This paper explains the main factors which has contributed to the increase in demand for iPhones in the United Kingdom. It also provides evidence to support the argument. Data, diagrams, and graphs are also used to illustrate and explain the factors.
The increased uptake on mobile phones has been influenced by how mobile users watch, listen and shop in the digital world. People are currently connected anywhere by a plethora of devices (Umair 2016 p.2). In the United Kingdom. The usage of smartphones has become widespread from 2013 to 2018. With the operating systems like computers, consumers have enjoyed technologically advanced features in the smartphones. The increased internet access has also improved the human-smartphone relationship making the citizens more reliant on it for online activities. For instance, weekly, smartphone users spend one day online. Seven in ten commuters use their smartphone on their journey for varied purposes. Statistically, 79 percent of UK adults use smartphones for texting, voice calls and social media (Muilenburg and Zane 2013, p.274). The iPhone sale in the UK has increased from 2011 to 2017 with 7.5 billion pounds being sold in 2017. In the 6 years period, about 38 million phones have been purchased. Therefore, for every 2 people, one owns an iPhone. Apple acquired 39 percent of the smartphone market by 2017 with £6.3 billion spent on iPhone in the same year (Merchant 2017, p.213). This is illustrated in Graph 1.0 below.
The factors that has contributed immensely contributed to the demand on iPhones are increase consumers’ disposable income, reduction on the price of iPhones, growth of population, increase in tastes and preferences of consumers to purchase iPhone. The increase in competitors’ smartphones (Android), effective advertisement, equality in the distribution of incomes, and the favorable government policy has also led to rise in iPhone demand in the UK. Studying the relationships between demand and its determinant is important to Apple since it is used in forecasting the market demand. It is also a valuable information in establishing a marketing strategy that attracts and retain potential customers. The industry’s demand concept is pertinent-data in business making the decision process.
Demand is the quantity of a product that consumers are able and willing to purchase at a given price at a given period of time (Marshall 2010, p. 99). Therefore, when the demand rises more of the product is bought.
The Decline in Purchase Price of iPhones
The law of demand states that the lower the price the high the quantity of a product demanded other factors held constant (Luke, Brian, Michael and Shor 2015, p.76). Apple’s effort in unveiling a new iPhone with bigger features, giant display, and power in the market led to the tumbling of the prices of the previous years’ models. Customers rushed to purchase the model whose prices declined at big discounts. For instance, as a result of the introduction of Max, the price of iPhone X with 64GB of memory reduced from £839 to £679 in Amazon. The price of iPhone 8 also dropped to £593.87 giving a discount of £100 in online retail. The low monthly repayment plans for £16 per month has also encouraged people to acquire the iPhones and make payment on installments. These price decline had encouraged people to buy iPhone in the UK market. An understanding of the price-demand relationship is important for Apple especially in the oligopolistic market for its success. Graph1.1 illustrates the shift in the demand curve for iPhone.
A decrease in the price of iPhone from P0 to P1 causes an increase in the quantity demanded shown by the movement from Q0 to Q1. This leads to a shift in the demand curve from D0 to D1. Therefore, more iPhones will be purchased by the customers due to a decline in prices.
Increase Consumers’ Disposable Income
The higher the disposable income of customers the higher the purchasing power. The demand for iPhone would increase when customers have the ability to buy. Other factors held constant, the demand for luxury goods increases when the disposable income increases. High income earners are always able to navigate in the market and enjoy price discounts than the lower-income segments who have less disposable income to purchase upfront. For instance, the disposable incomes of the households in the UK increased significantly between FYE 2016 and FYE 2017 (ONS 2017, p.2). The high-income earners were able to purchase iPhones. During this period the iPhone 6 dominated the scene.
Change in the Taste and Preferences of Customers in Favor of iPhones
Customers’ tastes are influenced by demographics, fashion, living standards, age, education, sex, and religion. A desire to own an iPhone has been triggered by attractive and advanced features of the phone such as configuration to google account, iCloud account and security features (Miser 2013 p.75). In comparison to gender, the female own more iPhones than the male counterparts an indication that the former provide a wider market for iPhones in the UK. Smartphones have overtaken computers for internet users because of their convenience in terms of portability. Lastly, the young generation and educated individuals prefer iPhones because they are fashionable.
A Rise in Prices of Related Products
The price of competitors’ products influences the demand for the substitute product since customers are price sensitive (Mamun, Rhaman and Robel 2014, p.2). An increase in the price of a substitute product will shift the demand the competitors’ product. Prices become more elastic when there are many substitute products. Android and iPhone are close substitutes but the latter has a more superior operating system giving it a more competitive edge. Its operating system runs in the iPad and iPod Touch (Pogue 2017, p.1). The company also provide more alternatives devices such as watches and laptops at reduced prices. Complementary products also affect the demand for products. The Apple Company has developed Apps that are more compatible with the iPhone. This has greatly lifted the iPhone complementary business and the subsequent increase in demand in the UK as shown below. Graph 1.2 shows the proportions taken by Android and iPhone in the UK.
Customer Expectation
The future expectation of price changes influences demand of a product. During festive seasons such as Christmas, customers purchase more of a product because they enjoy discounts. Many customers own iPhones because they are able to buy them at reduced prices. The iPhone company enjoys brand loyalty because of the positive publicity, ease of choice and superior security features. The good experience with the brand had made clients attracted and locked-in thereby contributing to an increase in demand for iPhone in the United Kingdom. (Tracy and Matthew 2017, p.11).
Effective Advertisement and Marketing Activities
Advertisement provides informative information about a product. Customers’ attention is attracted and persuaded to purchase and use a product. An effective advertisement may involve the use of celebrities to champion a brand (Hatten 2012, p.356). Attractive music and colorful pictures are also strategies for persuasive advertisements. The Apples’ “Hello” iPhone commercial, Cookie Monster on television screens and Campaign's iPhone video round-up have played a great role in popularizing the brand. Statistically, 15.6 percent of smartphone sales worldwide were iPhones within the first four months making it a market leader in 2018 (Pai 2015 p.277).
Conclusion
The iPhone is regarded as the most powerful and luxuries phones to own. There is an increased demand for iPhone in the United Kingdom. There are many demand factors associated with the rise. Low pricing and increase in disposable income have also led to a rise in the acquisition of luxurious iPhone. Peer pressure to embrace fashion, luring advertisements and celebrity endorsement of products has promoted the demand of iPhones in the UK. Finally, it is projected that the number of iPhone users will continue to rise because Apple is incorporating new attractive and powerful features into their products.
References
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