According to current reports demand for the iPad 2 is now starting to move closer towards the amount of supply of Apple iPads. Apple is promising consumers the delivery of their iPads in 2 to 3 weeks now rather than 3 to 4 weeks. When apple was promising consumers the delivery of their Apple iPad in 3 or 4 weeks supply was not able to keep up with the demand. This struggle of supply to keep up with the increasing demand of the Apple iPad 2 was moving Apple farther away from equilibrium and in turn reducing the firm’s profit. The excessive demand is a result of supply being too low. There are a couple of Global reasons why Apple’s Supply chain is most likely less than normal. The tsunami in Japan that happened in March as well as the problems at one of the country's nuclear power plants are large factors that economists are speculating as factors that have caused this change in Apple’s supply chain. As a result of the Apple’s lack of supply of iPad 2s, people have been selling iPad 2’s for between 40%-53% more than market price.
-Lizzie Sanders
Apple had to pick up the pace in the production of their new iPad 2 in order to meet the demand of the consumers. If Apple's supply couldn't keep up with the demand, this would allow other competitors to steal the profit that would have been made. Consumers of the iPad 2 might see that maybe buying a product similar to the iPad 2 might be more affordable and worth it. But maybe the lack of supply might benefit, to some extent, Apple. To keep the demand high can still bring in sufficient profit. There are some people out there who don't care about the supply meeting the demand, they have to have it.
ReplyDeleteApple made a smart move in lessening the amount of days it would take to ship the iPad 2 to households in and out of the U.S.. Demand will stay the same but the supply curve will shift upwards causing the two to be very close to the line of equilibrium. The down side to the catostrophe that occured in Japan relating to the iPad 2 is the decrease in the amount of supply, causing more and more people who currently have the iPad to sell it for higher than Apple's price. This occurs for those people who don't like to wait and wants everything immediately.
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