Supply And Demand

Glenda Hogan

September 16, 2006

Supply and Demand Ð'- Mini Ipod

University of Phoenix

ECO360

Instructor Ð'- Frank Kingsland

Whenever a hot new product comes out, the demand for it is usually extremely high. The intense marketing and promotions of these things boost the hype, which pushes the demand. However, the supply may be limited for these new hot products, which give manufactures the leverage as far as pricing is concerned. The Apple iPod Mini is one of those hot products that had limited supply when it first came out with high, high demand.

In 2004 Apple came out with a mini version of its popular iPod, a device that stores music that is chosen and loaded by the owner. At the time when the iPod mini was introduced it cost $249, just $50 cheaper than an iPod which had more than triple the storage space. So why was everyone going so crazy over an device with less storage space and cost almost as much as the original, larger version? Well, Apple got creative with their merchandising of the iPod mini to get the hype and buzz going. They created a package that was sleeker, available in five different colors, and is 35% lighter than the smallest original iPod, with the same eight our battery time. This creative packaging and new look sparked a high demand for this product.

Apple had 100,000 pre-orders for the iPod mini before it hit the market. This was a huge. The original white colored iPod sold 125,000 in its first three months hitting the market in 2001. This smaller, yet nicer looking device out sold the original larger capacity version in just a month.

Today, the iPod mini is now known as the iPod nano. It is the same concept as far as having a smaller version than the original iPod, just with a choice of storage space from 2GB 500 songs to 8GB 2,000 songs. The prices now range from $149 - $249, which $249 was the cost of the iPod min when it first hit the market in 2004, now with the same amount of storage space that the original iPod had at that time. Today, the original iPod is available with different storage sizes ranging from 30GB, which holds over 10,000 songs at $299 to 60GB which holds over 20,000 songs, slide shows and video at $399.

The pricing

...