Investigation Of The Factors Of Supply And Demand Of The Apple Iphone
Over the years American society has grown to be dependent on the advancement of technology. Each year technology becomes more and more accessible and easier to use. Through the course of this paper the factors of supply and demand of the Apple iPhone will be highlighted, as well as the changes of supply and demand and the affect it has had on the equilibrium price of the iPhone. Subsequently, I will describe any anticipation of changes to the supply and demand regarding the iPhone in the future. IPhones are a hot commodity and are used by hundreds of thousands of people.
The term supply and demand have been around since the beginning of time so it seems. In the book Principles of Economics, supply is defined as a schedule that shows quantities supplied at various prices throughout a particular period, all other things are unchanged. The same book goes on to define demand as a schedule that shows how much will be purchased at different prices throughout a particular period, all other things are unchanged. The factors that affect the supply and demand are different, this is especially true when it comes the iPhone. It seems one of the most popular devices carried by hundreds of thousands of people is the Apple iPhone. When a new iPhone is released on the market it is often times hard to acquire. The demand for the new product is extremely high and the supply is generally low. It almost seems as if the mobile tech giant does it on purpose, creating the buzz, introducing a new product, and playing catch up with the demand for the new devices. Generally speaking the higher the price on a new product, the lower the demand, simply because people may have a difficult time affording the product. However, with the Apple iPhone this goes is their favor. Apple offers high quality, innovative products at a high-end price, due to this the company foregoes the common theme of declining prices that drive demand for other devices. Franck, further explains that the higher the prices are the higher the demand is.
There are various factors that affect the ability to supply the demand for the Apple iPhone. Michael Potuck (2017), outlines threes factors that always affect supply especially when the product is being introduced. Potuck, refers to these three factors as forecasting demand, Apple’s perfectionism, and component shortages. Forecasting demand affects supply because the company has to factor the pre-order demands and where to distribute their products; however, this is rather difficult to do when it comes to releasing a new product with a higher price point. The second is Apple’s perfectionism. His affects supply because the company utilizes high end parts and they have to fit like a glove. Apple is notorious for changing things at the last minute which has the propensity to slow down the entire project. The last factor highlighted is component shortages. Shortages of components affect supply the most and at times it is unavoidable. There are many components which go into producing an Apple iPhone, in the event the company is unable to get the memory cards or cameras used in their builds it will hinder the production. Supply and demand have played an effect on the equilibrium price of the iPhone product. When Apple releases new products to the market the demand is through the roof and the price matches it. While Apple continues to produce high quality products the demand continues to grow. The prices continue to rise with each new model of iPhone that is released; however, consumers of Apple products are unaffected by it and demand the Apple products.
While the demand for the latest iPhone is ever prevalent the aspect of supply affects the equilibrium price. Supply has been trying to catch up to the demand if the iPhone X since it has been released in November of 2017. The tech giant has not been able to keep up with supplying the product to distributors and consumers, which has ultimately left the demand for the product relatively high. The biggest reason the iPhone X will take so long for the equilibrium price to balance out is due to supply constraints. The demand of the iPhone X wasn’t able to be fulfilled until the first quarter of 2018, the estimate for the iPhone X was lower than the demand which ultimately put Apple behind the curve ball.
I believe the Apple iPhone will remain a hot ticket item and will only continue to grow in both technology as well as demand. The iPhone X will eventually be an older product and Apple will release a new fresh product to the market. The demand for the iPhone X will diminish and the new product will take its place. The price for the iPhone X will decrease as time goes making way for the new technology as well as product. Consumers continue to want the bigger and better product available on the market. This will allow consumers to dictate the demand for new and older products produced by Apple. When the new products become available the demand will be high and the older products will fade away into the background.
In conclusion, the supply and demand of the Apple iPhone will be a constant roller coaster. New products will increase demand and the supply end will have to catch up with the demand and desire. Apple is a globally recognized name and produce some of the most user-friendly products. The company has the ability to capitalize the market with the technology and quality they are able to deliver. Apple will continue to be a strong competitor in the technology and mobile device industry leading the market.