Week 4 Differentiating Between Market Structures

Topics: Smartphone, Apple Inc., IPhone Pages: 11 (386 words) Published: June 29, 2015
Differentiating Between
Market Structures
Joshua Konieczka
Eco/365
June 8, 2015
Dennis McGuckian

Apple, Inc. Info

 Founded in 1976 by Steve Jobs, Steve Wozniak, and
Ronald Wayne
 Originally produced just computers and software
 Expanded into mobile devices (iPod, iPad, iPhone)

Monopolistic Competition or
Oligopoly
 Monopolistic Competition- a market structure in which
there are few barriers for entry and there are many
buyers and sellers of different products
 Oligopoly- a market structure in which there are few
firms and firms take the response of other firms into
account

Smartphone- Monopolistic
Competitive
 Many competing firms in the SmartPhone market
 All products are differentiated
 Samsung, Sony-Ericsson, HTC, Nokia, are just a few of
the brands of Smartphones

Mobile OS- Oligopoly
 3 main firms in mobile operating system market
 Android OS (Google)
 Windows (Microsoft)
 iOS (Apple)

 All firm decisions are influenced by the others
 iOS and iPhone are only available together- competitive
advantage

Entry Level Devices

 To appeal to a larger consumer base
 Profit is still high (only costs approx $250 to create an iPhone)
 Lower price- higher quantity demanded

Distribution- Mobile Companies

 AT&T and Verizon- Large Cellular
companies for the higher end phones
 T-Mobile and Sprint- Smaller cellular
companies for the lower end phones
 Allows Apple to provide options for
consumers

Competitive Advantage- The Apple
Ecosystem
 Apple has a distinct advantage in having an already
established ecosystem
 Apple TV, iPods, iPhone, iPads, and Mac PCs
 Run from a single marketplace- iTunes
 Offers an advantage over other OS firms since having
one Apple device offers a greater advantage by going
with more Apple products

Staying Ahead- Competitive
Advantage
 Apple is two years ahead of the competition
 Apple spent $1.18 billion on Research and Development
in 2013
 Innovative technology appeals to all consumers

Conclusion

References
6 reasons why Apple is so successful. (2014, May). Time.com, (), . Retrieved from http://techland.time.com/2012/05/07/six-reasons-why-apple-is-successful/ Colander, D. C. (2013). Microeconomics (9th ed.). New York, NY: McGraw-Hills/Irwin. Spendy but indispensable: Breaking down the full $650 cost of the iPhone 5 (2013, July). Digital Trends, (), . Retrieved from http://www.digitaltrends.com/mobile/iphone-cost-what-apple-is-paying/ What Apple Must Do To Survive. (2014). Retrieved from http://What Apple Must Do To Survive Apple Gazette. (2014.). Retrieved from http://www.applegazette.com/opinion/what-apple-must-doto-survive/



References: 6 reasons why Apple is so successful. (2014, May). Time.com, (), .
Retrieved from http://techland.time.com/2012/05/07/six-reasons-why-apple-is-successful/
Colander, D. C. (2013). Microeconomics (9th ed.). New York, NY: McGraw-Hills/Irwin.
Spendy but indispensable: Breaking down the full $650 cost of the iPhone 5 (2013, July). Digital
Trends, (), . Retrieved from http://www.digitaltrends.com/mobile/iphone-cost-what-apple-is-paying/
What Apple Must Do To Survive. (2014). Retrieved from http://What Apple Must Do To Survive Apple Gazette. (2014.). Retrieved from http://www.applegazette.com/opinion/what-apple-must-doto-survive/
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