Phones+Try+To+Stand+Out+In+a+Crowd

Article Title: Phones Try to Stand Out in Crowd Date: February 16, 2011 Source: __ [] __

Summary:

This article discusses the different approaches telephone and gadget companies have taken to attract more customers to buy their product in this competitive market. This article mainly focuses on one basic question regarding economics: what should the firm produce. The answer to this question can only be decided by one factor of production, management, which includes all the creative directors that come up with innovative ideas with the possible technology and resources at hand.

Apple’s IPhone has long been a strong competitor in the gadget market, but other companies such as Sony Ericsson, LG and HTC are all trying to come up with new innovative ideas to attract the demand of more customers. An example of this would be Sony’s Xperia Play, a new portable gaming device combined with a smart-phone. By doing this, companies are dealing with two determinants to increase their demand: technology and tastes of consumers. For the smart-phones industry as a whole, sales have increased by 72% compared to last year, according to Gartner research firm. This is a positive economic statement because it has real facts to support its claim. The research firm also predicted that the smart-phone would soon be just as common as laptop computers for global Internet access. This is a normative economic statement because it has no facts to support it, and is just a mere prediction and opinion.

Key Terms:

Factors of Production: These are the things required to produce something in an economy and are separated into four main categories: land, labor, management, and capital. This article specifically focuses on management because that is the factor that decides what must be produced and how to produce it.

Determinants of Demand: Factors that influence how much consumers are willing and able to buy a product. This is shown by either shifting the demand curve left or right. In this article, the two determinants were consumer’s tastes and improvement of technology.

Positive economic statement: A statement that is factual and based on true data regarding the economy.

Normative economic statement: A statement that is not factual and is based on mere personal opinion regarding the economy.

Diagram:



Explanation: This graph shows the two determinants of demand, tastes and technology, both increasing the demand of smart-phones, shifting the demand curve to the right. This has actually happened over the past year with statistical proof.

Evaluation: In my opinion, the smart-phone market has been one of the most successful ones in the past 2 years. The integration of mp4’s, computers, gaming devices, and phones into one device has become very popular among teenagers and adults. But because so many companies have come up with similar gadgets, they are now struggling to design more unique devices that are user-friendlier to a specific audience. This would be the logical approach for all the companies competing to win the demand from consumers. But the problem is that with every trend, there will be a time when the wild demand for a product dies down. I believe this may happen in the next couple years, when people start realizing they may not want such a complicated device with so many functions. When this happens (which I believe will just be in a couple years), companies would need to find a new approach to improving their products (such as style, functionality, simplicity, etc.) instead of creating the most sophisticated device with numerous functions. This once again relates to the determinant of taste, and how it may change over time like most trends.