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The market for iPad

The market for iPad. iPad – An Overview. iPad first released in the US on 3 rd April 2010 Different models ( wifi only or wifi+3G) From April to December, over 15 million iPads sold, generating US$9.5 billion dollars in revenue

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The market for iPad

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  1. The market for iPad

  2. iPad– An Overview • iPad first released in the US on 3rd April 2010 • Different models (wifi only or wifi+3G) • From April to December, over 15 million iPads sold, generating US$9.5 billion dollars in revenue • Was the fastest consumer product in the world selling 3million iPads in 80 days, before being overtaken by Xbox Kinect in November • iPad now has 90% market share of tablet PCs in the world, having sold more than all other tablet PCs combined

  3. How is the price of iPad determined? :o • Combination of several factors! • Cost of manufacturing parts! • Depends on the demand in the Tablet PC market! • Based on competing tablet PC prices! • Signalling function of the market mechanism!

  4. iPad and its related markets • Compliments • APPS! • Accessories • Substitutes • Other tablet PCs • Other devices for reading ebooks

  5. Apps! • Apple App Store has over a million apps! • >65,000 are iPad specialized! • Over $2b have been earned by developers accumatively selling their apps on the App Store • Other competitors have tried copying the App Store concept but are unable to attract developers and compete with Apple’s standards.

  6. Accessories! • Apple has several OEM accessories for the iPad like Docks! iPad Projector Cables! Keyboards Camera Kits!

  7. Substitutes! D: • Other tablet PCs Samsung Galaxy Tab Motorola Xoom

  8. Substitutes • Other ebook readers Amazon Kindle Nook

  9. Recent Developments affecting iPad • Emergence of competition from other Tablet PCs • More intensive advertising by competitors • Production problems in Foxconn China • Recent earthquake and tsunami crisis in Japan

  10. Emergence and advertising of competition • More companies have tried to join the success of the iPad by coming up with their own tablet substitutes • Example, Samsung Galaxy Tab, tries to copy the features and capabilities of the iPad like its design and App Store • They have also increased advertising of their products • Example, more advertisements on television, newspapers about their product.

  11. What does this mean? • With rise in substitutes, the quantity demanded for iPad will decrease. • With more advertising, this will effect the consumer’s taste and hence more consumers will shift away from iPad, quantity demanded for iPad will decrease

  12. What has been done? • Apple has ramped up advertising to compete with competitors advertising • Full building posters • More and more TV ads – iPad is ___ series • http://www.youtube.com/watch?v=btfbIVGES1I • Apple has come up with a new generation iPad • iPad 2 has a better design and features like dual cameras, faster graphics and CPU, 33% thinner • Keeps the iPad up-to-date and makes it a better substitute against other Tablet PCs

  13. iPad Production Problems • At Foxconn factory in China, employees are overloaded to meet high demand of iPads. • 14 suicides were reported in 2010 due to employees breaking under stress • Thus, productions of iPads had to be declerated • Recent earthquake and tsunami in Japan • The natural disasters affected the production of iPads because factories in Japan producing the iPad memory chips and batteries were closed

  14. What does this mean? • This means that the production of iPads will decline sharply. • With less supply, impatient consumers may turn to other alternatives instead of buying the iPad

  15. References • http://www.ismashphone.com/2011/03/japans-earthquake-and-the-possible-economic-tragedy.html • http://www.tuaw.com/2011/03/11/ipad-killing-the-competition/ • http://modmyi.com/forums/ipad-news/754457-ipad-2-costs-about-323-manufacture.html http://newenterprise.allthingsd.com/20110313/days-after-its-release-the-ipad-2-gets-the-teardown-treatment/?mod=googlenewshttp://www.zdnet.com/blog/apple/how-will-japan-earthquake-affect-apples-ipad-supply-chain/9763http://events.apple.com.edgesuite.net/1103pijanbdvaaj/event/index.html

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