Market Analytics

Case Questions

1. Examine how the demand curve of an iPhone early adopter differs from that of the consumer who waited to purchase the new device. Why is the important for pricing strategy?

The demand curve the early adopt has for the iPhone will have a slope which is less steep then that of later adopters. The early adopters demand is less elastic than the demand for other consumers. This is important to know because a profit maximizing firm can charge these consumers a higher price for the same quantity of a good and capture additional revenue from this consumer.

2. If Apple kept the price of the 8GB iPhone at $599 and avoided giving early adopter a $100 store credit, how would this have affected its output and marginal revenue for the iPhone?

The output for the iPhone would have fallen because there would be less consumers willing to pay $599 for the phone. The marginal revenue would remain the same.

3. Considering the declining market share of Symbian OS and Nokia , what should Apple learn from Nokia ? What will be the effect of growing popularity of Android OS? ? Should Apple reduce the selling price for iPhone?

Android as per the current projections will be gaining in the market share. The major effects are in the declining market share for Apple and Research in Motion( Black berry ) sales by 2014(see Appendix 10). The end user share with respect to the operating system was higher for the Symbian OS during the initial iPhone launch16. In 2011, 52 % of the global smart phone customers are using Android based operating system19. The apple OS or iPhone OS is used by only 15%(see appendix 5B). The Google based android OS has shown significant growth24. The stability of market share for Samsung, the growth for HTC is mainly because of the wide popularity of android based OS. When iPhone 5 will be launched in the market, this will be serious concern for Apple. Currently Nokia and RIM are also developing android based operating system...