Economics

Project

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