Apple Supply and Demand

Supply and Demand

Apple’s iPhone is undoubtedly one of the world’s biggest success stories in the telecommunications market. Since its debut in 2007, the iPhone has been dominating the cell phone industry with every new release. In fact, mentioned in TechnoBuffalo, “The devices launched just over a month ago, and Apple CEO Tim Cook says demand is far exceeding supply” (Russell, 2014). Supply and demand for the iPhone has always been an issue for Apple, as in the demand has always outweighed the supply of phone’s for the consumer. So what makes the iPhone such a great phone and what is Apple’s marketing strategy to keep the iPhone at the top of the consumers purchase list? The answer to both may be their technical advancement plan and undying customer loyalty.

The iPhone is definitely part of an Oligopoly market where only a few firms dominate the cell phone industry. Mentioned in ScienceDirect, “With its product, end-to-end system and exclusive distribution, Apple created competitors at all levels. Many of these competitors were among the most powerful and capable participants in the mobile phone value networks” (West & Mace, 2010). In order to beat its competitors with every new release, Apple’s technical development department must create new and improved capabilities that customers want. Being able to do this well, Apple has been able to establish a very loyal customer base almost guaranteeing they will purchase a new iPhone once released.

Apple’s market strategy of creating phones the way people want them, keeps the demand high regardless of the price of the phone. The price difference usually depends on how much memory you want and which purchasing package you want with a selected carrier. But Apple had some issues shortly after the iPhone’s first release. Because the iPhone had to be purchased through AT&T, software additions had to be purchased through Apple, and