Iphone Demand and Supply - Research Paper Example

The entire process includes a transaction and involves the exchange of goods and services for money. This paper helps to discuss and provide an insight into how demand and supply has changed the world in the present modern era with the help of electronics, in specific, the iPhone. This phone has become a phenomenon in the world today, however a news article talks about how the demand outstrips the supply in China for this particular commodity and how that has affected the people at a micro economic level in the country.

China Unicom Ltd. Said that it was not being able to meet the demand for iPhones in China with an equal level of supply because of the excess in quantity that has been demanded by the people there. The iPhone is no longer a good that falls under the category of luxury goods because this very fact that its demand is growing day by day, shows that the people are easily able to afford the same and want to purchase it at the price that it has launched at. According to the company, an estimated 200,000 iPhones were pre ordered the very day that the phone went on sale in the country (from the USA) and another 400,000 were sold on that day.

The company was able to attract so many buyers because of the popularity that the phone had gained over the Chinese market because of the sale of its previous model, which had further excited a wider consumer base. Even though the phones are more expensive, they offer better features as well as data services which have attracted such a wide consumer base. In economic terms, it is clear and evident that this particular phone has appealed a great deal to at least half of the Chinese market because more and more people have bought it at the price at which it was launched.

The iPad was also released in China and went on sale at a fast pace as well. However, the crux of the matter remained that the iPhone’s demand exceeded the supply that the company was able to give to the people. This goes to show that there was an extension of demand in the particular commodity at the same or even higher price. Since the iPhone 4 was costlier than the previous version, an extension (and not just an increase) in demand can be noticed here in economic terms which means that there is movement along the demand curve where the sale and purchase of iPhones in China are concerned.

As per the article, “As of the second quarter, Apple was the fifth-largest smart phone vendor in China with 7.1% of shipments, according to Beijing research firm Analysys International. Nokia Corp. had the largest share with 26.7%.” this very statement helps in understanding the kind of consumer base that Apple has created for itself in China; and that even in deep cut throat competition, the company has been able to sustain its position in the Chinese market, which can be seen when the demand for the phones exceeded the supply level.

In a nutshell, the concepts of supply and demand can be viewed with the help of understanding the