Comments on: Does Apple stand a chance? http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/ for students and teachers of Economics Wed, 23 May 2012 04:39:58 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Mirren Mecathum http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-1/#comment-22671 Mirren Mecathum Mon, 26 Mar 2012 11:17:55 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-22671 Hi Lola, I agree with your answers especially question 2. As there is such a low level of product differentiation, doesn’t it make you wonder how Apple did it? How it emerged from the bottom to the absolute top? So even if it is difficult for a new firm in the market, it is not impossible. Apple proved that theory wrong. However, I do agree in economics we have to agree on the normal behavior of such firms. Overall, your answers are good answers. They were brief but you didn’t miss out on anything! Hi Lola,
I agree with your answers especially question 2. As there is such a low level of product differentiation, doesn’t it make you wonder how Apple did it? How it emerged from the bottom to the absolute top? So even if it is difficult for a new firm in the market, it is not impossible. Apple proved that theory wrong. However, I do agree in economics we have to agree on the normal behavior of such firms. Overall, your answers are good answers. They were brief but you didn’t miss out on anything!

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: Mirren Mecathum http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-2/#comment-22670 Mirren Mecathum Mon, 26 Mar 2012 11:16:30 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-22670 What barriers to entry exist in the market for mobile phones? There is oligopoly in the market when dealing with the aspect of mobile phones. Therefore, as Apple comes into the picture of that market, the conviction they have to have on customers must be strong. This is because customer loyalty is not easily tampered with. Apple being a “new” brand in the market of mobile phones would first have to prove itself before they can gain customer loyalty and that is a barrier. Partnership is also a barrier and this is the most widely used style of advertising a phone now. The process of attaining a phone is a lot less complicated and cheaper when it is linked to a “plan” by a phone plan provider firm. Why do you think so few firms produce mobile phones? You can’t really “stand out” as a mobile phone company. All mobile phones do the same thing and have the same purpose. One phone would be better in one aspect but lacking in another. Apple may have one of the best systems but have really bad quality photos. Therefore there is a low level of product differentiation. Considering this factor plus customer loyalty, new firms who have not built a name for themselves would find it tough to pull through. Do you think Apple will be able to successfully penetrate the mobile market? In my opinion, Apple being as innovative and creative as they already are will definitely be able to penetrate the mobile phone market. Apple has advertised their product in such a way whereby it is not just a technological device to own an iPhone but a part of a “better” lifestyle. It is now a form of status in society to own one and not purely on the device’s functions. What threats do cheaper “knock-offs” of the Apple iPhone pose to Apples attempts to compete in China’s mobile market? This is no different from the case of pirated DVDs. It is a major issue in the world now and to Apple. It creates unfair competition for Apple as the phone is entirely Apple’s idea and hardwork but with a little tampering, able o be replicated and sold for a Cheaper price. Consumers who are not as well to do would go for the cheaper option, as that is only the consumer’s rational behavior towards their options. What barriers to entry exist in the market for mobile phones?
There is oligopoly in the market when dealing with the aspect of mobile phones. Therefore, as Apple comes into the picture of that market, the conviction they have to have on customers must be strong. This is because customer loyalty is not easily tampered with. Apple being a “new” brand in the market of mobile phones would first have to prove itself before they can gain customer loyalty and that is a barrier.
Partnership is also a barrier and this is the most widely used style of advertising a phone now. The process of attaining a phone is a lot less complicated and cheaper when it is linked to a “plan” by a phone plan provider firm.

Why do you think so few firms produce mobile phones?
You can’t really “stand out” as a mobile phone company. All mobile phones do the same thing and have the same purpose. One phone would be better in one aspect but lacking in another. Apple may have one of the best systems but have really bad quality photos. Therefore there is a low level of product differentiation. Considering this factor plus customer loyalty, new firms who have not built a name for themselves would find it tough to pull through.

Do you think Apple will be able to successfully penetrate the mobile market?
In my opinion, Apple being as innovative and creative as they already are will definitely be able to penetrate the mobile phone market. Apple has advertised their product in such a way whereby it is not just a technological device to own an iPhone but a part of a “better” lifestyle. It is now a form of status in society to own one and not purely on the device’s functions.

What threats do cheaper “knock-offs” of the Apple iPhone pose to Apples attempts to compete in China’s mobile market?
This is no different from the case of pirated DVDs. It is a major issue in the world now and to Apple. It creates unfair competition for Apple as the phone is entirely Apple’s idea and hardwork but with a little tampering, able o be replicated and sold for a Cheaper price. Consumers who are not as well to do would go for the cheaper option, as that is only the consumer’s rational behavior towards their options.

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: Ya Hsuan Pai http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-1/#comment-22061 Ya Hsuan Pai Sat, 25 Feb 2012 22:05:22 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-22061 Hi Simona, You did a great job on explaining and I do agree with most of your points. I agree with your example in the #3 answer where you said crowds waiting outside the apple store when a new product comes out, and #4 that because China has such a huge population, with a cheaper replica, Chinese people will not buy the real iPhone and Apple may experience a decrease in profit. Hi Simona,

You did a great job on explaining and I do agree with most of your points. I agree with your example in the #3 answer where you said crowds waiting outside the apple store when a new product comes out, and #4 that because China has such a huge population, with a cheaper replica, Chinese people will not buy the real iPhone and Apple may experience a decrease in profit.

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: Ya Hsuan Pai http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-2/#comment-22060 Ya Hsuan Pai Sat, 25 Feb 2012 21:54:27 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-22060 1.What barriers to entry exist in the market for mobile phones? Since there are already well-established big firms in the cell phone industry, new phone companies (such as Apple) that are just entering the firm will not have much chance to profit. However due to Apple’s strong product differentiation, the technology and brand loyalty of consumers, Apple would benefit a lot compared to other new entering mobile phone firms. 2.Why do you think so few firms produce mobile phones? Due to the firm concentration ratio on the above article, it shows that 75.6% of market is dominated by three large cell phone companies already. Therefore, when new firms produce mobile phones, they will only have little economies of scales. So, not many firms will want to produce mobile phones. 3.Do you think Apple will be able to successfully penetrate the mobile market? Apple is a strong company. They have succeeded in many of their past inventions. Thus not only does it have a reputation of good quality but also a strong brand loyalty. Therefore, I believe that they have the large capacity to successfully penetrate the mobile market. And because of their product differentiation, they present many function that other mobile phone never had- such as the touch screen, light weight, multiple apps, etc. Moreover, with their newly invented iPhone, it could have functions connected to other Apple products. 4.What threat does cheaper “knock-offs” of the Apple iPhone pose to Apples attempts to compete in China’s mobile market? The “knock-offs” in china may offer similar replica of the iPhone with better functions such as having everything in Chinese. Consumers then, will stop buying cell phone products from Apple and buy the similar replica that China created for a cheaper price and a better deal. 1.What barriers to entry exist in the market for mobile phones?

Since there are already well-established big firms in the cell phone industry, new phone companies (such as Apple) that are just entering the firm will not have much chance to profit. However due to Apple’s strong product differentiation, the technology and brand loyalty of consumers, Apple would benefit a lot compared to other new entering mobile phone firms.

2.Why do you think so few firms produce mobile phones?
Due to the firm concentration ratio on the above article, it shows that 75.6% of market is dominated by three large cell phone companies already. Therefore, when new firms produce mobile phones, they will only have little economies of scales. So, not many firms will want to produce mobile phones.

3.Do you think Apple will be able to successfully penetrate the mobile market?
Apple is a strong company. They have succeeded in many of their past inventions. Thus not only does it have a reputation of good quality but also a strong brand loyalty. Therefore, I believe that they have the large capacity to successfully penetrate the mobile market. And because of their product differentiation, they present many function that other mobile phone never had- such as the touch screen, light weight, multiple apps, etc. Moreover, with their newly invented iPhone, it could have functions connected to other Apple products.

4.What threat does cheaper “knock-offs” of the Apple iPhone pose to Apples attempts to compete in China’s mobile market?

The “knock-offs” in china may offer similar replica of the iPhone with better functions such as having everything in Chinese. Consumers then, will stop buying cell phone products from Apple and buy the similar replica that China created for a cheaper price and a better deal.

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: Nadiya S http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-1/#comment-21905 Nadiya S Mon, 20 Feb 2012 03:09:31 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-21905 In your answer for question four, its true that now, knock-offs don't pose a threat to Apple, yet at the time this Blog was written, was when they were less successful, and I think at the time, the threat of knock offs was really real for Apple, and really impacted their profits. In your answer for question four, its true that now, knock-offs don't pose a threat to Apple, yet at the time this Blog was written, was when they were less successful, and I think at the time, the threat of knock offs was really real for Apple, and really impacted their profits.

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: Nadiya S http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-2/#comment-21904 Nadiya S Mon, 20 Feb 2012 03:06:46 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-21904 3.Do you think Apple will be able to successfully penetrate the mobile market? I guess we can easily answer this quwstion now, because it is in hindsight. Apple is one of the most successful firms in the world. And the iPhone is beating the Blackberry out fast! Apple's innovative apps and devices were able to compete with the already established names, and were able to make it to the top. The same thing that was said about the Apple phones, was also said when Steve Jobs first started the company in his garage....there was already a computer comapany that was successful, and it was considered crazy to start from scratch and compete. Yet Apple made it to the top. 4.What threat do cheaper “knock-offs” of the Apple iPhone pose to Apples attempts to compete in China’s mobile market? They pose the threat that if they are almost identical yet the knock-off is much cheaper and at the same time can pass for an iPhone, most people will go for the knock-off, especially because at the time that this was a threat to Apple, Apple did not yet have the reputation it does today. 3.Do you think Apple will be able to successfully penetrate the mobile market?
I guess we can easily answer this quwstion now, because it is in hindsight. Apple is one of the most successful firms in the world. And the iPhone is beating the Blackberry out fast! Apple's innovative apps and devices were able to compete with the already established names, and were able to make it to the top. The same thing that was said about the Apple phones, was also said when Steve Jobs first started the company in his garage….there was already a computer comapany that was successful, and it was considered crazy to start from scratch and compete. Yet Apple made it to the top.

4.What threat do cheaper “knock-offs” of the Apple iPhone pose to Apples attempts to compete in China’s mobile market?
They pose the threat that if they are almost identical yet the knock-off is much cheaper and at the same time can pass for an iPhone, most people will go for the knock-off, especially because at the time that this was a threat to Apple, Apple did not yet have the reputation it does today.

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: Nadiya S http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-2/#comment-21903 Nadiya S Mon, 20 Feb 2012 03:06:32 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-21903 2.Why do you think so few firms produce mobile phones? Because an oligopoly has already been created. There are a few big firms with established names, like Motorola, LG, Nokia, Blackberry etc. And now the competition is between these already developed and strong comppanies who already have good names and reputations. Thus it would be really hard for any new firms to join into the competition because unless they could come up with something totally brand new that would beat the other firms (and this would be extremly hard because you need a lot of money to do so), then the opening firm would get beat out fast. 2.Why do you think so few firms produce mobile phones?
Because an oligopoly has already been created. There are a few big firms with established names, like Motorola, LG, Nokia, Blackberry etc. And now the competition is between these already developed and strong comppanies who already have good names and reputations. Thus it would be really hard for any new firms to join into the competition because unless they could come up with something totally brand new that would beat the other firms (and this would be extremly hard because you need a lot of money to do so), then the opening firm would get beat out fast.

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: Nadiya S http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-2/#comment-21902 Nadiya S Mon, 20 Feb 2012 03:06:12 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-21902 1.What barriers to entry exist in the market for mobile phones? A big factor of success for a firm in the market for mobile firms, is reputation. This is a barrier for entering firms. It is extremely hard to compete if you are a new and unknown firm, against one that already has a very good name, and one whose products have already been bought and are known for their good quality. It is hard for entering firms but not impossible, there are always new ways to be found to be innovative and to differentiate your product from those that already exist on the market.-------------------------------------------------------------------------------- 1.What barriers to entry exist in the market for mobile phones?
A big factor of success for a firm in the market for mobile firms, is reputation. This is a barrier for entering firms. It is extremely hard to compete if you are a new and unknown firm, against one that already has a very good name, and one whose products have already been bought and are known for their good quality. It is hard for entering firms but not impossible, there are always new ways to be found to be innovative and to differentiate your product from those that already exist on the market.——————————————————————————–

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: Sebastian VW http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-2/#comment-21885 Sebastian VW Sun, 19 Feb 2012 15:25:08 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-21885 What barriers to entry exist in the market for mobile phones? Mostly the fact that there are already SO many other companies that are making mobile phones. There are so many different models, touchscreen, no touchscreen, 3" screen, 4" screen, for everyone there is something they'd like. If you are new in the market, it is hard to differentiate your product from the others. Why do you think so few firms produce mobile phones? Just like I wrote above, there are so many other companies that already have some models, it is hard to enter the market. Especially for smaller firms it is hard to make their product stand out from the others. Do you think Apple will be able to successfully penetrate the mobile market? Well, since this article is a few years old, at the time it was a little unsure. But if we look at Apple now, it is one of the biggest mobile phone producers with Samsung. Therefore I think they have penetrated the mobile phone market successfully. What threat do cheaper “knock-offs” of the Apple iPhone pose to Apples attempts to compete in China’s mobile market? Because in China, many people are poor. Though, many people want a mobile phone. If they see two (almost) identical phones, and one of them is $100 and the other is $700, why would they buy the $700 one? That's why they buy the cheap fake one, though, Apple feels the pain. What barriers to entry exist in the market for mobile phones?

Mostly the fact that there are already SO many other companies that are making mobile phones. There are so many different models, touchscreen, no touchscreen, 3" screen, 4" screen, for everyone there is something they'd like. If you are new in the market, it is hard to differentiate your product from the others.

Why do you think so few firms produce mobile phones?

Just like I wrote above, there are so many other companies that already have some models, it is hard to enter the market. Especially for smaller firms it is hard to make their product stand out from the others.

Do you think Apple will be able to successfully penetrate the mobile market?

Well, since this article is a few years old, at the time it was a little unsure. But if we look at Apple now, it is one of the biggest mobile phone producers with Samsung. Therefore I think they have penetrated the mobile phone market successfully.

What threat do cheaper “knock-offs” of the Apple iPhone pose to Apples attempts to compete in China’s mobile market?

Because in China, many people are poor. Though, many people want a mobile phone. If they see two (almost) identical phones, and one of them is $100 and the other is $700, why would they buy the $700 one? That's why they buy the cheap fake one, though, Apple feels the pain.

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: alifsigridardottir http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-1/#comment-21764 alifsigridardottir Tue, 14 Feb 2012 22:08:32 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-21764 I agree with you Robertwang, the brand name Apple has clearly helped Apple establish itself in the mobile phone industry. People were waiting outside the store in lines for hours before the first iPhone came out and people still continue to do so - I think Apple may have the most loyal customers of all companies in the world. It's truly amazing. Apple has tricks up their sleeves to ensure that most people can afford to buy an iPhone as well, because once the newest generation comes out, the older generation decreases in price by a substantial amount. They really seem to know what they are doing. I agree with you Robertwang, the brand name Apple has clearly helped Apple establish itself in the mobile phone industry. People were waiting outside the store in lines for hours before the first iPhone came out and people still continue to do so – I think Apple may have the most loyal customers of all companies in the world. It's truly amazing. Apple has tricks up their sleeves to ensure that most people can afford to buy an iPhone as well, because once the newest generation comes out, the older generation decreases in price by a substantial amount. They really seem to know what they are doing.

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: alifsigridardottir http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-2/#comment-21763 alifsigridardottir Tue, 14 Feb 2012 22:05:53 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-21763 What barriers to entry exist in the market for mobile phones? There are typical barriers for the market for mobile phones, such as economies of scale and also the lack of originality; mobile phones are pretty standard, and anything extra, such as the smart phones that exist today are actually considered ‚‘‘mini laptops‘‘ most of the time. There is not a lot of product differentiation in mobile phones. Also, people are often incredibly loyal to their phone companies whether it is samsung, nokia or LG. Why do you think so few firms produce mobile phones? There are a select number of firms that simply dominate the industry and their experience with the phone industry and their strength overall most likely works as an entry barrier because people are afraid to enter an industry with no economies of scale, knowing that there are huge firms thriving in the industry with substantial economies of scale. Also, mobile phones are goods that last for a while, you aren‘t constantly buying a new phone and people usually just own one. Do you think Apple will be able to successfully penetrate the mobile market? Apple is definitely dominating the mobile market right now, and other phone companies like samsung are desperately trying to compete with Apple making look-a-like phones that have more desirable features such as more freedom (apps don‘t have to be purchased through Apple like with the iPhone, etc). Apple has clearly established itself in the phone industry and has successfully taken over. The iPhone has strange, interesting and desirable features that consumers clearly enjoy. What threat do cheaper knock offs of the Apple iPhone pose to Apples attempts to compete in Chinas mobile market? The iPhone is incredibly expensive for the average person, yet people that aren‘t able to buy an iPhone still want one, and a cheaper knock off without the brand name is a desirable alternative for many people. Especially if the phone is a ‚‘‘good‘‘ knock off. What barriers to entry exist in the market for mobile phones?
There are typical barriers for the market for mobile phones, such as economies of scale and also the lack of originality; mobile phones are pretty standard, and anything extra, such as the smart phones that exist today are actually considered ‚‘‘mini laptops‘‘ most of the time. There is not a lot of product differentiation in mobile phones. Also, people are often incredibly loyal to their phone companies whether it is samsung, nokia or LG.
Why do you think so few firms produce mobile phones?
There are a select number of firms that simply dominate the industry and their experience with the phone industry and their strength overall most likely works as an entry barrier because people are afraid to enter an industry with no economies of scale, knowing that there are huge firms thriving in the industry with substantial economies of scale. Also, mobile phones are goods that last for a while, you aren‘t constantly buying a new phone and people usually just own one.
Do you think Apple will be able to successfully penetrate the mobile market?
Apple is definitely dominating the mobile market right now, and other phone companies like samsung are desperately trying to compete with Apple making look-a-like phones that have more desirable features such as more freedom (apps don‘t have to be purchased through Apple like with the iPhone, etc). Apple has clearly established itself in the phone industry and has successfully taken over. The iPhone has strange, interesting and desirable features that consumers clearly enjoy.
What threat do cheaper knock offs of the Apple iPhone pose to Apples attempts to compete in Chinas mobile market?
The iPhone is incredibly expensive for the average person, yet people that aren‘t able to buy an iPhone still want one, and a cheaper knock off without the brand name is a desirable alternative for many people. Especially if the phone is a ‚‘‘good‘‘ knock off.

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: hslater http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-1/#comment-21730 hslater Tue, 14 Feb 2012 11:04:59 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-21730 Hi kedwards I agree with your answer to question 1 as I think the key is that all of the products offer the same sorts of services and this means that a consumer is more likely to go for a more well-known name than to take a risk on a new almost unheard of comapny that has only just entered the market. hslater Hi kedwards
I agree with your answer to question 1 as I think the key is that all of the products offer the same sorts of services and this means that a consumer is more likely to go for a more well-known name than to take a risk on a new almost unheard of comapny that has only just entered the market.
hslater

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: Jackson Truex http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-1/#comment-21473 Jackson Truex Wed, 08 Feb 2012 03:44:15 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-21473 I really like how you covered how Apple's products are more expensive and therefore they need to be cautious of their cost of production. I don't think replicas are ever exactly the same. I think that they are generally much cheaper. Good post! I really like how you covered how Apple's products are more expensive and therefore they need to be cautious of their cost of production. I don't think replicas are ever exactly the same. I think that they are generally much cheaper. Good post!

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: Jackson Truex http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-2/#comment-21471 Jackson Truex Wed, 08 Feb 2012 03:40:20 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-21471 What barriers to entry exist in the market for mobile phones? Economies of scale are one of the largest barriers to consider when entering the market for mobile phones. It is very hard for a small new firm to benefit from the large economies of scale that existing companies have. Producing a mobile phone takes a lot of expensive research and testing which needs to take before a company can even consider producing a phone. There is also the barrier of gaining customers. Many mobile phone companies force customers to sign contracts that require them to stay with their company for some time. This would make it very difficult for a new mobile phone company to gain new customers. Doing so would require very pricey ads and discounts. Why do you think so few firms produce mobile phones? One of the largest factors that explain why there are few firms that produce mobile phones is the barriers of entry. It would be very difficult for a new company to enter the market with very much success. The mobile phone industry is very hard for certain companies to do well in do the constantly changing technology that needs to be applied to the phones. Firms need to constantly change their business model in order to satisfy customers. Many mobile phone companies have gone bankrupt or bought out in recent years. Do you think Apple will be able to successfully penetrate the mobile market? I think that it is safe to say that Apple was successful in their penetration into the mobile market. The reason they were able to be extremely successful as a mobile phone firm was due to multiple reasons. Prior to entering the mobile phone market they were already very established as a company in the computer and mp3 markets. This allowed them to cover the financial barriers of entry as well as the publicity. The phone they first released was taken very by consumers due to its advertising and design. They were able to take many of their previous consumers of ipods and introduce them to a phone that is an ipod as well as a smart phone. I would say that they have been successful in entering and making a mark on the mobile market. What threat do cheaper “knock-offs” of the Apple iPhone pose to Apples attempts to compete in China’s mobile market? The knock-off phones do pose a large threat to Apple. These phones are sold at a much cheaper price than Apple offers their phones for. Apple can avoid this threat in using their advertising campaigns. I think that this does not pose a huge problem for Apple due to the fact that consumers tend to “buy into” the company as a whole and not just the mobile devices. Apple competes on the basis of non-price competition. What barriers to entry exist in the market for mobile phones?
Economies of scale are one of the largest barriers to consider when entering the market for mobile phones. It is very hard for a small new firm to benefit from the large economies of scale that existing companies have. Producing a mobile phone takes a lot of expensive research and testing which needs to take before a company can even consider producing a phone. There is also the barrier of gaining customers. Many mobile phone companies force customers to sign contracts that require them to stay with their company for some time. This would make it very difficult for a new mobile phone company to gain new customers. Doing so would require very pricey ads and discounts.

Why do you think so few firms produce mobile phones?
One of the largest factors that explain why there are few firms that produce mobile phones is the barriers of entry. It would be very difficult for a new company to enter the market with very much success. The mobile phone industry is very hard for certain companies to do well in do the constantly changing technology that needs to be applied to the phones. Firms need to constantly change their business model in order to satisfy customers. Many mobile phone companies have gone bankrupt or bought out in recent years.

Do you think Apple will be able to successfully penetrate the mobile market?
I think that it is safe to say that Apple was successful in their penetration into the mobile market. The reason they were able to be extremely successful as a mobile phone firm was due to multiple reasons. Prior to entering the mobile phone market they were already very established as a company in the computer and mp3 markets. This allowed them to cover the financial barriers of entry as well as the publicity. The phone they first released was taken very by consumers due to its advertising and design. They were able to take many of their previous consumers of ipods and introduce them to a phone that is an ipod as well as a smart phone. I would say that they have been successful in entering and making a mark on the mobile market.

What threat do cheaper “knock-offs” of the Apple iPhone pose to Apples attempts to compete in China’s mobile market?
The knock-off phones do pose a large threat to Apple. These phones are sold at a much cheaper price than Apple offers their phones for. Apple can avoid this threat in using their advertising campaigns. I think that this does not pose a huge problem for Apple due to the fact that consumers tend to “buy into” the company as a whole and not just the mobile devices. Apple competes on the basis of non-price competition.

Like or Dislike: Thumb up 0 Thumb down 0

]]> By: Brian Greggs http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/comment-page-2/#comment-21454 Brian Greggs Wed, 08 Feb 2012 01:30:49 +0000 http://welkerswikinomics.com/blog/2007/11/17/does-apple-have-a-chance/#comment-21454 What barriers to entry exist in the market for mobile phones? Certain established mobile phone providers have already put in place massive advertising campaigns that make it difficult for another company to enter the market Why do you think so few firms produce mobile phones? I think this because the start up cost for running a mobile phone company is massive, and also its hard for a company to "gain any steam" without one of the larger companies buying them out. Do you think Apple will be able to successfully penetrate the mobile market? Yes I do, but I think this is mainly because they are offering a revolutionary product that has changed the industry. Also they were capable of entering the market because they already had the infrastructure in place to begin production because of the other branches of the company. What threat do cheaper “knock-offs” of the Apple iPhone pose to Apples attempts to compete in China’s mobile market? Well it will certainly make it difficult for Apple to compete, but I think Apple offers a luxury product, so many people will desire toown an iPhone just so they can say they do. But initially they knock-offs will have a definite effect on Apple's profit. What barriers to entry exist in the market for mobile phones?

Certain established mobile phone providers have already put in place massive advertising campaigns that make it difficult for another company to enter the market

Why do you think so few firms produce mobile phones?

I think this because the start up cost for running a mobile phone company is massive, and also its hard for a company to "gain any steam" without one of the larger companies buying them out.

Do you think Apple will be able to successfully penetrate the mobile market?

Yes I do, but I think this is mainly because they are offering a revolutionary product that has changed the industry. Also they were capable of entering the market because they already had the infrastructure in place to begin production because of the other branches of the company.

What threat do cheaper “knock-offs” of the Apple iPhone pose to Apples attempts to compete in China’s mobile market?

Well it will certainly make it difficult for Apple to compete, but I think Apple offers a luxury product, so many people will desire toown an iPhone just so they can say they do. But initially they knock-offs will have a definite effect on Apple's profit.

Like or Dislike: Thumb up 0 Thumb down 0

]]>