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Brief introduction of iPad  iPad is originated in January 27, 2010  A line of tablet computers designed, developed and marketed by Apple Inc  Platform for audio-visual media including movies, music  Runs the same operating system as the iPod Touch and iPhone  Can run its own applications as well as iPhone applications.

How Price of iPad is determined? Determined by:  Consumers’ demand  Cost of production  Income of targeted consumers Finally, the price of iPad was determined at 499 US dollars.

Consumer’s demand  An increase in demand would raise the equilibrium price and so, Apple Inc. would choose to increase the price of an iPad to gain more profits. ta E2 P2 Q2 D2 Price of iPad S1 P1 Q1 Quantity of iPad

Cost of production  Increase in Cost of Production (COP) - wages, rent, interest, price of a raw material  Holding the price of the good constant, a higher unit cost of production would result in a lower profit per unit.  Hence, when COP of iPad increase, the producer of iPad will increase the price of iPad to maintain their profit.

Income of targeted consumers  As iPad is a normal good, income of consumers would be a deciding factor.  An increase in income leads to an increase in the demand of normal goods.  When demand of iPad increases, the producers would increase the price of iPad to maximize profits.

Products associated to iPad Complements:  iPad casing  iPad screen protector Subsitutes:  HP Slate  Dell Streak

How these products affect the demand/quantity demanded(Qd) of iPad?  Complements: Casing and screen protector. A fall in their price increases Qd of these goods thus an increase in the demand for iPad and vice versa.  Substitutes: A fall in price of substitutes will lead to a rise in Qd for those goods but a fall in the demand of iPad and vice versa.

How recent developments would affect your marketing and pricing decisions for the iPad?

Producer Factor 1: Trend of tablet PCs IIncreased competition in the tablet PC market NNeed a competitive edge over its rival EE.g: Potential substitutes - HTC Flyer and HP slate EEmergence of substitutes would make the PED for iPad more elastic DDemand for other substitutes likely to be responsive to the change in price of iPad.

Factor 2: Technology R&D HHigh degree of R&D -> more efficient method of production LLower cost of production of iPad DDecreases selling price of iPad MMore consumers rationed into the market PProfitability of each iPad would still increase TTotal revenue increases

Consumer Factor 1: Taste and preferences IImprovement in software TThe launch of iPhone gained commercial success for Apple AApple known to deliver products with consistent quality LLoyal patrons due to easily adaptable hardware TThus iPad was highly anticipated and demanded PPED of iPad would be relatively inelastic IIncrease in profits as higher dollar votes are casted

Factor 2: Consumer income CConsumers’ growing income with improvement in world’s economy PPurchasing power of Singaporean consumers increases TThe iPad and iPad 2 are normal goods (YED > 1) IIncrease in income => more than proportionate change in quantity demanded for iPads. IIncome increases, sales of iPad increase

Bibliography Marketing Mix. ( ). Retrieved March 18, 2011, from NetMBA Business Knowledge center: iPad - Wikipedia, the free encyclopedia. (Last modified: March 18, 2011). Retrieved March 18, 2011, from Wikipedia: the-apple-ipad/ html MJC economics notes.

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