Apple cuts prices on notebooks

Link: http://www.canada.com/theprovince/technology/story.html?id=ad639250-c1ae-4c79-876b-f35fba728aa8

Summary
It was just announced a few days ago that Apple has released their new-line of aluminum-clad Mac Books and Mac Books Pros at $1,299. New improvements has be made. The new Mac Books now use Nvidia Corp graphics and Intel Corp processors. Also, Apple has changed the appearance to a more high-end look with an aluminum-clad finish, instead of plastic. Apple has chosen to follow on their annual strategy of replacing older products and keeping the same pricing. The old glossy white and black Mac Books are now replaced and price has dropped down to just $999. At a $100 price-cut, Apple may face a disappointing result, as they may not be able to sell out all their old Mac Books.

The Operation of a Market: Supply & Demand
Since the new line of aluminum-clad Mac Books has just been released, the old Mac Books' prices have been cut down to $999. The new improvements on the aluminum-clad Mac Books make them even more irresistible to have. Like all of Apple's products, appearance is one of the biggest factors why people like their products. By replacing the older model with better physical design and processor, people would lean towards the newer model even though the old Mac Book is cheaper because of their tastes and preferences. This is an example of demand. As the older models are being phased-out, demand for them are less, which means Apple will have to do something to sell out their remaining stock of the older Mac Books. Without compromising the price too much, Apple applied a $100 price cut on the older Mac Books. In most circumstances, people will buy more of a product if the price is low and less of it if the price is high. Keep in mind, Apple may be disappointed by the fact that their older line of Mac Books may not sell really well due to the fast, declining economy. Usually when income is low, the quantity demand is low, but because customers are now more aware of the economy and the possible future prices, sale percentages are expected to drop. Although, economies are dropping, Apple is not worried about selling their new-line of Mac Books, as they have always exceeded their expectations. As for the new Mac Books, the demands for them are high, which means that the supplies are high as well. As the concept of demand states, “ if they continue to buy a certain product, it will continue to be produced.” Apple would need to manufacture more shipments of Mac Books in order to meet people's demands.

Reflection
First of all, I personally think that the consumers' response to the price changes for both the new and old Mac Book will affect Apple greatly. Apple will continue to increase their sales, even though most people already own a Mac Book. The number and characteristics of buyers is probably one of the main factors that will push the sale of the new Mac Books. The current generation and age group are dedicated to new technology, and because of this, Apple has been successfully selling previous products. Also, Apple does a great job advertising and designing their products, making them very user-friendly, which matches very well with consumers’ tastes and preferences that are new to the industry. The more the consumers are exposed to a certain brand through advertising, their purchase choices are likely to be affected. Also, I must say Apple is truly brilliant for their work because of the fact that they based their commercial for the new line of Mac Books on their production. It shows the “production cost,” going through the steps of producing the goods from the raw material to the finished product. When people see the time and effort placed on a product, they would want it more. As for the supply side, Apple will be able to manufacture more of the product because of the high-set price. Keep in mind Apple has never had a single product where very few people wanted. Although I believe that the new Mac Books will successfully sell out to consumers, I don't think they'll set any new records with this product. Declining economies are affecting everyone around the world right now, and are probably facing financial issues. Not only that, but people might decide to purchase a PC laptop due to a change in the price of substitute products. PC usually ranges from $300-$800, while Macs are $1000+. Apple will no doubt manufacture thousands of the new Mac Books to retailers, meeting the demand of the people. Thus, supply and demand will continue to increase till the next product from Apple is released.