Today, the IPhone 4S was announced to much excitment and anticipation. This is the first new phone from Apple in a year and a half. The IPhone has dominated the phone market since 2007. Every phone provider is vying for the access to the phone. They are even willing to sell the phone at a loss. Sprint will sell the new version of the phone at a major loss to them, but if they did not do that they would continue to lose customers. The main reason why Sprint loses customers is because of the IPhone. This is the first time that all three major cell companies, AT&T, Verizon, and Sprint, have the IPhone which means that they all have the opportunity to compete, leading to more competition. This is good for consumers and for Apple, but will be bad for the profits of the cell phone providers. The IPhone is part of an monopolistic competition which has been very good for the profits of Apple. Although, the Google Android platform is rapidly gaining speed against the IPhone. The IPhone still sets the standard for the Phone industry with their new innovation and different styles.
5 comments:
There is definitely going to be a high demand for these new and updated phones and many companies are trying to take advantage of the fact that people’s taste on the phones will increase demand. The sprint company may lose money on the phone itself, but they are still gaining money with the new lines added by the new clientele. Since Sprint is not necessarily losing as much money, their predatory pricing may work in their favor and may even boost business. AT&T, on the other hand, is losing more customers every day because like Rebecca said there are more companies selling at a lower price.
by Katherine La Serna
The iPhone's influence within the phone industry is that of growing power. The iPhone is not limited to justbeing a phone- it is your entertainment, GPS, and internet all at once, which is probably one of it's greatest qualities. I fully agree that the iPhone is in a monopolistic competition. It's competitors are selling differentiated products (such as the Samsung Galaxy S) that, despite being close substitutes, have different non-price values. Customers, when faced with the iPhone and Galaxy S, would most likely chose the iPhone because for the same price, Apple has a much better reputation. Additionally, the customers perceive that buying Apple's iPhone has better non-price benefits, such as discounts for other Apple products, and are thus willing to pay more. This perceived non-price benefit gives Apple some control over how high they can price an iPhone.
However, I do not believe the iPhone's increasing influence is entirely to blame for some of the phone companies' losses. I believe AT&T and Sprint are losing money more for their overall service. I know that as a user of AT&T, the signal has been awful for the past year or more. This consistent bad service will drive customers away more than higher priced iPhones. Additionally, there is too much hassle for people to switch companies just to get a better deal on a phone. Ultimately, because of the high demand, all the phone companies are sure to benefit by adding the iPhone to their options no matter what price they have to sell it for (given that the price is within a reasonable range of that of the other companies).
The cost of having an iphone is pretty high, so I'm sure that companies still come out on top after selling out texting and internet rights to consumers. I think the iphone has hit its peak, primarily because what else can you put on a phone? I agree that I cannot live my iphone, but I seriously cannot envision what other uses it could have. With the unveiling of the "4s", I think Apple has made a very unwise choice. The company is basically calling to the world that it is at an artistic and creative standstill, to the point where it must slap an "s" on a previous version that looks the same. Apple's stock prices should drop after this unveiling.
yes I agree there will good competition between AT&T, Verizon, Sprint and it would be cool to see who will make more money out of it. the phone companies maybe losing money on selling the phone but they get it back by charging the customers with a $30 fee for internet use ( even if you dont use the internet on the phone but I dont know why you wouldnt use the internet on the phone.) since the $30 charge is a monthly charge they will get their money back for money they lost on the phone. But the one company that will be making a lot money is apple for allow the three major carriers to sell the phone
As Rebecca mentioned, the iPhone is an indisputable king amongst the phone industry. iPhones have been in high demand since their initial production and continue to woo millions around the world. With the addition of Sprint and Verizon to the iPhone carrier list, the carriers are prone to profit decline while consumers are benefited exponentially. By expanding the variety of iphone carriers, the corporate masterminds behind this shift have created an extremely competitive market for iPhones. In terms of marketing, Apple is, quite obviously, ingenious. (even the ads are advertisement gold mines.) By promoting the old iPhone4 to a 4S, Apple essentially created a fancy label to sell to consumers greedy for reputable, brand-name products like the iPhone. Instead of titling the 'new' version of the phone as a "5", Apple deliberately upgraded the 4 to a mere 4S, creating the alluring image of a 'new' version while changing little and raising prices through the roof. Like I said, marketing geniuses.
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