are many different tech companies but there are only a handful that are major competitors to Apple Inc. On the release of the device, AT&T was the first company to carry the device in the United States to make the company a monopoly of the phone which increased the business of the company and also developed a strong partnership until the release of the iPhone 4 where Apple Inc allowed most carriers to carry the device. Upon it’s release in 2007, Apple struggled to keep up with the demand of the device and they accepted they were faced with a increased demand with a limited supply With the proper reseach and manafacturing tactics being in place, Apple Inc released the iPhone 3G in 2008 and sold over one million phones.
Although it was a major success to the company, it was speculated amongst their analyst that it could have became a bigger release if they had no restraint on the supply and distrubution aspects. The supply of the iPhone 3GS had room for improvement although the lessions of previous deevice should have been implemented. It took an unusual five business days for the phone to fully ship to consumers who preordered the device versus the promised 24 hours. This device has became a pioneer not only within the United States but it became a growning phenom amongst the major continents such as Asia and Europe. The reason behind the shortage was the increasing demand of the consumers outside of the United States. On average, a company has a gap of 100,000 units each year but it was driven up to one million units demanded due to the higher international demand. If Apple Inc had kept up with all their demand needs, they would have gained more sales over the many years.
Throughout Apple Inc years of manafacturing iPhones, the demand and supply has affected the price of the devices. Normally when a company has a increase in demand they create a limited amount of inventory and sell the units at a higher price, in Apple Inc they intially released the device at a full retail value when their pioneer device was released but they view the area of oppurtunity was to target the middle class. With that research, they allowed the iPhone 3G to be release with a contract in AT&T whcih allowed the device to nearly drop more than half of the price of the first device. This strategy was used to compete with competitors that were advertising their products as being more affordable to the average Americans versus Apple Inc.
Apple’s price cut was a strategy to appeal to more buyers at a larger demographic and with that release they reduced the price of the previous one which gained the late bloomers for the device. Apple Inc’s iPhone price strategy can be defined as a inter-temporal price discrimination. Inter0temporal price discrimation is when a company sets a high price for a product to consumers in order to identify the success of a product with the highest willingness to purchase the products and then lower the price to attract the consumers with lower willingness to purchase it. Once Apple Inc has decrease their product they notice a increase of their products from 4.7 million to 15 million iPhone sold.
Yes, Apple Inc has risen to their ranks by themselves but along the way they have partnered with many different companies. Apple Inc has embraced their very first partnership with AT&T communications to becoem the first carrier to carry the device. With the release of the iPhone 4S, Apple Inc has reached out to a company called SRI International who made a very interactive feature for the iPhone which elevated what a smart phone is capable of doing. They introduced SIRI, which is a personal assistant who can make notes, set alarms, make witty remarks and much more. This partnership soon became a merger where apple purchased the company and became an Apple Inc branded company. Where there were partnerships there were also enemies that have been made. With the release of the operating system IOS 6, Apple removed anything that had connections to Google and replaced it with their very own platforms.
In conclusion, Apple Inc has revolutionized the communication business with the very esquisite device of the Apple iPhone. With the many companies that try to perfect the idea, Apple Inc took the cell phone industry to a whole new level. In Microeconomics, its all about understanding consumers and why they make the decision in which they do. Apple Inc had discovered a new way to incorperate an entire market, formulate a way that everyone can be involved in this innovention and make this a revolutionizing product.