Economics Web QuestEconomics Web Quest

Project Presentation Project Presentation Group Members: Sherwinder, Darren, Group Members: Sherwinder, Darren, Vivek and NicholasVivek and Nicholas

iPadiPad

Here are some attributes of the iPad Here are some attributes of the iPad Has wifi and 3G data roaming Has wifi and 3G data roaming Latest operating system IOS 4.3Latest operating system IOS 4.3 Rather light for a tablet PC (680g)Rather light for a tablet PC (680g) Long battery life (1 month standby)Long battery life (1 month standby) Touch-screen Touch-screen Can be used as a e-book readerCan be used as a e-book reader Can be used as a gaming device Can be used as a gaming device A4 card, fast internet surfing speedA4 card, fast internet surfing speed

When did the iPad originate? When did the iPad originate? Tablet PCs seem to be the hype and the market is doing very wellTablet PCs seem to be the hype and the market is doing very well Apple re-entered market of mobile computing in 2007. Apple re-entered market of mobile computing in 2007. iPad officially announced in Jan 27 2010iPad officially announced in Jan 27 2010 11stst released in U.S.A. on April 2010 released in U.S.A. on April 2010

How is the price of the iPad How is the price of the iPad determined?determined?

Analysing demand/supply of tablet PCs Analysing demand/supply of tablet PCs For example, if demand is high, price of iPad would be high too. For example, if demand is high, price of iPad would be high too. This is due to the consumers casting higher dollar votes to ensure they This is due to the consumers casting higher dollar votes to ensure they

obtain the iPad. obtain the iPad. Signal to producers to produce more, price of iPad can be higher.Signal to producers to produce more, price of iPad can be higher. Those can’t afford rationed out.Those can’t afford rationed out. Those who can afford pay at equilibrium price ($499 - $829)Those who can afford pay at equilibrium price ($499 - $829) Price range due to some iPad having more memory/3G.Price range due to some iPad having more memory/3G.

What are related products to iPad?What are related products to iPad?

(Substitutes)(Substitutes) Other tablet PCs like galaxy tab Other tablet PCs like galaxy tab Acts as substitutes to the iPad, satisfy same wantsActs as substitutes to the iPad, satisfy same wants Price of galaxy tab Qty DD of galaxy tab Demand of iPad Price of galaxy tab Qty DD of galaxy tab Demand of iPad

Substitutes like the Amazon kindle are weakerSubstitutes like the Amazon kindle are weaker Kindle’s main function is as a e-book reader Kindle’s main function is as a e-book reader lesser functions/attributes than iPadlesser functions/attributes than iPad Consumers who have high expectations will choose iPadConsumers who have high expectations will choose iPad

SubstitutesSubstitutes

Samsung galaxy tab Amazon Samsung galaxy tab Amazon KindleKindle

What are related products to iPad?What are related products to iPad?

(Complements)(Complements) iPad covers/keyboards iPad covers/keyboards Most people who buy iPads would purchase cover too.Most people who buy iPads would purchase cover too. E.g. if price of iPad the quantity demanded as more people are E.g. if price of iPad the quantity demanded as more people are

rationed into the marketrationed into the market and to "decorate" their iPad with fashionable iPad covers, the demand of and to "decorate" their iPad with fashionable iPad covers, the demand of

iPad covers too.iPad covers too.

ComplementsComplements

iPad covers iPad keyboardiPad covers iPad keyboard

Project BProject B

Over the years Over the years recent developmentsrecent developments have affected the have affected the marketing and pricing marketing and pricing decisionsdecisions of Apple and its iPad!!! of Apple and its iPad!!!

Producer’s POVProducer’s POV

Development of Computers Technology advancementDevelopment of Computers Technology advancement

Development of ComputersDevelopment of Computers

In the producers’ point of In the producers’ point of view……view……

In the past 5 years, improvements have been made to laptops/desktops. In the past 5 years, improvements have been made to laptops/desktops. Development of Windows 7 and Windows Vista.Development of Windows 7 and Windows Vista. Laptops/Desktops are Laptops/Desktops are substitutes to the iPadsubstitutes to the iPad as they both can surf the net. as they both can surf the net. However, instead of demand of laptops increasing, sales have fallen.However, instead of demand of laptops increasing, sales have fallen. Tablet PCs like the iPad have better attributes than laptops and become Tablet PCs like the iPad have better attributes than laptops and become

weaker subs. Consumers choose iPad.weaker subs. Consumers choose iPad. Demand of tablet PCs stillDemand of tablet PCs still Consumers cast higher dollar votes to obtain iPad, pricesConsumers cast higher dollar votes to obtain iPad, prices Apple can continue to produce more iPads at high prices to maximise Apple can continue to produce more iPads at high prices to maximise

profits.profits.

Development of TechnologyDevelopment of Technology

In the producers point of view……In the producers point of view…… Technology is vastly improving in the 21Technology is vastly improving in the 21stst century century Invention of Apple designed A4 card for iPad Invention of Apple designed A4 card for iPad a package on package (PoP) a package on package (PoP)

system-on-a-chip (SoC) system-on-a-chip (SoC) make iPad have more attributes such as faster internet surfing speed.make iPad have more attributes such as faster internet surfing speed. Developments in technology would mean Developments in technology would mean better quality resourcesbetter quality resources Increased efficiency in manufacturing iPads, leading to Increased efficiency in manufacturing iPads, leading to lower costlower cost of of

production per unit of iPad. (up profits)production per unit of iPad. (up profits) Since firms aim to maximise profits, Apple should aim to supply more Since firms aim to maximise profits, Apple should aim to supply more

iPads in the future. (iPads in the future. (increase supplyincrease supply))

Consumer’s POVConsumer’s POV

Economic development Cheaper SubstitutesEconomic development Cheaper Substitutes - e.g. Samsung galaxy tab- e.g. Samsung galaxy tab

Economic DevelopmentEconomic Development

In the consumer’s point of view……In the consumer’s point of view…… iPad was released on April 2010 in the U.S.A.iPad was released on April 2010 in the U.S.A. At that period GDP of U.S.A. was 14400 billion dollars and there is a At that period GDP of U.S.A. was 14400 billion dollars and there is a

generally increasing trend.generally increasing trend.

Economic DevelopmentEconomic Development

In the consumer’s point of view……In the consumer’s point of view…… Consumers have higher income/spending powerConsumers have higher income/spending power They go for normal goods/luxuriesThey go for normal goods/luxuries Since iPad is a luxury, it is income elastic (positive and high YED) Since iPad is a luxury, it is income elastic (positive and high YED)

income will lead more than proportionate in demand income will lead more than proportionate in demand Consumers willing and able to pay, cast higher dollar votes to obtain itConsumers willing and able to pay, cast higher dollar votes to obtain it Signal to producers to increase quantity suppliedSignal to producers to increase quantity supplied iPads can be sold at higher price to max profit of AppleiPads can be sold at higher price to max profit of Apple

Development of Cheaper SubstitutesDevelopment of Cheaper Substitutes

In the consumer’s point of view……In the consumer’s point of view…… Other producers begin to manufacture substitutes to rival the iPadOther producers begin to manufacture substitutes to rival the iPad The selling price some of these substitutes is cheaperThe selling price some of these substitutes is cheaper E.g. Samsung Galaxy Tab is about $200 cheaper than iPad E.g. Samsung Galaxy Tab is about $200 cheaper than iPad Consumers choose to consume cheaper substitute (rationally) as they Consumers choose to consume cheaper substitute (rationally) as they

both satisfy the same needboth satisfy the same need

qty demanded of Galaxy Tab demand of iPadqty demanded of Galaxy Tab demand of iPad Thus, apple needs to have better advertisements/promotions to increase Thus, apple needs to have better advertisements/promotions to increase

sales of iPad or lower price of iPad in future (to max profits)sales of iPad or lower price of iPad in future (to max profits)

BibliographyBibliography

http://en.wikipedia.org/wiki/History_of_tablet_computershttp://en.wikipedia.org/wiki/History_of_tablet_computers

http://www.forecasts.org/gdp.htmhttp://www.forecasts.org/gdp.htm

http://news.cnet.com/8301-17938_105-10443186-1.htmlhttp://news.cnet.com/8301-17938_105-10443186-1.html

http://en.wikipedia.org/wiki/Apple_A4http://en.wikipedia.org/wiki/Apple_A4

http://mobility.cbronline.com/news/pc-growth-hurt-by-rising-http://mobility.cbronline.com/news/pc-growth-hurt-by-rising-demand for-tablet-computers-gartner-040311demand for-tablet-computers-gartner-040311