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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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Anonymous
Had to paraphrase some of the content but overall, really useful material.

Anonymous
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