Economics Project B

Deon LimHuiwen LeeYap Jia JiFoo Yao Zhi Sean TanTan Wei Sheng

IPAD?!

NANI?!

Our Task? 1) Discuss how recent developments

have affected the marketing strategies and pricing decisions for the iPad.

2) Focus on 4 main factors, considering

from both the consumer’s and producer’s point of view.

Factors Consumer’s Point of View :

1) Increase in income due to growing economy2) Increase in demand due to attractive

promotionsProducer’s Point of View :2) Stiff competition by rivals, such as Samsung

Galaxy Tab 3) Natural Disaster hindering production of

IPad

C1 – The Growing Economy As the world develops, the economy

grows, hence leading to an increase in income of the consumers.

An increase in income of consumers would spark off an increase in demand for iPads, as consumers have the purchasing power to buy iPads.

C1 – The Growing Economy Due to the fact that quantity demanded

for iPads increase, prices of iPads will increase as producers know that consumers are more willing and able to pay for the good due to their increase in income.

C2 – Promotional Package

• Producers try to persuade consumers to buy their goods by giving incentives through attractive promotional packages

• AT&T, the largest provider of fixed telephony in the United States, offered a promotion package of US$25/ month (2GB data plan) for every iPad purchased.

• In addition, offering the first month of data plan free

C2 – Promotional Package• With the additional incentives that

promotional packages provide, it attracts consumers to purchase the iPad.

• Quantity demanded for iPad would increase as consumers are more willing to purchase the iPad.

• Not only it improve sales of iPad, it imposes a threat on competitors, such as Samsung’s Galaxy Tab

P1 – Stiff Competition With introduction of many different

models of Tablets, the competition in the Tablets market increases.

Products that can best satisfy user’s needs and meet their expectations would be able to stay at edge of the competition.

Demand for iPad is dependant on its competitors

P1 – Stiff Competition• iPad is too big and unwieldy for many people,

and it creates problem when reading.• On the other hand, Galaxy is about the size

of those larger trade paperbacks, and can be loaded with the Kindle and Nook apps for "just right" reading of e-books. Android's OS makes it easy to access system brightness, a must for people who read at night. Reading with an iPad requires some extra jiggling.

P1 – Stiff Competition The Samsung Galaxy Tab serves the

same purpose as the iPad, but it is more user-friendly and light than the iPad.

This would create competition for iPad, as Galaxy Tab is a close substitute for the iPad, satisfying the same needs or even better.

Thus, if the demand for Galaxy Tab increases, the demand for iPad would fall.

P2 – Natural Disaster Natural disasters disrupts the

manufacturing process of industries, as they destroy factories in the process

Producers suffer heavy losses from the damage caused by these natural disasters.

P2 – Natural Disaster• Japan accounts for 6 percent of Apple's sales

and is a major source of components for its screens. It is a major source of glass for displays used in the iPads and is also home to around one fifth of the world's semiconductor production.

• Japanese factories producing everything from chips to car parts have closed following the earthquake and tsunami last week, threatening supplies to manufacturers across the globe, including Apple.

P2 – Natural Disaster• Thus, the disaster in Japan will have a direct

impact on both the supply (parts) and demand (consumers) of the iPad.

• Sales of the iPad in Japan will drop as the people are affected by the disaster and their efforts will be put mainly on their livelihoods.

• With factories in Japan closed, the cost of production of the iPad will increase. However, prices should not increase as the purchasing power of the Japanese have dropped.

THE END

THANK YOU FOR YOUR KIND ATTENTION

Bibliography http://www.microsoft.com/windowsx

p/using/tabletpc/expert/vanwest_05feb11tabvlap.mspx

http://www.nytimes.com/interactive/technology/personaltech/2010-tablet-computer-comparison.html?ref=technology

http://www.pcworld.com/zoom?id=204779&page=1&zoomIdx=1

http://www.msnbc.msn.com/id/40094205/ns/technology_and_science-wireless/

http://nokiafanboy.com/2011/03/10/ipad-2-vs-samsung-galaxy-tab-2-review/

Bibliography http://news.yahoo.com/s/nm/20110316/

tc_nm/us_apple_6 http://www.ipad-answers.com/is-there-

any-substitute-for-the-ipad/