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Assignme

nt 1
Demand Forecasting

Roll # 18010050, 18010021, 18010014,
18010008, 18010040
LUMS- MBA CLASS OF 2018

Adults who use it for their everyday needs. It went away from convention and introduced a simple screen keyboard. It has its own operating system of IOS and an app store which has a friendlier user interface. homegrown phone-maker QMobile is third. as people in Singapore are getting richer with higher levels if income due to the improved performance of the economy. iPhone is second. Factors affecting Demand of iPhone Positively  Buyers’ taste and preferences affects the demand for Apple iPhone. and tending to recommend it to family and friends. How would you define the market for this product? iPhone market can be defined as catering to a number of entities which includes. IPhone Market in Pakistan    Android is Pakistan’s top smartphone OS with 68 percent share just among smartphone users. If the price is high people tend not to buy it which  decreases demand however if the price falls.  Teenagers who are attracted by new technologies. the demand for iPhones will increase. Samsung is the top brand. Customers of others Apple’s products tend to be faithful to the brand purchasing an Apple smartphone.Managerial Economics Assignment 1 DR # 11 Industry: Information Technology Product: Apple’s iPhone Which product did you choose and why? Apple’s IPhone is selected for this study because:  IPhone introduced a new way to interact with computers. For example. there was a big technology gap between the iPhone and its competitors. During the first launch of iPhones. Windows Phone is third on eight percent. Factors affecting Demand of iPhone Negatively  The demand for iPhone depends on the price. There is an effect on the demand caused by substitutes. Changes in income levels also affect the demand for Apple iPhone. their  demand of the Apple iPhone is increasing Apple’s brand image affects positively the demand of iPhone. but in the latest years there are numbers of Page 1 of 6 . An increase in popularity of the  brand will increase the demand for the smart phone. IOS is second on 24 percent share. Business people who can use it to communicate more effectively with their clients.

price + d. Government import rules & regulations are also affecting iPhones supply negatively.pk.pk etc.import duty . This is affecting supply positively.applications + i. The letters before each factor denote the coefficient and hence the change in demand due to a change in the factor.competiton + e.brand loyalty + g. Telemark. This has positively affected supply of iPhone in the country. Higher income levels will have a positive impact as customers will be willing to Page 2 of 6 . a sensitivity analysis of demand would be most useful as the demand of the Iphone  depends on several assumptions that need to hold true for the demand function to be effective Demand = k +a. An explanation of each factor is given in the table below :- Customer Positive impact as customers prefer Iphone for its features but negative impact as preference Income level customers prefer cheaper phones with bigger screens.preference + b. are supplying iPhone at customers’ doorsteps. Sensitivity Analysis  Sensitivity analysis can be conducted to assess the risk of drastic changes in the variables of any model. Factors affecting Supply of iPhone Negatively  Absence of official Apple’s presence in Pakistan is the main reason that’s affecting iPhones supply in the  country.network infrastructure + h. Emerging e-commerce space in the country has pushed iPhone supply as many e-commerce players like  Daraz. If Apple manages to reduce its cost of production  for its products through innovative use of technology.security situation The k indicated the effect of all factors that have not been included in the analysis. A large number of retailers have jumped into sales and distribution of iPhone in Pakistan (as Apple hasn’t entered Pakistan officially).  It will assess the assumptions in any model and determine how likely they are to change For the iPhone.h. Cost of production affects supply of Apple iPhones.income level . supply for Apple’s iPhone will increase.Managerial Economics Assignment 1 DR # 11 close substitutes of it.complimentary goods -  j. Factors affecting Supply of iPhone Positively  Mobile network operators have entered in the market of selling iPhones through their distribution  network.c.dealership + f. For this reason the demand of iPhone decreased during the launch of new  competitors’ products with same level of technology or better (Example: Launch of Samsung S7 ) As iPhone hasn’t entered Pakistan market officially so lack of warranty and aftersales support in Pakistan is affecting its demand negatively.

Price Elasticity Data for IPhone in Pakistan Page 3 of 6 . Customers Import duty purchased the phone only to get the headset Increase in import duty will increase price and hence have a negative impact on demand. This could be impacted suddenly by an case that affects the image of Network Apple such as exploitative labor practice or environmentally unfriendly practices.Managerial Economics Assignment 1 DR # 11 Price buy an expensive phone with more disposable income Apple maintains an average standard price for the Iphone. If price rises then it will Competition have a negative impact on quantity demanded as customers will opt for alternatives Market for smartphones is getting more competitive as local players like Q mobile Official dealership are dominating market share. E. Pakistan’s budget of 2015-2016 almost doubled the tax on import of Security situation mobile phones and this will have an expected negative impact on demand Deterioration in the security and political situation will have a negative impact on demand. Increase in competition would decrease demand An official dealership in Pakistan would have a positive impact on demand as the Brand loyalty dealership would increase supply and after sales services Apple has a strong brand loyalty as consumers repeat purchases by getting the latest Iphone.g. Positive impact as more network towers are setup. Site sharing (one tower for infrastructure multiple networks) has started in Pakistan and this greatly increases smartphone Applications demand as more people can have access to the internet New applications (mobile apps) development will lead to more demand for the Complimentary iPhone as apps will be used more in businesses as well as by individual consumers Increase demand for the product as can be seen by the launch of the VR(virtual goods reality headset) that was given free with every new Samsung phone. increase in mobile snatching will motivate people to buy cheaper phones.

01 0. quantity demanded for iPhone will increase by 5.82 2.08 0.04 0.58 units.18 Change in Income Change in Demand Income Elasticity Coefficient 0. Page 4 of 6 .04 0.63 1.01 0.83 2.2 units.03 12 8 5 3.11 0.85 2.83 2.2.13 0.03 4 4 13 1.7 Income Elasticity Data for IPhone in Pakistan Year Demand (million) 2011 2012 2013 2014 2015 1.86 1.55 1.58 1.01 0.26 1.56 Annual Income Per Capita (USD) 2.Managerial Economics Assignment 1 DR # 11 Year Average Price (USD) Units Sold (millions) 2011 2012 2013 2014 2015 2.08 0.  quantity demanded will increase by 7. this implies that for a unit increase in income.53 1.1 3.05 0. Estimated average income elasticity of demand for the iPhone is 5.97 3.14 3.05 3.3 Based on the information given above:  Estimated average price elasticity for the iPhone is 7.02 0.50 1.74 Change in Quantity Sold Change in Unit Price Price Elasticity Coefficient 0.52 1.53 1.24 0.01 0. This implies that for a unit decrease in price.58.02 0.

June 30).Managerial Economics Assignment 1 DR # 11 References Kelly.statista. J. July 11).techinasia.com.com.com/2016/07/01/iphone-vs-android2016-iphone-better/ http://www. A snapshot of smartphone usage in Pakistan in 2014 (INFOGRAPHIC). Retrieved from GottabeMobile: http://www. S. 5 ways the iPhone changed our lives. (2012. January 7). (2014. Retrieved from TechinAsia: https://www.pk/search? q=gross+national+income+per+capita+in+pakistan&espv=2&biw=1600&bih=79 9&source=lnms&tbm=isch&sa=X&ved=0ahUKEwj0lICmuTOAhXJuY8KHYdYBuEQ_AUIBigB#imgrc=V29YWBIqPYYhmM%3A Page 5 of 6 .cnn. H.com/smartphones-in-pakistan-infographic-2014 Smith. iPhone vs Android: 15 Reasons iPhone is Better.google. (2016.gottabemobile.pk/search? q=iphone+price+history&biw=1600&bih=799&tbm=isch&tbo=u&source=univ&sa =X&ved=0ahUKEwjE2rOq3uTOAhVCLhoKHaHzBR8QsAQIGA#tbm=isch&q=averag e+iphone+price+yearwise&imgrc=uwwoBgc2RzHSDM%3A https://www. Retrieved from CNN: http://edition.com/statistics/263401/global-apple-iphone-sales-since-3rd-quarter2007/ https://www.com/2012/06/28/tech/mobile/iphone-5-years-anniversary/ Millward.google.