Factors Affecting Iphones

1084 Words5 Pages
Factors affecting supply of iPhones in the market Demand of consumers The demand of consumers is one of the factors which can affect the supply of iPhones. According to Munster, who surveyed 1,004 United State consumers about their upcoming cell phone purchase plans, demand for the iPhone has only arisen since the iPhone 6 and 6 Plus launched in September, 2013. Among the consumers surveyed who plan to buy a smartphone in the next three months, 50 percent said they wanted to purchase an iPhone. There were only 47 percent of consumers were planning on buying an iPhone which were obtained from a similar survey conducted in September, 2013. In 2013, demand for the iPhone 5s decreased after the launch of iPhone 6 and 6 Plus, whereas demand for…show more content…
Technological advancement influences the supply curve by allowing Apple to use more efficient production methods. Thus, more units of the iPhone can be produced at every price with the increased efficiency of production. Therefore, supply of iPhones will increase, shifting the supply curve to the right. Apple adopts the use of technology in managing its supply chain. Apple can divert products from assembly origin in China to wherever it is required based on sales through the supply chain monitoring technology. Apple also uses the available software to monitor the movement of cargo. Through this method, Apple gets to know where the stock at all times, which allows for continuous changes based on…show more content…
Furthermore, manufacturing cost including labor, is paid to the contract manufacturers. Warranty cost is paid back to the clients for returned product that can never be sold again. For iPhones, the manufacturing costs are much higher than comparable devices. This is partly due to the design of the product and partly due to the quality testing required. Those expenses are ranging between $12.5 and $30 for each unit. The iPhone manufacturing costs are twice or three times the average. The labor costs are a small part of the general cost structure at between 2% and 5% of the sales cost. The high level of human interaction which involves 141 work steps in the process of iPhone production could be automated. However, it is not implied that the expense of automation would be higher and the adaptability of the automated process would be lower. The process involves both the labor and robot intensive sub-processes. To produce an iPhone, the manufacturing cost is about $30 and $60 is needed to be allocated for transportation and warranty costs. Number of

More about Factors Affecting Iphones

Open Document