Wednesday, September 28, 2011

“Amazon’s Android Tablet is Coming Soon”

The iPad from Apple was and continues to be extremely popular, selling millions of iPads and pulling in huge revenue for Apple. Every firm’s goal is to maximize profit, and Amazon is doing so by creating an Android Tablet that will compete with the iPad. This tablet is a 7-inch touch-screen, slightly small than that of the iPad, but has additional features that the iPad does not, such as higher resolution. In terms of technology improvements, this device is not significantly more advanced or improved than the iPad, so Amazon will compete with Apple on price. They are going to price the Android Tablet at a lower price than the iPad. Consumers will buy the cheaper product out of their self-interest, and by pricing the Android Tablet at an obviously lower price to grab attention, Amazon hopes to win over consumers’ purchases. Analysts have made predictions that the Amazon will be Apple’s top competitor in tablets, and that the tablet is “going to be a big deal.” As of right now, Apple dominates the tablet market. Other companies such as HP and Blackberry have tried to do what Amazon will be doing, but have failed because their tablets were not able to compete with Apple and had to be taken out of the market. Amazon on the other hand is likely to stay in the market if they “compete on price, content, and commerce,” states Rotman Epps. Amazon plans to price the tablet at a lower price than the iPad, and by lowering the price, they hope demand for their product will go up. This would follow the law of demand which states that as price decreases, demand for the good increases. They hope consumers will notice both the lower price as well as the quality and features the Android Table has to offer.

http://money.cnn.com/2011/09/23/technology/amazon_tablet/index.htm

2 comments:

Abby said...

Christina,
I really liked your post! One thing that I really liked that you mentioned the "law of demand" to explain why the Android Tablet is expected to be one of Apple iPad's top competitors. Another thing you did really well was mentioning that the Android tablet will not be sigificantly more advanced than the iPad, showing that Ceteris paribus is true. Great job! :)

Christina B said...

Thank you Abby! I somewhat agree that ceteris paribus is true since they will be competing mostly on price, however I believe that there are other factors besides just price influencing a consumer's decision. Ceteris paribus means all other things held constant, where only the price changes. In this example, I believe that there could be other factors that influence a consumer's decision such as the brand name of Apple, advertising, and consumer tastes and personal preferences.