Buyers and Sellers in Smartphone Market: Is the New iPhone Worth it?
In class, we’ve talked about matching markets between buyers and sellers. The concept is very broad and applicable to many industries today. If we take a look at the mobile electronics market, Apple’s products have done remarkably well. In the context of market clearing prices, the buyers, Apple’s customers hold a specific value to each product that Apple, the seller, offers. In the past, Apple products have sold out quickly following their releases. Despite being more expensive, Apple products have continuously sold out. With the high demand in mind, Apple prices their gadgets accordingly so in order to take advantage of consumers.
It is no surprise that the newest iPhone was going to sell out; however, what is surprising is that this year the iPhone 7Plus sold out quicker than its smaller counterpart. Historically, the standard iPhones have usually outsold their larger counterparts. Within 48 hours of iPhone6’s release, the regular comprised 65% of its units whereas the Plus only comprised 35% of the sold units. In the first 48 hours of 6S’s release, the standard comprised 59% and the Plus comprised 41% of the units moved. This year, within the first two days of sales, the iPhone 7 only comprised 45% whereas the 7Plus comprised 55% of the sold phones.
The iPhone7 is already a hefty $650 for 32GB. To upgrade to the 7Plus costs $120 more than the 7. At first glance, the extra size may not seem worth it; however, the 7Plus offers exclusive hardware premiums such as a dual-lens camera, full HD display, and better battery life. These 3 new features are extremely practical. Since the commodity sold out, the extra $120 is less than or equal to the personal values buyers have placed on the phones.
At the end of it, you must ask yourself: Am I going to get $650+ worth from this new smartphone? To delve deeper, $650 is the base price for the 32 GB iPhone7. Each upgrade in storage capacity (128, 256 GB) costs $100 dollars and the Plus upgrade is an additional $120. That means a 256 GB 7Plus would be $970.
Personally, the price is too steep. I would rather buy from another seller in the market than spend $650+ dollars on a new phone. Although $200 for an additional 224GB is not a bad deal, you could buy a high performance 256GB micro SD card for ~$150. The micro SD card boosts any micro SD compatible smartphone’s storage capacity by 256GB and has decent write speed for a memory card. There are other sellers such as Samsung, Blackberry, Huawei, and HTC that offer smartphones comparable in functionality and aesthetics to the latest iPhones for half the price. Exploring other options in the market can save you a lot of money at the end of the day.
Article: http://bgr.com/2016/09/16/iphone-7-plus-vs-iphone-7-sales-sold-out/