“iPhone Demand Outstrips Supply in China”
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Transcript of “iPhone Demand Outstrips Supply in China”
Situation
UNICOM vender like Softbank and AU
Sept. 2010: 200,000 demanded However, only 100,000 were supplied
2009: 40,000 units were sold 200,000 > 40,000
iPhone is a hit in China
Graph
1 2 3 4 5 6 7 8 9$0
$100
$200
$300
$400
$500
$600
Shift in the Supply and Demand curve for the sales of iPhones in 2009 and the future in China
Quantity Supplied and Demanded in 10,000s
Pri
ce o
f iP
hon
e (
$)
D1
D2
S1
S2
E1
E2
E3
Effects: UNICOM
Winner
Only Chinese iPhone vender Law of Demand Opportunity to increase price for more profit
Sold all of its inventory
Get more from Apple
Loser
100,000 potential customers Wait Transfer to another smartphone
Effects: Apple
Similar to UNICOM
Winner
iPhone was a hit in China Additional market
Excessive Inventory
Diversion of iPhone shipment from other nations
Diversion of Inventory
UNICOM
1,000,000
1,000,000
-50,000
-50,000
+50,000
+50,000
100,000200,000
Apple HQ Meats Demand
Year Market Size
No. of iPhone sold
No. of Other smartphones sold
Wait/Buy other
2008 1 mil 0 1 mil 0
2009 1.1 mil 40,000 1.04 mil 0
2010 Sep.
1.2 mil 100,000 1 mil 100,000
2010 Nov.
1.2 mil 200,000
1 mil 0
16.6% 83.3%
Shipment diversion analysis (example)
If Apple takes action
Year Market Size
No. of iPhone sold
No. of Other smartphones sold
Wait/Buy other
2008 1 mil 0 1 mil 0
2009 1.1 mil 40,000 1.06 mil 0
2010 Sep.
1.2 mil 100,000 1 mil 100,000
2010 Nov.
1.2 mil 100,000
1.1 mil
0
8.3% 91.6%
If Apple does not take action
What other smartphone companies should do
Advertise product TV, newspaper, online
Create something new Catch customer’s attention
Unknown
iPhone hardware
(Manufacturing companies
and employees)
Chinese Apps (company and
engineer)
Black market dealers
Chinese iPhone Apps
Winner
Chinese App producing companies
Customers buy Chinese apps Increase business
Chinese Computer Engineers
More demand for Chinese Computer Engineers More job opportunities
iPhone hardware Manufactures
Winner
Company
iPhone is popular Produce more
Employees
Demand for more employees