Atlas’ Lemon Analysis of iPad market.... Introductory Video.

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Presentation transcript:

Atlas’ Lemon Analysis of iPad market...

Introductory Video

First Generation iPad

Launched on 3rd April rd post-PC blockbuster by Apple Inc. Sold almost 15 million iPad in 9 months Generated sales revenue of USD$9.5 billion (April - December 2010) Fastest-selling consumer product in history

How is the price of iPad determined?

By the interaction between the demand and supply curve

Demand The quantities of a product that consumers are willing and able to buy at various prices, ceteris paribus

Supply The quantities of a product that suppliers are willing and able to sell at various prices per period of time, ceteris paribus

Related/ Associated Products

Substitutes Alternate products to iPad Competitors for market shares Price of substitutes affect iPad’s demand Closer the prices, the greater the change in demand for iPad

Complements Used jointly to satisfy some particular wants and needs Eg. Accessories, Applications, AppleCare Fall in price of complements will lead to the increase in demand for iPad Closer the goods are as complements, the greater the change in demand

USD$79

Recent Developments Foxconn increased in wages Development of substitutes Natural disasters Improvement in economy

iPad 2

Launched in USA on 11 March 2011 Thinner (8.8mm) Lighter (601g - 613g) Cameras Faster Processor Available in WHITE!

Producer’s Point of View

Cost of production Decrease in demand for iPad Gotten feedback from first generation iPad Advertising Producer’s Point of View

Cost of production Decrease in demand for iPad Gotten feedback from first generation iPad Advertising Producer’s Point of View

Foxconn Increased wages 2 times in less than a week 30% first Then, 66% performance based pay rise

Natural disaster Delay in the launch of iPad 2 in Japan Apple Japan’s factory 8.9 earthquake - 11 March key components said to be made by Japan’s Apple Factory Insufficient materials

State of Technology Improved since the first-generation iPad Thinner, Lighter More features iSuppli estimates the cost of material of: - iPad (3G, 32GB) - USD$320 - iPad 2 (3G, 32GB) - USD$326.60

Cost of production Decrease in demand for iPad Gotten feedback from first generation iPad Advertising Producer’s Point of View

Decrease in demand for iPad Appearances of substitutes Competitors

Cost of production Decrease in demand for iPad Gotten feedback from first generation iPad Advertising Producer’s Point of View

New features Installed to the iPad 2 Cameras Linking of Apple’s products FaceTime - Video Call

Cost of production Decrease in demand for iPad Gotten feedback from first generation iPad Advertising Producer’s Point of View

Advertising “Free” advertisement for Apple’s products By reviewers, reporters Simple, neat, elegant High quality product

Consumer’s Point of View

Income Price Distribution Taste & Preferences

Consumer’s Point of View Income Price Distribution Taste & Preferences

Income Non-price factor -- Affects demand Economy recovering from economic downturn Income increases More disposable income Assuming iPad to be a normal good

Consumer’s Point of View Income Price Distribution Taste & Preferences

Price USD$499 for iPad 2 entry level First generation iPad dropped USD$100 Appearances of substitutes iPad’s demand decreases Price is supposed to decrease as well to achieve equilibrium price

Consumer’s Point of View Income Price Distribution Taste & Preferences

Distribution Distribute (sell) their products Ease of purchasing Apple’s products Apple’s 3 main channels Apple Online Store Apple Stores Resellers - eg. epiCentre

“One of the things that enabled us to roll out this technology so fast was our Apple Retail Stores... educate customers... without these Stores, I don’t think we would have been as successful either” - Steve Jobs, Apple KeyNote 2nd March 2011

Consumer’s Point of View Income Price Distribution Taste & Preferences

Product

Brand Safety & Security Features Peace of Mind Accessories and services

Thank you for your ATTENTION