Supply Demand

Introduction

Nowadays, mobile phones are considered needs because consumers are relying much on mobile phones for their basic necessities. In a dynamic working environment, consumers need mobile phones in a very short period of time for communication. The availability of text message, call and e-mail contribute to a much more efficient and effective way in delivering messages to others (Erickson, C. 2012). As uses of technology increase over time, every mobile phone brand creates a product differentiation in the mobile messaging. iMessage, for example, is only available in from Apple to Apple products while BBM is only available for Blackberry to Blackberry users. Not only mobile phone brands that have created these features, other third party brands also create these features or apps which increase more efficiency as communications are free to any mobile phone brands in a faster period of time. WhatsApp, Line and Waze are some famous apps that do such features. As there are more competition arise, it is not impossible that there are more upcoming apps in the future that would further improve ways of communication. That is why the demand and supply for mobile phones will never cease. In addition, increasing competition and dynamic consumer lifestyles will cause market equilibrium for mobile phones to change rapidly. The report below will analyze the factors that affect the level of demand and supply for mobile phones and the price elasticity of demand for both low ends and high ends mobile phones.

Factors that affect the level of demand in the mobile phones market:

Evolution of technology over time: People nowadays mostly rely on using mobile phones. Therefore, there is always be an increasing demand in mobile phones. Companies are eager to add new features to their mobile phones to win consumer’s choice between various brands of mobile phones. For example, we can observe an intense competition between Apple and Samsung. They constantly add new features to their products to meet up with consumers needs. In the past, mobile phones which have Bluetooth are considered expensive mobile phones. Nowadays, Bluetooth is included as the basic features of mobile phones. In the past, mobile phone cameras start with VGA and start to evolve into 1.3 Megapixels, 2 MP, 5 MP, and most mobile phones now have 8 Megapixels camera features (GigaOm, 2011). The last evidence of changing consumer demands in mobile phones is the development in mobile phone styles. Mobile phones nowadays are mostly touchscreen and no longer have telephone keypad or ‘qwerty’ keyboards. This is very contrast to mobile phones in the past that are relatively much heavier and must rely on telephone keypad to access the mobile phone. With the increasing competition in mobile phones, mobile phone companies are always adding new features to their new product to focus on consumer’s needs. Meanwhile, they are also not only trying to add new features, but also to make the demand for mobile phones as a need.