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Apple Inc Economic Analysis

Apple Inc Economic Analysis

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Apple Incorporated, formerly known as Apple Computers Incorporated,

and more commonly known just as Apple, has lead the way in

technology and innovation for consumer electronics with their slender

storage capacities, vibrant displays, and incredible touch screen

products. When they first started, their focus was more on personal

computers for customers, but as the company has aged, so has their

focus expanded towards this idea of consumer electronics as a whole.

Seeing as they now offer popular devices including, but not limited to,

computers (Mac Book), home theater (Apple TV), phones (iPhone),

tablets (iPad), and media (iPod), it can clearly be seen that versatility is a

strong suite of theirs.

Everywhere you look, an Apple product can be found. From the

consumer’s perspective, this is not merely a local market. Not only can

you purchase Apple products from Apple online or Apple stores, but their

products can be found in any number of places, including Wal-Mart, Best

Buy, and Fred Meyers. Similarly, if your device breaks down, wherever

you can find a computer or an Apple store, you can be helped. From

personal experience, when my first iPod broke, all that I needed to do

was go online and request a replacement device. Two weeks later a box

showed up for me to send my old one away, and a week later Apple

shipped me a new iPod. Similarly, if you are having problems with your

iPhone, it does not matter where you bought it, if you are in a location

where there is an Apple store and you are still under warranty, all you

need to do is walk in and they can replace it for you.

These options are available with any of Apple’s products, ranging from

their more expensive Mac Book all the way down to their Shuffle iPods.

This is part of the reason that Apple is so popular, not only do they have

great tech services, but they have products that can be found in any

price range. Diversity in products and their prices helps Apple remain an

inelastic company, regarding their demand. If a price rises for one of

their products, there is sure to be another product that moves into that

previous product’s price range that is still comparable in design and

quality. There will always be people to buy the more expensive items not

only because of Apple’s positive brand recognition and loyalty, but

because Apple consistently produces quality and innovative products;

including, if Apple finds a defect or fault, they fix the problem for free or

replace the product altogether.

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With Apple being so far ahead of their competition, the only problem one

can foresee in Apple’s future is how long they can sustain such

innovation before they plateau. Apple does a phenomenal job at

releasing their innovative products before their competition, but if their

innovation cannot hold steady, this may lead to changes in demand for

their products considerably. This can be seen with their release of the

iPhone, the first successful touch screen cellular phone. Although people

swarmed to the iPhone when it was first released because of its

advanced technology, as the years have passed, other similar designs,

including those with android and windows based operating systems,

have drawn a considerable portion of the market. A clear representation

of Apple’s attempt to regain some of this market can be seen when the

iPhone was released to Verizon Wireless’ customers in February of

2011, whereas it was only available to AT&T customers previously

(Cheng).

Not only has Apple used this technique to broaden their customer base,

but they have also, historically, used price discrimination as a tool to

generate further revenues from their products and keep their hold on the

market. Shown in 2007, after only two months from the release of their

first iPhone, Apple dropped their iPhone’s prices by two hundred dollars

just before the holiday season rush. As was to be expected, there was a

huge backlash from their already owners of the iPhone, resulting in an

empathetic letter from Steve Jobs and a hundred dollar store credit to all

those initial buyers (Jobs). As with most of Apple’s products, they only

use price discrimination if there is a newer or better version of product

for which to fill that higher price’s place. An example of this can be seen

with the release of the “new” iPad this spring with the retina display and

available 4G LTE data packages. The iPad 2 was discounted and in its

place, the “new” iPad took the peak price. So although price

discrimination is used, it is more as a tool to make their older products

more affordable when their newer products are released. An even further

example of this can be seen today as that first iPhone discussed

previously is now sold in cell phone stores as a free phone with the two

year service plan, seeing as there have been four new releases of the

iPhone since it was released in 2007.

One might say that is quite a few new releases for a product. Why can’t

they just release a good product and stick with it? The simple answer is

their market is growing and evolving as fast as the products they create.

In order to keep their competitive advantage, they must continue to

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Apple Incorporated, formerly known as Apple Computers Incorporated, and more commonly known just as Apple, has lead the way in technology and innovation for consumer electronics with their slender storage capacities, vibrant displays, and incredible touch screen products. When they first started, their focus was more on personal computers for customers, but as the company has aged, so has their focus expanded towards this idea of consumer electronics as a whole. Seeing as they now offer popular devices including, but not limited to, computers (Mac Book), home theater (Apple TV), phones (iPhone), tablets (iPad), and media (iPod), it can clearly be seen that versatility is a strong suite of theirs. Everywhere you look, an Apple product can be found. From the consumer's perspective, this is not merely a local market. Not only can you purchase Apple products from Apple online or Apple stores, but their products can be found in any number of places, including Wal-Mart, Best Buy, and Fred Meyers. Similarly, if your device breaks down, wherever you can find a computer or an Apple store, you can be helped. From personal experience, when my first iPod broke, all that I needed to do was go online and request a replacement device. Two weeks later a box showed up for me to send my old one away, and a week later Apple shipped me a new iPod. Similarly, if you are having problems with your iPhone, it does not matter where you bought it, if you are in a location where there is an Apple store ...
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