Why
is iPhone 5 so popular despite of its expensive price?
Apple's iPhone 5 and its strong competitor's Samsung Galaxy SIII.
What makes iPhone 5 stands out from the crowd?
Since
the long-awaited release of iPhone 5 by Apple – the top-selling smartphone
among the other brands, Apple announced that the demand of the public for it
has exceeded its initial supply unexpectedly. Due to that, customers that can
start to pre-order the smartphone of the year since 14 of September have to
wait until October to finally lay their hands on it. As comparisons between the
sales of all the iPhones released by Apple, it is found that since the release
of its first iPhone on June 2007, the selling rates and speed of their
following iPhones is constantly increasing that in the first 24-hours of taking
preorders iPhone 5, more than 2 million of iPhone 5 are sold.
The new iPhone 5
is undeniably a smartphone that functions really well, however, other
competitors such as Samsung and HTC also introduced smartphones of similar
functions. Therefore, its barely about functionality of the phone that causes
its popularity among the public. Before we step into deeper, let me explain
some terms to be used here. The definition of price elasticity stands for the
sensitivity of the price of a product by the consumers. This means how strong
is the influence of price to a customer while purchasing and it is generally divided
into three major types:
- Elastic
demand, where a change in the price brings a big change in the quantity demanded.
- Inelastic
demand, where a change in the price brings a moderate change in the quantity
demanded.
- Unit
elastic demand, where a change in the price brings an equal change in the
quantity demanded.
Now, the reason
why iPhone 5 can have increasing sales and popularity in despite of the
increase in the price for every generation of the iPhone is because the
customers of Apple are less elastic to the price of the smartphones. This means
that the price of iPhone 5 is not an extreme issue to the customers in making
their purchasing decision.
Why is it so?
There are a few determinants that can influence the customers to be more
willing to pay, or to be more insensitive of the price for iPhone 5.
Pageview from Apple's official website on the date of release.
This thing is due
to the fact that the public now views smartphones
as a necessity rather than a luxurious good even though its price is
relatively high. Before the introduction of smartphones, the requirement on a
phone is the enabling of calls and messages. However, the introduction of
smartphones and its extraordinary functions compared to the normal cellphone
causes the norm and view of society to treat smartphone as a daily essential.
No one knew that the influence the revolution of the technology, the
touchscreen could be such a big issue to change the society’s view. Since its
becoming more common and people think iPhone is a need instead of a want, it
becomes a fairly elastic demand and people is more willing to pay in obtaining
this product.
Besides that, the availability of comparable substitutes
is another factor that plays a great role in causing the customers to purchase
this smartphone. The attention grabbed from that audience is not purely on the
‘fans‘ of the brand Apple, however, it has also gotten attention from users of
smartphones such as Blackberry and Android. In the sector of smartphone
manufacturers, brands that are of the standard in terms of their popularity are
very little. The famous competitors in the market of Apple smartphones include
the Blackberry, HTC, Windows and Samsung. Therefore, it can be concluded that the
audience with similar requirements on smartphones will only consider these few
brands listed. From this small variety of smartphones and the added advantage
that iPhone receives great review from customers, people will put it on top of
the list even though it is more expensive.
Lastly, the purchase and owning of iPhone is now
becoming a trend. It is viewed as a buy that shows the personal preference
and social status of the customers’. As mentioned in the article, “Still,
analysts expect customers to line up days in advance at Apple stores to
purchase one of the new black or white phones, just for bragging rights to say
they got it on release day.” From that, it is clear that many people are
concerned of the ability to show off especially with the transparent social
websites such as (Facebook and Twitter) nowadays. Thus, the behavior and the
attitude of the society that think being on trend is more important instead of
the price of the product causes them to be less elastic of iPhone’s price.
As we come to the
ending of this post, I think all that the popularity, the amount of sales that
is gained through the introduction of the new iPhone 5 is definitely not solely
due to its functionality. As we live in the modern era of technology, it is
understandable for the customers to feel inelastic of the price of iPhone as it
is viewed as a necessity, especially when the amount close substitute is not
high. Since the view of the society of it as a trend is the reason for some of
the people in purchasing it as analyzed, I predict that when another trend is
introduced and Apple doesn’t get the chance to receive it by chance, the iPhone
will not be able to stand as the top-selling phone anymore.
Specifications of all the iPhones released up to Sept. 2012. (Source: Apple Inc.)
References of article:-
