The big picture

1. The big picture Several technologies such as the rise and collision of social, mobile and touch computing, have led to the introduction of new innovative products such as the Ipad from Apple and the Galaxy Tab from Samsung. By the release of the iPad 2 in March 2011, more than 15 million iPads had been sold – selling more than all other tablet PCs combined since the iPad's release. In 2011, it is expected to take 83 percent of the tablet computing market share in the United States. You are recently appointed as a market strategist, and your first task is to determine the effect of the following events on the price and quantity in the IPAD market. Prepared by Dr. Ikhlaas Fall 2012

2. Test yourself today! • A rise in the market price of IPAD due to the coming of Eid festivities. • Commercial Bank of Dubai recently launched a ‘no interest loan’ package for the first year upon the purchase of an IPAD. • National Bank of Abu Dhabi launched a ‘no interest loan’ package for the first six months upon the purchase of a Galaxy Tab. • Apple provides a free update on the software used to start IPAD, making the tablet faster to boot. • The IRS in the US decides to impose a tax of 12% on the current price of each Apple’s products. Prepared by Dr. Ikhlaas Fall 2012

3. The IRS decides to impose a tax of 12% on the current price of each Apple’s products and a tax of 15% on the current price of each Galaxy Tab. • The UAE Government implements a restrictive policy on the imports of IPAD due to more and more young kids accessing improper content on the web. • After Steve Jobs passed away, analysts expect the price of IPAD to rise in the next 6 months. Prepared by Dr. Ikhlaas Fall 2012

4. There is a decrease in the income of most of the working class population due to the effect of the global financial crisis forcing many companies to close down in the US. • There is a decrease in the income of most of the working class population due to the effect of the global financial crisis forcing many companies to close down in the US, followed by a reduction in the price of Galaxy Tabs. • The iPad uses an internal rechargeable battery made in Taiwan. Taiwan recently had a big cyclone destroying a major plant where the battery was made. Prepared by Dr. Ikhlaas Fall 2012

5. The iPad uses an internal rechargeable battery made in Taiwan. Taiwan recently had a big cyclone destroying a major plant where the battery was made. At the same time, Apple launched a campaign in UAE in Dubai Media City that the battery can provide up to 10 hours of video, 140 hours of audio playback, or one month on standby. • Apple’s executives are proposing to concentrate more of their operations in Iphone4, since the price of Iphone4 has been increasing more rapidly than the Ipad. • As part of expanding its market share of IPADs, Apple has launched 25 more Apple stores in the UAE. At the same time, there is a massive advertising campaign on some tv channels promoting the IPAD in the region. • Many universities are planning to adopt the IPAD as part of their teaching and learning methods within the next month. Assume all universities’ purchase of IPAD will represent 75% of the market share in UAE in the next month. Prepared by Dr. Ikhlaas Fall 2012

6. Integrating the Elasticity component • Do you think IPAD has an Elastic Demand? • What about the Elasticity of Supply for IPAD? • Is it a good strategy to raise prices on goods like IPAD in order to raise Apple’s profits? Explain your answer. • Would you expect the supply or the demand side to drive the market of IPAD? Explain your answer.

7. Come Early tomorrow Best of luck