Economics & the Smart Phone

Economics & the Smart Phone Industry Consumer Choice ..IT'S 3 am. Do you know where your mobile phone or tablet is? Of course you do. It's in the bedroom somewhere, probably within reach on a bedside bureau. In a recent survey of a few thousand business travellers, 38% of respondents admitted to actually reaching for it occasionally. A disturbing 8% checked at least once in the middle of every night. (The Economist, 2011) Consumer choice is at the focal point of economics. Supply & Demand is a function of consumer choice.

Economics is the study of how society distributes its scarce resources among a population with unlimited wants. Consumer choice is therefore based on the availability of goods, on quantity supplied and quantity demanded, and on barriers to entry in industry that may prevent competition from entering the market. The smart phone industry is preeminently based on consumer choice as well as on economics. Smart phones inherently involve making a trendy choice. Indeed, an iPhone 4 will be replaced by the next generation of iPhone when that particular phone is released.

What is important with regard to economics, consumer choice, and the smart phone industry is the following. Brand awareness is critical to consumer choice. Consumers will invariably prefer a given brand over the others in competition. The iPhone is an example as was Blackberry roughly about 6 years ago. The Android from Google is finding a niche' market and seems to be the newest rival of Apple's iPhone. Therefore, consumer choice is not always necessarily about economic variables such as wages and cost per unit for a particular iPhone.

Consumers will spend beyond disposable income into discretionary income to obtain a particular smart phone. Scarcity and Wants vs. Needs Scarcity and poverty are two different things as the book pointed out. Because it's about wants vs. needs. Some scarce resources we do actually need but something's are truly wants. Some individuals feel as though they need a phone must have the best and actual feel less fortunate or that they are struggling when in reality not to far in the past cell phones were considered a luxury.

This leads to scarcity and because it can't be eliminated people will always have to make choices and this is what economics is about. If you think about it because of our ingenuity and better technology we are constantly producing newer technology the iPhone 3 wasn't enough when iPhone 4 was introduced we demanded that etc. Scarcity and Wants is central to the discussion of economics. Wants vs. Needs is an area where politics is at the forefront, deciding what to do with the resources and its distribution among the population.

In a capitalist market, unlimited wants can ostensibly be addressed to infinity with resources lacking for those that cannot procure the resources to satisfy their own wants. The needs address food, shelter, and clothing. Before one can pursue wants, one should pursue needs. The smart phone industry is the perfect example of wants and needs and markets with smart phone scarcity. The wants of society is to obtain the most popular or trendy smart phone model.

The needs of society are to just obtain a cellular phone to contact individuals for emergency purposes. Some cellular phone models enable web browsing which allows further emergency planning for the individual. Wants, needs, and scarcity are essentially identifies choice among options to the point of scarcity. Scarce products such as the iPhone in a market such as Nigeria will cause the iPhone to be more expensive than in markets where the phone is more readily obtainable.

Employment Employment is a major driver in wages earned and therefore represents the ability for consumers to pay the obligation for the ownership of their smart phone of choice. Employment is a function of inflation. As inflation increases, there's too much money in the economy and therefore unemployment is expected to rise. All else being equal, monetary tightening would occur, which is the raising of interest rates which incentives savings, removing money from the economy and theoretically reducing inflation.

Employed individuals are great for the developers of smart phones because they know there's a willing market that's capable of making the purchase. When unemployment is high, companies may decide to delay the release of their new updated phone as a means to maximize profit. By withholding the release of the phone, not only does demand build but the ability of more consumers to enter into the market to purchase the phone does occur.

At this point, the profit maximization curve peaks earlier and is likely to have a prolonged parabola at the top of the curve which is a short-term profit maximization curve. With a low employment rate, the likelihood of the smart phone market to do very well is limited by the low employment rate and is subject to constraints when considering the smart phone market and the consumer's ability to pay. Supply & Demand Law of demand and substitutes how the demand of these phones are very high.

Which again ties back to scarcity but how substitutes are so readily available? I mean you don't have to have a smart phone you can have a regular ole cell and then an iPad. You would think that scarcity wouldn't be an issue but it is. Human desire is hard to fulfill we are always wanting the next biggest and best thing.

How incredibly elastic the smart phone industry and consumer choice….The book talk about things that caused a shift of the demand curve or a change in demand and one key point was obviously change in the price of a related good. This is really a key driver of competition in the smart phone industry. Even though consumers love their phones and really can't live without them price is always a factor and commercials and the top cell phone companies are constantly having price and technology wars.

Who can create the biggest best phone and sell it the cheapest. Consumer choice and how obviously price affects what a consumer will buy but the smartphone industry is interesting because these phones aren't exactly getting cheaper but consumers are still buying still trading their old phone in for the newest smart phone.

Supply and demand are ostensibly curves on a graph that will almost always intersect and create an equilibrium price where the smart phone market will meet the demand for the smart phone market and yield a competitive price for consumers. As consumer demand for the product decreases given the economic climate, supply created to satisfy demand decreases until the demand curve.