GoddsonBlair_MicroEconomics_week2

1. Introduction/Overview
uApple Inc. is a technology company based out of Cupertino,
California.
uThe company manufactures and distributes over $200 billion worth
of products every year across the globe.
uIt is the world's largest technology companies based on revenue and
the world's most valuable company since January 2021.
uApple Inc. has almost 150,000 employees operating 510 retail stores.
uApple is in the market for streaming tv, developing computers, and
phones.

2. Introduction/Overview
uApple Inc. is a technology company based out of Cupertino,
California.
uThe company manufactures and distributes over $200 billion worth
of products every year across the globe.
uIt is the world's largest technology companies based on revenue and
the world's most valuable company since January 2021.
uApple Inc. has almost 150,000 employees operating 510 retail stores.
uApple is in the market for streaming tv, developing computers, and
phones.

3. History
uApple Inc. was founded in 1976 by Steve Jobs, Steve Wozniak and
Ronald Wayne.
uThe first product was the Apple I, which was built completely by
Steve Wozniak.
uIn 1984, they built the Macintosh, which was the first personal
computer sold without a programming language.
uApple Inc. has since been able to produce many new devices that
are able to please the market of technology from average consumers
to professionals.
uThe devices have ranged from the iMac, Macbook, iPhone, iPod,
and more.

4. Competitors
uApple Inc. has a very strange list of competitors because of the
different markets that they are competing in as a company.
uOne of their main competitors is HP.
u Hp makes a large majority of the desktop and laptop computers that
conusmers use every day.
u Apple strives to narrow that gap to where consumers will see the value of
the Apple products over HP products.
uAnother large competitor of Apple is Samsung.
uSamsung currently sells the most phones worldwide.
uTheir phones are generally cheaper than Apple based phones, so they end up
in the hands of more users.
uApple is continuously closing the gap on Samsung, but it is a tight race.

5. Revenue Streams
uApple Inc. revenue is split into many different sources because of
their business ventures.
uThe main source of their finances is the iPhone.
uPeople are usually devoted to iphone once they have one.
uCustomers will continuously buy the phone every year
which develops as returning profit every year for Apple.
uAnother huge revenue stream for them is their computers.
uApple computers make up a large portion of the products people
buy.
uThese include the iMac, Macbook, iPad, Macbook Air, Mac Pro, and
more.

6. Competitive Structure
• Apple Inc. is in Oligopoly and Monopolistically competitive market.
Monopolistic (Apple Computers)
► Many producers & many consumers.
► Have complete control over prices, price makers
not price takers
► Focus on short term profits
► Example: Dell, Microsoft, HP, Etc.
Oligopoly (Apple Phones)
► Few Sellers.
► Production & sales are either identical or
slightly differentiated products.
► Significant barriers to entry
► Example: Coca Cola & Pepsi, Burger King &
McDonald's, Etc.

7. Consumer income
Customer income increase Customer income decrease
► Demand for Apple goods and services
increases.
► Most likely the economy is doing well.
► Consumers likely to spend more money
on Apple goods and services.
► Stock levels increase
► Investment levels increase
► Demand for Apple goods and services
decreases.
► Most likely the economy is doing bad.
► Consumers likely to spend less money on
Apple goods and services.
► Stock levels decrease
► Investment levels decrease

8. Price of related goods
Apple iPhone 12 Pro Max
$1,099.00
Samsung Galaxy Note20
$1,299.00
► When the price of one good goes up, the quantity demanded of the other brand goes up.
► When the price of one good goes down, quantity demand of the other brand falls.
Substitute goods- Different goods that at least partly, satisfy the same needs of the
consumers and therefore can be used to replace one another. Ex- Tea & Coffee, Coca-
Cola & Pepsi

9. Price of related goods
► When the price of one good falls, it increases the demand. The quantity demanded of complementary
goods also increases.
► When the price of one good rises it decreases the demand. It may decrease the demand for the
complementary goods as well.
► The iPhone12 is the first iPhone to not come with a charger
included. Instead, you’ll get a Lightning to USB C cable, and
you’ll need to provide your own USB C charging adapter.
► Charging adapters range between $19.00 - $79.00
Complementary goods- Goods whose use is interrelated with the use of an associated or
paired good, such that a demand for one, generates demand for the other. Ex- Printers & ink
cartridges.

10. Tastes Within the Market
uSimpler Product Line
Dropping the use of prefixes or suffixes such as Pro, Plus, Max, etc.
uFlip/Foldable Phones
u The Motorola Razr was a huge hit and has recently been reimagined and
rereleased
u Samsung has released the Galaxy Z Flip 5G as well as other flip phones
uHome Safety
uRing Doorbell has shown how accessible and effective electronic safety
systems are
uAmazon's Alexa even has security features to make home feel more secure
uThis would be a great market to reach into due Apple's compatibility across
products

11. Expectations Within the Market
uUncertainty
u With COVID-19 still running rampid in some areas, it is hard to predict the buying
market.
uVaccinations
u The growing accessibility to the vaccine will bring people back to work
u Eventually, the government will stop handing stimulus checks, and unemploment
checks will go back to normal as well
u This means people might have to budget their money according to their
paychecks and not what the government is giving them.
uContinue to rise... but for how long?
uTech companies have surged through the pandemic
uMac sales increased 11% through the pandemic
uThese numbers will most likely drop slightly once the pandemic fully ends

12. Number of Buyers
uIncrease in Customers
u A branch into a new market could be exactly what Apple needs. Adding a home
security systemt that is compatible with other Apple devices could catch the
interest of buyers old and new.
uDecrease in Customers
u Releasing updates before they are ready can make a great product seem
mediocre at best. This tends to be a major reason why people switch from
Apple products.
u Security needs to be at an all-time high, especially with COVID information
being released. Any security breach would be detrimental to sales.

13. Elasticity
• Apple has Established Itself Very Well
• Apple has inelastic products because most consumers don’t care about the price of
the new iPhone
• The new iPhone is always a product that customers will line up for hours to get their
hands on due to brand elasticity
• Therefore, if it isn't a derastic change, sales should increase either from larger sale
prices or from greater availability
uCharacteristics of Apple Users
u Apple users tend to want to the high-end things on the market
u Apple users have higher usually have a higher income, as well as a larger socio-
economic status. Thus, furthur proving why Apple has such a faithful following

14. Input Prices
• Minimum Wage
• Around the world minimum wage is increasing
• This could lead to more specialized training to get more out of employee
• This way Apple would't have to employ as many people as possible
• Supply Would Stay the Same
•Many sales will come from resalers like AT&T, Verizon, Best Buy, etc.
•Other sales will come from apple.com where customers can buy items directly and have
them shipped
•The last group of sales will come from Apple in-store sales

15. Technology
VCG/GETTY IMAGES
Apple created a $200 million
fund to remove carbon
emissions from the air
This also serves to support
sustainable forestry the
company uses to package
iPhones and other products
The Restore Fund, as it is
called, uses the wetlands,
forests, and other natural
resources to draw the carbon
emissions from the air to
permanently store in the soil
This will remove one of the
causes blamed for COVID-19
Apple is one of the 300+
businesses challenging the
Biden Administration to set a
climate-change goal by 2030
This will allow Apple to invest
in more fiberwood,
increasing the company’s ROI

16. Expectations
Evercover ISI analyst Amit Daryanani believes that Apple is in a great
position to outperform their rating in the stock market due to how
well iPhone and other services performed
During the first two months of the quarter, iPhone shipments in
China were up 185%
The App Store received a 32% growth
With this momentum, Apple is set to sustain a steady growth in the
market.

17. Entry/Exit
• Partner with companies that manufacture in technology, such
as processing chips the automobiles and other industries demand
for their own mass production
•
• Engineer carbon emission-free technology that will reduce
the negative effects of climate-change
•
• This will result in an affordable way of producing raw
material needed for packaging
•
• Remain versatile in the digital market while providing
streaming services for both consumers and artists/companies to
drive supply and demand
Competitors must do the following to stay ahead of Apple Inc.

18. What Impact has COVID Had
on Apple Inc.
MARKETWATCH PHOTO ILLUSTRATION/ISTOCKPHOTO
Increase in online
education
Resulting in families
demanding Macs and
iPads
iPhone fans began
branching their
spending by purchasing
Macs and iPads
The September Back-to-
School quarter found an
increase of 46% of
revenue
Causing a gross of $9.03
Billion in Mac revenue
during the September
quarter

19. Cited Sources
► Banton, C. (2020, December 02). The characteristics of monopolistic markets. Retrieved April 19, 2021, from
https://www.investopedia.com/terms/m/monopolymarket.asp
► Bary, E. (2021, April 16). Apple found Fans beyond the iPhone as PANDEMIC gave life to Mac and iPad. Retrieved
April 19, 2021, from https://www.marketwatch.com/story/apple-found-fans-beyond-the-iphone-as-pandemic-
gave-life-to-mac-and-ipad-
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► Beal's, R. (2021, April 16). Apple launches $200 million FORESTRY fund it says will bring financial return for
investors. Retrieved April 19, 2021, from https://www.marketwatch.com/story/apple-launches-200-million-
forestry-fund-it-says-will-bring-financial-return-for-investors-
11618587180?adobe_mc=MCMID%3D61322304786742857924301601410734823154%7CMCORGID%3DCB68E
4BA55144CAA0A4C98A5%2540AdobeOrg%7CTS%3D1618637763
► Journal, W. (n.d.). AAPL | Apple Inc. analyst ESTIMATES & rating – WSJ. Retrieved April 19, 2021, from
https://www.wsj.com/market-data/quotes/AAPL/research-ratings
► The Wall Street Journal. (n.d.). AAPL | Apple INC. stock price & news - WSJ. Retrieved April 19, 2021, from
https://www.wsj.com/market-data/quotes/AAPL