Economics Holiday Homework :

Gulliver’s iPad quest

Today we will be talking about……….(drumroll)

*Idea of the iPad*First tablet computer developed by Apple Inc.

*Serves as a platform for audio-visual media

*Sparked off idea of the iPhone subsequently

It can be connected

to a wireless keyboard.

*Price of the iPad*Determined by the price mechanism

*Signaling – consumers : signal changes in demand through prices they are willing and able to pay

* producers : signal changes in supply through prices they are willing to accept

*Rationing - prices ration goods and services to consumers who are willing and able to pay

*Goods and services purchased depend on – 1.level of income, 2.prices and 3.preferences.

*Related iPad products

*1. The Samsung Galaxy Tab

*2. Dell Streak

*They are substitute products of the iPad

*Substitute products : products that satisfy the same wants or needs.

*How are they related?

*The iPad, the Samsung Galaxy Tab & the Dell Streak :

*are tablets with touchscreens

*offer basic functions like web browsing, watching movies and viewing photos

*The Samsung Galaxy Tab and the iPad are said to be in competitive demand

*This is because Samsung Galaxy is a close substitute of the iPad.

•dependent on demand and supply in a market economy •Decisions of producers would determine the supply while decisions of buyers determine the demand.

*Pricing decision

*iPad marketing

*Producers want consumers to perceive iPad as a "magical" and "revolutionary" device, as said by Steve Jobs. *most consumers do not want something so different that “changes the way I live my life”* it would help to market the iPad as something similar to an e-book, which people are familiar with. *“it will do much more than that.” This would attract a new group of consumers, who are e-book users*quantity demanded of iPad would increase. *Lead to shortage of iPad*price would increase until it reaches equilibrium to eliminate shortage, by reducing the amount of consumers willing and able to buy iPad.

*Dual core processor of

recent development in

iPad2

*affect the marketing of iPad 2 as a highly efficient device suitable for professional work and play.

*effective advantage for producers who see importance in use of advanced technology, as an edge over other similar products “from rival manufacturers such as HP and Samsung”, hence attracting producers through it’s marketing.

*Drop in price of iPad

*recent development of the iPad 2 will cause producers to lower the price of iPad.

*Since iPad 2 has many better functions, consumers will chose iPad2 more than iPad

*to clear the stock of iPad, producers have to decrease the price in order to increase quantity demanded.

*Drop in price of iPad

*presence of substitutes in the market, such as Samsung Galaxy Tab and Xoom, would attract consumers to cast their spending vote on them instead of iPad*they are similar in function and is affordable at lower price than iPad. *Thus, if consumers change to cheaper substitutes, quantity demanded of iPad will fall and hence price will decrease.

*consumers see the high cost of iPad as a signal that the apps should therefore be very cheap

*need to market iPad as a device which have feature rich apps that are unique to iPad

*This would attract more consumers, thus increasing quantity demanded, leading to increasing price to eliminate the shortage. 

THANK YOU!