Market Equilibration
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Market Equilibration
Michael Hintz
Phoenix University
Market Equilibration
The mobile phone market is one of the markets that continues to reinvent itself and still has not fully matured yet. Not only has technology changed but service levels, pricing, and contracts have all changed in an attempt to capture the burgeoning consumer desire for mobile phone service. This author believes that even though the iPhone has experienced historic levels of consumer demand, the same market equilibrating effects have been experienced by Apple with the iPhone.
Apple’s iPhone Market Equilibrium
The initial launch of the iPhone over 4 years ago was a very interesting marketing study. Apple had begun to regain some of their image with the iPod and iTunes music library. They was so much pent up demand y the time the phone was launched the price was set at 398$ and still required customers to change cell phone companies to AT&T. This is a very good example of the power of intense consumer demand. The following 3 years saw very large numbers of customers converting to the iPhone including this author. The reality of AT&T service and the introduction of an upgraded iPhone 4 illustrate the “invisible hand” of the change in market demand. After this new phone and declining service are in place, the same phone that was 398$ is now only 98$ , although it still requires a 2 yr service agreement.
This change in pricing would certainly follow the concepts the Adam Smith had in mind when he first coined the term invisible hand of the market in The Theory of Moral Sentiments. “ For Smith, the invisible hand was created by the conjunction of the forces of self-interest, competition, and supply and demand, which he noted as being capable of allocating resources in society” (Wikipedia). As smith explained the demand for the first issue of the iPhone dropped as the new version was released and the initial ferver was ballanced by the...
Michael Hintz
Phoenix University
Market Equilibration
The mobile phone market is one of the markets that continues to reinvent itself and still has not fully matured yet. Not only has technology changed but service levels, pricing, and contracts have all changed in an attempt to capture the burgeoning consumer desire for mobile phone service. This author believes that even though the iPhone has experienced historic levels of consumer demand, the same market equilibrating effects have been experienced by Apple with the iPhone.
Apple’s iPhone Market Equilibrium
The initial launch of the iPhone over 4 years ago was a very interesting marketing study. Apple had begun to regain some of their image with the iPod and iTunes music library. They was so much pent up demand y the time the phone was launched the price was set at 398$ and still required customers to change cell phone companies to AT&T. This is a very good example of the power of intense consumer demand. The following 3 years saw very large numbers of customers converting to the iPhone including this author. The reality of AT&T service and the introduction of an upgraded iPhone 4 illustrate the “invisible hand” of the change in market demand. After this new phone and declining service are in place, the same phone that was 398$ is now only 98$ , although it still requires a 2 yr service agreement.
This change in pricing would certainly follow the concepts the Adam Smith had in mind when he first coined the term invisible hand of the market in The Theory of Moral Sentiments. “ For Smith, the invisible hand was created by the conjunction of the forces of self-interest, competition, and supply and demand, which he noted as being capable of allocating resources in society” (Wikipedia). As smith explained the demand for the first issue of the iPhone dropped as the new version was released and the initial ferver was ballanced by the...