PROJECT A

first announced on January 27, 2010, by Steve Jobs at an Apple press conference in San Francisco. Steve Jobs San Francisco first iPad was released by Apple in April million iPads sold worldwide as of December 2010 (75% of total tablet PCs sales)

by the cost of production taken from iSuppli, the total cost of production of iPad 2 is $336, however the price sold in market is $ for a 32GB iPad first generation. quantity demand by consumers through the price they are willing and able to pay.

 Samsung Galaxy Tab  HP touchpad  Motorola Xoom  BlackBerry Playbook  tablets by Acer Inc. have similar functions as iPad some are even sold at lower prices such as the Samsung Galaxy Tab. Hence, this puts the market of iPad at a disadvantage as consumers may turn to other brands of tablet computers that they may get at a cheaper price. This will cause the total revenue for products by Apple to decrease.

This is a study of the iPad market where producers study how recent changes in the market can affect the revenue of firm.

o Existence of many other products can satisfy same wants or needs as iPad are known as substitutes. For example, Samsung Galaxy Tab. In time to come, other tablet computers will be released such as Motorola Xoom and Blackberry Playbook. Marketing decisions for the iPad by consumers will be affected because they now have a range of tablet computers to choose from. With increased number of substitutes, demand for iPad might be affected and equilibrium quantity decrease. Pricing decision for iPad will be affected, as shown in the figure below. D1 S2 Q2Q1 E2 E1 P2 P1 Quantity of Samsung galaxy tab D2 D1 S1 Q2 Q1 P1 P2 Quantity of iPad Price of iPad E1 E2 Price of Samsung galaxy tab S1

o die-hard Apple fans buy Apple products even when sold at high-end prices. For instance, they buy iPod nano, ranging from first generation to the latest 6 th generation and are willing to queue overnight for the grand release of new Apple products. This results in increase in demand for iPad which will affect the marketing and pricing decisions for iPad as demand increases, equilibrium price increases.

Producer’s point of view Hp and Samsung galaxy tab are in competitive supply with iPad which is produced using same resources. If prices of Hp and Samsung galaxy tab increases, this causes increase in quantity supplied due to higher profit per unit output. Thus, resources are diverted away from iPad causing decreased production of iPad, supply curve of iPad will shift to the left. Marketing decision is affected as there are more producers producing similar goods causing supply of iPad to decrease. Pricing decision is affected due to increase in competitive supply, hence causing equilibrium price of iPad to increase. iPad producers adopt non-price competition to maintain its sale in response to fall in prices of substitutes. For example during IT fair, iPad sellers give free gifts such as speakers to establish uniqueness of iPad in consumers’ mind.

S1 Q2Q1 Q2Q1 P1 P2 P1

recent development, and investment in research and development(R&D), technology improved over the years increase productivity in production of iPad hence efficiency increase, ceteris paribus. Therefore, more output can be produced with same amount of input, higher profit per unit of output. Increase in quantity supplied due to increasing popularity among consumers lead to a rightward shift of supply curve. Marketing decision will be affected due to improvement in technology and increase number of sellers resulting in increase in supply. Pricing decision will be affected due to increase supply leading to decrease in equilibrium price.

Overall, recent developments will affect marketing and pricing decisions of iPad. With more competition from other brands it affects it negatively. However, support from die- hard fans of Apple products neutralise impact of increasing competition. Inversely, increasing amount of competitive supply may cause decrease in supply of iPad but improvement in technology and increase number of sellers neutralises impact.