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Economic Impact of Recent Developments on iPad Marketing and Pricing

Explore how recent developments affect iPad marketing and pricing decisions. Analyze consumer and producer perspectives using economic tools and factors like demand, cost, related goods, government policies, and market supply.

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Economic Impact of Recent Developments on iPad Marketing and Pricing

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Presentation Transcript

  1. Economics WebQuest – iPad (Project B)

  2. Group Members: • Crystal • Yong Siang • Saranya • Adliya • Zi Yan • Wee Ping

  3. Task • Discuss how recent developments would affect your marketing and pricing decisions for the iPad. You should concentrate on the four main factors,2 from the consumer point of view and 2 from the producer’s point of view. Use the economic tools to support your answer.

  4. Recent Developments for iPad • Android Tablets gain on Apple iPad in fourth quarter • iPad clears government hurdle in china • More than 300.000 iPad sold on launch date in US • Kindle or iPad: which will change reading • Acer seeking piece of iPad market with introduction of 3 Tablet devices • Apple slashes original iPad price to us$399 (wi-fi enabled with 16GB memory space)

  5. Consumer’s Point of View

  6. Assumptions • The law of demand starts that the higher the price of the good, the lower the quantity demanded, ceteris paribus 

  7. Price 

  8. Price  • Popularity and good reputation of Apple products mean that iPad will be in high demand • Loyal Apple customers do not mind paying a premium for quality iPad • Wide availability of complimentary complements for iPad in the market • Multimedia entertainment features are appealing to customers • Recent launch of iPad 2 reduced price of iPad, thus increasing its demand

  9. Features iPad

  10. Convenience • Free shipping lower price for consumers • >100million iBooks downloaded from more than 2500 publishers. Consumers can store books in iPad, making learning easier on the go. •  200 million Apple ID with credit card and 1-click purchasing.

  11. Promotion

  12. Producer’s Point of View

  13. Cost of Production • Designed in California • Assembled in China • Product of globalisation • Cost of Production:US$259.60

  14. Cost of Production

  15. Price of an iPad

  16. Price of an iPad

  17. Price of an iPad (Limitation)

  18. Changes in Prices of Related goods • Related goods: iPhone, iPod, accessories of Apple products • Joint supply: goods that are produced jointly together with the same resources (technology products with similar functions)

  19. Changes to price of related goods • Diversion of resources • Decrease in supply of iPhone/iPod • An increase in demand for iPad • Demand for iPad related accessories • Quantity demanded surged • Higher profit margin for Apple • Increase in supply of Apple accessories

  20. Government Policies • Ad valorem tax: tax that is a fixed percentage of the price of the good (eg. VAT,GST)

  21. Government Policies

  22. Expectations for future prices • popularity of Apple product leads to surge in quantity demanded for iPad, a new Apple product

  23. Expectations for future prices • Release in iPad 2 leads to fewer quantity demanded for iPad • A decrease in price of iPad is seen (via price mechanism) • Lower profit margin per unit • Fewer quantity supplied

  24. Supply Markets • Major emerging markets in developing world: BRIC countries (Brazil, Russia, India, China)

  25. Supply Market

  26. Supply Market

  27. Credits • http://www.electronista.com/articles/10/04/07/apple.still.keeps.margins.on.tablet.costs/ • http://www.nytimes.com/interactive/technology/personaltech/2010-tablet-computer-comparison.html?ref=technology

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