Charles Edison

"Economics, politics, and personalities are often inseparable." - Charles Edison

Tuesday, February 8, 2011

iPhone 5

With a little redesigning of the iPhone 4 for there newly contracted service, Verizon, iSupply also leaked new information on the iPhone 5. The leak of information on the iPhone 5 will affect Apples supply and demand on there iPhone 4 product. This will affect the iPhone 4 product because people will want to wait for the new iPhone 5. Thus creating less demand for the iPhone 4 but the demand for the iPhone 5 will increase. This would take into affect the supply of the iPhone 4 that is distributed to the service companies. This would create, for an amount of time, a decrease in the amount of profit generated by the iPhone 4 alone. But since the iPhone 5 has been leaked and is sure to come out, the value of the iPhone 4 will go down. This is because the iPhone 4 will become out dated and replaced by a newer product. In the long run the iPhone 5 will generate a better profit for the company. It will also cause for a bigger demand for the iPhone 5 due to the iPhones credibility that it has earned over its many generations.

8 comments:

Smith said...

I am one of those people you are discussing. I have a 3G and it runs extremely slow; however, I am holding out for the iPhone 5. Do you think the decreasing demand for iPhone4 will be offset by the release of the 5? With this “leak”, do you think it will lead to a decreased shortage upon release?

kern said...

Do you think how Apple releases products is strategically done? Why don't they announce all their products at the beginning of the year even if they are going to release them at a later time? We know there will be a new iPhone and iPad this year why don't they just come out and tell us when they will hit the market and what features they have currently? Do there decisions have any affect on the demand for their products?

joseph said...

to Smith: I do believe that the decreasing demand for the iPhone 4 will be offset by the release for the iPhone 5. I believe this because like you, there are many other people with the 3G, 3GS, and possibly the iPhone 4 who are waiting and wanting the upcoming iPhone 5. With a leak and not s confirmed release of the iPhone 5, Apple builds hype. What i mean by this is that Apple is quite possibly building up the demand for the iPhone 5. They are making people want the iPhone 5 helping them get an idea on how many models to make for the release itself.

joseph said...

to Kern: I do believe that Apple's way of releasing a product is strategicaly done. Like I previously stated in the comment towards Smith i beleive they "leak" and not "announce" the release of there product to build up demand. By coming out and telling the people straight up what the iPhone 5 has and its features they could possibly be letting themselfs open for critism. But by leaking the possibility of the iPhone 5 the are building up the demand from the people themselves. This would indeffenatly build up the demand for there product because people want what is some what mysterious to them.

Tyler said...

I think we all know when we buy a new iphone, or any other new technological gadget, that as it is released on the market, a new improved version has already been developed. The tech companies want to make money on all the products they make so they have to hold off on some of the newest developments until they have flooded the market. Then they can release the newer version. We still buy their products knowing full well that a newer version will come out. The reason we buy though is because we want it now. We will upgrade then and get the newest version as soon as it is available. Others, usually older people, don’t care as much about having the newest tech things and will wait for the newer ones to come out so the price drops on the older version. They like the savings they get.

Cara Sheffer said...

I am along with Smith. I have Verizon, so I have been waiting for the iPhone to even come to Verizon, but now that it has I do not want to get a phone that will be more advanced and upgraded in three months or so. I think this "leak" you are talking about will lead to a decrease in the demand for the iPhone 4 rather than iPhones in general. People like Smith and I just might wait until that newer, better phone comes out. With this happening it could bring a quicker release for this new phone because Apple will not want to have their numbers down for a long period of time.

Brandeezy said...

You explained that the iphone 4 will become outdated, which will decrease demand. You also stated that the price will go down. This will result in a increase in demand. My question is... Will the decrease in demand be greater than the increase? If not the iphone 4's demand will not be affected.

Caitlin Harrington said...

I found this analysis very interesting. I agree that since the iSupply leaked the information that the iPhone 5 will be released, the sale of iPhone 4's will go down. I also like how you talked about the iPhone's credibility because if more and more people like the product and think that it is a good phone, then they can spread the words to their friends, which could cause them to go out an buy an iPhone; the profit that Apple would recieve would go up. It is interesting how you related the leaking of the iPhone 5 to the economics of one of the biggest techonogy companies.