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Econ
om
ics
Pro
ject
Whendidthe iPadfirstoriginate?
Origins of iPad• 1983 – Apple Inc. started the idea of a Tablet PC – a portable personal
computer with a touchscreen
• August, 1993 – First series of tablet released, known as the Newton MessagePad series
• Steve Jobs developed the idea of a multitouch glass screen – applied on iPhone and iPods
Origins of iPad
3rd April, 2010 – the original iPad was released
Origins of iPadAug, 1993 June, 2007 Sep, 2007 3rd April, 2010
NewtonMessagePad iPhone iPod Touch iPad
A 16GB Wi-fi iPad by Apple sells for US$499
Why???
Price Mechanism Price of iPad
How price is determined
Related Goods
Complements
Apps Accessories
Substitutes
Other Tablet PCs
1.ComplementsApps (Applications)• Games• Entertainment• Books• Business• Education• Music• Lifestyle
Accessories• Cases• Speakers & Headphones• Keyboards & Docks• Chargers• Cables & Adapters
1.Complements
Price of iPad
Demand for iPad
Demand for Apps Accessories
Cross elasticity of demand (XED) of Apps and
accessories with respect to the price of iPad is a large negative integer
They are close complements
1.Complements
2. Substitutes
Dell Streak 7 Samsung Galaxy Tab Motorola Xoom
Price of Substitutes
iPad comparatively cheaper
Demand for iPad
2. Substitutes
Cross elasticity of demand (XED) of iPad with respect to the price of other tablet PCs is a positive integer
They are substitutes
2. Substitutes
Crude oil
Factory(producer)
Finalproductsconsumer
Shall I buy?
Recent events in iPad market
• Civil war in Libya(major crude oil producer)
supply Price
Crude oil
Crude oil
CIVIL WAR
before after
Price of iPad
=D D:
Purchasing power(consumer)
Total revenue(producer)
Luxury goods (iPad)
income elastic
Consequence: quantity demanded of ipad will fall
income
demand
Income elasticity of demand(YED)
Purchasing power(consumer)
Recent events in iPad market
• Earthquake and tsunami in JapanDisrupted Apple's component supply chain
Shortages of the iPad
For the rest of this month and possibly longer
Supply
Price
Pricing strategy
Loss in TR
Gain in TR
Cutting down the price of iPad leads to a more than proportionate increase in the quantity demanded for iPad and a rise in the total revenue gained.
Substitutes
Samsung Galaxy Tab GT-P1000
Viewsonic ViewPad 7
LG Optimus Pad
HP touchpad
HTC Flyer
Motorola Xoom
Competitions
iPad, Wi-Fi, 16G
$499
Acer Android powered tablet
$299
1. Price competitions
$499 $299
Consumer’s view
Consumers are more willing to purchase ipads.
Quantity demand
Qty demanded
Price
When price drops
$499 $299
Producers are willing to lower the price, in order to maximize TR
Qty demanded
price
When price drops
Quantity demand Total revenue
2. Non-price competitions
• Establishing uniqueness• Advertisement.• Product development.• Promotion activities.• Consumers’ taste
advertisementshttp://www.youtube.com/watch?v=R41NNPBqRCk
Product development
bundling strategy with app. developers and provide various packages for consumers to make choices.
games
Popularise iPad
10 inches screenmulti-coreGraphicsmulti-tasking Apple iPad boasts an entire aluminum body
• Cater to consumers’ preferences
• Establish product’s uniqueness
Price for ipad
• luxury goods is always income elastic, which means when there is an increase in real income, there will be a more than proportionate increase in the quantity demanded for ipad and vice versa. Hence, in this case, the quantity demanded of ipad will fall as the real income of consumers drop, ceteris paribus.
Bibliographyhttp://blog.appboy.com/wp-content/uploads/2010/06/ipad-app-store.jpghttp://cache.gawkerassets.com/assets/images/4/2010/04/epicapps.jpghttp://blog.appboy.com/wp-content/uploads/2010/05/ipad-apps.jpg
http://images.tathya.net/wp-content/uploads/2010/11/Acer-android-tablet.jpghttp://www.theproducersperspective.com/.
a/6a00e54ef2e21b883301156ff915d3970c-pihttp://en.wikipedia.org/wiki/IPadhttp://www.engadget.com/2010/01/26/the-apple-tablet-a-complete-history-supposedly/http://ipad.org/origins-of-ipad/http://www.pcworld.com/article/193746/apple_ipad_costs_260_to_build_isuppli_finds.htmlhttp://store.apple.com/us/browse/home/shop_ipad/family/ipad/select?mco=MjE0OTI0MDIhttp://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action.html
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