Milestone 1: Apple
A well-known company in the United States, arguably one of the largest companies in the
The United States is Apple. Apple completed shifted the market for personal computers and
technology. Although it wasn’t the first company to make personal computers or “smartphones”,
Apple certainly, as Vox Media put it, “changed the world forever.” Their quick success made
them one of the most successful companies in the world, “These days, Apple is worth more than
twice as much as Exxon Mobil and three times as much as General Electric, traditional blue chip
stocks.” (How Apple’s iPhone changed the world). There are many rivals to Apple. Different
computer companies like Microsoft, IBM, Dell, and more. And to their phone’s rivals, Samsung,
Andriod, Google, and more. Even though their rivals provide a much cheaper alternative to their
phone, Apple has seriously developed a “cult-like” (MKBDH) following that has obtained loyal
customers. But with the high cost of their products, has certainly affected the type of customers
that Apple is able to obtain. Even though they are successful, they have a smaller customer base
than a typical Andriod company would. Having a high income is an essential part of an
individual’s buying power for Apple’s products. (Sullivan & Steven 2003). As a result, the
demand is lower than their rivals. This is why Apple mostly focuses on affluent countries, such
as the United States, most countries in the European Union, and Canada. Many Apple customers
would feel out of place in most countries around the world because the majority of the market
internationally is held by Andriod.
The GDP in the countries that Apple focuses on its $15 trillion or more. Due to the
pandemic, there has been a lack of supply for their products, such as a “chip shortage”. But,
“Bank of America analysts said on Wednesday that iPhone demand is still strong despite a recent
report that said Apple cut production of its iPhone 13 and new iPhone SE.” (CNBC).
So although there are changes in the economy, Apple does not suffer because its client base is more affluentvand has created a desire from its customers to purchase their new products. Thus, making it the
first company to reach a GDP of $3 trillion dollars, making it larger than many countries.
According to the textbook, “‘The lower the price, the greater the quantity demanded—this is
often called the ‘law of demand.’” (pg 31, Modern Principles of Economics). Although their
price is high, and their demand is lower, they are still extremely successful compared to their
rivals, making their market strategy one of the most brilliant in the industry.
References:
Cowen, T., & Tabarrok, A. (2020). Modern Principles of Economics (5th Edition).
Macmillan Higher Education. https://bookshelf.vitalsource.com/books/9781319329464
Gross domestic product. Gross Domestic Product | U.S. Bureau of Economic Analysis
(BEA). (n.d.). Retrieved July 1, 2022, from
https://www.bea.gov/data/gdp/gross-domestic-product
IPhone market's supply and demand. StudyCorgi.com. (2020, May 19). Retrieved July 1,
2022, from https://studycorgi.com/iphone-markets-supply-and-demand/
Molla, R. (2017, June 26). How Apple's iphone changed the world: 10 years in 10 charts.
Vox. Retrieved July 1, 2022, from
https://www.vox.com/2017/6/26/15821652/iphone-apple-10-year-anniversary-launch-mobi
le-stats-smart-phone-steve-jobs
Sarahalessan. (2022, March 30). Bofa says iPhone demand still strong despite reports of
production cutback. CNBC. Retrieved July 1, 2022, from
https://www.cnbc.com/2022/03/30/apple-iphone-demand-still-strong-despite-reports-of-pro
duction-cut-bofa.html
As a marketing student, I have always been incredibly impressed by Apple's ability to communicate their brand so clearly and capture the attention of such a wide audience. You have articulated that the company offers a product mix that is often priced higher than the offerings of major competitors. Though price tends to correlate with demand, Apple has created a product that has a higher perceived value in a consumers mind than many competitors.
You have brought up an interesting point in terms of the relationship between GDP and demand. Apple products tend to sell at higher rates in more affluent geographical areas than in areas with a lower GDP. It is interesting that you have stated that the company has not suffered in the current economic climate. Though the company continues to dominate the tech industry and has hit several significant milestones, production cuts have hit Apple in recent months due to rising inflation. While the company may not suffer great losses, I do believe the company has been hit with the challenge of not being able to operate at its maximum capacity given current economic trends.