DD202A

We will show good model of the mobile phone market in order to

understand the issues and domains that attached with the supply and demand. For
instance, it displayed how modern technology and raised supply can diminish the
price, even as demand increase.

The pretty news for the customers or the people in the market that the price of the
mobile phones predicted that may be decreased through the coming 6 years. This is
firstly due to the raised rivalry and raised supply from basic producers. As markets
arrive to the satisfaction point, demand will raise at a slower rate by 5 percent a
year till 2015

The Supply and Demand Diagram for diminishing the Mobile Phone Prices.

S1

S2
P1

P2
D2

D1
Q

Q1 Q2

The market in Kuwait for mobile handset is inclined to minimize by 6% year on

year at 2016, these issues in done in accordance with the final prediction that
played by International Data Corporation (IDC).

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 The international innovation research and advising services companies predict the
market to pursue particular year-on-year minimize of 19% and 22% in the second
and 9 months of this year with a diminish of 17 percent at 2015 as full. This
prediction will result in impact on the orientations of the supply and demand curve
because there is prediction that report that the buying of the mobile phones
diminish at 2016, the demand quantity will reduce, and then the demand curve
could move to the left.

Price of PHONES

Supply curve

P1

P2

D1

D2

Q.D of phones

Q2 Q1

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 "The oil field in our state considered the most important factor in the national
export revenue by 95 % of export revenues. Also oil field is considered 60 % of the
nation's GDP, referring that diminishing in the oil prices will have passive undulate
impact on demand for products and services in the economy." These will lead to
reduce the demand quantity, and then the demand curve will move to the left side.

Price of PHONES

Supply curve

P1

P2

D1

D2

Q.D of phones

Q2 Q1

Factors impacting demand

The curve of the individual demand show the price persons are seek to pay for a
specific quantity of a good.

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 The market demand curve is considered the total all customers demand curves. It
displays the quantity of a good that the people organize to purchase at various
prices.

1. Change in price

A change in price leads to a motion over the Demand Curve.

400

385

370 D

Quantity
20 m 25 m

In accordance to apple organization, as the apple corporation made the decision of

decreasing the prices of iphone6 in order to increase the sales more than the
Samsung company from 400 $ to 370 $. So, from 20 million customers to 25
million customers are considered the value of increase the demand of the demand
curve of iphone 6.

Shifts in the demand curve

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 This occurred when, even at the identical price, the people are seeking to purchase
larger (or lower) quantity of product. This will happen if there is a move in the
situations of demand.

P
D2

D1

P1

QUANTITY

Q1 Q2

Diagram to display a shift in demand

S
P1

P2
D2

D1
Q.S of tobacco

Q1 Q2

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A shift to the right in the demand curve can occur for a number of reasons:

Income: - An increase in income provides the people to be capable to bear or buy

more products. The more income would occurred for set of reasons, like more or
larger wages and less taxes

Quality: - An increase in the product’s quality such as phones that stand on great
quality cameras such as I phone 6, these entice the people to purchase one of it.

Advertising could increase allegiance to the products and increase the demand. For
instance; the more expenditure on advertising via the Samsung company, and the
more sales achieved by it in all markets. In 2015 , Messi was considered the player
in the adv of Samsung . These leaded to support the name of Samsung in the
world.

Substitutes: - An increase in the prices that exposed by the substitutes, such as

when the price of Samsung mobile phones raises, this will raise the demand for
Apple iPhones , the major substitute for the Samsung company.

Complements: - the diminishing in the price of complements will support and

increase the demand. Such as little price on the product of I phone lead to raise the
demand for the other android phones in the market.

Prediction of price raises: - when the customer guess that I phones could increase
in the future, the customer will purchase it at the moment.

The reducing in demand would happen due to little income or reduce in goodwill
of the product.

Determinants of supply of the mobile phones

1-Prices of related products: - these back to the plant, where the plant can
manufacture either cell Phones or laptops. Because the plant choose to
manufacture large quantities of laptops and little quantities of mobile phones as the
price of cell phones reduced, the firm could do the same when the price of laptops

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increased but the price of cell phones remain fixed( Jagg Xaxx ,2015). Apple
Company produces the smart watches and smart phones. The management of the
company decided to increase it supply from smart watch because the prices of it
in the market is high , these will leaded to reduce the supply of iPhone 6 in order to
increase the profits from selling the smart phones.

2- Technology: - improved innovation support firms to manufacture more

expeditiously, applying little resources to create specific product. Thus, little
production costs, increasing the quantity that the company is seeking to supply at
every price. The supply curve that attached to the iphone was shifted to the right
side because of the effective technological changes. These leaded to raise
equilibrium quantity and decrease the equilibrium price. The apple company
depends on effective machines that coheres chips in speed way, these leaded to
diminish the production cost of Apple Company and supply of iPhone 6 will ne
supported. (Bla Bla Writing,2016).

3-Prices of inputs: - The input’s price stratified to make product is important part
of its cost. When the prices of inputs increase, the production costs raises and the
quantity of the specific product which manufacturer seeking to supply at any price
diminishes. Apple depended on platinum and gold to produce the iphone , but
these material are considered expensive material . These leaded to increase the
product cost and increasing the supplied quantity of the iphone.

4-Expectations: - Suppliers’ predictions about prices in the coming periods also

affect on the supplied quantity.

5-Number of sellers: - the quantities of a product which specific set of

manufacturers will supply at various prices in a given market.

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According to these issue , There are some forces which that can impact on the
mobile phone’s demand and supply for the Samsung firm in Kuwait. The prim one
to affect on the demand of the cell phone is considered the price. For several
persons they have different view of the price. For most of customers, cell phone is
considered tool that can contact with others, thus that they don't need new cell
phone. At this issue, the diminishes in the price will result to raise in the QD, the
demand is flexible. The second force is the income of customers, is either their
wages can be endured to the mobile phone. For instance, the price of Samsung
Note 2 is only KD 200, but the average income of the customers in Kuwait is
mainly KD 300 per month, thus they can’t pay about 66% from their salaries to
purchase this phone. Another reason of convey in the demand is the size of the
customers. Samsung mobile has a big rival that is Iphone, when Samsung S3
appeared, individuals put interest in this device, but after Apple Iphone 5 created,
they become like new Iphone 5, thus the demand of Samsung S3 will diminish.
This could also jostle against the own cell phone, such as S3 jostle against Note 2.

According to the diminish in the price, the advantages will become low and low,
thus the supply quantity will also reduce. The supply also may be impacted by the
new innovation of Samsung cell phone or the point of the innovation itself. like
Samsung S plus, after vending this model, the firm reduce the supply of this
approach. By the diminish of the price, the company won't get income of this issue,
thus they will stop of producing from these product.( Jagg Xaxx ,2015).

In conclusion, It is also clear that our state of Kuwait is a brand- focal market as the
people seek to still with their desired brands. The various macro forces are likewise
curb the growth, including the predicted demolishes of the market due to reducing
of consumer demand and lingering population growth.

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The percentage of the oil and gas section in the export revenues of Kuwait is
about 95% and about 60 %of the country's gross domestic product, and because the
reduce in the oil’s price , the demand for the cell phones diminish in our country.
For IDC, the cell phones that low than $150 price point considered as larger
growth rates. (odora,2014)

The growth in inexpensive devices is being provided via collection of forces such
as new brands that starting low-end phones in this price section. These involve
Xtouch, VSun, Obi, and etc. The forces that specify the supply of Samsung cell
phone also have many components. For the matters of venders, the price of the
input is considered force which specifies the supply, if the price is higher, the
company profits more. As a new generation of cell phone first appeared, the price
may be the higher and higher. These lead to support the profitability for Samsung
Company.

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Reference

Austin Frakt PhD & Mike Piper CPA ,2014,Microeconomics Made Simple: Basic
Microeconomic Principles Explained in 100 Pages or Less

David Besanko & Ronald Braeutigam,2013, Microeconomics

Denise A. Robson ,2000, Race, ethnicity, and gender in principles of economics

textbooks,ISBN:- 1083-0898

Jagg Xaxx ,2015,Factors Affecting the Market Demand & Supply for Mobile
Phones, visited in 20-10-2016, available at:-

https://www.techwalla.com/articles/factors-affecting-the-market-demand-supply-
for-mobile-phones

IDC,2015,Kuwait's Mobile Handset Market Set to Shrink in 2016, visited in 05-11-

2016, available at :-

http://www.idc.com/getdoc.jsp?containerId=prCEMA40706215

The odora,2014,Kuwait economy, , visited in 09-11-2016, available at :-

http://www.theodora.com/wfbcurrent/kuwait/kuwait_economy.html

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