Supply & Demand in the iPhone Market (as reported by Quentin Fottrell via marketwatch.com)

The laws of supply and demand dictate that if demand is met by disproportionately high supply, there will generally be a decrease in the price of a good. Furthermore, if there is a high supply of a good which is similar to another good in the market, individuals may be unwilling to continue paying high prices for the original good. This simple pair of ideas has an interesting implication in the iPhone market. While new iPhones are still quite expensive, if second-hand versions of the devices became more readily available, this could put downward pressure on prices. However, new research suggests that this is unlikely because people are holding onto their secondary devices. The article found here discusses some of the reasons why individuals have held onto old phones and how this prospect supports a positive outlook for Apple’s profits.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: