Supply and Demand Analytical Paper As the world grabs the technological advancement at a highest possible level so far, the realm of communication cannot be overlooked. It simply introduces higher opportunity for the mobile phone technology to proliferate in the communication industry. Apple Incorporated is one such a fortunate company to establish its competitive advantage in its industry. Lately, a staggering demand for its iPhone helps Apple lift its quarterly profit by 38 percent (Wakabayashi). As estimated, Apple’s profit as of January 27, 2015 hits $18 billion as 74. 5 million iPhones are sold. Everybody knows that Apple compete with quality for it to remarkably set a highly competitive price for its product offerings. In the case of Apple, competitive price does not necessarily mean to be lower prices compared to its competitors’. In fact, in most of the time, it is higher than the others. However, it is clear that there is an ongoing high demand for Apple’s iPhone products despite its comparatively higher price than the competitors’ offerings’.
The law of demand states that the price is highly associated with the number of quantity demanded and vice versa. This means that there will be more quantity demanded for a certain offering if the price goes down or as the price goes down, more quantity for the product will be demanded. As stated in Figure 1, the law of demand simply states that price has a linear relationship with the number of quantity demanded.
Figure 1. Demand Curve
However, knowing that Apple sells iPhone products at a price higher than its competitors’, considering a staggering increase of its revenue and profit, is an indication of increasing demand for its product offerings.
On the other hand, there is a significant indication that the use of mobile phones has become a reality or part of life. In Europe alone, there was an ongoing perception that there will be no enough available frequency to satisfy the demand for talking, texting and surfing the Net on mobile phones (O’Brien). The broadcast spectrum is simply becoming a limited commodity for as long as more users are inclined to buy mobile phones and use them for either talking, texting or surfing the Net. As a result, there is no question as to why there is an increasing demand for Apple’s iPhone even if it was set at a higher price. Mobile phones, particularly smart phones, are not just wants but are becoming strong basic commodities.
Apple has continued innovation of products that have improved functionalities that are known to use wider broadcast spectrums. In this case, Apple is simply enjoying the opportunity of acquiring profit as explained in the Supply curve.
Figure 2. Supply Curve
As stated in the supply curve, Apple is enjoying the opportunity to increase its supply for iPhones, but still at a higher price. There is an increasing demand for its product offerings. Therefore, Apple has the opportunity to maximize its profit, even if it continues to offer its products at a higher price, due to surging demand.
Thus, the demand curve may not significantly apply in the case of Apple and its target market in particular. This leaves an observation that the mobile phone industry is such a unique industry that cannot be generalized by the supply and demand concepts.
O’Brien, Kevin J. Supply and Artificially High Demand in Mobile Spectrum. The New York Times, 24 March 2013. Web. 9 Feb. 2015. .
Wakabayashi, Daisuke. Staggering iPhone Demand Helps Lift Apple’s Quarterly Profit by 38%. The Wall Street Journal, 27 Jan. 2015. Web. 9 Feb. 2015. .