Market Structure Of Apple

1250 Words 5 Pages
pple is a multinational company that has its headquarters in California, USA. With specialization in technology and technological products, it not only manufactures, but also markets media devices like laptops, phones, music players among others. Apple has managed to acquire numerous consumers worldwide most of whom are very loyal due to the quality of apple products.
The nature of products that apple produces places it in the competitive Market types are classified according to the presence or absence of competition. In Microeconomics, Competitive markets have many buyers and sellers. So many companies produce electronic gadgets like apple while at the same time people worldwide are embracing technology and the value it has added to life
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There is only a slight difference in the operation and applications each of these phones have (Rachet, 2014). These three are the most referred to characteristics of the competitive market structure that apple belongs to. Apple can also be said to be operating in the Oligopolist market structure. Under this type of structure, a small number of competitors called oligopolists controls competition. The companies that operate in such a market structure usually enjoy being at the top because of the numerous entity barriers that may be existent in the mother countries. It can be concluded that Apple operates in the oligopoly market structure based on the operating systems that they use on their devices. In real sense, the Smartphone market operates in the oligopolistic market because there are few firms that account for more than half of the industry supply. In this case, Apple has the iPhone; Google has the Android and a couple more companies. Any action taken by any one of these companies affects the whole industry because of the simple fact that these firms are …show more content…
The fact that Apple does not discount through its direct channel enables the company keep reseller-pricing stable and consequently the retail pricing. The key characteristic to note here is stability. At times the company foregoes profit for reputation and to keep the customer satisfied and retained to the same brand over and over again. The retail stores that exist and belong to the Parent company are also a huge success due to the good reputation of the company. In microeconomic theory, products that have a lower supply normally have a higher demand. Apple may have used this strategy to price their products very high. Unfortunately, this strategy failed in the case of Apple.
Apple has been reducing the prices of their iPhones over the years. This could be a strategy to sell their products to new consumers while consequently expanding its market share through more and more people affording to purchase IPhones. Froeb, Luke, & Ganglmair (2009) have referred to this pricing strategy by Apple as Inter-temporal price discrimination. This refers to setting a high price for a product to sell to customers who are able to buy at that price and reducing the price to attract the low-income earners in the

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