First part
I plan to analyze smartphone supply and demand for my term project. The laws of supply and demand govern nearly every product we consume. Smartphones, made possible by rapidly developing technologies, have simplified regular social interactions. Smartphones function in the economic sphere in the same way that any other product does, with supply and demand. Smartphones have changed the way we communicate with one another and the world at large. Something new always appears on the market somewhere in the world, and we live in an age where this is the norm rather than the exception. Smartphone companies have iterated on their designs frequently since the device’s invention.
The first article I will analyze for this assignment is the BBC “Coronavirus: Smartphone sales collapse amid pandemic” article. According to the article, the coronavirus epidemic in China had far-reaching consequences. The inability of some Asian manufacturers to produce cell phones coincided with the inability or unwillingness of many customers to go out and purchase new devices from shops. According to the story, smartphone sales decreased from 99.2 million in 2019 to 61.8 million in 2020.
The second article I will analyze in this project is the New York Times “Tech Companies Slowly Shift Production Away from China” article (Wakabayashi & Mickle, 2022). According to the authors, Apple and Google have new smartphone generations due out in the next few weeks, and they’ll be competing to set themselves apart. However, buyers will largely ignore a significant shift: some phones will no longer be manufactured in China. According to the article, a small number of the newest iPhones will be manufactured in India, and some of the newest Pixel phones will be manufactured in Vietnam. The change is a reaction to mounting worries about China’s role in recent global conflicts and pandemic-caused interruptions to supply chains. China has traditionally been the global electronics industry’s factory floor due to the country’s unparalleled ability to attract large numbers of highly trained employees and maintain sufficient production capacity to meet surging demand for the next big thing.
The third article I will analyze in this assignment is the BBC article, “Apple warns coronavirus will hurt iPhone supplies” According to the article, Apple has cautioned that the coronavirus disturbance in China will result in lower-than-expected sales. The tech behemoth reported that output and sales were impacted and that there would be temporary constraints on iPhone availability around the globe. Apple is the first big US corporation to acknowledge that the pandemic will harm its bottom line publicly. Apple did not mention the probable impact despite predicting record sales of up to $67bn for the current quarter. Apple predicted decreased sales of its goods in China because most shops would be shuttered or have limited hours.
Second part
Since the COVID-19 outbreak, the economy has suffered a significant blow. Low wages, high taxes, a high cost of living, and high unemployment all add to a market eagerly seeking out less expensive options for luxury smartphones. However, nearly all smartphone manufacturers have established virtually similar prices in recent months. This move turns off most potential customers, resulting in a significant decline in smartphone purchases. Most of these businesses have established comparable cheap prices for their goods to boost market competition.
Some of the variables affecting the supply industry are essential to investigate supply and demand. Customer standards are the single most crucial element in the supplier industry. Most smartphone producers strive to create cutting-edge products that meet consumers’ high standards. Another significant element that affects the smartphone market supply segment is the manufacturing expense. BBC news argues that a product’s market price is set by its manufacturing costs. Smartphones with a high market price also have a high manufacturing expense. Including a processor, touch panel, and other electrical components raises the expense of manufacturing.
Market rivalry is another major element influencing availability. Smartphone makers and retailers are in a never-ending battle for market share. To stay ahead of the competition, these businesses create cutting-edge technology that pleases their consumers. To obtain an edge in the market, some competitors have lowered the costs of their products.
Equilibrium values are affected by supply and demand for a product. New, improved versions that live up to consumers’ standards are always needed in the marketplace. Due to the high cost of manufacturing new cell phones, many retailers have reduced the costs of previously released models. There will be room for the company’s freshly developed goods if the price is lowered. Most of the time, the market has a shortage of recently created cell phones and an overabundance of outdated models.
The smartphone industry has hit a plateau as of late. The smartphone market is on the rise. Increasing battery life, improving picture quality, and developing faster battery charging methods are common goals of the smartphone industry. The smartphone industry is currently saturated. The finest smartphone marketplaces, which include Europe and the United States, are already at capacity. Users in these areas cannot afford to upgrade to new devices now. Supply must shift to restore balance in the smartphone market as demand falls.
The mobile phone industry has halted output after a year of exceptional sales in 2018 due to trade disputes and weaker global development. Because the phone industry anticipates an increase in the cost of doing business with its vendors, this anticipation acts as a de facto supply driver. The result is a leftward change in the supply trajectory. The piece also discusses how the mobile phone industry tends to stock up on equipment during prosperous times and slow down on purchases during leaner times. The decline in household wealth is setting demand. The demand slope will move to the left as a result of this. The equilibrium amount has shrunk, but the equilibrium price is undefined.
References
BBC. (2020, February 17). Apple warns Coronavirus will hurt iPhone supplies. BBC News. Retrieved March 30, 2023, from https://www.bbc.com/news/business-51539322
BBC. (2020, March 20). Coronavirus: Smartphone sales collapse amid pandemic. BBC News. Retrieved March 30, 2023, from https://www.bbc.com/news/technology-51981841
Wakabayashi, D., & Mickle, T. (2022, September 1). Tech companies slowly shift production away from China. The New York Times. Retrieved March 30, 2023, from https://www.nytimes.com/2022/09/01/business/tech-companies-china.html
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