More Subjects
Name of Student
Name of Professor
Name of Class
Day Month Year
Project
Technology changes with time. From first communication device (telegraph) to the latest smartphones individuals made the demand for this technology. Apple is the company popular for its innovative technology. It is the major industry for laptop and smartphone manufacturing. Apple is an American multinational company, whose headquarter is in California. Sales of Apple products are increasing every year. Brand sales in 2013 were 170 billion while it reached 229 billion dollars in 2017. iPhone is the most popular brand of Apple company. About 60% of the total population of the United States consumes this brand. Latest news about the approval of the government request for the customer data access made consumers insecure regarding privacy policy. The latest transparency report of the company indicated that more than thirty thousand demands had been made by the government worldwide to access the 160 thousand devices approximately. The latest figure shows the nine percent increase in the demand for device access. Apple explained that the increase in the demand for access is mostly due to the investigation for stolen devices. German is the most demanding government while the US as well ranked highly with about 4.5 thousand requests for 15 thousand devices. About thousands of requests sent for financial identifier by the US. Apple is unable to reject the request unless it is inappropriate, invalid, or unclear. This news of transparency report made Apple customer curious. To maintain the loyalty of consumers CEO of Apple said that company made an effort to make their consumer's privacy as the priority over profit. The company can make a ton of profit if they monetized their costumer and treat them as a product ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"ONfjhRhi","properties":{"formattedCitation":"(\\uc0\\u8220{}Apple Admits Giving Governments Access to Thousands of IPhones and Other Devices\\uc0\\u8221{})","plainCitation":"(“Apple Admits Giving Governments Access to Thousands of IPhones and Other Devices”)","noteIndex":0},"citationItems":[{"id":62,"uris":["http://zotero.org/users/local/rVaVAHaF/items/PYHKHQ8B"],"uri":["http://zotero.org/users/local/rVaVAHaF/items/PYHKHQ8B"],"itemData":{"id":62,"type":"webpage","title":"Apple admits giving governments access to thousands of iPhones and other devices","container-title":"The Independent","abstract":"Apple's Transparency Report reveals a 9 per cent rise in the number of demands for customer data in 2018","URL":"https://www.independent.co.uk/life-style/gadgets-and-tech/news/apple-iphone-ipad-government-data-privacy-transparency-report-2018-a8697761.html","language":"en","issued":{"date-parts":[["2018",12,24]]},"accessed":{"date-parts":[["2019",1,25]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} ("Apple Admits Giving Governments Access to Thousands of iPhones and Other Devices").
Many questions arise from this news, but the most important question is "Should there be more regulations in place to ensure consumer privacy?" Apple lies in two types of market structure at the same time. It can be considered an oligopoly for smartphones brands while it is monopolistic competition in computer brands. Different factor effect the price an output of the company such as substitutes of products, taste, and preference, and total income. Apple s one of the high priced brands, but high demand for the product is successfully made through different strategies. The high price is determined due to the unique features of the product. There are different companies in competition with Apple, but this uniqueness of technology and unique feature made Apple largest company of industry. Apple is also taken as a luxury item, and people demand it due to taste and preference. In nutshell factors that affect the output and price of the company include customer orientation, innovation, leadership, and production ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"aWVs5e9I","properties":{"formattedCitation":"({\\i{}Apple\\uc0\\u8217{}s Key Success Factors in the UK That Could Be Learned and Applied by Other Companies from the Same Industry by Edgar Wilson\\uc0\\u8239{}:: SSRN})","plainCitation":"(Apple’s Key Success Factors in the UK That Could Be Learned and Applied by Other Companies from the Same Industry by Edgar Wilson :: SSRN)","noteIndex":0},"citationItems":[{"id":64,"uris":["http://zotero.org/users/local/rVaVAHaF/items/Y423ZF2S"],"uri":["http://zotero.org/users/local/rVaVAHaF/items/Y423ZF2S"],"itemData":{"id":64,"type":"webpage","title":"Apple's Key Success Factors in the UK that Could Be Learned and Applied by Other Companies from the Same Industry by Edgar Wilson :: SSRN","URL":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3152328","accessed":{"date-parts":[["2019",1,25]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Apple’s Key Success Factors in the UK That Could Be Learned and Applied by Other Companies from the Same Industry by Edgar Wilson :: SSRN).
If we analyze the news of privacy concern, we noticed that it could affect different microeconomic terms like demand and supply, strategic interaction and price discrimination. Lets us look each of these terms one by one.
Demand and Supply:
Demand and Supply model is the simplest but essential model of the microeconomics. It tells the behavior between the producer and consumers. Consumers made demand and producers made the supply. Demand refers to the quantity that a consumer is willing to buy while supply is the quantity that a firm or market can supply.
The effect of the news will be adverse on demand. If the customer faces any problem or insecurity from the goods and services demands go down. No one feels comfortable if their private information becomes public or used with their consent. As the government requested the information from the company, it will lead to the customer to feel insecure. He will try to maintain his privacy. For this reason, customers may move to other substitute product or company who will ensure their privacy. This will result in a decrease in the demand for company product. Demand curve will shift to the left which mean access to supply. When supply is more than the demand, company decrease their prices, but in the case of Apple they are unable to change the price as the company works in monopolist competition market structure. Monopolist competition is the type where there are no proper competition different companies' produce products that are dissimilar to each other. It men there is no perfect substitute. Therefore, change in price will not attract the consumers ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"IMsQNWxq","properties":{"formattedCitation":"(Roosen)","plainCitation":"(Roosen)","noteIndex":0},"citationItems":[{"id":67,"uris":["http://zotero.org/users/local/rVaVAHaF/items/C8Q6PEAB"],"uri":["http://zotero.org/users/local/rVaVAHaF/items/C8Q6PEAB"],"itemData":{"id":67,"type":"report","title":"A Regional Econometric Model of U.S. Apple Supply and Demand","collection-title":"ISU General Staff Papers","publisher":"Iowa State University, Department of Economics","source":"ideas.repec.org","abstract":"Estimation of consumer and producer surplus changes that are caused by technology shifts requires knowledge of demand and supply elasticities in the markets in questions. Because apple production systems are very heterogeneous across the United States, growers' abilities to respond to technology changes and market forces differ widely. To capture the dispersion of responses, estimates of elasticities are needed for the different grower groups. To this end, a model of U.S. apple production was estimated at a regional level.","URL":"https://ideas.repec.org/p/isu/genstf/199904010800001318.html","number":"199904010800001318","language":"en","author":[{"family":"Roosen","given":"Jutta"}],"issued":{"date-parts":[["1999",4,1]]},"accessed":{"date-parts":[["2019",1,25]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Roosen).
Price discrimination:
Apple is a highly consumed brand. Increase in the demand of the products enables the company to increase the price of the product in order to maintain supply and production. From the past few years, demand for Apple product is increasing due to this reason Apple today is one of the highest priced brands in the world. Still, the price discrimination is not possible for the company. They made a high price only because of the unique feature they develop, latest technology, and monopolist competition market.
Strategic interaction:
It is the model between two companies that contain a different combination of the rules and outcome. A company made a decision which can affect the outcome of the other companies in return other company makes his strategy to avoid the loss or any risk for the company.
In this case, Apple Company is on risk as news can make their customer move to a similar group. Samsung is the largest competitor of Apple Company. Therefore we can say that customer may start using Samsung product instead of Apple. Samsung can take advantage of this news and start producing the product which has similar features to the Apple brand. On the other hand, Apple should play the card to minimize the issue created by the news. They should make the concerns of the consumer as their priority, and it will lead to the maintenance of consumer loyalty and total demand of the product.
Government Intervention:
Government intervention is harmful in this case. Government is the one who made these complications for the company. The government needs to make the policy that will efficient for both the consumers and company. The demand for consumer personal information and access to their data somehow questions on the individual freedom in the country.
Conclusion:
Apple is the monopolistic competitive company which is in the news due to the privacy issues from the consumers. Government is demanding to access to the consumer’s data that can create the complications. Customers may move to other substitute product or company who will ensure their privacy. This will result in a decrease in the demand for company product. Demand curve will shift to the left which mean access to supply ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"4oGy8AMZ","properties":{"formattedCitation":"(Smith)","plainCitation":"(Smith)","noteIndex":0},"citationItems":[{"id":66,"uris":["http://zotero.org/users/local/rVaVAHaF/items/4WEUIGSD"],"uri":["http://zotero.org/users/local/rVaVAHaF/items/4WEUIGSD"],"itemData":{"id":66,"type":"article-journal","title":"Distribution channels for events: Supply and demand-side perspectives","container-title":"Journal of Vacation Marketing","page":"321-338","volume":"13","issue":"4","source":"SAGE Journals","abstract":"Distribution involves the dissemination of information, the means of booking and purchase, and product bundling or packaging. In an increasingly competitive market place, special events, like other tourism products, require an effective distribution strategy to reach their target tourist and local markets. This article systematically integrates data from interviews with events organizers and a survey of attendees at four events in Wellington, one of New Zealand's main event tourism destinations. The complexity of event distribution channels is influenced by the event's target market, capacity, partnership relationships, and other factors. Free events have simple distribution channels focused on disseminating information; channels for ticketed events are more complex. There is limited bundling of event tourism packages and a number of barriers exist to their further development in this destination.","DOI":"10.1177/1356766707081009","ISSN":"1356-7667","shortTitle":"Distribution channels for events","journalAbbreviation":"Journal of Vacation Marketing","language":"en","author":[{"family":"Smith","given":"Karen A."}],"issued":{"date-parts":[["2007",10,1]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Smith). The company cannot change the price of the product much to handle the risk, and there is the risk of strategic interaction with the Samsung company. Therefore it is concluded that the government should play a role to help the company to solve this issue. The loyalty of the consumer is the most important factor in this case. Only consumer loyalty and their trust can minimize the negative impact of the news on the apple company.
Works Cited
ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY “Apple Admits Giving Governments Access to Thousands of IPhones and Other Devices.” The Independent, 24 Dec. 2018, https://www.independent.co.uk/life-style/gadgets-and-tech/news/apple-iphone-ipad-government-data-privacy-transparency-report-2018-a8697761.html.
Apple’s Key Success Factors in the UK That Could Be Learned and Applied by Other Companies from the Same Industry by Edgar Wilson :: SSRN. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3152328. Accessed 25 Jan. 2019.
Roosen, Jutta. A Regional Econometric Model of U.S. Apple Supply and Demand. 199904010800001300, Iowa State University, Department of Economics, 1 Apr. 1999. ideas.repec.org, https://ideas.repec.org/p/isu/genstf/199904010800001318.html.
Smith, Karen A. “Distribution Channels for Events: Supply and Demand-Side Perspectives.” Journal of Vacation Marketing, vol. 13, no. 4, Oct. 2007, pp. 321–38. SAGE Journals, doi:10.1177/1356766707081009.
More Subjects
Join our mailing list
© All Rights Reserved 2024